LSI Industries, headquartered in Cincinnati, Ohio, reported 4Q 2025 and full year 2025 earnings on August 21. As one of the few remaining publicly traded lighting companies that report earnings, LSI is a data point for the lighting industry.
Lighting represented 46.9% of the company’s FY Q4 (CY Q3) sales.
LSI Overall – Strong Growth
LSI Industries delivered strong Q4 2025 results, exceeding expectations with 20% growth overall and 22% year-over-year growth across both the Lighting and Display Solutions segments. This record revenue was driven by a combination of organic growth, and contributions from the acquisitions of EMI Industries, which is focused on millwork, metals, and refrigeration products, including checkout counters, food and beverage dispensing fixtures, food-grade stainless steel and aluminum fixtures, and enclosed refrigeration, and Canada’s Best Holdings, which likewise is focused on millwork and metal fixtures serving the Canadian market, including Grocery, C-Store, QSR, banking, and specialty retail segments.
LSI Lighting Segment Insights
Focusing on the Lighting Segment, sales grew 12% in the 4th quarter with revenue of $72.7 million, driven by growth in large lighting projects in key verticals, such as grocery, retail, and refueling/c-store sectors, which started to move forward. However, management noted that market uncertainty remains, resulting in fluctuating demand.
Its lighting brands are LSI Lighting and Atlas Lighting Products, which is more of a “white goods” business.
However, for the full year, sales were down -5% to $248.4 million. Margins expanded, with adjusted gross margin increasing to 36.2% from 33% prior year and adjusted operating profit margin expanded 250 basis points year-over-year, driven by volume, pricing strategies, productivity gains and stable input prices.
The Lighting Segment performance reflects improved project order rates, particularly in larger projects, where market activity slowed the last twelve months with project delays. Additionally, project quotation and order rates remain active, and the backlog exiting fiscal 2025 was up 20% over last year. This suggests strong demand going into LSI’s fiscal 2026.
The Lighting Segment incurred minimal tariff impact in the fourth quarter, as existing inventories were utilized in manufacturing. The tariff impact is expected to increase in the fiscal Q1 2026, as inventory procured during the highest tariff period is consumed in production. However, LSI noted that they source the majority of components domestically and expect tariff impacts to be limited to several component categories and that they will partially offset higher costs with previously implemented price increases and other cost reduction efforts.
LSI remains focused on a vertical market approach, targeting high-value applications for lighting and display, such as quick service restaurants, convenience stores, refueling stores, retail and grocery, and others with their portfolio of solutions. Their solutions now include professional services and program management such as site assessments, permitting, construction management, installation, reporting and data management.
No formal Q126 guidance was given, but management indicated a continued focus on organic growth and strategic M&A. LSI remains committed to its vertical market strategy, focusing on expanding its addressable markets and enhancing operational excellence. LSI introduced their Fast Forward strategic initiative earlier in the month. This plan is targeted at growing revenue $300 million and growing margin at least 50 basis points annually by 2028 through a combination of expanding end markets focusing on services (design, build, installation, aftermarket service for recurring revenue), safety and security, solar, infrastructure and bolt-on horizontal M&A
Stakeholder concerns regarding LSI Industries’ Q4 2025 results center on several key areas, despite the overall strong performance, primarily around lack of formal forward guidance for 2026 or quarters. This leaves some stakeholders uncertain about the pace and trajectory of future growth. Also, the strong lighting rebound in Q4 compared to the annual decline leaves questions that recent growth could be to the sustainability of the rebound if project pipelines soften.
Investors have expressed concerns about potential impacts from tariffs and ongoing supply chain pressures. While Q4 margins improved due to effective management, ongoing cost volatility or tariff escalation could pressure profitability in future quarters.
Finally, free cash flow, although positive, was down from the prior year. Some analysts are monitoring inventory, working capital, and debt trends for possible early warning signs as the company pursues growth and M&A.
Thoughts
- With lighting representing 46.9% of company sales, and a projected $290 million based upon their run rate, what is the company’s intent in the lighting space? If they are interested in M&A, could some of it be in the lighting area?
- With pre-tariff component inventory being exhausted and costs presumably increasing due to tariffs, will the company implement another round of price increases, or will the incremental margin captured from prior price increases be utilized to delay price increases, perhaps waiting to a historically traditional cycle (January)? In a competitive market it is questionable unless they can piggyback on others.
- 2 brands represent $72 million. Which should be the company’s focus?
How does LSI’s lighting businesses – Atlas and LSI Lighting – perform for you?
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Strategic Assessment: Addressing LSI’s Lighting Segment Questions
Based on your Q4 2025 earnings analysis and additional market research, here’s a comprehensive assessment addressing the three critical questions:
1. LSI’s Strategic Intent in Lighting and M&A Opportunities
With lighting representing 46.9% of company sales (~$290 million projected run rate), LSI’s commitment to the lighting segment appears strategically significant, particularly within their Fast Forward 2028 strategy. This plan targets $800 million in total net sales and $100 million in adjusted EBITDA by FY28, representing over 60% growth from FY23 levels, with sales growth expected to be evenly balanced between organic and inorganic investments.
M&A Likelihood in Lighting: While recent acquisitions have focused on the Display Solutions segment (EMI Industries in 2024 for $50 million and Canada’s Best Holdings in 2025), lighting M&A remains probable for several reasons:
LSI recently launched the V-LOCITY™ series, their largest lighting product introduction in seven years, focusing on operational efficiency and installation ease
The company maintains a disciplined acquisition approach with a commitment to maintaining a long-term net debt to trailing twelve-month adjusted EBITDA ratio at or below 3.0x
Their two-brand strategy (LSI Lighting for projects, Atlas for stock-and-flow) creates opportunities for complementary acquisitions
2. Tariff Impact and Pricing Strategy
The tariff situation presents both immediate challenges and strategic considerations:
Current Tariff Environment: As of 2025, tariffs on Chinese lighting imports have reached approximately 35% (temporarily reduced from peaks as high as 145%), with reciprocal tariffs on other Asian countries at around 10%. The February 1, 2025 implementation of 25% tariffs on Mexican and Canadian imports and an additional 10% on Chinese goods has disrupted supply chains across the lighting industry.
LSI’s Positioning and Response:
The company has a significant advantage with domestic manufacturing capabilities
Management indicated minimal Q4 tariff impact due to existing inventory utilization
Industry peers like RAB Lighting announced price increases effective May 3, 2025, due to tariff pressures
Pricing Strategy Recommendation:
LSI should consider a selective price increase approach:
Implement targeted increases on components most affected by tariffs (likely 5-8% range)
Time increases for early calendar 2025 to align with traditional industry cycles
Use dynamic pricing clauses in contracts to adjust for tariff fluctuations
Leverage their domestic manufacturing advantage as a competitive differentiator
3. Brand Focus: LSI Lighting vs. Atlas Lighting Products
The two-brand strategy remains strategically sound but requires nuanced management:
Current Brand Positioning:
LSI Lighting focuses on the project channel with made-to-order products, while Atlas Lighting targets stock-and-flow business through electrical distributors
Atlas was acquired for $97.5 million in 2017, with Atlas’ gross margins noted by management as “much larger than LSI’s”
Strategic Recommendation: Maintain Both Brands with Targeted Investment
LSI’s entire lighting segment generated $72.7 million in Q4 2025 quarterly revenue (not broken down by individual brand), suggesting strong market traction across both brands. Rather than choosing one, LSI should:
Continue the dual-brand strategy – The complementary nature of the two brands allows LSI to cover both project-based and stock-and-flow markets effectively
Prioritize Atlas for margin expansion – Atlas’s stock-and-flow model offers higher margins and faster inventory turns
Leverage LSI brand for large projects – The 20% backlog increase indicates strong project pipeline momentum
Focus integration on back-office synergies while maintaining separate sales channels to avoid channel conflict
How LSI Stacks Up Against the Competition in 2025
To truly understand LSI’s position, let’s look at how they’re performing against other major US lighting brands this year. The picture that emerges is quite revealing.
The Giants Are Barely Growing
Acuity Brands’ lighting segment, at $3.6 billion in FY2025 revenue, grew just 1.1% year-over-year. Their CEO Neil Ashe essentially admitted the bar is low, stating “our belief is that we’ve outperformed the industry” with that minimal growth and characterizing the 2026 lighting market outlook as “flat to down”. When the industry leader celebrates 1% growth as outperformance, you know the market is tough.
Signify is faring even worse. Their Q2 2025 revenue of €1.418 billion ($1.66B) marked the lowest quarterly revenue since their 2016 IPO, and Q1 2025 at €1.448 billion was the lowest since Q1 2020 during COVID disruptions. They’re banking on a Q4 recovery, but the trend isn’t encouraging.
The Current Lighting Cautionary Tale
Perhaps most telling is what’s happening at Current Lighting, owned by private equity firm American Industrial Partners. This company has essentially gone dark on financial reporting, and what we do know tells a troubling story:
Starting at $940 million when AIP acquired it from GE in 2019, Current’s revenue fell to $630 million by 2021. Even after acquiring Hubbell Lighting (which had $550 million in revenue) in 2022, pushing combined revenues above $1.1 billion, the company reported just $922 million by December 2023 – the last time they disclosed financials.
Think about that: they added a $550 million business and somehow ended up with less revenue than the two companies had separately. Current has now stopped regular reporting entirely, with no 2024 or 2025 data available. Their revenue has effectively returned to pre-COVID, pre-acquisition levels despite adding a major competitor.
Where LSI Fits In
Against this backdrop, LSI’s performance takes on a different light (pun intended). Yes, their lighting segment revenue of $248 million is down 5% for the full year, but:
Their Q4 growth of 12% suggests momentum is building
Their 20% backlog increase is remarkable in a declining market
Their gross margins at 36.2% (up from 33%) show operational improvement
They’re actually providing transparent, regular reporting
H.E. Williams, the other family-owned player at $84.8 million in 2025 revenue, remains a niche player with minimal disclosure.
The Bottom Line
LSI’s lighting segment, while facing near-term headwinds, is surprisingly well-positioned given the industry context. When your biggest competitor celebrates 1% growth as market-beating performance, and a major private player has essentially imploded from over $1.1 billion to $922 million (and stopped talking about it), LSI’s strategic positioning looks increasingly attractive.
Their advantages are clear:
Domestic manufacturing in a high-tariff environment
A complementary two-brand strategy capturing different market segments
Improving margins despite revenue challenges
Strong backlog growth in a declining market
Transparency and regular reporting that builds investor confidence
The Fast Forward 2028 plan’s ambitious targets might have seemed aggressive, but in a market where competitors are shrinking or stagnating, LSI’s combination of strategic acquisitions, operational improvements, and domestic manufacturing capabilities could make them a relative winner in a challenging industry. Sometimes being the best house on a tough block is exactly where you want to be.
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