ARGAN INC
For the period ended Jan 31, 2026. Filed Mar 26, 2026.
View on SEC.govAbout this filing
A company's yearly report to the SEC, with audited financial statements. It is the fullest account a company gives of its business, its finances and the risks it sees.
FY2026 · Filed Mar 26, 2026
AGX$277.50+6.2%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-K
Period ended 2025-01-31; filed 2025-03-27.
0001558370-25-003819
Item 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONSCurrent report: 10-K
Period ended 2026-01-31; filed 2026-03-26.
0001104659-26-035216
ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONSThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 156 previous paragraphs and 138 current paragraphs.
36 unchanged; 53 reworded; 44 added; 64 removed; 3 previous and 5 current paragraphs rearranged.
Tables are not compared: 7 previous and 7 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (44)
Current report
Teledata: Our Teledata segment provides project management, construction, installation, maintenance, repair, and emergency response services across power distribution and information, communications, and data networks. The segment’s customers include commercial and industrial organizations, as well as state and federal government agencies, primarily throughout the Mid-Atlantic region of the U.S.
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860 MW Thermal Project
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In October 2025, we entered an EPC services contract and received the corresponding full notice to proceed (“FNTP”) for the construction of an approximately 860 MW natural gas-fired power plant located in the ERCOT market. Construction began during the fourth quarter of Fiscal 2026, and the project has an expected completion date in calendar year 2028.
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1.4 GW Thermal Project
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In October 2025, we received FNTP on an EPC services contract for a 1.4 GW combined-cycle natural gas-fired power plant in Ward County, Texas. Construction began during the fourth quarter of Fiscal 2026, and the project has an expected completion date in calendar year 2029.
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170 MW Thermal Project
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In July 2025, we entered an EPC services contract for the construction of a power plant with a planned electricity generation capacity of approximately 170 MW in County Meath, Ireland. Project activity commenced in the third quarter of Fiscal 2026. The project has an expected project completion date in calendar year 2028.
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Sandow Lakes Power Station
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In April 2025, we received a notice to proceed on an EPC services contract to build a 1.2 GW combined-cycle natural gas-fired power plant in Lee County, Texas. Project activity commenced in the second quarter of Fiscal 2026. The project has an expected completion date in calendar year 2028.
Current report
In November 2022, we received FNTP related to an EPC services contract for the construction of a 950 MW combined-cycle natural gas-fired power plant in Lordstown, Ohio. Substantial completion of the project was reached during the fourth quarter of Fiscal 2026. Project completion is scheduled for the first half of Fiscal 2027.
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Industrial Segment Project Backlog
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As of January 31, 2026, our Industrial segment’s project backlog was approximately $253.0 million as compared to $53.2 million on January 31, 2025. During Fiscal 2026, the Industrial segment added contracts to its project backlog related to
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an automotive plant, data centers, an aluminum rolling and recycling facility, a water treatment plant, and facilities related to certain other industries.
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Power Market Outlook
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Electricity demand in the United States has increased to its highest levels in approximately two decades, driven by continued growth in data centers, increased electrification across transportation and industrial sectors, and ongoing onshoring of manufacturing activities. At the same time, a significant portion of the existing power generation fleet is aging or being retired, creating challenges for grid reliability as capacity additions struggle to keep pace with rising demand.
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Grid operators have emphasized the need for additional dispatchable, reliable power sources to support system stability, particularly during periods of peak demand or reduced renewable output. These dynamics continue to influence investment decisions across the power generation sector. The timing and economics of power generation projects may also be influenced by evolving federal, state, and local regulatory requirements, permitting processes, and energy-related incentive programs, which can affect development schedules, financing, and project viability.
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Natural gas remains the primary source of utility-scale electricity generation in the United States and continues to play a central role in maintaining grid reliability. The retirement of coal-fired facilities, combined with the efficiency, flexibility, and lower emissions profile of modern combined-cycle and simple-cycle gas plants, has supported sustained demand for natural gas-fired generation.
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The pace of new gas-fired power plant development faces certain challenges, including equipment supply constraints, the limited number of EPC contractors, interconnection delays, evolving regulatory requirements, and financing considerations. In addition, long-term clean energy and decarbonization goals adopted by various jurisdictions may influence development timelines. However, recent actions by grid operators and state governments highlight a growing recognition of the importance of dispatchable generation in supporting reliability. Programs designed to incentivize new power capacity, including gas-fired facilities, reflect this focus. We believe that the operating efficiency, fuel availability, and operational flexibility of natural gas-fired power plants position them to remain a critical component of the U.S. generation mix, particularly as a complement to renewable energy resources.
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Utility-scale solar generation and battery storage capacity continue to grow in the United States, supported by declining technology costs, advancements in energy storage, and available incentives. Battery storage, in particular, has become increasingly important in addressing the intermittency of renewable generation and enhancing grid flexibility. While renewable capacity additions are expected to continue, these resources typically require firm, dispatchable generation to ensure reliability. As a result, renewable energy development often requires natural gas-fired generation and energy storage solutions to support system balance and performance.
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Behind-the-meter ("BTM") generation is becoming more prevalent among commercial and industrial customers, particularly data center developers facing tight timelines and interconnection constraints. As BTM resources expand alongside renewables, grid operators may require additional flexible dispatchable generation to maintain reliability, which could support continued demand for natural gas-fired power plants.
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Nuclear energy may influence future generation capacity additions, with industry focus increasingly shifting toward small modular reactors ("SMRs") given the extended timelines, regulatory complexity, and high capital costs associated with
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conventional nuclear development. While interest in nuclear has grown due to its minimal carbon footprint, meaningful new capacity is generally not expected at scale for several years.
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Our domestic operations of our Power segment historically has represented the predominant portion of our power-related revenues. However, overseas power markets may continue to provide important new power construction opportunities, particularly in Ireland and the United Kingdom. Both markets are pursuing ambitious renewable energy objectives while also emphasizing the need for flexible, dispatchable generation and grid-supporting technologies to maintain reliability as renewable penetration increases. In Ireland, energy policy continues to support the development of additional generation and grid support resources, including natural gas-fired generation, battery storage, and other technologies intended to enhance security of supply. In the U.K., energy policy continues to evolve, with ongoing efforts to expand renewable generation while recognizing the role of flexible conventional generation and grid infrastructure in supporting system reliability. We continue to pursue selective construction opportunities in these markets consistent with our experience in power generation and related infrastructure.
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Across many of these markets, the demand for new power generation capacity and related infrastructure is occurring at a pace that exceeds the industry’s ability to construct new facilities in the near term. A limited number of experienced EPC contractors, along with constraints in specialized labor, major equipment manufacturing capacity, and project development timelines, have created a supply-constrained environment for large-scale power generation construction. As a result, project developers and utilities often rely on a relatively small group of contractors with demonstrated experience in the engineering and construction of large-scale power generation facilities.
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We believe these market dynamics have contributed to a strong pipeline of project opportunities. Our backlog growth in recent periods reflects these conditions and the continued demand for experienced contractors capable of executing complex power generation projects. However, the timing and extent of future project awards remain subject to a variety of factors, including regulatory developments, financing conditions, permitting timelines, equipment availability, and broader economic conditions, any of which could affect the pace at which new power generation projects move forward.
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Industrial Market Outlook
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Industrial field services typically represent most of the revenues within our Industrial segment, with the remaining revenues derived primarily from metal fabrication projects. While the Industrial segment has executed projects across the U.S., its core operating footprint is concentrated in the Southeastern U.S., a region that continues to attract industrial investment due to favorable business climates, established transportation infrastructure, access to modern seaports, and supportive state and local economic development programs.
Current report
Demand for industrial construction services in this region continues to be driven by increased manufacturing investment, infrastructure upgrades, data center development, biotechnology and life sciences projects, energy storage deployment, and clean water and environmental initiatives. In addition, ongoing domestic manufacturing expansion, digital infrastructure investment, and supply chain realignment have supported construction activity across a range of industrial end markets, creating opportunities for large-scale, complex construction projects aligned with the Industrial segment’s capabilities.
Current report
While the industrial construction market continues to face headwinds such as rising labor costs, skilled labor availability constraints, and supply chain volatility, near-term activity levels are expected to remain supported by continued investment in manufacturing, data centers, infrastructure, and energy-related facilities. We believe the Industrial segment’s geographic footprint, project execution experience, and ability to support industrial customers across multiple end markets position it to compete effectively for projects within its core regions.
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Teledata Market Outlook
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In regards to our Teledata segment, demand for telecommunications and technology infrastructure continues to grow as utilities, businesses, and public sector entities invest in network capacity, connectivity, and digital infrastructure. Increased data center development, expansion of broadband and fiber networks, deployment of IoT-enabled systems, and ongoing grid modernization initiatives are driving demand for outside plant and inside plant construction and technology wiring services. In addition, utilities and commercial customers continue to upgrade communications infrastructure to support advanced metering, distributed energy resources, and other digital grid technologies. These trends are expected to support continued demand for the services provided by our Teledata segment.
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Comparison of the Results of Operations for Fiscal 2026 and Fiscal 2025
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NM – not meaningful
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Power Segment
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Industrial Segment
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Teledata Segment
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The revenues of the Teledata segment were $20.6 million for Fiscal 2026 compared with revenues of $13.5 million for Fiscal 2025. The project backlog amounts for the Teledata segment as of January 31, 2026 and 2025 were $8.4 million and $3.6 million, respectively.
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For Fiscal 2026, consolidated gross profit was $193.7 million, representing a gross profit percentage of approximately 20.5% of consolidated revenues, compared with $141.0 million, or approximately 16.1% of consolidated revenues, for Fiscal 2025. The increase in gross profit margin between periods was primarily attributable to the changing mix of projects and contract types. Our international operations experienced a significant improvement in profitability, reflecting strong execution and strategic discipline. In addition, disciplined execution on the Trumbull Energy Center reduced project costs and enabled us to achieve substantial completion ahead of schedule. The gross profit percentages of corresponding revenues for the Power, Industrial and Teledata segments for Fiscal 2026 were 22.4%, 12.1% and 19.5%, respectively. The gross profit percentages of corresponding revenues for the Power, Industrial and Teledata segments for Fiscal 2025 were 16.7%, 13.3% and 23.8%, respectively.
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For Fiscal 2026 and Fiscal 2025, the net amounts of other income were $25.8 million and $23.0 million, respectively, which primarily reflected income earned during the periods on investments, cash and cash equivalents.
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Provision for Income Taxes
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Removed paragraphs (64)
Previous report
Telecommunications Infrastructure Services: Through SMC, which conducts business as SMC Infrastructure Solutions, we provide project management, construction, installation and maintenance services to commercial, local government and federal government customers primarily in the Mid-Atlantic region of the U.S.
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In October 2022, GPS added to project backlog the EPC services contract value of the Trumbull Energy Center, a 950 MW natural gas-fired power plant now under construction in Lordstown, Ohio (the “Trumbull Energy Center”). We received the FNTP from the project owner, Clean Energy Future-Trumbull, LLC, in November 2022. This combined cycle power station will consist of two Siemens Energy SGT6-8000H gas-fired, high efficiency, combustion turbines with two heat recovery steam generators and a single steam turbine. Project completion is scheduled for the first quarter of Fiscal 2027.
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Shannonbridge Power Project
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APC entered into an EPC services contract with GE Vernova for the construction and commissioning of an open-cycle thermal power facility in County Offaly, Ireland, that has the capacity to generate approximately 264 MW of temporary emergency electrical power (the “Shannonbridge Power Project”). In August 2023, APC received the FNTP on this project. Substantial completion of this project, that is defined in the corresponding contract as system turnover for commissioning, occurred in March 2024, and as of January 31, 2025, no amounts related to this project remained in project backlog.
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ESB FlexGen Peaker Plants
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In May 2022, APC entered into engineering and construction services contracts with the ESB to construct three 65 MW aero-derivative gas turbine flexible generation power plants in and around the city of Dublin, Ireland (“ESB FlexGen Peaker Plants”). Two of the power plants, the Poolbeg and Ringsend FlexGen Power Plants, are located on the Poolbeg Peninsula, and the Corduff FlexGen Power Plant is located in nearby Goddamendy. Substantial completion of each power facility occurred during the third quarter of Fiscal 2025, and as of January 31, 2024, no amounts related to these projects remained in project backlog.
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TRC Project Backlog
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As of January 31, 2025, TRC’s project backlog was approximately $53.2 million as compared to $127.5 million on January 31, 2024. For Fiscal 2025 and Fiscal 2024, TRC generated $167.6 million and $142.8 million in revenues, respectively. The increase in revenues for the current year from the comparative prior period highlights the results of our successful business development efforts in recent years with both new and recurring clients, particularly in securing larger industrial field service construction projects. Despite the decrease in the amount of TRC’s project backlog during the current year, we are encouraged by the number and size of opportunities in our project pipeline, and we expect the TRC project backlog will grow in Fiscal 2026.
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Other Activity Subsequent to Year-end
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In February 2025, an EPC services contract was awarded to GPS by Sandow Lakes Energy Company, LLC for a 1.2 GW ultra-efficient natural gas-fired power plant in Lee County, Texas. This project will be added to backlog upon receipt of a FNTP. Construction of this plant, which will be powered by two gas-fired turbines supplied by Siemens Energy, is scheduled to commence later this year and the project owner expects to commence power generation in 2028.
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In October 2021, APC UK was contracted to construct a 2 x 330 MW natural gas-fired power plant in Carrickfergus that is near Belfast, Northern Ireland, in an existing structure that was initially designed to enclose coal-fired power plant units. As previously disclosed, there were a number of challenges related to the Kilroot Project that adversely impacted our ability to execute as expected, including supply chain delays, material changes to the project, the COVID-19 omicron outbreak, the war in Ukraine and extreme weather. Unresolved variations and claims disrupted the execution and harmed the cash flow of this project.
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APC UK provided 14 days’ notice to terminate as a result of project owner breaches of the contract. Those breaches were not resolved during that 14-day period, as a result of which the contract terminated on May 3, 2024. Subsequently, the project owner made a draw for the full amount of a $9.2 million irrevocable letter of credit, or on-demand performance bond, issued by the Company’s bank. This amount is now part of the open and disputed claims related to this project because APC UK and the Company believe the project owner initiated the draw without cause and, therefore, the amount should be refunded. This amount is included in accounts receivable as of January 31, 2025.
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Growing Power Demand
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Since 2007, total annual U.S. electricity demand has fluctuated, where eight of the years during that period experienced year-over-year decreases in energy consumption. However, U.S. electricity demand has since reached its highest level in two decades, reflecting a surge in consumption driven by emerging technologies and economic shifts. One prominent driver of this surge in energy demand is the rapid increase in the number of data centers, which are expanding to support the growing adoption of AI technologies. These facilities require substantial amounts of electricity to power advanced computing infrastructure, positioning them as a major contributor to future electricity demand. Technology companies
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with AI ambitions have begun exploring deals to bring more power to the grid in order to secure long-term power contracts to address their significant electricity demand. However, advancements in AI efficiency—as highlighted by DeepSeek, a generative AI model—could reduce the power required per computation, potentially moderating the overall anticipated surge in electricity demand. If these efficiency gains outpace current expectations, the anticipated expansion of data center power needs might be significantly lower than forecasted.
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Other factors contributing to the projected growth of electricity demand in the U.S. are the accelerating shift toward electric vehicles (“EVs”) and the trend of onshoring manufacturing facilities. As more drivers transition to EVs, the need for electricity to power charging networks will grow significantly, further straining grid capacity. Meanwhile, companies relocating production to the U.S. to enhance supply chain resilience are increasing the energy requirements of industrial operations. Combined, these factors underscore a growing imperative for the U.S. energy sector to adapt to rising electricity demands in the coming decades.
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Keeping up with growing energy demand is further challenged by the aging fleet of traditional power facilities that are at or nearing the end of their operational life. Throughout the U.S., the risk of electricity shortages grows as the retirement of traditional power plants outpaces their replacement. While renewable energy sources like solar and wind are expanding, they often cannot provide the same level of consistent, around-the-clock power generation as the retiring fossil-fuel plants. Electric-grid operators are warning that power-generating capacity is struggling to keep up with demand, a gap that could lead to additional rolling blackouts during heat waves or other peak power periods. As demand for electricity continues to surge—driven by factors such as an increase in data center development, industrial expansion, and the increasing electrification of transportation—these closures could place even greater strain on an already burdened grid, heightening reliability concerns across multiple regions.
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Natural Gas Power
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The overall growth of our power business has been substantially based on the number of combined cycle and simple cycle gas-fired power plants built by us, as many coal-fired plants have been shut down in the U.S. In 2010, coal-fired power plants accounted for about 45% of net electricity generation in the U.S. For 2024, coal fueled approximately 16% of net electricity generation. It has been reported that the average age of the active plants in the coal-fired fleet approximates 45 years old with an average life span of 50 years; the last coal-fired power plant built in the U.S. was constructed in 2015. On the other hand, natural-gas fired power plants provided approximately 42% of the electricity generated by utility-scale power plants in the U.S. in 2024, representing an increase of 70% in the amount of electrical power generated by natural gas-fired power plants since 2010. Natural gas-fired power plants provided approximately 24% of net electricity generation in 2010.
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There exist certain headwinds confronting a significant resurgence in the pace of planning new developments of gas-fired power plants. Persistent supply chain constraints, which delay critical equipment delivery, and interconnect challenges that complicate grid integration delay project timelines and strain the availability of project financing. In addition, various cities, counties and states have adopted clean energy and carbon-free goals or objectives with achievement expected by a certain future date, typically 10 to 30 years out.
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However, there appears to be a growing realization that such carbon-free goals present risks to the reliability of the electricity grids. For example, in November 2023, Texas voters approved the $10 billion Texas Energy Fund (“TEF”), thereby establishing a pool of funds intended to provide financing to projects that will enhance grid reliability and incentivize new dispatchable power generation projects, with a significant focus on natural gas-fired power plants. Shortly thereafter, the Public Utility Commission of Texas selected 17 natural gas-fired generation projects, totaling nearly 10 GW, to advance through a due diligence review, representing $5.4 billion in potential state-backed loans. Initial disbursements for the projects are expected to begin in late 2025, with construction on several sites already underway.
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Solar, Wind, and Battery Power
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The net amount of electricity generation in the U.S. provided by utility-scale solar photovoltaic and wind facilities continues to rise. Together, such power facilities provided approximately 16%, 15% and 13% of the net amount of electricity generated by utility-scale power facilities in 2024, 2023 and 2022, respectively. The EIA projected that new renewable power capacity will continue to be added to the utility-scale power fleet in the U.S. at a brisk pace, attributable to declines in costs of components for renewable power plants and power storage, an increase in the scale of energy storage capacity (i.e., battery farms and other energy storage technologies), and the availability of valuable tax credits.
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Battery storage has become a critical component in integrating renewable energy into the grid, addressing the intermittency of solar and wind power. In 2024, U.S. battery storage capacity nearly doubled, with developers adding 14.3 GW to the existing 15.5 GW. This rapid expansion enhances grid reliability and flexibility, allowing excess energy generated during peak production periods to be stored and used when demand is high or production is low. The integration of battery storage systems not only supports the stability of the power grid but also contributes to the economic viability of renewable energy projects.
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Declining capital costs for solar panels, wind turbines and battery storage, as well as government subsidies like those included in the IRA, were projected to result in renewables becoming increasingly cost effective compared with the alternatives when the costs of building new power capacity were considered. The EIA indicated that for 2024, of the approximately 62.8 gigawatts of new utility-scale electric-generating capacity that was planned to be added to U.S. power grids, approximately 58% was expected to come from solar facilities, and 23% from battery storage.
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Nuclear Power
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Over the last several decades, the number of operating nuclear reactors has declined, with only four reactors entering commercial operation in the past 30 years—the most recent being Vogtle Units 3 and 4 in Georgia, which became operational in July 2023 and April 2024, respectively. These projects faced significant cost overruns—more than twice their initial estimates—and substantial delays, prompting the industry to shift its focus toward smaller, more economical designs such as small modular reactors. There is growing interest in expanding nuclear power production due to its minimal carbon footprint, but the limited industry activity over the past three decades has created challenges in ramping up development. As a result, it is widely expected that it could take up to a decade before the nuclear sector begins actively adding new plants to the power grid at scale.
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The Regulatory Landscape
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President Donald Trump's decision to withdraw the United States from the Paris Climate Agreement in January 2025 has significantly influenced the nation's energy production landscape. This move, coupled with a series of executive orders, has shifted federal policies to favor fossil fuel industries, impacting both renewable energy initiatives and the broader energy market. On his first day in office, President Trump declared a national energy emergency, aiming to boost domestic oil and gas production. This declaration has led to the suspension of certain environmental regulations, expedited approvals for fossil fuel projects, and the lifting of moratoriums on offshore drilling. The administration also established the National Energy Dominance Council to further streamline energy infrastructure projects and reduce regulatory barriers. These actions are intended to enhance energy independence and stimulate economic growth within traditional energy sectors. However, regulatory changes under the current administration are occurring at a rapid pace, which poses risks that the industry is unable to adapt in a timely manner.
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In August 2022, President Biden signed the IRA, a bill that funds hundreds of billions of dollars in tax subsidies intended to combat climate change among other measures, with the receipt of the majority of the tax subsidies conditioned on the extent that taxpayers “buy American” and/or pay prevailing wages, among other requirements. Existing supply chains and skilled labor pools could lack the capacity to meet the demand that the incentives were intended to create. Therefore, the subsidies may not have provided the economic incentives to renewable and other energy project owners to the extent that was expected. Upon taking office in January 2025, President Trump initiated a 90-day review of aspects of the IRA and the Infrastructure Investment and Jobs Act. This action has paused disbursements of certain funds, including grants and loans, pending a review to ensure alignment with the new administration’s energy policies. This pause introduces additional uncertainty for ongoing and planned projects that rely on IRA incentives.
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In May 2023, the Biden administration proposed new rules for the Environmental Protection Agency (the “EPA”) that were intended to drastically reduce greenhouse gases from coal- and gas-fired power plants that officials admit will cost such plants billions of dollars to comply fully by 2042. In April 2024, the EPA issued final rules that require coal-fired power plants that are expected to operate beyond 2039 to reduce their carbon emissions by 90% prior to 2032. For new gas-fired power plants, the rules require a sliding scale of carbon capture up to 90% based on the operational load of the individual power plant. Rules for existing natural gas power plants have been delayed until 2025 in response to concern that such rules could affect grid reliability. President Trump has expressed strong opposition to the EPA’s emissions-regulating rules and has pledged to abolish them.
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In June 2023, President Biden signed a bill that included reforms for certain elements of the permitting process for energy projects. Following the 2024 presidential election, President Trump has taken more significant steps to modify the permitting process. In January 2025, he signed executive orders prioritizing oil, gas, nuclear, coal, hydropower, biofuel, and critical mineral projects, while notably excluding wind and solar initiatives. These orders aim to expedite permitting for specific energy sectors by proposing changes to the National Environmental Policy Act (“NEPA”) to facilitate faster approvals.
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In May 2024, the Biden administration launched the Federal-State Modern Grid Deployment Initiative, a collaborative measure between the federal government and twenty-one states intended to prioritize efforts that support the adoption of modern grid solutions to expand grid capacity and build modern grid capabilities for both new and existing transmission and distribution lines.
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Changes in U.S. trade policy, particularly the introduction of higher and fluctuating tariffs, have created economic uncertainty, raising concerns in the construction sector about material price inflation and delivery delays. In January 2025, the U.S. announced new tariffs on imports from several nations, including Mexico, Canada, and China. Some of these tariffs were later postponed or modified. While intended to support broader policy objectives, these tariffs could disrupt supply chains, impact trade agreements, and increase costs while limiting access to materials essential for project execution. As trade negotiations continue and new policies are introduced, the tariff situation remains fluid, adding to the unpredictability of material costs and supply chain stability. The uncertainty surrounding trade policies may deter investment in new power plant or industrial construction projects, as stakeholders assess the financial viability amid fluctuating costs.
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Behind-the-Meter Power Generation
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The energy sector continues to experience significant shifts driven by evolving regulatory policies, technological advancements, evolving utility rate structures, and increasing customer demand for energy resilience and sustainability. A key trend influencing the market is the growing adoption of behind-the-meter (“BTM”) power generation assets, which allow commercial, industrial, and residential customers to generate electricity on-site rather than relying solely on the traditional grid. As BTM resources increase, grid operators may require more flexible and fast-ramping natural gas plants to balance intermittent generation from solar and other distributed energy resources, creating a role for gas-fired plants as reliability assets.
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The adoption of BTM power generation is accelerating among commercial businesses, particularly data centers, seeking greater energy resilience, cost control, and sustainability. Most importantly, BTM power generation enables data centers and other commercial enterprises to connect to power more quickly, bypassing lengthy interconnection processes and delays associated with grid upgrades. Many companies are investing in on-site generation, such as solar-plus-storage and combined heat and power systems, to mitigate grid reliability risks, reduce peak demand charges, and meet corporate sustainability goals. While BTM generation offers businesses greater control over their energy use, it also challenges traditional utilities, requiring adjustments in grid management and revenue models.
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Outlook for Natural Gas-Fired Power Plants
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We believe that the lower operating costs of natural gas-fired power plants, the higher energy generating efficiencies of modern gas turbines, and the requirements for grid resiliency should sustain the demand for modern combined cycle and simple cycle gas-fired power plants in the future. We believe that the benefits of natural gas as a source of power are compelling, especially as a complement to the deployment of solar and wind-powered energy sources, and that the future long-term prospects for natural gas-fired power plant construction remain favorable as natural gas continues to be the primary source for power generation in our country. The future availability of less carbon-intense, higher efficiency and inexpensive natural gas in the U.S. should be a significant factor in the economic assessment of future power generation capacity additions, although the pace of new opportunities emerging may be restrained and the starts of awarded EPC projects may be delayed or canceled due to the challenges described above.
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The current scramble for electricity, regardless of source, may indicate that the 100% transition to renewable energy is in the distant future and has prompted, in part, renewed interest in not only carbon capture techniques, but carbon removal technologies as well. Governments, including the U.S., are taking initial steps to boost this industry. The success of this industry could reduce the climate-change fear associated with natural gas-fired power plants. We intend to execute an “all-
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Previous wording
This section of our 2025 Annual Report may include projections, assumptions and beliefs that are intended to be “forward-looking statements.” They should be read in light of our cautionary statement regarding “forward-looking statements” presented at the beginning of this 2025 Annual Report. The following discussion summarizes the financial position of Argan, Inc. and its subsidiaries as of January 31, 2025, and the results of their operations for Fiscal 2025 and Fiscal 2024, and should be read in conjunction with the consolidated financial statements and notes thereto included elsewhere in Item 8 of this 2025 Annual Report.
Current wording
This section of our 2026 Annual Report may include projections, assumptions and beliefs that are intended to be “forward-looking statements.” They should be read while considering our cautionary statement regarding “forward-looking statements” presented at the beginning of this 2026 Annual Report. The following discussion summarizes the financial position of Argan, Inc. and its subsidiaries as of January 31, 2026, and the results of their operations for Fiscal 2026 and
Previous wording
Please see “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations,” in the Company’s Annual Report on Form 10-K for the year ended January 31, 2024, that was filed with the SEC on April 11, 2024, for a discussion of financial trends, variance drivers and other significant matters for Fiscal 2024 as compared with Fiscal 2023.
Current wording
Refer to “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations” in the Company’s Annual Report on Form 10-K for the year ended January 31, 2025, that was filed with the SEC on March 27, 2025, for a discussion of financial trends, variance drivers and other significant matters for Fiscal 2025 as compared with Fiscal 2024.
Previous wording
The Company is primarily a construction firm that conducts operations through its wholly owned subsidiaries, GPS, APC, TRC and SMC across three distinct reportable business segments.
Current wording
The Company is primarily a construction firm that conducts operations through its wholly-owned subsidiaries across three distinct reportable business segments.
Previous wording
Power Industry Services: Through GPS and APC, we provide a full range of engineering, procurement, construction, commissioning, maintenance, project development and technical consulting services to the power generation market, including the renewable energy sector, for a wide range of customers, including independent power project owners, public utilities, power plant heavy equipment suppliers and other commercial firms with significant power requirements. Projects are located in the U.S., Ireland and the U.K.
Current wording
Power: Our Power segment provides a full range of engineering, procurement, construction, commissioning, maintenance, project development and technical consulting services to the power generation market. The customers include primarily independent power producers, public utilities, power plant equipment suppliers and other commercial firms with significant power requirements. Customer projects are located in the U.S., Ireland and the U.K.
Previous wording
Industrial Construction Services: Through TRC, we provide primarily field services that support new plant construction and additions, maintenance turnarounds, shutdowns and emergency mobilizations for industrial plants primarily located in the Southeast region of the U.S. and that may include the fabrication, delivery and installation of steel components such as piping systems and pressure vessels.
Current wording
Industrial: Our Industrial segment provides field services supporting new plant construction and plant additions for industrial facilities primarily located in the Southeast region of the U.S. The segment also fabricates, delivers, and installs metal components, including piping systems and pressure vessels, and performs maintenance turnarounds, shutdowns, and emergency mobilizations.
Previous wording
At January 31, 2025 and 2024, our consolidated project backlog amount of $1.4 billion and $0.8 billion, respectively, consisted substantially of projects within our power industry services reporting segment.
Current wording
As of January 31, 2026 and 2025, our consolidated project backlog amount of $2.9 billion and $1.4 billion, respectively, consisted substantially of projects within our Power segment.
Previous wording
Our reported amount of project backlog at a point in time represents the total value of projects awarded to us that we consider to be firm as of that date less the amounts of revenues recognized to date on the corresponding projects. Typically, we include the total value of EPC services and other major construction contracts in project backlog upon receiving a notice to proceed from the project owner. When provided with an LNTP, we usually record only the value of the contract related to the LNTP initially. Nevertheless, the inclusion of contract values in project backlog may require management judgment based on the facts and circumstances. It is important to note that the start of new projects is primarily controlled by project owners and that delays may occur that are beyond our control.
Current wording
The amount of our project backlog reported at a point in time represents the expected revenues from the remaining work on projects where the scope is sufficiently defined and the contract value can be reasonably estimated. While the inclusion of contract values in project backlog involves management judgment based on the facts and circumstances, we typically include the value of the contract in project backlog upon receiving a notice to proceed from the project owner. In making the determination of project backlog, management may consider several factors, including terms of the contract, the degree of project financing and permitting, and historical experience with similar contracts. The start of new projects is primarily controlled by project owners and delays may occur that are beyond our control.
Previous wording
We are committed to the construction of state-of-the-art, natural gas-fired power plants, as important elements of our country’s electricity-generation mix now and in the future. We target natural gas-fired power plant, renewable energy plant and industrial construction opportunities in the U.S., Ireland and the U.K. Our vision is to safely contribute to the construction of the energy infrastructure and state-of-the-art industrial facilities that are essential to future economic prosperity in the areas where we operate. We intend to realize this vision with motivated, creative, high-energy and customer-driven teams that are committed to delivering the best possible project results each and every time.
Current wording
We are committed to the construction of state-of-the-art, natural gas-fired power plants, as important elements of our country’s electricity-generation mix now and in the future. We target natural gas-fired power plants, renewable energy plants, energy storage, and industrial construction opportunities in the U.S., and natural gas-fired power plants and biomass power plants in Ireland and the U.K. Our vision is to safely contribute to the construction of the energy infrastructure and state-of-the-art industrial facilities that are essential to future economic prosperity in the areas where we operate. We intend to realize this vision with motivated, creative, high-energy and customer-driven teams that are committed to delivering the best possible project results each and every time.
Previous wording
In January 2025, APC entered into an EPC services contract for an approximately 300 MW biofuel power plant located in County Kerry, Ireland. The Tarbert Next Generation Power Station will consist of Ansaldo Energia’s AE94.3A turbine that will run on 100% sustainable biofuels, specifically hydrotreated vegetable oil, with the potential to convert to hydrogen. The flexible power generated at the Tarbert Next Generation Power Station will help to support Ireland’s energy security while delivering a renewables-led system. Enabling works are now underway ahead of full construction commencing Fiscal 2026 with planned completion towards the end of calendar year 2027.
Current wording
In January 2025, we entered an EPC services contract to build an approximately 300 MW biofuel power plant located in County Kerry, Ireland. The Tarbert Next Generation Power Station will run on 100% sustainable biofuels, specifically hydrotreated vegetable oil. Project activity commenced in the first quarter of Fiscal 2026. The project has an expected completion date towards the end of calendar year 2027.
Previous wording
In December 2024, GPS entered into an EPC services contract and received the corresponding FNTP with a customer for an approximately 700 MW combined-cycle natural gas-fired power plant located in the United States. Project activity commenced in the fourth quarter of Fiscal 2025.
Current wording
In December 2024, we entered an EPC services contract and received the corresponding FNTP to build an approximately 700 MW combined-cycle natural gas-fired power plant located in the U.S. Project activity commenced in the fourth quarter of Fiscal 2025. Project completion is scheduled for calendar year 2028.
Previous wording
In June 2024, GPS entered into a subcontract and received FNTP for the installation of five 90 MW gas turbines for the dedicated supply of power to a liquified natural gas (“LNG”) facility in Louisiana. This project, led by GPS, is a collaboration with TRC and APC. Project completion is scheduled for the first half of Fiscal 2026.
Current wording
In June 2024, we entered a subcontract and received FNTP for the installation of five 90 MW gas turbines for the dedicated supply of power to a LNG facility in Louisiana. This project, led by our Power segment, was a collaboration with our Industrial segment. Project work was completed during the first half of Fiscal 2026.
Previous wording
In April 2024, GPS executed an LNTP with a customer to construct a utility-scale solar field in Illinois with the capacity to provide 405 MW of electrical power (the “405 MW Midwest Solar Project”). In August 2024, GPS received a full release for the activities on the EPC contract. The unique, multi-phased project includes solar-tracking panels that can be stowed by remote command for expected adverse weather events and will use pre-existing transmission and utility infrastructure from a nearby retired coal power plant. Project completion is scheduled for the first half of the fiscal year ending January 31, 2027 (“Fiscal 2027”).
Current wording
In August 2024, we received FNTP on an EPC services contract to construct a utility-scale solar field in Illinois with the capacity to provide 405 MW of electrical power. Project completion is scheduled for Fiscal 2027.
Previous wording
In August 2023, GPS executed LNTPs for three solar and battery projects in Illinois (the “Midwest Solar and Battery Projects”). Under the LNTPs, GPS commenced early engineering and design activities as well as procurement of major equipment for construction of state-of-the-art solar energy and battery energy storage facilities. Between January and early May 2024, GPS received FNTPs on all three of the solar and battery projects. The three projects will cumulatively represent 160 MW of electrical power and 22 MW of energy storage. Two of these projects were completed in the fourth quarter of Fiscal 2025. Completion of the final project is expected in Fiscal 2026.
Current wording
Between January and early May 2024, we received FNTPs for three state-of-the-art solar energy and battery energy storage facilities in Illinois. The three projects will cumulatively represent 160 MW of electrical power and 22 MW of energy storage. Two of these projects were completed in Fiscal 2025. Completion of the final project, which has experienced certain regulatory delays, is expected to occur within the first half of Fiscal 2027.
Previous wording
We have recognized an estimated contract loss related to the Kilroot Project in the amount of approximately $13.4 million, of which $3.4 million was recorded during Fiscal 2025 and the remainder was recorded in the prior fiscal year. APC UK has significant billable receivables, unresolved contract variations and claims for extensions of time, among other issues, related to the Kilroot Project. The project owner has asserted counterclaims that APC UK disputes. APC UK will continue to pursue all of its rights under the contract (see Note 10 to the accompanying consolidated financial statements).
Current wording
In prior fiscal years, our U.K subsidiary recognized an estimated contract loss related to an overseas project in the amount of approximately $13.4 million, of which $3.4 million was recorded during Fiscal 2025 and the remainder was recorded in Fiscal 2024. Our U.K subsidiary has significant billable receivables, unresolved contract variations and claims for extensions of time, among other issues, related to an overseas project (see Note 10 to the accompanying consolidated financial statements).
Previous wording
The following schedule compares our operating results for Fiscal 2025 and Fiscal 2024 (dollars in thousands):
Current wording
The following schedule compares our operating results for Fiscal 2026 and Fiscal 2025 (dollars in thousands, except per share data):
Previous wording
The revenues of the power industry services business increased by 66.5%, or $276.8 million, to $693.0 million for Fiscal 2025 compared with revenues of $416.3 million for Fiscal 2024, as the current year construction activities increased for the Midwest Solar and Battery Projects, the Trumbull Energy Center, the 405 MW Midwest Solar Project and the Louisiana LNG Facility. The increase in revenues between years was partially offset by decreased construction activities associated with the Guernsey Power Station project, the ESB FlexGen Peaker Plants, the Shannonbridge Power Project and the Kilroot Project, as those projects have concluded. The revenues of this business represented approximately 79.3% of consolidated revenues for Fiscal 2025 and 72.6% of consolidated revenues for the prior year. The project backlog amounts for the power industry services reportable segment as of January 31, 2025 and 2024 were $1.3 billion and $0.6 billion, respectively.
Current wording
The revenues of the Power segment increased by 9.2%, or $63.5 million, to $756.5 million for Fiscal 2026 compared with revenues of $693.0 million for Fiscal 2025. The increase was primarily attributable to increased construction activity for the 405 MW Midwest Solar Project, the 700 MW Combined-Cycle Project, and the commencement of several recently started gas-fired projects. The increase in revenues between years was partially offset by decreased construction activities associated with the Trumbull Energy Center, the Midwest Solar and Battery Projects, the Louisiana LNG Facility, the ESB FlexGen Peaker Plants, and the Shannonbridge Power Project, as those projects are in their later stages or have fully concluded. The revenues of this business represented approximately 80.1% of consolidated revenues for Fiscal 2026 and 79.3% of consolidated revenues for the prior fiscal year. The project backlog amounts for the Power reportable segment as of January 31, 2026 and 2025 were $2.7 billion and $1.3 billion, respectively.
Previous wording
The revenues of industrial construction services increased by $24.8 million, or 17.4%, to $167.6 million for Fiscal 2025 compared with revenues of $142.8 million for Fiscal 2024 as the amounts of field services construction activities increased meaningfully between periods, partially offset by decreased supporting vessel fabrication work between periods. The revenues of this business represented approximately 19.2% of consolidated revenues for Fiscal 2025 and 24.9% of consolidated revenues for the prior fiscal year.
Current wording
The revenues of the Industrial segment were essentially flat at $167.6 million for Fiscal 2026 compared to $167.6 million for Fiscal 2025, as increased field services construction activities were largely offset by decreased supporting vessel fabrication work between periods. The revenues of this business represented approximately 17.7% of consolidated revenues for Fiscal 2026 and 19.2% of consolidated revenues for the prior fiscal year. The project backlog amounts for the Industrial segment as of January 31, 2026 and 2025 were $253.0 million and $53.2 million, respectively.
Previous wording
Due primarily to the increase in consolidated revenues for Fiscal 2025 compared with revenues for Fiscal 2024, consolidated cost of revenues also increased. These costs were $733.2 million and $492.5 million for Fiscal 2025 and Fiscal 2024, respectively.
Current wording
Due primarily to the increase in consolidated revenues for Fiscal 2026 compared with revenues for Fiscal 2025, consolidated cost of revenues also increased. These costs were $750.9 million and $733.2 million for Fiscal 2026 and Fiscal 2025, respectively.
Previous wording
Selling, general and administrative expenses were $52.8 million and $44.4 million for Fiscal 2025 and Fiscal 2024, respectively, representing 6.0% and 7.7% of consolidated revenues for the corresponding periods, respectively.
Current wording
Selling, general and administrative expenses were $59.0 million for Fiscal 2026 and $52.8 million for Fiscal 2025, representing 6.2% and 6.0% of consolidated revenues, respectively. The increase was primarily due to higher incentive and stock-based compensation.
Previous wording
We recorded income tax expense for Fiscal 2024 in the net amount of approximately $16.6 million primarily due to our reporting pre-tax income for financial reporting purposes in the amount of $48.9 million for the year. Our annual effective income tax rate for Fiscal 2024 was 33.9%. This tax rate differed from the statutory federal tax rate of 21% due to the net operating loss of APC’s subsidiary in the U.K. that was not tax effected with benefit. Partially offsetting this unfavorable tax effect were the benefits provided by foreign tax rate differentials.
Current wording
We recorded income tax expense for Fiscal 2026 in the net amount of approximately $22.7 million. Our annual effective income tax rate for Fiscal 2026 was 14.2%. This tax rate differed from the statutory federal tax rate of 21% due to the favorable effects of the windfall benefit from stock-based compensation and the change in valuation allowance for NOLs. Partially offsetting these benefits were the unfavorable effects of state income taxes and certain nondeductible expense amounts.
Previous wording
We recorded income tax expense for Fiscal 2025 in the net amount of approximately $25.7 million primarily due to our reporting pre-tax income for financial reporting purposes in the amount of $111.2 million for the year. Our annual effective income tax rate for Fiscal 2025 was 23.2%. This tax rate differed from the statutory federal tax rate of 21% due to the unfavorable effect of state income taxes and the unfavorable effects of certain nondeductible expense amounts. Partially offsetting these unfavorable effects were the investment tax credit effect recorded in Fiscal 2025 related to our solar fund investments and the windfall benefit from stock-based compensation.
Current wording
We recorded income tax expense for Fiscal 2025 in the net amount of approximately $25.7 million. Our annual effective income tax rate for Fiscal 2025 was 23.2%. This tax rate differed from the statutory federal tax rate of 21% due to the unfavorable effect of state income taxes and the unfavorable effects of certain nondeductible expense amounts. Partially offsetting these unfavorable effects were the investment tax credit effect recorded in Fiscal 2025 related to our solar fund investments and the windfall benefit from stock-based compensation.
Previous wording
At January 31, 2025 and 2024, our balances of cash and cash equivalents were $145.3 million and $197.0 million, respectively, which represented a decrease of $51.7 million between years.
Current wording
As of January 31, 2026 and 2025, our balances of cash and cash equivalents were $339.5 million and $145.3 million, respectively, which represented an increase of $194.2 million between years.
Previous wording
The net amount of cash provided by operating activities for Fiscal 2025 was $167.6 million. Our net income for Fiscal 2025, adjusted favorably by the net amount of non-cash income and expense items, represented a source of cash in the total amount of $99.7 million. The temporary increase in contract liabilities of $118.2 million represented a source of cash, primarily due to the net effect of the early phase of construction activities on certain projects. The increase in the combined
Current wording
The net amount of cash provided by operating activities for Fiscal 2026 was $414.7 million. Our net income for Fiscal 2026, adjusted favorably by the net amount of non-cash income and expense items, represented a source of cash in the total amount of $157.3 million. The temporary increase in contract liabilities of $214.7 million represented a source of cash, primarily due to the net effect of the early phase of construction activities on certain projects. The decrease of accounts receivable in the amount of $42.3 million represented a source of cash during the period. The increase in the combined level of accounts payable and accrued expenses in the amount of $28.6 million represented a source of cash during the period as well. The increase in contract assets of $15.0 million and increase in other assets of $13.3 million represented uses of cash during the period.
Previous wording
During Fiscal 2025, we used $120.7 million, net of maturities, to invest in available-for-sale (“AFS”) securities consisting primarily of U.S. Treasury notes. We also used $45.0 million, net of maturities, to invest in CDs issued by the Bank. We used $16.3 million to invest in a new solar tax credit entity and fund our remaining capital contribution obligation to a solar energy project we invested in during the prior year. We also used $6.6 million for the purchases of property, plant and equipment.
Current wording
For Fiscal 2026, we used $182.0 million for investing activities. During Fiscal 2026, we used $171.7 million, net of maturities, to invest in available-for-sale (“AFS”) securities consisting primarily of U.S. Treasury notes. We purchased $150.0 million of CDs issued by the Bank and maturities of $150.0 million during the period offset those purchases. We
Previous wording
For Fiscal 2025, we used $26.1 million cash in financing activities, including $18.3 million used for the payment of regular cash dividends and $1.5 million used to repurchase shares of common stock pursuant to our share repurchase program. We also used $6.3 million for share-based award settlements, which represented the net of payments of $12.7 million for withholding taxes reimbursed by shares of common stock and $6.5 million of proceeds from the exercise of stock options during the period. As of January 31, 2025, there were no restrictions with respect to intercompany payments between the holding company, GPS, TRC, APC and SMC.
Current wording
For Fiscal 2026, we used $42.6 million for financing activities, including $24.3 million used for the payment of regular cash dividends and $9.9 million used to repurchase shares of common stock pursuant to our share repurchase program. We also used $8.4 million for share-based award settlements, which represented payments for withholding taxes reimbursed by shares of common stock, net of proceeds received from stock option exercises. As of January 31, 2026, there were no restrictions with respect to intercompany payments among the holding company and our subsidiaries.
Previous wording
At January 31, 2025, a portion of our balance of cash and cash equivalents was invested in a money market fund with most of its net assets invested in cash, U.S. Treasury obligations, other obligations issued by U.S. Government agencies and sponsored enterprises, and repurchase agreements secured by U.S. government obligations. The major portion of our domestic operating bank account balances are maintained with the Bank. We do maintain certain Euro-based bank accounts in Ireland and certain pound sterling-based bank accounts in the U.K. in support of the operations of APC.
Current wording
As of January 31, 2026, certain amounts of our cash equivalents were invested in money market funds with assets invested in cash, U.S. Treasury obligations, other obligations issued by U.S. Government agencies and sponsored enterprises, and repurchase agreements secured by such obligations. Most of our operating bank account balances are maintained with the Bank. We do maintain certain Euro-based bank accounts in Ireland and certain pound sterling-based bank accounts in the U.K. in support of our overseas operations.
Previous wording
In order to monitor the actual and necessary levels of liquidity for our business, we focus on working capital, or net liquidity, in addition to our cash balances. Our net liquidity increased by $56.5 million to $301.4 million as of January 31, 2025 from $244.9 million as of January 31, 2024, due primarily to our net income for the fiscal year, partially offset by the payment of cash dividends, common stock repurchases, and net cash paid for withholding taxes due to stock-based award net settlements. As we have no debt service, as our fixed asset acquisitions in a reporting period are typically low, and as our net liquidity includes our short-term investments and AFS investments, our levels of working capital are not subjected to the volatility that affects our levels of cash and cash equivalents.
Current wording
To monitor the actual and necessary levels of liquidity for our business, we focus on working capital, or net liquidity, in addition to our cash balances. Our net liquidity increased by $119.6 million to $421.0 million as of January 31, 2026 from $301.4 million as of January 31, 2025, due primarily to our net income, partially offset by the payment of cash dividends, common stock repurchases, and settlements of share-based awards, net of withholding taxes paid. As we have no debt service, as our fixed asset acquisitions in a reporting period are typically low, and as our net liquidity includes our short-term investments and AFS investments, our levels of working capital are not subjected to the volatility that affects our levels of cash and cash equivalents.
Previous wording
We believe that cash on hand, our cash equivalents, cash that will be provided from the maturities of short-term investments and other debt securities and cash generated from our future operations, with or without funds available under our New Credit Agreement, will be adequate to meet our general business needs in the foreseeable future. In general, we maintain significant liquid capital in our consolidated balance sheet to ensure the maintenance of our bonding capacity and to provide parent company performance guarantees for EPC and other construction projects.
Current wording
We believe that cash on hand, our cash equivalents, cash that will be provided from the maturities of short-term investments and other debt securities and cash generated from our future operations, with or without funds available under our Credit Agreement, will be adequate to meet our general business needs in the foreseeable future. In general, we maintain significant liquid capital in our consolidated balance sheet to ensure the maintenance of our bonding capacity and to provide parent company performance guarantees for EPC and other construction projects.
Previous wording
On May 24, 2024, we executed with the Bank the New Credit Agreement with an expiration date of May 31, 2027. The New Credit Agreement supersedes the Expired Credit Agreement, reduces the base lending commitment amount from $50.0 million to $35.0 million, increases the letter of credit fees to be consistent with current market conditions, and establishes the interest rate for revolving loans at SOFR plus 1.85%. In addition to the base commitment, the new facility includes an accordion feature that allows for an additional commitment amount of $30.0 million, subject to certain conditions. We may use the borrowing ability to cover other credit instruments issued by the Bank for our use in the ordinary course of business as defined in the New Credit Agreement. Further, on May 31, 2024, we entered into a companion facility, in the amount of $25.0 million, pursuant to which the Company’s Irish subsidiary, APC, may cause the Bank’s European entity to issue letters of credit on its behalf that are secured by a blanket parent company guarantee issued by Argan to the Bank. Despite the reduction in the base amount of the credit commitment provided by the New
Current wording
On May 24, 2024, we executed with the Bank the Credit Agreement with an expiration date of May 31, 2027. The Credit Agreement, which was amended on October 23, 2025, has a base lending commitment amount of $35.0 million and establishes the interest rate for revolving loans at SOFR plus 1.85%. In addition to the base commitment, the credit facility includes an accordion feature that allows for an additional commitment amount of $30.0 million, subject to certain conditions. We may use the borrowing ability to cover other credit instruments issued by the Bank for our use in the ordinary course of business as defined in the Credit Agreement. Further, on May 31, 2024, we entered a companion facility, in the amount of $25.0 million, pursuant to which an overseas subsidiary of the Company may cause the Bank’s European entity to issue letters of credit on its behalf that are secured by a blanket parent company guarantee issued by Argan to the Bank.
Previous wording
At January 31, 2025 and 2024, we did not have any borrowings outstanding under the New Credit Agreement or the Expired Credit Agreement, respectively. At January 31, 2025, there were no outstanding letters of credit issued under the credit facilities.
Current wording
As of January 31, 2026 and 2025, we did not have any borrowings outstanding under the Credit Agreement. However, the Bank has issued a letter of credit in the total outstanding amount of $0.3 million as of January 31, 2026. As of January 31, 2025, there were no outstanding letters of credit issued under the credit facilities.
Previous wording
We have pledged the majority of the Company’s assets to secure its financing arrangements. The Bank’s consent is not required for acquisitions, divestitures, cash dividends or significant investments as long as certain conditions are met. The New Credit Agreement requires that the we comply with certain financial covenants at its fiscal year-end and at each fiscal quarter-end. The New Credit Agreement includes other terms, covenants and events of default that are customary for a credit facility of its size and nature, including a requirement to achieve positive adjusted earnings before interest, taxes, depreciation and amortization, as defined, over each rolling twelve-month measurement period. As of January 31, 2025, we were in compliance with the covenants and other requirements of the New Credit Agreement.
Current wording
We have pledged most of the Company’s assets to secure its financing arrangements. The Bank’s consent is not required for acquisitions, divestitures, cash dividends or significant investments if certain conditions are met. The Credit Agreement requires that we comply with certain financial covenants at our fiscal year-end and at each fiscal quarter-end. The Credit Agreement includes other terms, covenants and events of default that are customary for a credit facility of its size and nature, including a requirement to achieve positive adjusted earnings before interest, taxes, depreciation and amortization, as defined, over each rolling twelve-month measurement period. As of January 31, 2026, we were in compliance with the covenants and other requirements of the Credit Agreement.
Previous wording
During Fiscal 2025, there was no significant change in the nature or amounts of our contractual obligations. We estimate that the balance of such contractual obligations as of January 31, 2025 was less than $20.0 million. The two largest items in this estimate, operating leases and deferred compensation, are amounts included as liabilities in our consolidated balance sheet. The remainder of such obligations relate primarily to open service arrangements. Outstanding commitments represented by open purchase orders and subcontracts related to our construction contracts have not been included in the estimated amounts of contractual obligations as such amounts are expected to be funded through contract billings to customers. We do not have any significant obligations for materials or subcontracted services beyond those required to complete construction contracts awarded to us.
Current wording
During Fiscal 2026, there was no significant change in the nature or amounts of our contractual obligations. We estimate that the balance of such contractual obligations as of January 31, 2026, was less than $20.0 million. The largest items in this estimate, operating leases and contractual and deferred compensation, are amounts included as liabilities in our consolidated balance sheet. The remainder of such obligations relate primarily to open service arrangements. Outstanding commitments represented by open purchase orders and subcontracts related to our construction contracts have not been included in the estimated amounts of contractual obligations as such amounts are expected to be funded through past or future contract billings to customers. We do not have any significant obligations for materials or subcontracted services beyond those required to complete construction contracts awarded to us.
Previous wording
In the normal course of business and for certain major projects, we may be required to obtain surety or performance bonding, to provide parent company guarantees, or to cause the issuance of letters of credit (or some combination thereof) in order to provide performance assurances to clients on behalf of one of our subsidiaries.
Current wording
In the normal course of business and for certain major projects, we may be required to obtain surety or performance bonding, to provide parent company guarantees, or to cause the issuance of letters of credit (or some combination thereof) to provide performance assurances to clients on behalf of one of our subsidiaries.
Previous wording
If our services under a guaranteed project would not be completed or would be determined to have resulted in a material defect or other material deficiency, then we could be responsible for monetary damages or other legal remedies. As is typically required by any surety bond, we would be obligated to reimburse the issuer of any surety bond provided on behalf of a subsidiary for any cash payments made thereunder. The commitments under performance bonds generally end concurrently with the expiration of the related contractual obligation. Not all of our projects require bonding.
Current wording
If our services performed under a guaranteed project would not be completed, or if it would be determined to have resulted in a material defect or other material deficiency, then we could be responsible for monetary damages or other legal remedies. As is typically required by any surety bond, we would be obligated to reimburse the issuer of any surety bond provided on behalf of a subsidiary for any cash payments made thereunder. The commitments under performance bonds generally end concurrently with the expiration of the related contractual obligation.
Previous wording
As of January 31, 2025, the estimated amount of our unsatisfied bonded performance obligations, covering all of our subsidiaries, was approximately $0.7 billion. In addition, as of January 31, 2025, the outstanding amount of bonds covering other risks, including warranty obligations and contract payment retentions related to completed activities, was $25.2 million.
Current wording
As of January 31, 2026, the estimated amount of our unsatisfied bonded performance obligations of all our subsidiaries was approximately $0.5 billion. In addition, as of January 31, 2026, the outstanding amount of bonds covering other risks, including warranty obligations and contract payment retentions related to completed activities, was $44.7 million.
Previous wording
When sufficient information about claims related to performance on projects would be available and monetary damages or other costs or losses would be determined to be probable, we would record such losses. As our subsidiaries are wholly owned, any actual liability related to contract performance is ordinarily reflected in the financial statement account balances determined pursuant to the Company’s accounting for contracts with customers. Any amounts that we may be required to pay in excess of the estimated costs to complete contracts in progress as of January 31, 2025 are not estimable.
Current wording
When sufficient information about claims related to performance on projects would be available and monetary damages or other costs or losses would be determined to be probable, we would record such losses. As our subsidiaries are wholly owned, any actual liability related to contract performance is ordinarily reflected in the financial statement account balances determined pursuant to our accounting for contracts with customers. Any amounts that we may be required to pay in excess of the estimated costs to complete contracts in progress as of January 31, 2026 are not estimable.
Previous wording
We make investments in limited liability companies that make equity investments in solar energy projects that are eligible to receive energy tax credits, for which we have received substantially all of the income tax benefits associated with those investments. During Fiscal 2024, we made an investment of approximately $5.1 million cash in a solar tax credit entity, and during the first quarter of Fiscal 2025, we paid $3.3 million in cash to satisfy our remaining capital contribution obligation.
Current wording
We make investments in limited liability companies that make equity investments in solar energy projects that are eligible to receive energy tax credits, for which we have received substantially all the income tax benefits associated with those investments.
Previous wording
Later in Fiscal 2025, we evaluated and entered into an investment opportunity in an additional solar tax credit entity, where we contributed $13.0 million in the fourth quarter of Fiscal 2025. As of January 31, 2025, we have $11.5 million remaining of cash investment commitments related to this solar fund, which we expect to fulfill in Fiscal 2026. It is likely that we will evaluate opportunities to make other solar energy investments of this type in the future.
Current wording
In Fiscal 2024, we invested $5.1 million in a solar tax credit entity and paid an additional $3.3 million in early Fiscal 2025 to satisfy our remaining capital commitment. Later in Fiscal 2025, we entered an investment opportunity in an additional solar tax credit entity, where we contributed $13.0 million in Fiscal 2025, followed by $11.5 million of remaining contributions in Fiscal 2026. As of January 31, 2026, we had no remaining cash investment commitments related to the solar tax credit entities. It is likely that we will evaluate opportunities to make other alternative energy project investments in the future.
Previous wording
We selectively participate in power plant project development and related financing activities 1) to maintain a proprietary pipeline for future EPC services contract opportunities, 2) to secure exclusive rights to EPC contracts, and 3) to generate profits through interest income and project development success fees. As is common in our industry, EPC contractors and third parties periodically form joint ventures, limited partnerships and limited liability companies for purposes of executing a project or program for a project owner. These teaming arrangements are typically dissolved upon completion of the project or program. In addition, we may obtain interests in VIEs formed by its owners for a specific purpose. The evaluation of whether such interests represent our financial control of a VIE requires analysis and judgment.
Current wording
We selectively participate in power plant project development and related financing activities. As is common in our industry, EPC contractors and third parties periodically form joint ventures, limited partnerships and limited liability companies for purposes of executing a project or program for a project owner. These special purpose entities are typically dissolved upon completion of the project or program.
Previous wording
In Fiscal 2025, we funded a loan to a special purpose entity in the amount of $5.0 million to support the development phase of a natural gas-fired power plant (see Note 18 to the accompanying consolidated financial statements). We may enter into other support arrangements in the future in connection with power plant development opportunities when they arise and when we are confident that providing early financial support for the projects will lead to the award of the corresponding EPC contracts to us.
Current wording
We may enter other support arrangements in the future in connection with power plant development opportunities when they arise and when we are confident that providing early financial support for the projects will lead to the award of the corresponding EPC contracts to us.
Showing the first 40 of 53 pairs. Open the source sections for the rest.
Rearranged current paragraphs (5)
Current report — wording carried from elsewhere
ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF** OPERATIONS.**
Current report — wording carried from elsewhere
Fiscal 2025, and should be read in conjunction with the consolidated financial statements and notes thereto included elsewhere in Item 8 of this 2026 Annual Report.
Current report — wording carried from elsewhere
In Fiscal 2025, we funded a loan to a special purpose entity in the amount of $5.0 million to support the development phase of a natural gas-fired power plant. During Fiscal 2026, the loan was repaid in full.
Current report — wording carried from elsewhere
Revenues from fixed-price contracts, including portions of estimated gross profit, are recognized as services are provided, based on costs incurred and estimated total contract costs using the cost-to-cost approach. The cost and profit estimates
Current report — wording carried from elsewhere
Most of our customer contracts include the right for customers to terminate contracts for convenience. The value of future work that companies are contractually obligated to perform pursuant to active customer contracts should not be included in the disclosure of remaining unsatisfied performance obligations (“RUPO”) when the corresponding contracts include termination for convenience clauses without substantial penalties accruing to the customers upon such terminations. In the application of this guidance, we assess whether the nature of the work being performed under contract is largely service-
Rearranged previous paragraphs (3)
Previous report — wording carried elsewhere
statements. These amounts reflect differences in the periods in which certain transactions are recognized for financial and income tax reporting purposes.
Previous report — wording carried elsewhere
Our revenues are primarily derived from construction contracts that can span several quarters or years. We enter into EPC and other long-term construction contracts principally on the basis of competitive bids or in conjunction with our support of the development of power plant projects. The types of contracts may vary. However, the EPC contracts of our power
Previous report — wording carried elsewhere
The transaction price of a contract represents the value used to determine the amount of revenues recognized as of the balance sheet date. It may reflect amounts of variable consideration, which could be either increases or decreases to the