Argan 2026 Q3 Earnings Record Net Income and $3B Backlog Despite Revenue Dip

Argan (AGX) reported mixed third-quarter results, with revenue declining 2.3% year-over-year but EPS and net income rising. The company raised its quarterly dividend to $0.50/share and outlined a $3 billion backlog driven by new gas-fired projects. Guidance emphasized maintaining 10–12 active projects and improving EBITDA margins to 16% for Q3 2026.

Revenue

Argan’s total revenue fell to $251.15 million in Q3 2026, a 2.3% decline from $257.01 million in the prior year. The Power Services segment led with $195.51 million, while Industrial Services contributed $49.36 million. Telecom Services generated $6.29 million, and other segments reported $0. The year-over-year drop was attributed to project timing, though sequential revenue rose 6% from Q2.

Earnings/Net Income

The company’s EPS surged 7.2% to $2.22, and net income reached $30.74 million, a 9.7% increase from $28.01 million in 2025 Q3. This marked a record high for Q3 net income in over 20 years, driven by improved gross margins and disciplined cost management.

Post-Earnings Price Action Review

The strategy of buying AGX shares after its revenue report and holding for 30 days delivered a total return of 687.99% over three years, outperforming the benchmark by 616.66%. With a CAGR of 99.91%, maximum drawdown of 0.00%, Sharpe ratio of 1.97, and 50.66% volatility, the approach demonstrated robust risk-adjusted returns.

CEO Commentary

CEO David Watson highlighted a “solid” quarter with a record backlog of $3 billion, fueled by projects like the 1.4 GW Basin Ranch and 816 MW Texas facilities. He emphasized growth in power infrastructure demand due to electrification, AI/data centers, and retiring fossil plants. Despite a QoQ revenue dip, the company maintained a 6% sequential increase and raised dividends for the third consecutive year.

Guidance

Argan expects to sustain 10–12 active projects, with sequential revenue growth and EBITDA margins improving to 16%. The company reiterated $0.50/share dividends and a $150 million share repurchase authorization. Management emphasized disciplined capital allocation, M&A opportunities, and operational excellence to secure market leadership.

Additional News

Argan raised its quarterly dividend to $0.50/share, marking the third consecutive increase, and authorized a $150 million share repurchase program. The company’s cash reserves grew to $726.8 million as of October 31, 2025, with no debt. Additionally, Argan announced two new gas-fired projects in Texas—the 1.4 GW CPV Basin Ranch Energy Center and an 860 MW facility—contributing to a $3.0 billion backlog.

The stock price edged up 2.19% on the latest trading day but dropped 6.37% for the week, while climbing 14.81% month-to-date. Analysts remain bullish, with a median 12-month price target of $370.00, 5.4% above its December 3 closing price.