Argan Inc ((AGX)) has held its Q3 earnings call. Read on for the main highlights of the call.
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The recent earnings call for Argan Inc. conveyed a generally positive sentiment, highlighting the company’s strong financial performance, a significant increase in backlog, and a notable growth in dividends. Despite these positive aspects, there were some concerns about revenue declines in certain segments, attributed mainly to timing issues.
Record Backlog
Argan Inc. has achieved a record backlog of approximately $3 billion, which underscores the robust demand for its services. This milestone reflects the company’s strong project pipeline and its ability to secure new contracts, positioning it well for future growth.
Strong Financial Performance
The company reported improved gross margins of 18.7%, up from 17.2% in the previous year. Net income stood at $31 million, or $2.17 per diluted share, with an EBITDA of $40 million, translating to an EBITDA margin of 16%. These figures highlight Argan’s solid financial footing and operational efficiency.
Solid Revenue Growth
Argan experienced a sequential revenue growth of 6%, with revenues increasing from $238 million in 2026 to $251 million. This growth indicates the company’s resilience and ability to expand its revenue base despite challenges in certain segments.
Increased Dividend
In a move that will please shareholders, Argan raised its quarterly dividend to 50¢ per share, representing a 33% increase. This marks the third consecutive year of dividend growth, demonstrating the company’s commitment to returning value to its investors.
Growth in Telecommunications Infrastructure Services
The telecommunications infrastructure services segment saw impressive growth, expanding by 76% to $6.3 million in 2026 from $3.6 million in the previous year. This growth highlights the increasing demand for telecommunications infrastructure and Argan’s ability to capitalize on this trend.
Decline in Power Industry Services Revenue
Revenues from the power industry services segment decreased by 8% to $196 million in the third quarter, compared to $212 million in 2025. This decline was primarily due to timing issues, affecting the overall revenue figures for the quarter.
Overall Revenue Decline
The third quarter saw a 2% decrease in overall revenues, totaling $251.2 million. This decline was mainly attributed to the timing of certain projects in the power industry services segment, which impacted the company’s revenue performance.
Forward-Looking Guidance
Argan Inc. provided forward-looking guidance that highlights its strong project pipeline, including over six gigawatts of new thermal and renewable power plants. Despite a slight decrease in quarterly revenues due to the completion of major projects, the company achieved a gross margin of 18.7% and maintained a strong balance sheet with $727 million in cash and investments. The company remains optimistic about its future prospects, supported by a record backlog and no debt.
In summary, Argan Inc.’s earnings call painted a largely positive picture, with strong financial performance and strategic growth initiatives. While there were some concerns about revenue declines in specific segments, the company’s record backlog and increased dividends are promising indicators of its future potential.