Argan, Inc. reported third‑quarter fiscal 2026 results on December 4, 2025, showing revenue of $251.2 million, a 2.3% year‑over‑year decline, and net income of $30.7 million, or $2.17 per diluted share. The company’s gross profit rose to $46.9 million, giving a gross margin of 18.7%, up 1.5 percentage points from the 17.2% margin recorded in the same quarter a year earlier.
Revenue fell as the company’s project mix shifted toward early‑stage construction of new gas‑fired plants, which generate lower billable revenue in the first quarter of a project. The timing of work performed and the mix of fixed‑price contracts contributed to the decline, while the prior‑year period included peak execution activity on several large projects. Segment‑level data show the Power Industry Services segment posted an 8% revenue drop, whereas Industrial Construction Services grew 19% and Telecommunications Infrastructure Services surged 76% year‑over‑year, offsetting the overall decline.
Earnings per share of $2.17 beat consensus estimates of $1.77 by $0.40, a 22.6% lift. The beat was driven by disciplined cost management and a favorable mix of high‑margin gas‑fired projects, which helped the company maintain a 18.7% gross margin despite lower top‑line growth. The company’s EBITDA of $37.5 million, up from $35.2 million a year earlier, further illustrates the impact of cost controls and operational leverage.
The company’s backlog reached a record $3.0 billion, an increase of $1.6 billion from the $1.4 billion reported at the start of the fiscal year. Two new gas‑fired projects in Texas—a 1.4 GW CPV Basin Ranch Energy Center and an 860 MW facility—added to the under‑contract capacity, bringing the total to roughly 6 GW of power‑generation assets. CEO David Watson said the backlog reflects “significant urgency” for new natural‑gas plants as older facilities retire and electrification drives demand for reliable energy.
Management guided for continued revenue growth in the remaining fiscal year, citing the strong backlog and the company’s disciplined approach to project selection. Watson emphasized that the backlog “will translate into revenue as projects progress through construction and into operation.” The company also reiterated its focus on maintaining profitability through cost discipline while expanding its gas‑fired portfolio.
Investors reacted with a mixed after‑hours response: the EPS beat and margin expansion were offset by the revenue miss and year‑over‑year decline, leading to a cautious market stance. Analysts noted that the company’s strong profitability and backlog position provide a solid foundation, but the revenue shortfall raised concerns about near‑term growth momentum.
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