Argan (AGX) Q4 2025 earnings summary

Executive summary

• Fiscal 2025 consolidated revenue rose 52% to $874 million, with record diluted EPS of $6.15 and EBITDA of $113.5 million.

• Fourth quarter revenues increased 41% to $232.5 million, with Q4 EPS of $2.22 and net income of $31.4 million.

• Project backlog reached $1.4 billion at year-end, driven by major new natural gas and biofuel projects.

• The company maintains a strong balance sheet with $525 million in cash and investments, $301 million in net liquidity, and no debt.

• Annual dividend increased 25% to $1.50 per share, with $102.5 million returned to shareholders since 2021.

Financial highlights

• Full-year gross margin improved to 16.1% from 14.1%; Q4 gross margin was 20.5%, up from 14.4% in the prior year.

• Net income for fiscal 2025 was $85.5 million ($6.15 per diluted share), up from $32.4 million ($2.39 per share) in fiscal 2024.

• EBITDA for fiscal 2025 was $113.5 million, more than double the prior year’s $51.3 million; Q4 EBITDA was $39 million.

• SG&A expenses increased in absolute terms but decreased as a percentage of revenue to 6% for the year.

• Cash dividends per share for fiscal 2025 were $1.35, up from $1.10 in fiscal 2024.

Outlook and guidance

• Management expects continued strong demand for power infrastructure, especially natural gas projects, with renewables as a strategic focus.

• Anticipates further backlog growth and sustained revenue increases, with a slight revenue dip expected in the upcoming quarter.

• Positioned as a partner of choice for innovative energy solutions amid rising power grid demand.

• Electricity consumption expected to grow 4% annually through 2027.

• Optimistic about long-term growth due to industry underinvestment and rising energy demand.