Executive Summary
Argan Inc delivered a highly solid QQ4 2025, capping a year of rapid growth and strong execution across its three reportable segments. Q4 revenue rose 41% year over year to $232.5 million, with gross margin expanding to 20.5% as the company benefited from a favorable project mix and closeouts of select jobs. For the full year, revenue increased 52% to $874.2 million and EBITDA reached $113.5 million, supported by materially improved gross margins (16.1% vs 14.1% in FY2024) and a return to profitability across segments. The company exited the year with a dominant balance sheet: cash and investments of $525 million, net liquidity of $301 million, and no debt, enabling flexibility for growth investments and shareholder returns (dividend raised to $1.50 annual run rate; Cumulative buybacks of ~$102.5 million since 2021).
The project backlog stood at approximately $1.4 billion at January 31, 2025, up 80% YoY, reflecting a robust pipeline and execution capacity to land large-scale gas-fired and renewable projects. Notably, Argan added ~1 gigawatt of power projects to backlog in Q4, including a 700 MW US combined-cycle natural gas plant and a 300 MW biofuel plant in Ireland. The mix shift toward fixed-price contracts and increased U.S.-based work supports higher-margin opportunities going forward. Management emphasizes a multi-year runway driven by an energy grid under strain and the need for reliable power, with natural gas and renewables forming the core growth engine. Investor relevance is heightened by the upcoming Investor Day on April 8, 2025 and the company’s disciplined capital allocation, including ongoing share repurchases and dividend increases.
Key Performance Indicators
QoQ: 11.99% | YoY:161.02%
QoQ: 11.59% | YoY:156.67%
Key Insights
Revenue: Q4 2025 $232.47 million, up 41.3% YoY from $164.55 million in Q4 2024; full-year 2025 revenue $874.2 million, up 52% YoY from $573.3 million in 2024.
Gross Profit: Q4 2025 gross profit $47.61 million (gross margin 20.5%); FY2025 gross margin 16.1% vs 14.1% in FY2024 with segment margins of 16.7% (Power), 13.3% (Industrial Construction), and 23.8% (Telecom) compared with 14.1%, 12.9%, and 26.5% respectively in 2024.
Operating Income / EBITDA: Q4 2025 operating income $32.67 million; EBIT...
Financial Highlights
Revenue: Q4 2025 $232.47 million, up 41.3% YoY from $164.55 million in Q4 2024; full-year 2025 revenue $874.2 million, up 52% YoY from $573.3 million in 2024.
Gross Profit: Q4 2025 gross profit $47.61 million (gross margin 20.5%); FY2025 gross margin 16.1% vs 14.1% in FY2024 with segment margins of 16.7% (Power), 13.3% (Industrial Construction), and 23.8% (Telecom) compared with 14.1%, 12.9%, and 26.5% respectively in 2024.
Operating Income / EBITDA: Q4 2025 operating income $32.67 million; EBITDA $39.3 million (YoY EBITDA +123%); FY2025 EBITDA $113.5 million vs $51.3 million in 2024.
Net Income / EPS: Q4 2025 net income $31.4 million, EPS (diluted) $2.22; FY2025 net income $85.5 million, EPS (diluted) $6.15.
Backlog and Backlog Quality: Backlog of $1.4 billion as of 1/31/2025, up 80% YoY from $757 million; added ~1 GW of new projects in Q4 (700 MW US gas, 300 MW Ireland biofuel); backlog is skewed toward natural gas (≈54%) and renewables (≈42%). Notable projects include Trumbull (950 MW gas), a 405 MW solar+battery project, SLEC 1.2 GW Texas plant not yet in backlog, and Tarbert 300 MW biofuel (Ireland).
Liquidity and Capital Allocation: $525 million in cash and investments; net liquidity $301 million; no debt; annual dividend run-rate of $1.50 per share; ~102.5 million in aggregate shareholder value returned since Nov 2021 through buybacks (~2.7 million shares, ~17% of shares outstanding).
Income Statement
| Metric |
Value |
YoY Change |
QoQ Change |
| Revenue |
232.47M |
41.28% |
-9.55% |
| Gross Profit |
47.61M |
105.73% |
7.41% |
| Operating Income |
32.67M |
178.63% |
7.70% |
| Net Income |
31.37M |
161.02% |
11.99% |
| EPS |
2.31 |
156.67% |
11.59% |
Key Financial Ratios
operatingProfitMargin
14.1%
operatingCashFlowPerShare
$3.28
freeCashFlowPerShare
$3.18
Management Commentary
Key management takeaways from the earnings call:
- Strategy and market conditions: Argan highlighted a robust project pipeline and backlog, emphasizing its energy-agnostic capabilities to build both traditional gas-fired and renewable energy facilities. David Watson noted a consolidated backlog of about $1.4 billion and the addition of 1 GW of new projects in Q4, signaling a multi-year growth runway driven by electric-grid modernization needs.
- Execution and margins: Josh Baugher attributed the quarterly gross margin expansion to a shifting project mix toward more U.S.-based and power-related revenues and to successful job closeouts, while KB Kilroot’s prior-year margin weakness was a drag on the comparative period. The company expects further gross-margin benefits from a higher fixed-price mix as gas projects, though higher risk, provide higher reward.
- Customer base and pipeline: Management emphasized a broad customer base, historically IPPs, with ongoing conversations across potential new customers including data-center operators. The pipeline is currently US-centric, with Texas as a key growth region, and includes renewable projects (solar+battery) alongside traditional gas facilities.
- Capital allocation and shareholder returns: The company reiterated its commitment to capital returns, including a dividend increase to 1.50 per share annually and ongoing buybacks. Argan underscored its strong liquidity position and debt-free balance sheet as a strategic advantage for pursuing backlog growth.
- Investor day and outlook: An investor day was scheduled for April 8, 2025 at the NYSE, reinforcing management's intent to engage investors on its growth strategy and project opportunities. Management remained positive about a multi-year growth path given the current energy transition and grid resilience needs.
Our fourth quarter performance continued the momentum we built throughout fiscal 2025, delivering a strong close to a year characterized by exceptional execution across all of our businesses. The focus and dedication of our team resulted in consolidated revenue growth in fiscal 2025 of 52% to $874 million, full year gross margin of 16.1%, record full year diluted EPS of $6.15 and EBITDA of $113.5 million.
— David Watson
We exited the fiscal year with a project backlog of approximately $1.4 billion at January 31, 2025, an 80% increase compared to backlog of $757 million at January 31, 2024. In fact, during the fourth quarter, we added 1 gigawatt of power projects to our backlog, including a 700 megawatt combined cycle natural gas powered project in the U.S. and a 300 megawatt biofuel plant in Ireland.
— David Watson
Forward Guidance
Market context and management commentary imply a constructive outlook, anchored by:
- Backlog and pipeline: A $1.4B backlog and ~1 GW of new power projects added in Q4 suggest continued revenue visibility over 3–4 year project cycles, with additional opportunities such as the SLEC 1.2 GW Texas plant moving toward construction.
- Growth drivers: Ongoing grid modernization, surging demand for gas-fired capacity to complement renewables, and the expansion of data center, industrial manufacturing, and EV charging demand support a favorable long-term backlog composition toward natural gas and renewables.
- Margin trajectory: Expect higher fixed-price content to sustain margin improvements, though management cautions that quarterly margin levels can vary due to project mix and the timing of job closeouts; Kilroot-related margins from FY2024 should not be repeated, as the company operates in a more favorable environment.
- Balance sheet flexibility: The debt-free capital structure provides strategic flexibility to fund backlog growth and fund share buybacks or dividends; investor focus should monitor potential backlog shifts toward gas and the pace of renewable project awards.
- Risks to monitor: Execution risk on large gas projects (e.g., 700 MW US plant) and supply chain constraints for long-lead equipment; regulatory shifts could impact permitting speed; and macro energy demand cycles could influence project award rates and backlogs.
Overall assessment: Given the strong backlog, deleveraged balance sheet, and a diversified mix across natural gas and renewables, Argan appears well-positioned to translate the multi-year market tailwinds into sustained revenue growth and margin expansion, with upside potential from additional contract wins and potential strategic acquisitions.