Argan (NYSE:AGX) reported record financial results for the fourth quarter and fiscal year ended January 31, 2026, driven by what management described as strong execution across its project portfolio and continued demand for large, complex power generation facilities.
On the company’s earnings call, CEO David Watson said the quarter “continued the strong execution we achieved across the company throughout fiscal 2026,” producing record top- and bottom-line performance for both the quarter and the full year. CFO Joshua Baugher attributed the quarter’s revenue growth primarily to project timing in the Power segment, including the Trumbull Energy Center reaching substantial completion during the quarter and activity ramping on recently awarded projects.
Record quarterly and full-year results
Fourth-quarter gross profit was approximately $65.6 million, translating to a 25% gross margin, compared with 20.5% in the same quarter last year. For fiscal 2026, gross margin was 20.5%, up from 16.1% in fiscal 2025. Baugher said margin improvement was “primarily driven by our Power segment,” citing strong execution and the company’s ability to reach substantial completion ahead of schedule at the Trumbull Energy Center.
Net income for the fourth quarter was $49.2 million, or $3.47 per diluted share, compared with $31.4 million, or $2.22 per diluted share, a year earlier. For the full year, net income was $137.8 million, or $9.74 per diluted share, compared with $85.5 million, or $6.15 per diluted share, in fiscal 2025.
EBITDA increased to $56.0 million in the fourth quarter (a 21.4% margin) from $39.3 million (16.9% margin) in the prior-year quarter. Full-year EBITDA was $162.8 million, up from $113.5 million the year before.
Argan’s fourth-quarter SG&A expense rose to $17.9 million from $14.9 million in the prior-year period. The company also reported $7.7 million of other income (net) in the quarter, which Baugher said “primarily reflected investment income earned during the period.”
Segment performance and backlog composition
Watson reviewed performance across Argan’s three reportable segments and emphasized demand tied to power grid constraints, electrification trends, and data center growth. He said the company is seeing heightened demand for its services and continues to take a “disciplined approach” to selecting projects.
- Power: Fourth-quarter revenue was $204 million (78% of consolidated revenue), compared with $197 million a year earlier. Pre-tax book income was $55 million. Fourth-quarter gross margin for the segment was 29%. Power segment backlog ended the year at $2.7 billion.
- Industrial: Fourth-quarter revenue rose to $53 million from $33 million in the prior-year quarter, representing 20% of consolidated revenue. Pre-tax book income was approximately $4 million. Segment gross margin in the quarter was 11%. Industrial backlog was $253 million at year-end.
- Telecommunications Infrastructure Services: Fourth-quarter revenue was $5 million, up from $3 million a year earlier, representing 2% of consolidated revenue. Segment gross margin was 14.2%. Backlog ended the year at $8.4 million.
Total consolidated backlog at January 31, 2026 was $2.9 billion, reflecting $2.5 billion of new contract value added during the year. Watson said those additions included three gas-fired power plants in the U.S. totaling over 3.4 GW. He characterized the backlog as “fully committed projects” expected to translate into revenue “over the next 3+ years.”
Management said the backlog mix was approximately 77% natural gas projects, 14% renewable, and 9% industrial. Watson said the company expects natural gas projects to remain a substantial portion of backlog in the near and midterm, while maintaining renewable capabilities.
Project updates and execution focus
Watson highlighted progress on several major projects, including reaching substantial completion in December 2025 on the 950 MW Trumbull Energy Center project. He said the project was completed ahead of schedule, calling it a significant accomplishment.
Argan also discussed ongoing work on a 1.2 GW combined cycle natural gas-fired plant for SLEC in Texas and early work on two additional gas-fired projects in Texas, including a 1.4 GW project with CPV and an 860 MW project. Management said work on a 700 MW combined cycle natural gas-fired power plant in the U.S. was progressing well. Overseas, Watson cited continued progress in Ireland on the Tarbert Next Generation Power Station (a 300 MW biofuel plant for SSE Thermal) and a 170 MW thermal facility.
In the Industrial segment, Watson pointed to projects including a $125 million data center project and work on water treatment and recycling-related facilities.
During the Q&A, Watson said fourth-quarter Power segment margins benefited from execution and from reaching substantial completion early at Trumbull, which reduced the time and costs associated with remaining on a job site. He also noted a “slight rotation” in mix toward a more gas-heavy backlog versus renewable projects.
Demand environment, capacity, and pricing discipline
Management repeatedly tied demand to power grid constraints, data center growth, electrification, aging infrastructure, and years of underinvestment. Watson said Argan expects to add “a handful of new projects over the next 12-20 months,” and reiterated confidence in the company’s ability to execute on 10-12 jobs simultaneously.
In response to questions about staffing and capacity, Watson said the company had nine projects underway at the time of the call (seven thermal and two renewable) and that Trumbull was nearing the “tail end,” indicating capacity to take on additional work while staying below the 10–12 project level.
On pricing, Watson said the company’s approach remains consistent, factoring in inflation, labor, supply chain considerations, and contract-specific risks. He emphasized collaboration with customers and said there is “no one-size-fits-all pricing approach,” noting that factors such as combined cycle versus simple cycle scope and risk allocation can vary by contract.
Asked about supply chain conditions and turbine availability, Watson said there are “improving conditions” as supply chains work to catch up with increased demand in the U.S. and globally, while also noting that Argan does not control project start timing due to factors including supply chain, turbines, and interconnection.
When asked about possible demand catalysts in PJM, Watson said the region’s emergency capacity procurement process was still “TBD,” but he said it could potentially have a similar effect to the Texas Energy Fund in pulling forward opportunities, and that the company is monitoring developments closely.
Cash, capital returns, and balance sheet
Argan ended fiscal 2026 with $895 million in cash equivalents and investments, net liquidity of $421 million, and no debt, according to management. Watson said net liquidity increased by $120 million from January 31, 2025, and that the balance sheet supports operations, bonding capacity, and the company’s position as an EPC partner.
Stockholders’ equity was $462 million at January 31, 2026. Watson also said the company returned $43 million of capital to shareholders during fiscal 2026 and remains committed to shareholder returns. The company increased its quarterly dividend in September 2025 by 33% to $0.50 per share, equating to a $2 annual run rate, marking its third consecutive annual dividend increase.
Watson noted that since initiating its share repurchase program in November 2021, Argan has returned approximately $114 million to shareholders, and said the board increased buyback authorization to $150 million in April 2025. He added that the company will continue to evaluate M&A opportunities that could complement its capabilities or expand its geographic footprint.
Looking ahead, management reiterated a focus on disciplined project selection, risk management, and execution—aimed at improving project management effectiveness and minimizing costly overruns—while pursuing organic growth and remaining open to acquisitions that fit within its capital allocation strategy.
About Argan (NYSE:AGX)
Argan, Inc (NYSE: AGX) is a holding company that provides professional technical and management services to the power generation and renewable energy industries. Through its wholly owned subsidiaries, the company delivers engineering, procurement and construction management (EPCM), commissioning and operations and maintenance (O&M) services for a broad range of energy facilities. Argan focuses on projects for utility, industrial and municipally owned clients, helping to bring efficient thermal and renewable energy plants into operation and maintain optimal performance over the asset life cycle.
The company’s principal subsidiaries include Gemma Power Systems, which specializes in turnkey construction of combined-cycle, simple-cycle, cogeneration and renewable energy plants; Atlantic Projects Company, which provides electrical balance-of-plant, control systems, instrumentation and commissioning services; and Infrastructure Solutions, which offers industrial maintenance, outage support and modification services.
