ARGAN Q1 FY27 earnings call AGX

Consolidated revenue rose 50% YoY to a record $291 million from $194 million, primarily on timing as construction ramped at recently awarded Power projects. All three segments grew revenue. Consolidated gross profit was $61.1 million (21% margin) versus $36.9 million (19%) a year earlier, driven by Power's favorable project/contract mix, strong execution, and ahead-of-schedule substantial completion on the final Midwest solar-and-battery project plus completion of Trumbull. Net income was $46.1 million ($3.24 diluted EPS) versus $22.6 million ($1.60), and adjusted EBITDA was $56.4 million (19.4% margin) versus $31.5 million (16.3%). SG&A rose to $15.7 million but fell to 5.4% of revenue from 6.5%.

Consolidated fully-committed backlog was $2.8 billion at April 30, 2026, down slightly from $2.9 billion, reflecting the natural gap between completing jobs and announcing new ones. The Power segment holds $2.5 billion, including four US gas-fired plants totaling over 4.1 GW. Backlog composition is roughly 79% natural gas, 13% renewable and 8% industrial; management expects complex combined-cycle gas to be the majority of backlog for the near and midterm. Beyond the major awards, Argan added $215 million of backlog in Q4 and over $125 million in Q1 from new/add-on Industrial and Teledata jobs and change orders, while converting $550 million of revenue over the last couple of quarters.

The Industrial segment posted record revenue of $58 million (20% of total) with ~$5 million pretax book income and $225 million backlog, aided by a data-center contract awarded November 2025 to fabricate thermal-expansion and energy-storage tanks. Argan broke ground in late April on an additional North Carolina fabrication facility — a $10-13 million PP&E investment, unusually large for its light-capex model — located about 20 miles from the existing plant to leverage current staff. It targets tank production before year-end and supports a multi-year data-center runway; the Industrial segment also has a $125 million data-center project and a recycling/water-treatment plant in Alabama underway.

Argan ended the quarter with $974 million in cash, cash equivalents and investments, $421 million net liquidity, no debt, and $474 million stockholders' equity. Net liquidity was flat versus January 31, 2026, despite returning $33.6 million to shareholders. Capital allocation centers on four areas: organic investment in people and fabrication capacity; a $0.50 quarterly dividend ($2 annualized, raised 33% in September 2025 for a third straight year and up 100% cumulatively); a buyback (authorization raised to $200 million from $150 million, extended to January 31, 2030, with ~$116.7 million repurchased since the 2021 inception); and disciplined M&A evaluation.

Management framed demand as robust and not the constraint — electrification, onshoring, EVs and data-center proliferation are straining a grid whose generation is aging out. Gas-fired plants are positioned as the ideal reliable solution, and only a handful of firms can execute these complex fixed-price combined-cycle builds, giving Argan discipline to pick the right projects, locations and partners. Now in its 20th year, Argan cited its track record, risk management and balance sheet as competitive advantages. The gating factors on new awards are developmental milestones — air and water permits, gas access, turbines and financing — not developer willingness, which management said is unchanged.