Key Takeaways:
Argan Inc. reported record Q1 revenue of $291 million, up 50.2%, as power and data center demand accelerated.
"The results reflect strong execution across our project portfolio and the ahead-of-schedule completion of the Midwest Solar and Battery Project," the company said in its earnings release. Gross profit rose 65.8% to $61.1 million, with gross margin expanding 200 basis points to 21%. Adjusted EBITDA climbed 79.2% to $56.4 million, pushing the adjusted EBITDA margin to 19.4%.
Earnings per share more than doubled to $3.24, while the company's backlog swelled to $2.77 billion, underpinned by large combined-cycle natural gas projects, industrial fabrication contracts and data center-related work. Argan ended the quarter with $973.6 million in cash, cash equivalents and investments, net liquidity of $421.4 million and no debt. The board also authorized a $200 million share repurchase program.
The results come as rising electricity demand from AI-driven data centers, manufacturing reshoring and aging grid infrastructure creates a sustained tailwind for EPC contractors with specialized power expertise. Argan is investing in a new fabrication facility in North Carolina to capture additional capacity. Shares have gained 84% year to date and 173% over the past 12 months, though the stock has pulled back 17% from recent highs as valuation concerns emerged. At $599.74, Argan trades at 52.1 times earnings, a premium to the US construction industry average of 40.1 times, according to Simply Wall St data.
The record backlog and expanding margins signal management expects power infrastructure demand to remain elevated. Investors will watch the next quarterly report for updates on the North Carolina facility timeline and backlog conversion rates.
This article is for informational purposes only and does not constitute investment advice.
