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• Revenue: Fiscal 2025 revenue increased 52% to $874 million.

• Gross Margin: Full year gross margin was 16.1%.

• Diluted EPS: Record full year diluted EPS of $6.15.

• EBITDA: Fiscal 2025 EBITDA was $113.5 million.

• Project Backlog: Increased 80% to $1.4 billion as of January 31, 2025.

• Cash and Investments: $525 million with no debt as of January 31, 2025.

• Fourth Quarter Revenue: Increased 41% to $232.5 million.

• Fourth Quarter Gross Margin: Approximately 20.5%.

• Fourth Quarter Net Income: $31.4 million or $2.22 per diluted share.

• Fourth Quarter EBITDA: $39.3 million.

• Annual Dividend Rate: Increased to $1.50 per common share.

• Warning! GuruFocus has detected 9 Warning Signs with AIR.

Release Date: March 27, 2025

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• Argan Inc (NYSE:AGX) reported a 52% increase in consolidated revenue for fiscal 2025, reaching $874 million.

• The company achieved a record full-year diluted EPS of $6.15 and EBITDA of $113.5 million.

• Argan Inc (NYSE:AGX) ended the fiscal year with a project backlog of approximately $1.4 billion, an 80% increase from the previous year.

• The Power Industry Services segment saw a 65% increase in revenue for the current quarter, contributing significantly to the company's growth.

• Argan Inc (NYSE:AGX) maintains a strong balance sheet with $525 million in cash and investments, net liquidity of $301 million, and no debt.

Negative Points

• Industrial Construction Services segment experienced a decrease in revenue to $33 million compared to $41 million in the previous year's fourth quarter.

• Selling, general, and administrative expenses increased to $14.9 million for the fourth quarter, although they decreased as a percentage of revenue.

• The Telecommunications Infrastructure Services segment remains the smallest, contributing only 1% of fourth-quarter revenues.

• The company faces challenges related to supply chain issues, particularly in obtaining turbines and other long-lead items.

• There is ongoing uncertainty regarding the interconnect process and regulatory environment, which could impact project timelines.

Q & A Highlights

Q: Could you break down the 20.5% gross margin further? Are there specific factors contributing to this figure? A: David Watson, CEO: The higher margins reflect strong execution across all businesses and a shift in project mix, including more US-based and power revenues. We closed out several jobs positively in our Power and Industrial segments. The prior year's fourth quarter had margin degradation from the Kilroot project. While we may not often see margins at this level, we expect our consolidated gross margin to benefit from the increase in gas projects, which are higher risk/higher reward jobs.