Argan (AGX) Q3 2026 earnings summary

Executive summary

• Achieved record project backlog of $3.0 billion as of October 31, 2025, driven by major new gas-fired projects in Texas and the Midwest, supporting approximately 6 GW in new energy builds.

• Q3 2026 revenues were $251.2 million, down 2–2.3% year-over-year but up 6% sequentially; gross margin improved to 18.7%.

• Net income for Q3 was $30.7 million ($2.17 per diluted share), up from $28 million ($2.00 per share) last year; EBITDA for Q3 was $40.3 million (16% margin), up from $37.5 million (14.6% margin) year-over-year.

• Increased quarterly dividend by 33% to $0.50 per share, marking the third consecutive annual increase.

• Demand for services is rising due to grid modernization, electrification, AI/data center growth, and replacement of aging power infrastructure.

Financial highlights

• Nine-month revenues rose 6–6.4% year-over-year to $682.6–$683 million; nine-month net income was $88.6–$89 million ($6.27 per share), up from $54.1–$54 million ($3.91 per share) last year.

• Gross profit for Q3 was $46.9–$47 million; gross margin: 18.7% for Q3, 18.8% for nine months (up from 17.2% and 14.6% YoY).

• EBITDA for Q3: $40.3 million (16% margin); nine-month EBITDA: $106.8–$107 million (15.7% of revenue).

• Cash, cash equivalents, and investments totaled $726.8–$727 million as of October 31, 2025; net liquidity at $377–$377.3 million; no debt.

• Stockholders' equity: $420 million; tangible book value per share: $28.12 as of Q3 2026.

Outlook and guidance

• Expects to maintain project capacity of 10–12 major jobs, with potential for further expansion as workforce grows.

• Management expects continued strong demand for power infrastructure, driven by electrification, AI/data centers, EV adoption, and manufacturing onshoring.

• Anticipates electricity demand to rise 25% by 2030 and 78% by 2050, supporting long-term growth.

• Remains optimistic about adding new projects over the next 12–24 months, but timing is dependent on customer schedules.

• Management is intentionally conservative on margin guidance; 16%+ gross margin is a benchmark, but recent performance has exceeded this.