Core Insights - Powell Industries reported a strong start to fiscal Q1 2026, with significant revenue growth, margin expansion, and a record backlog driven by demand in liquefied natural gas (LNG), data centers, and electric utilities [4][6][21] Financial Performance - Net income for the quarter was $41.4 million, or $3.40 per diluted share, compared to $34.8 million, or $2.86 per diluted share, in the prior-year quarter [1] - Revenue increased to $251 million, up from $241 million in the same period of fiscal 2025, with gross profit rising $12 million year-over-year to $71 million and gross margin expanding 380 basis points to 28.4% [2][3][6] - SG&A expenses were $25.2 million, an increase of $3.7 million from the prior-year quarter, with SG&A as a percentage of revenue rising 110 basis points to 10% [1] Orders and Backlog - New orders surged 63% year-over-year to $439 million, resulting in a record backlog of $1.6 billion, with a book-to-bill ratio of 1.7x [6][7] - The backlog composition has shifted, with oil and gas and utilities each representing roughly 30% of total backlog, while commercial and other industrial has grown to 22% [8][11] Capacity and Expansion Plans - Powell ended the quarter with $501 million in cash and no debt, with $43.6 million in operating cash flow, and plans to deploy 40-50% of cash to working capital for the backlog [5][19][20] - The company is expanding its Jacintoport facility and has added leased production space to support growing demand, with a potential investment of around $100 million being evaluated for future capacity needs [13][14][15] Market Trends and Demand - Management noted ongoing high levels of project execution and robust demand across all major end markets, particularly in North American natural gas and LNG, electric utilities, and commercial sectors led by data centers [21][22] - The company secured two "mega" orders during the quarter, including a domestic LNG project valued at over $100 million and a $75 million order for a single data center [10][11]