Aug 4, 2026 earnings call — Record orders and backlog, capacity expansion
Powell booked a record $934 million of new orders in the quarter, lifting backlog to nearly $2.4 billion.
Revenue $0.3B (est $0.3B) · EPS $1.42 (est $1.47)
Key quotes
"Overall, Powell's awarded a record $934 million of new orders in the third quarter which is nearly 3x higher than the prior year and nearly double the order total from last quarter."
"And in April, we entered into a lease agreement for a facility near our Houston facilities that is providing another 50,000 square feet of manufacturing capacity."
"Revenue grew 9% compared to the prior year and our continued focus on productivity delivered a gross margin of 30.6%."
Analyst Q&A 6
Margins, pricing, capacity, and labor availability
Q (John Franzreb · Sidoti & Company): He asked why gross margins remain elevated and whether Powell can be more aggressive on pricing given demand. He also asked how the company thinks about new greenfield vs leased facilities and what labor availability looks like for capacity expansion.
A: Management said there is some opportunity for price, but delivery speed drives value and the industrial market is more price sensitive than commercial. They plan to use a leased facility near term (adding cranes and some capital) and time an owned facility later as pipeline and M&A needs grow. They have R&D, operating leverage, and pricing stability helping margins, but see moderate commodity inflation and noted project closeouts added roughly 100 basis points year-to-date.
"And combined, we were just over 30% GP for the quarter on a year-to-date basis just shy of that 29.6%." — Michael Metcalf (CFO)
Revenue shortfall and demand by verticals
Q (Tomohiko Sano · JPMorgan): He asked what drove the modest revenue shortfall versus Street expectations — segment mix, Canadian softness, petrochemical timing, or backlog conversion. He also asked for color on demand trends by the three verticals going forward.
A: Mike said the business is project-based and revenue timing is lumpy; there was a 9% V versus prior year and no specific cadence issue to call out. Brett said all three verticals are very active: commercial and data center have plenty of activity, LNG remains robust (offshore yard coming online soon), and U.S. utility is strong while Canada is a bit softer.
"All 3 verticals heading in today, very active." — Brett Cope (CEO·CHAIR)
Margins peak, capacity, and backlog conversion
Q (Manish Somaiya · Cantor): First, he asked whether margins have peaked. Then he asked how to think about industry capacity coming online and how Powell is different. Finally, he asked how the backlog will burn over the next 12–18 months and requested the next 12 months backlog number.
A: Brett said he would not say margins have peaked and that continued opportunities in commercial, data center, automation, and service strategies are accretive to margins, though results can be chunky quarter-to-quarter. On capacity, management is focused on a long-term 10–20 year strategy, allocating most investment toward industrial and utility and viewing some commercial moves as opportunistic. Mike said of the other $2.4 billion of backlog, just under $1.3 billion (roughly 54%) will convert over the next 12 months, and average book-and-bill is about $75 million a quarter.
"So of the other $2.4 billion of backlog, roughly $1.3 billion -- just under $1.3 billion will be convertible over the next 12 months so roughly 54%." — Michael Metcalf (CFO)
Data center project timeline and Remsdaq
Q (Alexander Rygiel · Texas Capital): He asked how revenue on the $400 million data center project will be recognized over next quarters and what future phases could look like. He also asked whether similar large projects are in the pipeline and for an update on the Remsdaq acquisition.
A: Brett said the $400 million job's burn rate is similar to other large jobs, roughly a 2 to 2.5-year burn, and the project was split across at least five North American facilities; it is behind-the-meter and has multiple future phases that could be copies if successful. He said there are more $100–$200 million commercial mega projects, but few projects as large as $400 million other than future phases of this job. On Remsdaq, Powell has been integrating their products into U.S. and Canadian commercial and utility markets since the end of last calendar year / start of fiscal '26 and expects the next-generation controller to launch in the next couple of quarters.
"It is a job that we broke up into multiple factories." — Brett Cope (CEO·CHAIR)
Domestic supply, defense, and R&D needs
Q (Alfred Moore · ROTH MKM): He asked whether domestic opportunities (defense, public power) are increasing given supply disruptions from China and how Powell sees that opportunity. He also asked for an update on new products and how R&D ties to capacity expansion.
A: Brett said Powell has little tie to the Asian supply side and is well positioned on supply chain and manufacturing; they are pursuing defense opportunities, the funnel is growing, and they expect to cross the hump in the next couple of quarters. He said R&D activity has risen to build samples and get third-party testing/certification for new electrical kit, which has required diverting some R&D resources short-term; they will only invest in a new owned facility once those products and certifications are ready for market.
"I can't report our results yet, but I do anticipate we'll get over the hump on that here in the next couple of quarters, and we'll have a really solid story to add into the color on future results." — Brett Cope (CEO·CHAIR)
Data center efficiency, DC, and SG&A
Q (Jon Braatz · Kansas City Capital): He asked how Powell's products could help data centers improve efficiency (e.g., 800-volt designs) and whether that could increase Powell content. He also asked if expansion plans will require higher SG&A spending.
A: Brett said Powell's market on utility connection (around 38 kV) is very strong and that behind-the-meter, self-generation projects increase Powell content across switchgear, controls, and services; Powell is not currently in the inside of data centers but is watching 800-volt and DC trends and sees a midterm opportunity on the DC side. Mike said there will be some pressure on SG&A as new facilities are stood up during a transitional period, and they are working to mitigate impacts but expect some transitional spend.
"That actually does increase the content for Powell from a switchgear, switches, control and services, total package." — Brett Cope (CEO·CHAIR)