Ton Photograph/iStock via Getty Images Full disclosure, when I covered Argan as a 'Strong Buy' six months ago I was not expecting the upward move to be so ferocious, and that too within such a short span of time. SA The core of my thesis boiled down to the following - It could provide uncorrelated returns and also outperform the index which is rare to be found. Argan operates in the energy infrastructure sector, which benefits from rising global energy demands driven by population growth, urbanizatio ...

Core Viewpoint - Argan, Inc. (AGX) has recently gained significant attention and praise from analysts and investors following a strong earnings report, indicating robust growth potential in the energy construction sector [9][10][32]. Financial Performance - AGX reported a normalized EPS of $1.31, beating expectations by $0.34, and a revenue of $227.02 million, surpassing estimates by $35.97 million [13][12]. - Revenue has reached a five-year high, supported by a strong project backlog [12][15]. - The company’s gross profit for the quarter ended July 31, 2024, was $31.1 million, with a gross margin of 13.7%, down from 16.8% the previous year [19]. - Net income increased to $18.2 million, up from $12.8 million year-over-year [19]. Backlog and Project Pipeline - AGX's project backlog has grown to 1,035,000 projects, reflecting an increase of 278,000 projects year-over-year [15][17]. - The backlog includes $570 million in renewable projects, indicating a strong pipeline and confidence in future growth [17]. Dividend and Shareholder Returns - The company has raised its dividend to $0.30 per share, demonstrating confidence in its ability to sustain and grow shareholder returns [20]. Future Growth Catalysts - The demand for energy infrastructure is expected to rise due to the adoption of electric vehicles and the expansion of data centers, with power demand projected to increase by up to 160% in the next six years [23]. - Bipartisan support for infrastructure spending, particularly in energy, is anticipated to benefit AGX, regardless of political outcomes [25][26]. Valuation Metrics - AGX's current P/E ratios are higher than sector medians, indicating that while the company has strong growth prospects, its valuation may be considered rich compared to peers [31]. - The company has a dividend yield of 1.68%, which is above the sector average [31].

Core Insights - Argan's stock surged 34.4% in early trading, reaching a 52-week high, with a market capitalization of approximately $1.2 billion [1] - The company reported significant revenue and earnings growth for Q2, driven by strong demand for renewable energy and successful project deliveries [2] Financial Performance - Revenue increased by 61% to $227 million [2] - Gross margin decreased to 13.7% from 16.8% year-over-year [2] - Net income rose by 43% to $18 million [2] Growth Drivers - Sustained demand for renewable energy is a key factor in Argan's growth, particularly through its power construction business, Gemma Power Systems [2] - The company has a backlog of $1 billion, including $70 million in renewable projects, indicating future growth potential [3] - Management anticipates that data centers, electric vehicles, and onshoring of manufacturing will drive demand for power in the coming years [3] Cash Position and Dividends - Argan ended Q2 with approximately $485 million in cash, up from $412 million as of January 31, 2024 [3] - The company pays a dividend, which may keep its stock attractive to investors [3]

Argan, Inc. (NYSE:AGX) Q2 2025 Earnings Conference Call September 5, 2024 5:00 PM ET Company Participants Jennifer Belodeau - IMS Investor Relations David Watson - President and Chief Executive Officer Hank Deily - Senior Vice President, Chief Financial Officer, Treasurer and Corporate Secretary Conference Call Participants Chris Moore - CJS Securities Rob Brown - Lake Street Capital Markets Operator Good evening, ladies and gentlemen, and welcome to the Argan, Inc. Earnings Release Conference Call for the ...

Second Quarter Fiscal PRESENTATION 2025 Results Safe Harbor Statement All statements in this presentation that are not historical are forward-looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934. Such forward-looking statements may be identified by words such as "believe," "intend," "expect," "may," "could," "would," "will," "should," "plan," "project," "contemplate," "anticipate," or similar statements. Because these statements reflect the current views of Argan, Inc. ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q (Mark One) QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934 For the Quarterly Period Ended July 31, 2024 or ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT For the Transition Period from to Commission File Number 001-31756 (Exact Name of Registrant as Specified in Its Charter) (State or Other Jurisdiction of Incorporation) (I.R.S. Employer Identification ...

[Executive Summary](index=1&type=section&id=Executive%20Summary) [Announcement and Overview](index=1&type=section&id=Announcement%20and%20Overview) Argan, Inc. announced its financial results for the second quarter of fiscal year 2025, ended July 31, 2024, reporting significant increases in consolidated revenues, net income, and EBITDA, reflecting strong business momentum - Argan, Inc. reported second quarter fiscal year 2025 results on September 5, 2024[1](index=1&type=chunk) [Consolidated Financial Highlights](index=1&type=section&id=Consolidated%20Financial%20Highlights) The company experienced substantial growth in Q2 FY2025, with revenues increasing by 60.6% and net income by 42.5% year-over-year. For the six months ended July 31, 2024, revenues grew by 57.0% and net income by 75.3%. Project backlog also saw a significant increase Consolidated Financial Highlights (Q2 FY2025 vs. Q2 FY2024) | Metric | Q2 FY2025 ($ in thousands) | Q2 FY2024 ($ in thousands) | Change ($) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | Revenues | $227,015 | $141,349 | $85,666 | 60.6% | | Gross profit | $31,105 | $23,742 | $7,363 | 31.0% | | Gross margin % | 13.7 % | 16.8 % | (3.1)% | -18.5% | | Net income | $18,198 | $12,767 | $5,431 | 42.5% | | Diluted income per share | $1.31 | $0.94 | $0.37 | 39.4% | | EBITDA | $24,842 | $17,945 | $6,897 | 38.4% | | Cash dividends per share | $0.30 | $0.25 | $0.05 | 20.0% | Consolidated Financial Highlights (Six Months FY2025 vs. Six Months FY2024) | Metric | Six Months FY2025 ($ in thousands) | Six Months FY2024 ($ in thousands) | Change ($) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | Revenues | $384,697 | $245,024 | $139,673 | 57.0% | | Gross profit | $49,049 | $37,966 | $11,083 | 29.2% | | Gross margin % | 12.8 % | 15.5 % | (2.7)% | -17.4% | | Net income | $26,080 | $14,876 | $11,204 | 75.3% | | Diluted per share | $1.90 | $1.10 | $0.80 | 72.7% | | EBITDA | $36,732 | $21,594 | $15,138 | 70.1% | | Cash dividends per share | $0.60 | $0.50 | $0.10 | 20.0% | Key Balance Sheet and Operational Metrics (As of July 31, 2024 vs. January 31, 2024) | Metric | July 31, 2024 ($ in thousands) | January 31, 2024 ($ in thousands) | Change ($) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | Cash, cash equivalents and investments | $484,682 | $412,405 | $72,277 | 17.5% | | Net liquidity | $259,827 | $244,919 | $14,908 | 6.1% | | Project backlog | $1,035,000 | $757,000 | $278,000 | 36.7% | [CEO Commentary and Business Outlook](index=1&type=section&id=CEO%20Commentary%20and%20Business%20Outlook) The CEO highlighted continued business momentum in fiscal 2025, with Q2 revenues up 61% and the highest quarterly EBITDA since 2017. Strong performance was noted from Gemma Power Systems in renewables and The Roberts Company with record quarterly revenues. The company's backlog reached $1.0 billion, driven by increasing electrical power demands from data centers, manufacturing onshoring, and EV expansion, positioning Argan well for future growth in energy facility construction - **Consolidated revenues** increased by **61%** to **$227 million** in Q2, with **net income** of **$18.2 million** and **EBITDA** of approximately **$25 million**, marking the **highest quarterly EBITDA** since 2017[3](index=3&type=chunk) - Gemma Power Systems showed strong performance and sustained growth in the renewable market, while The Roberts Company achieved **record quarterly revenues** of almost **$50 million**[3](index=3&type=chunk) - **Project backlog** closed at **$1.0 billion**, an increase of approximately **$210 million** from the previous quarter, including **$570 million** in renewable projects[4](index=4&type=chunk) - Key drivers for increasing electrical power demands and new business opportunities include high energy demand data centers, onshoring of manufacturing operations, and expansion of electric vehicle use[4](index=4&type=chunk) [Second Quarter Fiscal 2025 Performance](index=3&type=section&id=Second%20Quarter%20Fiscal%202025%20Performance) [Revenues](index=3&type=section&id=Revenues) Consolidated revenues for Q2 FY2025 significantly increased by 60.6% year-over-year, driven by progress on projects like Trumbull Energy Center, Midwest Solar and Battery Projects, and Louisiana LNG Facility, partially offset by the completion or near-completion of other projects - **Consolidated revenues** for Q2 FY2025 were **$227.0 million**, an increase of **$85.7 million** (**60.6%**) from **$141.3 million** in the comparable prior year quarter[5](index=5&type=chunk) - Increased revenues were attributed to projects such as the Trumbull Energy Center, Midwest Solar and Battery Projects, 405 MW Midwest Solar Project, and the Louisiana LNG Facility[5](index=5&type=chunk) - Revenue growth was partially offset by decreased construction revenues from projects nearing completion, including Guernsey Power Station, Shannonbridge Power Project, ESB FlexGen Peaker Plants, and Kilroot power facility[5](index=5&type=chunk) [Gross Profit and Margin](index=3&type=section&id=Gross%20Profit%20and%20Margin) Consolidated gross profit for Q2 FY2025 increased to $31.1 million, but the gross margin percentage declined to 13.7% from 16.8% in the prior year, reflecting a changing mix of projects and contract types - **Consolidated gross profit** for Q2 FY2025 was approximately **$31.1 million**, or **13.7%** of consolidated revenues[6](index=6&type=chunk) - This compares to a **gross profit** of **$23.7 million**, or **16.8%** of consolidated revenues, in Q2 FY2024[6](index=6&type=chunk) - The decline in **gross profit** percentage reflects the changing mix of projects and contract types[6](index=6&type=chunk) [Operating Expenses (SG&A)](index=3&type=section&id=Operating%20Expenses%20(SG%26A)) Selling, general and administrative (SG&A) expenses increased in absolute terms but decreased as a percentage of revenues in Q2 FY2025, indicating improved operational leverage - **SG&A expenses** increased by **$1.9 million** to **$12.4 million** in Q2 FY2025 from **$10.5 million** in Q2 FY2024[7](index=7&type=chunk) - As a percentage of revenues, **SG&A expenses** declined to **5.5%** in Q2 FY2025 from **7.4%** in Q2 FY2024[7](index=7&type=chunk) [Other Income and Income Tax Expense](index=3&type=section&id=Other%20Income%20and%20Income%20Tax%20Expense) Other income, net, for Q2 FY2025 was $5.6 million, primarily from invested funds. Income tax expense increased due to higher pre-tax book income - **Other income, net**, for Q2 FY2025 was **$5.6 million**, including approximately **$4.8 million** from invested funds[8](index=8&type=chunk) - **Income tax expense** for Q2 FY2025 was **$6.1 million** on consolidated pre-tax book income of **$24.3 million**, compared to **$4.6 million** on **$17.4 million** in Q2 FY2024[8](index=8&type=chunk) [Net Income and EBITDA](index=3&type=section&id=Net%20Income%20and%20EBITDA) Argan achieved significant increases in net income and EBITDA for Q2 FY2025, reflecting enhanced profitability - **Net income** for Q2 FY2025 was **$18.2 million**, or **$1.31 per diluted share**, up from **$12.8 million**, or **$0.94 per diluted share**, in Q2 FY2024[9](index=9&type=chunk) - **EBITDA** for Q2 FY2025 increased to **$24.8 million**, compared to **$17.9 million** in Q2 FY2024[9](index=9&type=chunk) [Financial Position and Liquidity](index=3&type=section&id=Financial%20Position%20and%20Liquidity) Argan maintained a strong financial position with substantial cash, cash equivalents, and investments, along with healthy net liquidity and no debt as of July 31, 2024 - **Total cash, cash equivalents, and investments** were **$484.7 million** as of July 31, 2024, up from **$412.4 million** as of January 31, 2024[10](index=10&type=chunk) - **Net liquidity** stood at **$259.8 million** at July 31, 2024, compared to **$244.9 million** at January 31, 2024[10](index=10&type=chunk) - The Company reported no debt[10](index=10&type=chunk) [First Six Months Fiscal 2025 Performance](index=4&type=section&id=First%20Six%20Months%20Fiscal%202025%20Performance) [Revenues](index=4&type=section&id=Revenues) Consolidated revenues for the first six months of FY2025 increased significantly by 57.0% compared to the prior year period - **Consolidated revenues** for the six months ended July 31, 2024, were **$384.7 million**, an increase of **$139.7 million** (**57.0%**) from **$245.0 million** in the comparable prior year period[11](index=11&type=chunk) [Gross Profit and Margin](index=4&type=section&id=Gross%20Profit%20and%20Margin) For the first six months of FY2025, consolidated gross profit increased, but the gross margin percentage declined due to a changing project mix and losses related to the Kilroot project - **Consolidated gross profit** for the six months ended July 31, 2024, increased to approximately **$49.0 million**, with a **consolidated gross margin** of **12.8%**[12](index=12&type=chunk) - This compares to a **gross profit** of **$38.0 million**, or **15.5% gross margin**, for the six months ended July 31, 2023[12](index=12&type=chunk) - The **gross margin** was adversely impacted by losses related to the Kilroot project and the changing mix of projects and contract types[12](index=12&type=chunk) [Operating Expenses (SG&A)](index=4&type=section&id=Operating%20Expenses%20(SG%26A)) SG&A expenses increased in absolute terms for the first six months of FY2025 but decreased as a percentage of revenues, demonstrating improved efficiency - **SG&A expenses** increased by **$2.8 million** to **$23.9 million** for the six months ended July 31, 2024, from **$21.1 million** in the comparable prior year period[13](index=13&type=chunk) - As a percentage of revenues, these expenses declined to **6.2%** from **8.6%** between the periods[13](index=13&type=chunk) [Other Income and Income Tax Expense](index=4&type=section&id=Other%20Income%20and%20Income%20Tax%20Expense) Other income, net, for the first six months of FY2025 was $10.4 million, primarily from invested funds. Income tax expense increased due to higher pre-tax book income - **Other income, net**, for the six months ended July 31, 2024, was **$10.4 million**, primarily from invested funds[14](index=14&type=chunk) - **Income tax expense** for the six months ended July 31, 2024, was **$9.5 million** on consolidated pre-tax book income of **$35.6 million**, compared to **$5.5 million** on **$20.4 million** in the prior year[14](index=14&type=chunk) [Net Income and EBITDA](index=4&type=section&id=Net%20Income%20and%20EBITDA) Argan reported substantial growth in net income and EBITDA for the first six months of FY2025, reflecting strong overall performance - **Net income** for the six months ended July 31, 2024, was **$26.1 million**, or **$1.90 per diluted share**, up from **$14.9 million**, or **$1.10 per diluted share**, in the comparable prior year period[15](index=15&type=chunk) - **EBITDA** for the six months ended July 31, 2024, was **$36.7 million**, compared to **$21.6 million** in the same period last year[15](index=15&type=chunk) [Company Information and Disclosures](index=4&type=section&id=Company%20Information%20and%20Disclosures) [About Argan (Business Description)](index=4&type=section&id=About%20Argan%20(Business%20Description)) Argan's core business involves providing construction and related services to the power industry, specializing in natural gas-fired and renewable energy facilities through its subsidiaries Gemma Power Systems and Atlantic Projects Company. It also includes The Roberts Company for industrial construction and SMC Infrastructure Solutions for telecommunications - Argan's primary business is providing a full range of construction and related services to the power industry[18](index=18&type=chunk) - Service offerings include engineering, procurement, and construction of natural gas-fired power plants and renewable energy facilities, along with commissioning, maintenance, project development, and technical consulting services[18](index=18&type=chunk) - Key operating subsidiaries are Gemma Power Systems, Atlantic Projects Company, The Roberts Company (industrial construction, fabrication, plant services), and SMC Infrastructure Solutions (telecommunications infrastructure services)[18](index=18&type=chunk)[19](index=19&type=chunk) [Non-GAAP Financial Measures](index=5&type=section&id=Non-GAAP%20Financial%20Measures) The company uses EBITDA as a non-GAAP financial measure to supplement understanding of its ongoing operating results, excluding the effects of capital structure, depreciation, amortization, and tax rates, and provides a reconciliation to comparable GAAP measures - **EBITDA** is presented as a non-GAAP financial measure to supplement the understanding of Argan's ongoing operating results[20](index=20&type=chunk) - This measure excludes the effects of capital structure, depreciation, amortization, and tax rates[20](index=20&type=chunk) - Reconciliation of non-GAAP financial measures to comparable GAAP measures is provided in the financial tables[20](index=20&type=chunk) [Safe Harbor Statement](index=5&type=section&id=Safe%20Harbor%20Statement) The report contains forward-looking statements subject to risks and uncertainties, including the successful addition of new contracts, project completion, and mitigation of losses, as detailed in the company's SEC filings - The press release contains forward-looking statements subject to federal securities laws[21](index=21&type=chunk) - Future financial performance is subject to risks and uncertainties, including successful contract additions, receipt of notices to proceed, ability to complete projects, and mitigating losses from the Kilroot contract[21](index=21&type=chunk) - Actual results may differ materially from projections due to risk factors described in the Company's SEC filings (Form 10-K, 10-Q)[21](index=21&type=chunk) [Conference Call and Investor Contacts](index=4&type=section&id=Conference%20Call%20and%20Investor%20Contacts) Argan hosted an investor conference call and webcast on September 5, 2024, with replay options available, and provided contact information for company and investor relations inquiries - Argan hosted a conference call and webcast for investors on September 5, 2024, at 5:00 p.m. ET[16](index=16&type=chunk) - A replay of the teleconference is available until September 19, 2024, and a webcast replay until September 5, 2025[17](index=17&type=chunk) - Contact information for David Watson (Company Contact) and IMS Investor Relations (John Nesbett/Jennifer Belodeau) is provided[22](index=22&type=chunk) [Condensed Consolidated Financial Statements](index=6&type=section&id=Condensed%20Consolidated%20Financial%20Statements) [Statements of Earnings](index=6&type=section&id=Statements%20of%20Earnings) The Condensed Consolidated Statements of Earnings provide detailed financial performance for the three and six months ended July 31, 2024, and 2023, showing revenues, cost of revenues, gross profit, operating expenses, other income, income tax expense, and net income Condensed Consolidated Statements of Earnings (Three Months Ended July 31) | Metric (In thousands, except per share data) | 2024 | 2023 | | :--- | :--- | :--- | | REVENUES | $227,015 | $141,349 | | Cost of revenues | 195,910 | 117,607 | | GROSS PROFIT | 31,105 | 23,742 | | Selling, general and administrative expenses | 12,428 | 10,501 | | INCOME FROM OPERATIONS | 18,677 | 13,241 | | Other income, net | 5,604 | 4,118 | | INCOME BEFORE INCOME TAXES | 24,281 | 17,359 | | Income tax expense | 6,083 | 4,592 | | NET INCOME | 18,198 | 12,767 | | Basic Net Income Per Share | $1.36 | $0.95 | | Diluted Net Income Per Share | $1.31 | $0.94 | | Cash Dividends Per Share | $0.30 | $0.25 | Condensed Consolidated Statements of Earnings (Six Months Ended July 31) | Metric (In thousands, except per share data) | 2024 | 2023 | | :--- | :--- | :--- | | REVENUES | $384,697 | $245,024 | | Cost of revenues | 335,648 | 207,058 | | GROSS PROFIT | 49,049 | 37,966 | | Selling, general and administrative expenses | 23,853 | 21,092 | | INCOME FROM OPERATIONS | 25,196 | 16,874 | | Other income, net | 10,398 | 3,489 | | INCOME BEFORE INCOME TAXES | 35,594 | 20,363 | | Income tax expense | 9,514 | 5,487 | | NET INCOME | 26,080 | 14,876 | | Basic Net Income Per Share | $1.96 | $1.11 | | Diluted Net Income Per Share | $1.90 | $1.10 | | Cash Dividends Per Share | $0.60 | $0.50 | [Balance Sheets](index=7&type=section&id=Balance%20Sheets) The Condensed Consolidated Balance Sheets present the company's financial position as of July 31, 2024, and January 31, 2024, detailing assets, liabilities, and stockholders' equity Condensed Consolidated Balance Sheets (As of July 31, 2024 vs. January 31, 2024) | Metric (Dollars in thousands) | July 31, 2024 | January 31, 2024 | | :--- | :--- | :--- | | **ASSETS** | | | | Cash and cash equivalents | $232,685 | $197,032 | | Investments | 251,997 | 215,373 | | Accounts receivable, net | 95,315 | 47,326 | | Contract assets | 46,086 | 48,189 | | Other current assets | 48,871 | 39,259 | | TOTAL CURRENT ASSETS | 674,954 | 547,179 | | Property, plant and equipment, net | 12,098 | 11,021 | | Goodwill | 28,033 | 28,033 | | Intangible assets, net | 2,022 | 2,217 | | Deferred taxes, net | 1,637 | 2,259 | | Right-of-use and other assets | 7,830 | 7,520 | | **TOTAL ASSETS** | **$726,574** | **$598,229** | | **LIABILITIES AND STOCKHOLDERS' EQUITY** | | | | Accounts payable | $99,693 | $39,485 | | Accrued expenses | 61,698 | 81,721 | | Contract liabilities | 253,736 | 181,054 | | TOTAL CURRENT LIABILITIES | 415,127 | 302,260 | | Noncurrent liabilities | 3,379 | 5,030 | | **TOTAL LIABILITIES** | **418,506** | **307,290** | | Common stock | 2,374 | 2,374 | | Additional paid-in capital | 165,902 | 164,183 | | Retained earnings | 243,519 | 225,507 | | Less treasury stock, at cost | (99,644) | (97,528) | | Accumulated other comprehensive loss | (4,083) | (3,597) | | **TOTAL STOCKHOLDERS' EQUITY** | **308,068** | **290,939** | | **TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY** | **$726,574** | **$598,229** | [Reconciliation to EBITDA](index=8&type=section&id=Reconciliation%20to%20EBITDA) The reconciliation table provides a breakdown of how EBITDA, a non-GAAP measure, is derived from net income for both the three and six months ended July 31, 2024, and 2023, by adding back income tax expense, depreciation, and amortization Reconciliation to EBITDA (Three Months Ended July 31) | Metric (In thousands) | 2024 | 2023 | | :--- | :--- | :--- | | Net income, as reported | $18,198 | $12,767 | | Income tax expense | 6,083 | 4,592 | | Depreciation | 463 | 488 | | Amortization of intangible assets | 98 | 98 | | **EBITDA** | **$24,842** | **$17,945** | Reconciliation to EBITDA (Six Months Ended July 31) | Metric (In thousands) | 2024 | 2023 | | :--- | :--- | :--- | | Net income, as reported | $26,080 | $14,876 | | Income tax expense | 9,514 | 5,487 | | Depreciation | 943 | 1,035 | | Amortization of intangible assets | 195 | 196 | | **EBITDA** | **$36,732** | **$21,594** |

Core Viewpoint - Argan, Inc. (AGX) is well-positioned to benefit from increasing electricity demand driven by generative AI, electric vehicle (EV) adoption, and the need for enhanced energy infrastructure, leading to a positive growth outlook and a recommendation for a buy rating [3][19]. Company Overview - AGX operates through subsidiaries including Gemma Power Systems, The Roberts Company, Atlantic Projects Company, and Southern Maryland Cable, providing services to the power generation, industrial, and telecommunications markets [3]. - The power industry services segment is the largest, accounting for approximately 70% of total revenue, followed by industrial construction services at 28% and telecommunications infrastructure services at 2% [10]. Demand Drivers - The demand for electricity is expected to rise due to the growth of AI and data centers, EVs, and renewable energy projects, necessitating upgrades to the global energy infrastructure [11]. - Generative AI is projected to increase data center power consumption by 160% by 2030, with data centers expected to account for 3-4% of overall power usage by the end of the decade [12]. - EV sales reached nearly 14 million in 2023, with expectations for continued growth, potentially reaching 17 million in 2024, which will significantly increase power demand [15]. Financial Performance - AGX's revenue was approximately $509.37 million in 2021, decreased to $455.04 million in 2022, and rebounded to $573.33 million in 2023, with notable growth in power industry services (20.3%) and industrial construction services (53.9%) [6][8]. - In Q1 2025, AGX reported a 52.1% year-over-year increase in consolidated revenue to $157.7 million, driven by projects like the Trumbull Energy Center and Midwest Solar and Battery Projects [8]. Profitability Metrics - AGX's gross profit margin contracted from 19% to 14.1% in 2024, primarily due to a $13.6 million loss related to the Kilroot project, impacting net income margin which fell from 7.3% to 5.6% [7]. - Despite the gross margin contraction, EBITDA margin improved from 3.5% to 7.5% in Q1 2025, supported by lower SG&A expenses [8]. Growth Outlook - AGX's forward revenue growth rate is 24.42%, significantly higher than the peers' median of 11.46%, indicating strong growth potential [18]. - The company has a robust project backlog, including the Trumbull Energy Center and a utility-scale solar field in Illinois, which is expected to generate 405 MW of electricity [18]. Market Positioning - AGX's forward P/E ratio is 19.48x, higher than the peers' median of 16.47x, reflecting its strong growth outlook and profitability margins [18]. - The anticipated market revenue for AGX in 2026 is approximately $876 million, with an EPS estimate of $4.94 per share [18].

Financial Data and Key Metrics Changes - Consolidated revenues increased by 52% to $157.7 million for Q1 2025 compared to the same quarter last year [6][18] - EBITDA improved to $11.9 million from $3.6 million year-over-year [21] - Net income rose to $7.9 million or $0.58 per diluted share, compared to $2.1 million or $0.16 per diluted share in the prior year [21] Business Line Data and Key Metrics Changes - Power Industry Services segment revenues increased by 57% to $110.3 million, representing 70% of total revenues [9][19] - Industrial Construction Services segment (TRC) achieved revenue growth of 44% to $43.7 million, contributing 28% of total revenues [10][19] - Telecommunications Infrastructure Services contributed 2% of total revenues, reflecting the smallest segment [11] Market Data and Key Metrics Changes - Project backlog at the end of Q1 2025 was $824 million, up from $757 million at the end of Q4 2024 and $806 million year-over-year [7][22] - Approximately $318 million or 39% of the backlog consists of renewable projects, with 86% of the backlog supporting zero or low carbon emissions [14][22] Company Strategy and Development Direction - The company aims to expand its leadership role in energy infrastructure, focusing on both traditional and renewable energy projects [13][26] - There is a strong emphasis on leveraging capabilities to meet increasing energy demands driven by data centers and electric vehicle adoption [12][27] - The company is committed to disciplined risk management and exploring acquisition opportunities to enhance growth [27] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the growing urgency to reinforce energy infrastructure to meet anticipated consumption levels [16][28] - The company is well-positioned to benefit from the transition to cleaner energy alternatives while maintaining grid reliability [27] - Management highlighted the robust pipeline of opportunities and the effectiveness of their growth and diversity plan [14][26] Other Important Information - The company reported a strong balance sheet with $416 million in cash and investments, net liquidity of $247 million, and no debt [7][24] - A total of approximately $101.2 million has been returned to shareholders through stock repurchases since November 2021 [25] Q&A Session Summary Question: Are there likely or possible additional charges coming from the Kilroot project? - Management indicated that while there is a possibility of additional losses, there is also potential for recovery, with claims exceeding $25 million being pursued [31][32] Question: Can you talk about the cadence of the Trumbull project? - Management confirmed that the project is on schedule and expects peak activity throughout the year [33][34] Question: What needs to happen to begin construction on the 405 megawatt solar project? - Management stated that a full notice to proceed is required, which is expected to be received this summer [35][36] Question: How does the Louisiana gas project compare to traditional gas plant projects? - Management explained that the Louisiana project is a subcontract and will have a quicker revenue flow compared to traditional projects [44] Question: How is the pipeline of activity looking? - Management expressed satisfaction with the pipeline, noting recent full notices to proceed on renewable jobs totaling 565 megawatts [41][42]

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q (Mark One) QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934 For the Quarterly Period Ended April 30, 2024 or ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT For the Transition Period from to Commission File Number 001-31756 (Exact Name of Registrant as Specified in Its Charter) (State or Other Jurisdiction of Incorporation) (I.R.S. Employer Identificatio ...