Argan, Inc. Q3 FY2026 earnings call

• Delivered a solid third quarter with a record backlog of approximately $3 billion, including new projects like the 1.4 gigawatt CPB Basin Ranch project and an 816 megawatt project in Texas. • Revenue was $251 million in Q3 2026, down slightly from $257 million in 2025 but up 6% sequentially. • Achieved enhanced gross margin of 18.7% compared to 17.2% in 2025, with strong profitability. • Backlog includes over six gigawatts of new thermal and renewable power plants, with 79% natural gas projects and 16% renewable. • Key projects: Trumbull Energy Center nearing completion, 1.2 gigawatt ultra-efficient natural gas plant in Texas, and progress on renewable projects in Ireland.

Power Industry Services: Revenue decreased 8% to $196 million in Q3 2026, contributing 78% of third quarter revenues. Industrial Construction Services: Revenue increased 19% to $49 million, contributing 20% of third quarter revenues. Telecommunications Infrastructure Services: Revenue grew 76% to $6.3 million, contributing 2% of third quarter revenues.

• Expect to continue adding a handful of projects through 2027, aiming for 10 to 12 jobs in the foreseeable future. • Optimistic about project cadence despite quarter-over-quarter variability due to project timing. • Committed to returning capital to shareholders, including raising the quarterly dividend to 50¢ per share, third consecutive increase.

• Project start dates determined by developers can lead to staggered timings affecting revenue and backlog. • Labor and procurement challenges as the company scales. • Competitive environment changes, though currently few competitors for large complex combined cycle projects.

Q: Thoughts on margins moving forward and pricing on large natural gas projects?

A: Pricing model considers market factors, margins have been good, but early to predict 2027 margins.

Q: Pipeline cadence and competitive environment?

A: Expect to add handful of jobs, few competitors for large complex projects.

Q: Labor challenges and team capacity?

A: At largest headcount, aiming for 10-12 teams, creative deployment of talent.

Q: Project size and opportunities from private players?

A: Open to various sizes, flexible with customers, including private players.

Q: Geographical opportunities?

A: Active in Texas, PJM region including West Virginia, Ohio, Pennsylvania.