second quarter of fiscal year 2027
Filed Sep 2, 2026Record Revenue of $384 Million; Record Net Income of $53.3 Million
Second-quarter revenue increased 61.5% year over year, gross margin expanded to 19.3%, net income reached $53.3 million, and adjusted EBITDA reached $70.0 million. The balance sheet held $1.03 billion of cash, cash equivalents and investments with no debt, although project backlog declined to approximately $2.5 billion from approximately $2.9 billion at January 31, 2026.
Key metrics
as reported| Metric | Value | q/q | y/y |
|---|---|---|---|
| Revenue, three months ended July 31, 2026GAAP | $ 383,976 | – | 61.5% |
| Cost of revenues, three months ended July 31, 2026GAAP | 309,758 | – | – |
| Gross profit, three months ended July 31, 2026GAAP | 74,218 | – | $ 29,951 |
| Gross margin, three months ended July 31, 2026GAAP | 19.3 % | – | 0.7 % |
| Selling, general and administrative expenses, three months ended July 31, 2026GAAP | 17,413 | – | – |
| Selling, general and administrative expenses as a percentage of corresponding consolidated revenues, three months ended July 31, 2026GAAP | 4.5% | – | – |
| Income from operations, three months ended July 31, 2026GAAP | 56,805 | – | – |
| Other income, net, three months ended July 31, 2026GAAP | 10,083 | – | – |
| Income before income taxes, three months ended July 31, 2026GAAP | 66,888 | – | – |
| Provision for income taxes, three months ended July 31, 2026GAAP | 13,586 | – | – |
| Net income, three months ended July 31, 2026GAAP | $ 53,302 | – | $ 18,027 |
| Basic earnings per share, three months ended July 31, 2026GAAP | $ 3.80 | – | – |
| Diluted earnings per share, three months ended July 31, 2026GAAP | 3.76 | – | 1.26 |
| EBITDA, three months ended July 31, 2026non-GAAP | 67,608 | – | – |
| Adjusted EBITDA, three months ended July 31, 2026non-GAAP | $ 70,030 | – | $ 31,540 |
| Adjusted EBITDA margin, three months ended July 31, 2026non-GAAP | 18.2 % | – | 2.0 % |
| Revenue, six months ended July 31, 2026GAAP | $ 674,930 | – | 56.5% |
| Cost of revenues, six months ended July 31, 2026GAAP | 539,598 | – | – |
| Gross profit, six months ended July 31, 2026GAAP | 135,332 | – | 54,202 |
| Gross margin, six months ended July 31, 2026GAAP | 20.1 % | – | 1.3 % |
| Selling, general and administrative expenses, six months ended July 31, 2026GAAP | 33,132 | – | – |
| Income from operations, six months ended July 31, 2026GAAP | 102,200 | – | – |
| Other income, net, six months ended July 31, 2026GAAP | 18,457 | – | – |
| Income before income taxes, six months ended July 31, 2026GAAP | 120,657 | – | – |
| Provision for income taxes, six months ended July 31, 2026GAAP | 21,292 | – | – |
| Net income, six months ended July 31, 2026GAAP | $ 99,365 | – | $ 41,540 |
| Basic earnings per share, six months ended July 31, 2026GAAP | $ 7.10 | – | – |
| Diluted earnings per share, six months ended July 31, 2026GAAP | 7.01 | – | 2.92 |
| EBITDA, six months ended July 31, 2026non-GAAP | 122,011 | – | – |
| Adjusted EBITDA, six months ended July 31, 2026non-GAAP | $ 126,469 | – | $ 56,492 |
| Adjusted EBITDA margin, six months ended July 31, 2026non-GAAP | 18.7 % | – | 2.5 % |
| Cash dividends per share, three months ended July 31, 2026GAAP | $ 0.500 | – | $ 0.125 |
| Cash dividends per share, six months ended July 31, 2026GAAP | 1.000 | – | 0.250 |
Segments
| Segment | Revenue | q/q | y/y |
|---|---|---|---|
| PowerContinued ramp-up of construction activities on several contracts that have not yet reached peak construction; management cited a gross margin of 22%. | $301 million | – | 53% |
Capital returns
- Cash dividends per share were $ 0.500 for the three months ended July 31, 2026, compared to $ 0.375 for the three months ended July 31, 2025.
- Cash dividends per share were 1.000 for the six months ended July 31, 2026, compared to 0.750 for the six months ended July 31, 2025.
- Treasury stock, at cost was (144,914) at July 31, 2026 and (114,361) at January 31, 2026.
What drove it
- Higher revenues across all of the Company’s business segments.
- Power-segment revenue growth reflected continued ramp-up of construction activities on several contracts that have not yet reached peak construction.
- Gross-profit percentage improved primarily due to the changing mix of projects and contract types and strong execution in the Power segment.
- Other income, net of $10.1 million for the three months ended July 31, 2026 primarily reflected investment income earned during the period.
- Construction of the new fabrication facility was progressing as planned, with expected completion next quarter; the plant will support heightened demand for the fabrication of vessels for data centers.
- The acquisition of ValCor Communications expanded Teledata's geographic presence and client base to defense, aerospace, and technology clients in the region.
Concerns
- The increase in gross-profit percentage was partially offset by decreased performance on certain projects in the Industrial and Teledata segments.
- Consolidated project backlog declined from approximately $2.9 billion at January 31, 2026 to approximately $2.5 billion at July 31, 2026.
- Future financial performance is subject to successful addition of new contracts to project backlog, receipt of corresponding notices to proceed with contract activities, and the ability to successfully complete projects obtained.
What to watch
- Final completion was achieved following the close of the quarter on the remaining project of the Midwest Solar and Battery Projects.
- Expected completion next quarter of the new fabrication facility.
- Additions of new contracts to project backlog and receipt of corresponding notices to proceed with contract activities.
- Execution and performance on Industrial and Teledata projects.
- Integration of ValCor Communications into the Teledata segment.
Balance sheet and cash flow
- Cash and cash equivalents were $ 364,481 at July 31, 2026 and $ 339,481 at January 31, 2026.
- Investments were 663,965 at July 31, 2026 and 555,500 at January 31, 2026.
- Cash, cash equivalents and investments were $ 1,028,446 at July 31, 2026 and $ 894,981 at January 31, 2026.
- Net liquidity was 440,360 at July 31, 2026 and 421,000 at January 31, 2026.
- The Company had no debt.
- Accounts receivable, net were 180,356 at July 31, 2026 and 133,677 at January 31, 2026.
- Contract assets were 35,713 at July 31, 2026 and 43,397 at January 31, 2026.
- Other current assets were 73,955 at July 31, 2026 and 60,202 at January 31, 2026.
- Total current assets were 1,318,470 at July 31, 2026 and 1,132,257 at January 31, 2026.
- Property, plant and equipment, net were 22,797 at July 31, 2026 and 16,596 at January 31, 2026.
- Goodwill was 30,670 at July 31, 2026 and 28,033 at January 31, 2026.
- Intangible assets, net were 6,030 at July 31, 2026 and 1,450 at January 31, 2026.
- Right-of-use and other assets were 23,003 at July 31, 2026 and 8,018 at January 31, 2026.
- Total assets were $ 1,400,970 at July 31, 2026 and $ 1,186,354 at January 31, 2026.
- Accounts payable were $ 115,212 at July 31, 2026 and $ 107,540 at January 31, 2026.
- Accrued expenses were 135,878 at July 31, 2026 and 89,748 at January 31, 2026.
- Contract liabilities were 627,020 at July 31, 2026 and 513,969 at January 31, 2026.
- Total current liabilities were 878,110 at July 31, 2026 and 711,257 at January 31, 2026.
- Deferred taxes, net were 3,061 at July 31, 2026 and 6,555 at January 31, 2026.
- Noncurrent liabilities were 12,960 at July 31, 2026 and 6,280 at January 31, 2026.
- Total liabilities were 894,131 at July 31, 2026 and 724,092 at January 31, 2026.
- Total stockholders' equity was 506,839 at July 31, 2026 and 462,262 at January 31, 2026.
- Project backlog was approximately $2.5 billion at July 31, 2026, compared to approximately $2.9 billion at January 31, 2026.
Analysis
Argan reported a record second quarter of fiscal 2027. Consolidated revenue was $384.0 million, up $146.2 million, or 61.5%, from the comparable prior-year quarter. Gross profit was $74.2 million and gross margin was 19.3%, compared with $44.3 million and 18.6%, respectively, a year earlier. Net income reached $53.3 million, or $3.76 per diluted share, versus $35.3 million, or $2.50 per diluted share. Adjusted EBITDA increased to $70.0 million from $38.5 million, while adjusted EBITDA margin rose to 18.2% from 16.2%.
Demand and execution in Power were the principal operating drivers. Management said Power revenue grew 53% year over year to $301 million, supported by the continued ramp-up of construction activity on several contracts that have not yet reached peak construction. The company attributed gross-margin improvement to project and contract-type mix and strong Power execution. The improvement was partly offset by decreased performance on certain Industrial and Teledata projects. Selling, general and administrative expense increased to $17.4 million from $14.2 million, but represented 4.5% of revenue versus 6.0% in the prior-year quarter.
First-half results also strengthened. Revenue for the six months ended July 31, 2026 was $674.9 million compared with $431.4 million, gross margin was 20.1% compared with 18.8%, and net income was $99.4 million compared with $57.8 million. Other income, net was $10.1 million in the quarter and primarily reflected investment income. The company also reported completion of the remaining Midwest Solar and Battery Projects project following quarter-end, ongoing construction of a new fabrication facility expected to be completed next quarter, and the acquisition of ValCor Communications for the Teledata segment.
Liquidity remained substantial. Cash, cash equivalents and investments totaled $1.03 billion at July 31, 2026, compared with $895.0 million at January 31, 2026. Net liquidity was $440.4 million, compared with $421.0 million, and management stated that the company had no debt. The key offset is backlog, which was approximately $2.5 billion at July 31, 2026 versus approximately $2.9 billion at January 31, 2026. The release did not provide forward financial guidance, leaving backlog additions, notices to proceed, project execution, Industrial and Teledata performance, and fabrication-facility completion as central items to monitor.
Management, verbatim
We delivered a strong second quarter, highlighted by record revenue of $384 million, a gross margin of 19.3%, record net income of $53 million, and record adjusted EBITDA of $70 million.
David Watson, President and Chief Executive Officer of Argan
Our Power segment continued to execute extremely well during the second quarter, growing revenue 53% year over year to $301 million at a gross margin of 22%.
David Watson, President and Chief Executive Officer of Argan
We are energized by the opportunities we are seeing across all three of our business segments and believe that our diverse capabilities, proven track record of excellent execution, and strong balance sheet position us well to benefit from the current demand environment.
David Watson, President and Chief Executive Officer of Argan
Not in the filing
stated, not guessed- Forward financial guidance for revenue, gross margin, operating expenses, tax rate, EPS, EBITDA, capital expenditures, cash flow, or backlog was not provided.
- Previous-release outlook was not provided.
- Non-GAAP earnings per share was not reported.
- Operating cash flow was not reported.
- Free cash flow was not reported.
- Capital expenditures were not reported.
- Industrial segment revenue was not reported.
- Teledata segment revenue was not reported.
- Segment revenue, year-over-year growth, and quarter-over-quarter growth for segments other than Power were not reported.
- Quarter-over-quarter comparisons for income-statement metrics were not reported.
- A quantitative debt balance was not reported; the release stated that the Company had no debt.
AlphAI analysis generated from the company’s SEC earnings filing (Form 8-K Item 2.02, or Form 6-K for a foreign private issuer). Every figure was cross-checked against the filing text; consensus estimates, price targets and share-price reactions are not shown because they are not in the filing. AI-generated research, not investment advice.