Quarterly Report for Quarter Ending October 31, 2025 (Form 10-Q)

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Power Industry Services: This 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.

Industrial Construction Services: This segment primarily provides 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.

Telecommunications Infrastructure Services: This segment provides telecommunications project management, construction, installation, maintenance, repair and response services to commercial, local government and federal government customers primarily in the Mid-Atlantic region of the U.S.

We may make opportunistic acquisitions and/or investments by identifying companies with significant potential for profitable growth and realizable synergies with one or more of our existing businesses. As a result, we may have more than one industrial focus depending on the opportunities and/or needs of our customers. Acquired companies will be operated in a manner that we believe will best provide long-term and enduring value for our stockholders.

Market Outlook

Most of our consolidated revenues relate to performance in the U.S. by the Power Industry Services segment, which provides EPC services to design, build, and commission large-scale energy projects. In the U.S., electricity demand has reached its highest level in two decades, driven by the build-out of data centers supporting artificial intelligence technologies, the adoption of electric vehicles, and the reshoring of manufacturing activities. 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 lives. Throughout the U.S., the risk of electricity shortages is rising as the retirement of traditional power plants outpaces their replacements. While renewable energy sources like solar and wind are increasingly prevalent, they often cannot provide the same level of consistent, around-the-clock power generation as the retiring thermal plants. Natural gas-fired power plants are expected to remain a key component of future capacity additions due to their cost-effectiveness, reliability, and ability to support intermittent energy sources.

Utility-scale solar, wind, and battery storage projects continue to expand their prevalence, supported by declining capital costs, improved energy storage systems that enhance grid reliability, and supportive tax and policy incentives. Despite their increasing cost competitiveness and their rapid deployment over the past several years, the long-term trajectory of renewables may be influenced by shifts in energy policy, evolving regulatory frameworks, and grid integration challenges.

Recent changes in U.S. trade policy, including the implementation of new or increased tariffs, have introduced cost and supply chain uncertainties affecting certain construction materials and equipment. Tariffs on imported materials, including steel and aluminum, could significantly impact the cost of building power plants. Tariff measures may also cause import delays, increasing lead times necessary for materials to arrive at our construction sites. The resulting rise in material costs and delivery delays could lead to higher overall project costs and changes to project timelines. As the current U.S. administration's approach to tariffs remains fluid, the full extent of these effects remains uncertain. We continue to monitor developments closely, as prolonged or expanded trade restrictions could negatively affect project costs, timing, and customer demand.

On July 4, 2025, the OBBBA was enacted into law. The legislation includes several changes to U.S. federal income tax law that generally allow for more favorable deductibility of certain business expenses beginning in calendar year 2025, including the restoration of immediate expensing for domestic research and development expenditures and the reinstatement of 100% bonus depreciation for qualified property. The OBBBA also includes certain modifications to the U.S. taxation of foreign activity, including changes to rules governing foreign tax credits, GILTI, FDII, and BEAT, among other changes. Most of these modifications to the U.S. taxation of foreign activity are generally effective for tax years beginning after December 31, 2025. Certain benefits from the OBBBA, such as deducting previously capitalized domestic research and development expenditures, are included in the provision for income taxes for the three and nine months ended October 31, 2025. We are currently evaluating the impact on future periods. We do not expect the impact of the OBBBA to be material.

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Project Backlog

As of October 31, 2025 and January 31, 2025, our consolidated project backlog amounts of $3.0 billion and $1.4 billion, respectively, consisted substantially of projects within our Power Industry Services reporting segment.

The amount of our project backlog reported at a point in time represents the expected revenue 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.

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., 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.

860 MW Thermal Project

In October 2025, we entered into 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 is expected to begin during the fourth quarter of Fiscal 2026, with an expected project completion date in calendar year 2028.

1.4 GW Thermal Project

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 is expected to begin during the fourth quarter of Fiscal 2026, with an expected project completion date in calendar year 2029.

170 MW Thermal Project

In July 2025, we entered into an EPC services contract for the development of a power plant with a planned electricity generation capacity of approximately 170 MW. The facility will be built 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.

Sandow Lakes Power Station

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.

Tarbert Next Generation Power Station

In January 2025, we entered into 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.

700 MW Combined-Cycle Project

In December 2024, we entered into 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 the fiscal year ending January 31, 2028.

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Louisiana LNG Facility

In June 2024, we 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 our Power Industry Services segment, was a collaboration with our Industrial Construction Services segment. The project was completed during the first half of Fiscal 2026.

405 MW Midwest Solar Project

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 the first half of Fiscal 2027.

Midwest Solar and Battery Projects

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 the fourth quarter of Fiscal 2025. Completion of the final project, which has experienced certain regulatory delays, is expected to occur within the first half of Fiscal 2027.

Trumbull Energy Center

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. Project completion is scheduled for the first quarter of Fiscal 2027.

Industrial Construction Services Project Backlog

As of October 31, 2025, the Industrial Construction Services segment's project backlog was approximately $158.8 million as compared to $53.2 million on January 31, 2025. During the nine months ended October 31, 2025, the Industrial Construction Services segment added contracts to its project backlog related to an automotive plant, a data center, an aluminum rolling and recycling facility and water treatment plant, and facilities related to certain other industries.

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Comparison of the Results of Operations for the Three Months Ended October 31, 2025 and 2024

The following schedule compares our operating results for the three months ended October 31, 2025 and 2024 (dollars in thousands):

Revenues

Power Industry Services

The revenues of the Power Industry Services business decreased by 7.8%, or $16.6 million, to $195.5 million for the three months ended October 31, 2025 compared with revenues of $212.1 million for the three months ended October 31, 2024 as the quarterly construction activities decreased for the Trumbull Energy Center and the Midwest Solar and Battery Projects, and as activities had concluded prior to the current quarter for the Louisiana LNG Facility. The decrease in revenues between quarters was partially offset by increased construction activities associated with the 405 MW Midwest Solar Project and the 700 MW Combined-Cycle Project. The revenues of this business segment represented approximately 77.8% of consolidated revenues for the quarter ended October 31, 2025 and 82.5% of consolidated revenues for the corresponding prior year quarter.

The primary drivers for this segment's revenues for the three months ended October 31, 2024, were the construction of the Midwest Solar and Battery Projects, the Trumbull Energy Center, the 405 MW Midwest Solar Project and the Louisiana LNG Facility.

Industrial Construction Services

The revenues of Industrial Construction Services increased by $8.1 million, or 19.4%, to $49.4 million for the three months ended October 31, 2025 compared to revenues of $41.3 million for the three months ended October 31, 2024, as the amounts of field services construction activities and vessel fabrication work increased between periods. For the three months ended October 31, 2025 and 2024, the revenues of this segment represented 19.7% and 16.1% of consolidated revenues for the corresponding periods.

Telecommunications Infrastructure Services

The revenues of Telecommunications Infrastructure Services were $6.3 million for the three months ended October 31, 2025, compared with revenues of $3.6 million for the three months ended October 31, 2024.

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Cost of Revenues

Cost of revenues were $204.2 million and $212.7 million for the three-month periods ended October 31, 2025 and 2024, respectively.

For the three-month period ended October 31, 2025, we reported a consolidated gross profit of approximately $46.9 million, which represented a gross profit percentage of approximately 18.7% of corresponding consolidated revenues. For the three-month period ended October 31, 2024, we reported a consolidated gross profit of approximately $44.3 million, which represented a gross profit percentage of approximately 17.2% of corresponding consolidated revenues. The gross profit percentage increased between periods primarily due to the changing mix of projects and contract types. The gross profit percentages of corresponding revenues for the Power Industry Services, Industrial Construction Services and the Telecommunications Infrastructure Services segments were 19.8%, 13.9% and 21.2%, respectively, for the quarter ended October 31, 2025. The gross profit percentages of corresponding revenues for the Power Industry Services, Industrial Construction Services and the Telecommunications Infrastructure Services segments were 18.3%, 11.1% and 26.1%, respectively, for the quarter ended October 31, 2024.

Selling, General and Administrative Expenses

These costs were $14.3 million and $14.0 million for the three months ended October 31, 2025 and 2024, respectively, and represented 5.7% and 5.4% of corresponding consolidated revenues, respectively.

Other Income, Net

For the three months ended October 31, 2025 and 2024, the net amounts of other income were $7.1 million and $6.6 million, respectively, which primarily reflected income earned during the periods on investments, cash and cash equivalent balances.

Provision for Income Taxes

We recorded income tax expense for the three months ended October 31, 2025 in the net amount of approximately $9.0 million. Our effective income tax rate for the three months ended October 31, 2025 was 22.6%. This effective tax rate differed from the statutory federal tax rate of 21% due primarily to the typically unfavorable estimated effects of state income taxes, partially offset by the favorable tax benefit resulting from stock option exercises during the period.

We recorded income tax expense for the three months ended October 31, 2024 in the net amount of approximately $9.0 million. Our effective income tax rate for the three months ended October 31, 2024 was 24.3%. This effective tax rate differed from the statutory federal tax rate of 21% due primarily to the typically unfavorable estimated effects of state income taxes and permanent differences.

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Comparison of the Results of Operations for the Nine Months Ended October 31, 2025 and 2024

The following schedule compares our operating results for the nine months ended October 31, 2025 and 2024 (dollars in thousands):

Revenues

Power Industry Services

The revenues of the Power Industry Services segment increased by 11.4%, or $56.7 million, to $552.8 million for the nine months ended October 31, 2025 compared with revenues of $496.1 million for the nine months ended October 31, 2024 as the construction activities increased for the 405 MW Midwest Solar Project and the 700 MW Combined-Cycle Project. The increase in revenues between periods was partially offset by decreased construction activities associated with the Midwest Solar and Battery Projects, the Trumbull Energy Center, the Shannonbridge Power Project, the ESB FlexGen Peaker Plants, and the Louisiana LNG Facility, as those projects are in their later stages or have fully concluded. The revenues of this business segment represented approximately 81.0% of consolidated revenues for the nine months ended October 31, 2025 and 77.3% of consolidated revenues for the nine months ended October 31, 2024.

The primary driver for this segment's revenues for the nine months ended October 31, 2024, were the construction activities of the Midwest Solar and Battery Projects, the Trumbull Energy Center, the 405 MW Midwest Solar Project, and the Louisiana LNG Facility.

Industrial Construction Services

The revenues of our Industrial Construction Services segment decreased by $20.1 million, or 14.9%, to $114.6 million for the nine months ended October 31, 2025 compared to revenues of $134.7 million for the nine months ended October 31, 2024 as the amounts of field services and vessel fabrication work decreased meaningfully between periods. For the nine months ended October 31, 2025 and 2024, the revenues of this segment represented 16.8% and 21.0% of consolidated revenues for the corresponding periods.

Telecommunications Infrastructure Services

The revenue results of this business segment were $15.1 million for the nine-month period ended October 31, 2025, an increase of $4.2 million, or 38.8%, from the amount of revenues earned during the nine months ended October 31, 2024.

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Cost of Revenues

With the increase in consolidated revenues for the nine months ended October 31, 2025 compared with the nine months ended October 31, 2024, the consolidated cost of revenues also increased between the periods. These costs were $554.5 million and $548.3 million for the nine-month periods ended October 31, 2025 and 2024, respectively.

For the nine-month period ended October 31, 2025, we reported a consolidated gross profit of approximately $128.1 million, which represented a gross profit percentage of approximately 18.8% of corresponding consolidated revenues. For the nine-month period ended October 31, 2024, we reported a consolidated gross profit of approximately $93.4 million, which represented a gross profit percentage of approximately 14.6% of corresponding consolidated revenues. The consolidated gross profit percentage increased between periods primarily due to the changing mix of projects and contract types. The gross profit percentages of corresponding revenues for the Power Industry Services, Industrial Construction Services and the Telecommunications Infrastructure Services segments were 20.0%, 12.7% and 21.4%, respectively, for the nine months ended October 31, 2025. The gross profit percentages of corresponding revenues for the Power Industry Services, Industrial Construction Services and the Telecommunications Infrastructure Services segments were 14.8%, 12.5% and 26.8%, respectively, for the nine months ended October 31, 2024.

Selling, General and Administrative Expenses

These costs were $41.0 million and $37.8 million for the nine months ended October 31, 2025 and 2024, respectively, and represented 6.0% and 5.9% of corresponding consolidated revenues, respectively.

Other Income, Net

Other income, net, for the nine months ended October 31, 2025 and 2024 was $18.1 million and $17.0 million, respectively, which primarily reflected income earned during the period on investments, cash and cash equivalent balances.

Provision for Income Taxes

We recorded income tax expense for the nine months ended October 31, 2025 in the amount of approximately $16.6 million, which represents an effective income tax rate of 15.7%. This effective tax rate differed from the statutory federal tax rate of 21% due primarily to the favorable tax benefit resulting from stock option exercises during the period, partially offset by the typically unfavorable estimated effects of state income taxes.

For the nine months ended October 31, 2024, we reported income tax expense in the amount of approximately $18.5 million, which represented an effective tax rate of 25.5% for the period. This effective tax rate differed from the statutory federal tax rate of 21% due primarily to the typically unfavorable estimated effects of state income taxes.

Liquidity and Capital Resources as of October 31, 2025

As of October 31, 2025 and January 31, 2025, our balances of cash and cash equivalents were $306.3 million and $145.3 million, respectively, which represented an increase of $161.0 million during the current fiscal year.

The net amount of cash provided by operating activities for the nine months ended October 31, 2025 was $242.4 million. Our net income for the nine months ended October 31, 2025, adjusted favorably by the net amount of non-cash income and expense items, represented a source of cash in the total amount of $103.9 million. The increase in contract liabilities of $152.7 million and the decrease in accounts receivable in the amount of $5.5 million represented sources of cash during the period. The increase of contract assets of $10.0 million and the increase of other assets of $9.6 million represented uses of cash during the period. The decrease in the combined level of accounts payable and accrued expenses in the amount of $0.1 million represented a use of cash during the period as well.

During the nine months ended October 31, 2025, our primary source of cash from investing activities was the net maturities of CDs issued by the Bank, in the amount of $35.0 million. We used $72.2 million, net of maturities, to invest in AFS securities consisting of U.S. Treasury notes. We also used $11.5 million to fund our remaining capital contribution obligation to a solar energy project and $2.7 million for purchases of property, plant, and equipment.

For the nine months ended October 31, 2025, we used $32.5 million in cash for financing activities, including $7.0 million used to repurchase shares of common stock pursuant to our share purchase program and $17.3 million used for the payment of regular cash dividends. We also used $8.1 million for share-based award settlements, which represented payments for

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withholding taxes reimbursed by shares of common stock, net of proceeds received from stock option exercises. As of October 31, 2025, there were no restrictions with respect to intercompany payments between the holding company and all subsidiaries.

As of October 31, 2025, 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.

In order to monitor the actual and necessary levels of liquidity for our business, we focus on net liquidity, or working capital, in addition to our cash balances. During the nine months ended October 31, 2025, our net liquidity increased by $75.9 million to $377.3 million 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 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.

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.

However, any significant future acquisition, investment, or other unplanned cost or cash requirement may require us to raise additional funds through the issuance of debt and/or equity securities. There can be no assurance that such financing will be available on terms acceptable to us, or at all.

Financing Arrangements

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 into 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.

As of October 31, 2025, we did not have any outstanding borrowings under the Credit Agreement. However, the Bank has issued a letter of credit in the total outstanding amount of $0.3 million as of October 31, 2025.

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 Credit Agreement requires that we comply with certain financial covenants at its 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 October 31, 2025, we were in compliance with the covenants and other requirements of the Credit Agreement.

Performance Bonds and Guarantees

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.

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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.

As of October 31, 2025, the estimated amount of our unsatisfied bonded performance obligations, covering all of our subsidiaries, was approximately $0.5 billion. In addition, as of October 31, 2025, the outstanding amount of bonds covering other risks, including warranty obligations and contract payment retentions related to completed activities, was $69.5million.

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 October 31, 2025 are not estimable.

Solar Energy Project Investments

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 the nine months ended October 31, 2025, we made $11.5 million of cash contributions to solar tax credit entities. As of October 31, 2025, 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.

Development Financing

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.

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, which remains outstanding as of October 31, 2025. 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.

Earnings before Interest, Taxes, Depreciation and Amortization ("EBITDA")

We believe that EBITDA is a meaningful presentation that enables us to assess and compare our operating performance on a consistent basis by removing from our operating results the impacts of our capital structure, the effects of the accounting methods used to compute depreciation and amortization and the effects of operating in different income tax jurisdictions. Further, we believe that EBITDA is widely used by investors and analysts as a measure of performance.

However, as EBITDA is not a measure of performance calculated in accordance with U.S. GAAP, we do not believe that this measure should be considered in isolation from, or as a substitute for, the results of our operations presented in accordance with U.S. GAAP that are included in our consolidated financial statements. In addition, our EBITDA does not necessarily represent funds available for discretionary use and is not necessarily a measure of our ability to fund our cash needs.

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The following tables present the determinations of EBITDA for the three and nine months ended October 31, 2025 and 2024, respectively (amounts in thousands):

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Critical Accounting Policies

There have been no material changes in our critical accounting policies and estimates from those disclosed in our Annual Report filed with the SEC on March 27, 2025.

Recently Issued Accounting Pronouncements

See Note 1 to the accompanying condensed consolidated financial statements for discussion on recently issued accounting pronouncements.