Argan (AGX) Q1 2026 earnings summary

Executive summary

• Revenues grew 23% year-over-year to $193.7 million for Q1 FY2026, driven by strong power industry services and increased project activity.

• Net income rose to $22.6 million ($1.60 per diluted share), up from $7.9 million ($0.58 per share) in the prior year quarter, with EBITDA increasing to $30.3 million (15.6% margin).

• Achieved record project backlog of $1.9 billion as of April 30, 2025, with major new awards including a 1.2 GW natural gas project in Texas and a 300 MW biofuel plant in Ireland.

• Maintained a strong balance sheet with $546.5 million in cash and investments, $315 million net liquidity, and no debt.

• Quarterly dividend increased to $0.375 per share, with share repurchase authorization raised to $150 million.

Financial highlights

• Gross profit was $36.9 million (19% margin), up from $17.9 million (11.4%) last year, reflecting a favorable project mix.

• Power industry services revenues grew 45% to $160 million, representing 83% of Q1 revenue; industrial construction services declined to $29 million, 15% of revenue.

• EBITDA was $30.3 million (15.6% of revenue), up from $11.9 million (7.5%) year-over-year.

• SG&A expenses rose to $12.5 million but decreased as a percentage of revenue to 6.5%.

• Other income, primarily from investments, was $5.4 million for the quarter.

Outlook and guidance

• Backlog expected to exceed $2 billion in the near term, with strong project pipeline visibility for the next decade.

• Approximately 32% of the $1.9 billion backlog is expected to convert to revenue in fiscal 2026, with the remainder through fiscal 2029.

• Revenues anticipated to increase throughout fiscal 2026 as new projects ramp up, especially in power and renewables.

• Gross margins projected to remain strong, exceeding last year's profile.

• Management remains disciplined in pursuing profitable growth and maintaining leadership in energy infrastructure construction.