Argan, Inc.

What they do

Argan operates through three wholly-owned subsidiaries in three reportable segments: Power, Industrial, and Teledata. Power provides full-scope EPC services for power generation projects in the U.S., Ireland, and the U.K. Industrial provides field services, maintenance turnarounds, and fabrication of piping and pressure vessels, mainly in the Southeast U.S. Teledata provides construction and maintenance for power distribution and data networks, primarily in the Mid-Atlantic.

Revenue drivers

• Power segment — EPC services for combined-cycle, simple-cycle, biofuel, biomass, solar, and wind projects with typical durations of one to four years. Revenue was $756.5M in fiscal 2026, or 80.1% of consolidated revenue.
• Industrial segment — On-site construction support, turnarounds, shutdowns, and fabrication and installation of metal components such as piping systems and pressure vessels for industrial customers in the Southeast U.S., including datacenter developers.
• Teledata segment — Project management, construction, installation, repair, and emergency response for power distribution and information, communications, and data networks, serving commercial, industrial, and state and federal government customers in the Mid-Atlantic.
• Project backlog conversion — Consolidated project backlog was $2.9B at January 31, 2026, substantially in the Power segment, and $2.518B at July 31, 2026, with revenue recognized as remaining work on awarded contracts is performed.

Recent performance

Second quarter fiscal 2027 revenue was a record $384.0M, up 61.5% from $237.7M a year earlier. Gross margin was 19.3% versus 18.6%, net income was a record $53.3M versus $35.3M, and diluted EPS was $3.76 versus $2.50. Power segment revenue rose 53% year over year to $301M at a 22% gross margin. First half revenue was $674.9M with net income of $99.4M, and cash, cash equivalents and investments were $1.03B at July 31, 2026.

Strategy

Management targets natural gas-fired power plants, renewable energy, energy storage, and industrial construction in the U.S., and natural gas and biomass plants in Ireland and the U.K. The company is building a new fabrication facility, expected to be complete next quarter, to support vessel fabrication demand for data centers. In the Teledata segment it closed the acquisition of ValCor Communications, a Connecticut-based installation and repair provider, adding defense, aerospace, and technology clients. Capital returned to shareholders includes $0.50 per share of dividends in the latest quarter, and treasury stock purchases of $144.9M at cost as of July 31, 2026.

Risks

• Customer and project concentration — The company cites concentration of consolidated revenues in a limited number of customers and projects and dependence on awards of utility-scale natural gas-fired and renewable EPC projects and corresponding full notices-to-proceed.
• Backlog conversion and cancellations — Backlog fell to $2.518B at July 31, 2026 from $2.929B at January 31, 2026, and the company warns that delays, suspensions, or cancellations can reduce backlog or the rate at which it converts to revenue.
• Supply chain and cost inflation — The company flags inflation and higher costs or reduced availability of labor, materials, components, and equipment, including extended lead times for gas turbines and other long-lead equipment.
• Regulatory and permitting delays — Required approvals including permits, interconnection agreements, and natural gas pipeline approvals can be delayed or fail, which could push project schedules.

Outlook

Management said it sees opportunities across all three segments and believes its capabilities, execution record, and balance sheet position it to benefit from current demand. It cited a Power segment pipeline of large natural gas-fired projects with expected completion dates in calendar 2028 and 2029, and expected completion of the new Industrial fabrication facility next quarter. Teledata is expanding through the ValCor acquisition into defense, aerospace, and technology clients. The company said its forward expectations for revenue and operating results exclude potential impacts of any future acquisitions.