Argan Inc. reported record second-quarter revenue for fiscal year 2027, driven by surging demand for power infrastructure tied to the U.S. data center buildout and broader electrification trends.
Revenue for the quarter ended July 31, 2026, rose 62% to $384 million from $238 million in the year-ago period, the company said in its earnings release. Diluted earnings per share came in at $3.76, up from $2.50, while net income climbed to $53 million from $35 million. Adjusted EBITDA reached a record $70 million, or 18.2% of revenue, compared with $70 million at a 16.2% margin in the prior-year quarter.
Gross margin expanded to 19.3% from 18.6%, lifting gross profit to $74 million from $44 million. SG&A expenses improved to 4.5% of revenue from 6.0%. The balance sheet remained clean: Argan held $1.028 billion in cash, cash equivalents and investments, maintained net liquidity of $440.4 million, and carried zero debt.
The power segment was the dominant contributor, generating $301 million in revenue — 78% of total — and $66 million in pre-tax income. That segment operates under the Gemma and Atlantic Projects Company brands. The industrial division, branded TRC, contributed $76 million in revenue and $4 million in pre-tax income. The teledata unit, operating through SMC Infrastructure Solutions and bolstered by the recent acquisition of ValCor Communications, brought in $7 million with a modest $0.2 million pre-tax loss.
For the first half of the fiscal year, revenue rose to $675 million from $431 million, and net income reached $99 million from $58 million. Adjusted EBITDA totaled $126 million, or 18.7% of revenue.
Argan entered the quarter with a $2.9 billion project backlog, which stood at $2.5 billion as of July 31. Of that amount, $2.3 billion was in power projects, including major Texas facilities such as the CPV Basin Ranch Energy Center, a 1,350 MW combined-cycle plant, and the Sandow Lakes Power Station, rated at 1,200 MW. Additional natural gas and renewable projects range from 170 MW to 860 MW. The backlog also includes a $125 million contract to fabricate thermal expansion and energy storage tanks for data centers and a $100 million recycling and water treatment facility in Alabama.
The power backlog mix supports approximately 80% natural gas generation, 11% renewable energy and 8% industrial applications. Industrial projects accounted for $210 million and teledata projects for $9 million.
Several research organizations highlighted the structural demand tailwinds. S&P Global 451 Research projects U.S. data center power demand will nearly triple to 134.4 GW by 2030. ICF research forecasts peak electricity demand to rise 25% by 2030 and 78% by 2050. The U.S. Department of Energy estimates 104 GW of aging power plant retirements by 2030.
On capital returns, Argan paid a quarterly dividend of $0.50 per share, marking a 100% cumulative increase from the June 2023 payout. Since November 2021, the company has returned $123.8 million to shareholders through share repurchases. Shares jumped 7.82% in after-hours trading following the report, reaching $442.50, with after-hours levels climbing as high as $452.99 against a previous close of $410.40.
