Argan 2026 Q1 Earnings Strong Performance with Net Income Surging 186.1%
Daily EarningsWednesday, Jun 4, 2025 9:12 pm ET

Argan (AGX) reported its fiscal 2026 Q1 earnings on June 4, 2025. The company's results exceeded expectations, showcasing a significant rise in net income and enhanced profitability. With a record backlog, Argan anticipates surpassing $2 billion later this year. The firm's strategic positioning within the power industry services segment is driving robust revenue growth. CEO David Watson emphasized ongoing investments in workforce and project execution to meet the rising demand for energy resources. Argan maintains a disciplined approach to capital allocation and is well-prepared for sustained growth.
Revenue
Total revenue for Argan increased by 22.8%, reaching $193.66 million in Q1 2026 compared to $157.68 million in Q1 2025. The Power Industry Services segment contributed significantly, with revenues amounting to $160 million, representing an impressive 45% year-over-year growth and accounting for 83% of the consolidated revenue. The Industrial Construction Services segment experienced a decline, with revenues at $29 million, down from $44 million, making up 15% of the total revenue. Telecommunications Infrastructure Services contributed the remaining 2%.
Earnings/Net Income
Argan's EPS saw a notable increase of 179.7%, rising to $1.65 in Q1 2026 from $0.59 in Q1 2025, highlighting substantial earnings growth. The company's net income reached $22.55 million in Q1 2026, marking a 186.1% increase from $7.88 million in Q1 2025. This achievement set a new record for fiscal Q1 net income, the highest in 19 years. The EPS performance was commendable, reflecting strong profitability.
Post-Earnings Price Action Review
The strategy of buying AGX shares following a revenue miss and maintaining them for 30 days has proven effective, yielding a remarkable 414.95% return with a compound annual growth rate (CAGR) of 39.04%. Despite these impressive returns, the strategy carries a high maximum drawdown of -43.74%, indicating considerable risk. The Sharpe ratio stands at 0.98, suggesting moderate risk-adjusted returns. Investors should consider the potential volatility and risk associated with this approach, balancing the enticing returns against the strategy's inherent risks.
CEO Commentary
David Hibbert Watson, CEO, highlighted that Argan delivered a strong start to fiscal 2026, achieving consolidated revenue growth of 23% to $193.7 million, driven by the momentum in the Power Industry Services segment. He emphasized robust profitability, with net income reaching approximately $22.6 million, and noted a record backlog of $1.9 billion, underlining the need for new energy resources amid rising power demand. Watson expressed confidence in the company’s strategic positioning within the market, stating, "We are excited about demand we’re seeing for our services," and affirmed a disciplined approach to capital allocation, ensuring ongoing investments in workforce and project execution.
Guidance
Argan expects to significantly exceed a backlog of $2 billion later this year, driven by a robust project pipeline with several new power industrial jobs anticipated in the next six months. Watson indicated that revenues are expected to increase meaningfully over the next several quarters in the Industrial Construction Services segment, reflecting strong interest and confidence in the market. He mentioned that combined-cycle projects typically take 3 to 4 years to complete, suggesting ongoing growth potential throughout fiscal 2026 and beyond.
Additional News
Within the past three weeks, Argan announced a notable increase to its share repurchase program, raising the authorization to $150 million. This move reflects Argan's commitment to returning capital to its shareholders. Additionally, the company declared a regular quarterly cash dividend of $0.375 per common share, maintaining a strong dividend payout. In leadership changes, Argan appointed Sean Terrell as the CEO of The Roberts Company, succeeding Bobby Feister Jr., who stepped down as part of a planned transition. These strategic actions highlight Argan's focus on strengthening shareholder value and leadership within its subsidiary operations.
Revenue
Total revenue for Argan increased by 22.8%, reaching $193.66 million in Q1 2026 compared to $157.68 million in Q1 2025. The Power Industry Services segment contributed significantly, with revenues amounting to $160 million, representing an impressive 45% year-over-year growth and accounting for 83% of the consolidated revenue. The Industrial Construction Services segment experienced a decline, with revenues at $29 million, down from $44 million, making up 15% of the total revenue. Telecommunications Infrastructure Services contributed the remaining 2%.
Earnings/Net Income
Argan's EPS saw a notable increase of 179.7%, rising to $1.65 in Q1 2026 from $0.59 in Q1 2025, highlighting substantial earnings growth. The company's net income reached $22.55 million in Q1 2026, marking a 186.1% increase from $7.88 million in Q1 2025. This achievement set a new record for fiscal Q1 net income, the highest in 19 years. The EPS performance was commendable, reflecting strong profitability.
Post-Earnings Price Action Review
The strategy of buying AGX shares following a revenue miss and maintaining them for 30 days has proven effective, yielding a remarkable 414.95% return with a compound annual growth rate (CAGR) of 39.04%. Despite these impressive returns, the strategy carries a high maximum drawdown of -43.74%, indicating considerable risk. The Sharpe ratio stands at 0.98, suggesting moderate risk-adjusted returns. Investors should consider the potential volatility and risk associated with this approach, balancing the enticing returns against the strategy's inherent risks.
CEO Commentary
David Hibbert Watson, CEO, highlighted that Argan delivered a strong start to fiscal 2026, achieving consolidated revenue growth of 23% to $193.7 million, driven by the momentum in the Power Industry Services segment. He emphasized robust profitability, with net income reaching approximately $22.6 million, and noted a record backlog of $1.9 billion, underlining the need for new energy resources amid rising power demand. Watson expressed confidence in the company’s strategic positioning within the market, stating, "We are excited about demand we’re seeing for our services," and affirmed a disciplined approach to capital allocation, ensuring ongoing investments in workforce and project execution.
Guidance
Argan expects to significantly exceed a backlog of $2 billion later this year, driven by a robust project pipeline with several new power industrial jobs anticipated in the next six months. Watson indicated that revenues are expected to increase meaningfully over the next several quarters in the Industrial Construction Services segment, reflecting strong interest and confidence in the market. He mentioned that combined-cycle projects typically take 3 to 4 years to complete, suggesting ongoing growth potential throughout fiscal 2026 and beyond.
Additional News
Within the past three weeks, Argan announced a notable increase to its share repurchase program, raising the authorization to $150 million. This move reflects Argan's commitment to returning capital to its shareholders. Additionally, the company declared a regular quarterly cash dividend of $0.375 per common share, maintaining a strong dividend payout. In leadership changes, Argan appointed Sean Terrell as the CEO of The Roberts Company, succeeding Bobby Feister Jr., who stepped down as part of a planned transition. These strategic actions highlight Argan's focus on strengthening shareholder value and leadership within its subsidiary operations.

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