Argan, Inc. Posts Record $3 Billion Backlog as Profit Margins and Liquidity Hit Multi-Year Highs

Project Backlog Nearly Doubles, Driving Optimism for Sustained Growth

Argan, Inc. (NYSE: AGX) delivered its third-quarter fiscal 2026 results with a show of strength: a record $3.0 billion project backlog, almost double its position from the start of the year. This dramatic jump is fueled by two major gas-fired projects in Texas, now putting Argan under contract for approximately 6 GW of power generation construction—clear evidence of accelerating demand for energy infrastructure.

Management emphasized that these new awards reflect urgent needs across the industry as utilities scramble to replace aging facilities and address growing electrification. This backlog provides strong visibility into future revenue streams and hints at a multi-year runway for growth, particularly as power plant construction ramps up to meet modern grid demands.

Profit Margins Show Strong Improvement Amid Revenue Stability

While revenues for the quarter slightly decreased year-over-year—$251.15 million vs. $257.01 million in Q3 FY25—the company made significant strides in profitability. Gross margin rose to 18.7% from 17.2% in the prior year’s quarter, thanks in large part to higher efficiency in the Power Industry and Industrial Construction Services segments.

Net income increased to $30.74 million ($2.17 per diluted share), up from $28.01 million ($2.00 per share), while EBITDA margin advanced from 14.6% to 16.0%. These improvements indicate robust operational execution and effective project management, even as project mix and timing saw some fluctuations in headline revenue.

Balance Sheet Strengthened with Rising Cash and No Debt

One standout feature of Argan's Q3 results is the company’s robust liquidity profile. Cash, cash equivalents, and investments soared to $726.82 million from $525.14 million at the start of the year—a $201.68 million jump—while net liquidity reached $377.31 million. Importantly, Argan reported zero debt, giving it ample flexibility to pursue new projects or weather unforeseen headwinds. This strong cash position also supported a higher quarterly dividend payout of $0.50 per share, up from $0.38 per share a year earlier.

Profitability Trends Highlight Operational Efficiency

For the first nine months of fiscal 2026, the momentum continues: revenues rose to $682.56 million, up 6.4% year-over-year, while gross margin improved sharply to 18.8%. Net income reached $88.56 million (versus $54.09 million a year ago), and EBITDA soared to $106.82 million, signaling sustained execution and robust project economics.

Despite the slight quarter-over-quarter revenue decline, management pointed to a "timing of work performed and project mix," noting that current contracts are progressing through early construction phases, with peak execution activity from prior periods winding down. Importantly, these metrics suggest Argan is successfully managing transitions between projects without significant disruptions to margins or earnings.

Key Takeaways: Record Backlog, Enhanced Profitability, and Ample Flexibility

Argan’s Q3 fiscal 2026 results show a company in a position of rare strength among construction and infrastructure peers. With a record backlog that more than doubles last year’s tally and a fortress balance sheet, Argan is well-placed to capitalize on ongoing energy transition trends and grid modernization needs. Improved profit margins and cash generation point to effective management and sustainable long-term value creation for shareholders.

Looking ahead, investors may want to watch how Argan continues to convert backlog into earnings and whether its margin expansion can be sustained as large projects move into peak execution phases. For now, Argan's combination of operational momentum and financial strength stands out as a compelling story in energy infrastructure.

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