Sep 2, 2026 earnings call — Record quarter and ValCor acquisition
Argan reported record consolidated revenue of $384 million in the quarter.
Revenue $0.4B (est $0.3B) · EPS $3.76 (est $2.64)
Key quotes
"Demand for our capabilities across all 3 operating segments is high, particularly in our Power segment, where our current backlog includes 4 gas-fired power plants in the United States totaling over 4.1 gigawatts."
"Our net liquidity was $440 million and we had no debt."
Analyst Q&A 4
near-term projects and new facility
Q (Robert Brown · Lake Street): He asked for a description of the current project activity and the number of projects in the pipeline. He also asked how much revenue the new fabrication facility can support and which markets it will serve.
A: Management said they remain conservative but expect to add a handful of new projects over the next 7 to 15 months, mostly complex natural gas-fired facilities, and timing of the next job is uncertain. They noted backlog remains over $2.5 billion despite revenue generation this year. The new facility should complete in Q3, is geared to support the $125 million data center project, and they expect it to add around $10-plus million a quarter to Industrial revenue later this year and into next year.
"Right now, it's primarily geared towards supporting that $125 million data center project that we're fabricating thermal expansion tanks and energy storage tanks." — David Watson (CEO)
hiring, margins, and Texas impact
Q (Christopher Moore · CJS): He asked how Gemma's employee count compares to a year ago and where it will be, why Industrial gross margin was low this quarter, and whether Texas political moves are affecting demand.
A: They said Gemma is adding employees every month and headcount is at record levels, meaningfully above a year ago, and they guide capacity to 10 to 12 jobs at any one time. Industrial margin weakness came from a couple of projects unrelated to data centers where estimates to complete were worse than original estimates; they expect to finish those projects over the next 6 months so margins may run below norms for a quarter or two. On Texas and political news, they see continued urgency from developers and no change in developer behavior, and they are working with developers on early activities with potential new project starts in the next 7 to 15 months.
"Gemma is every month breaking new records of the number of employees that they have." — David Watson (CEO)
revenue outlook and pricing
Q (Mark W. Strouse · JPMorgan): He asked if revenue will grow in the second half versus Q2. He also asked about pricing trends in the Gemma business and the ability to get higher prices.
A: They said it is their expectation that fiscal year '27 will be meaningfully higher than fiscal year '26, but Q3 quarter-over-quarter growth may be limited because some revenue was pulled forward in Q2 and industrial revenues are expected to decrease for the rest of the year. Revenues vary with project start and completion timing and construction phases. On pricing, it depends on contract type and location, they typically do fixed price contracts, and power margins have been north of 22% recently so they expect meaningful pricing on future contracts.
"It's our -- clearly, it's our expectation that we will be meaningfully higher than fiscal year '26." — David Watson (CEO)
power margins and ValCor deal
Q (Goldman Sachs): She asked what drove the strong power margins and whether that is sustainable. She also asked about the ValCor acquisition and the chance of more bolt-on deals.
A: They said margins vary quarter-to-quarter based on project mix and where projects are in the construction cycle, noting power margins were 22.4% in Q2 and 23.6% in Q1 and that completing projects early can be beneficial. On ValCor, they said they have not done much M&A in the last 10 years, they expect synergies to increase Teledata revenue run rate and potentially double revenues from fiscal year '26 while driving EBITDA growth over the next couple of quarters and beyond, but they remain selective and see M&A as one of their capital allocation pillars.
"Our margins will vary from quarter-to-quarter depending on several factors, including project mix, where we are in projects, where the projects sit in the construction cycle." — David Watson (CEO)