Argan Inc ((AGX)) has held its Q2 earnings call. Read on for the main highlights of the call.
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In the latest earnings call, Argan Inc. showcased a robust financial performance, marked by significant revenue growth, a record backlog, and improved gross margins. Despite facing challenges in the Industrial Construction Services segment, the overall sentiment was positive, underscored by a strong cash position and a commitment to returning capital to shareholders.
Strong Financial Performance
Argan Inc. reported consolidated revenue of $238 million, marking a 5% growth compared to the previous year’s second quarter and a sequential increase of 23%. The company also achieved a record net income of $35.3 million, translating to $2.50 per diluted share, highlighting its strong financial footing.
Record Backlog
The company’s backlog reached an unprecedented $2 billion, driven by significant projects such as the Platton Power Station in Ireland and a recycling water treatment plant in Alabama. This record backlog underscores Argan’s strong project pipeline and future revenue potential.
Increased Gross Margins
Argan reported improved gross margins of 18.6%, a notable increase from 13.7% in 2025. This improvement reflects the company’s operational efficiency and ability to manage costs effectively.
Power Industry Services Growth
Revenue from power industry services grew by 13% to $197 million, accounting for 83% of the second quarter revenues. This growth highlights the increasing demand for power facilities, driven by the electrification of the economy and aging infrastructure.
Strong Cash Position
The company maintained a robust balance sheet with $572 million in cash and investments, net liquidity of $344 million, and no debt. This strong cash position provides Argan with the flexibility to invest in growth opportunities and return capital to shareholders.
Commitment to Shareholders
Argan demonstrated its commitment to shareholders by paying a quarterly dividend of 37.5¢, marking a 25% increase, and authorizing a share buyback program up to $150 million. These actions reflect the company’s confidence in its financial health and future prospects.
Industrial Construction Services Revenue Decline
The Industrial Construction Services segment experienced a revenue decline to $36 million from $50 million in 2025, attributed to the timing of certain projects and contract awards. This segment’s performance was a notable challenge in an otherwise strong quarter.
Increased SG&A Expenses
SG&A expenses rose to $14.2 million from $12.4 million in the previous year. While this increase reflects higher operational costs, it is aligned with the company’s growth and expansion efforts.
Forward-Looking Guidance
Argan Inc. remains optimistic about its future, driven by a robust pipeline of projects and increasing demand for power facilities. The company highlighted its strong financial performance for the second quarter of fiscal 2026, with expectations of continued growth supported by its record backlog and strategic investments.
In conclusion, Argan Inc.’s latest earnings call painted a positive picture of the company’s financial health and future prospects. With significant revenue growth, a record backlog, and a strong cash position, the company is well-positioned to capitalize on emerging opportunities in the power industry. Despite challenges in the Industrial Construction Services segment, Argan’s commitment to returning capital to shareholders and its strategic focus on growth remain key takeaways from the call.