---
title: "The hidden AI \"water seller\"? Argan (AGX) Q3 earnings quick read: Not just construction, but also a winner in energy transition"
description: "AI data centers not only require chips, but also massive amounts of electricity. While everyone is focusing on NVIDIA, power plant builder Argan (AGX) just delivered a very interesting report. 📊 Here"
type: "topic"
locale: "en"
url: "https://longbridge.com/en/topics/100000000343555.md"
published_at: "2025-12-09T13:11:58.000Z"
author: "[SUMO](https://longbridge.com/en/profiles/9184639)"
---

# The hidden AI "water seller"? Argan (AGX) Q3 earnings quick read: Not just construction, but also a winner in energy transition

AI data centers not only require chips but also massive amounts of electricity. While everyone is focused on Nvidia, power plant builder Argan (AGX) just delivered a very interesting report card. 📊

Here are the key highlights for Q3 FY26:

**1\. Backlog Hits Record High (Backlog is King) 📜**

The most eye-catching data isn't revenue but the staggering **$3 billion** backlog.

-   This means extremely high revenue visibility in the future.
-   Main drivers: Natural gas projects (79%) and renewables (16%).

**2\. Profitability Significantly Improved 💰**

Although revenue dipped slightly by 2.3% YoY to $251 million due to project transitions, **profitability strengthened**:

-   **Gross Margin:** Rose to 18.7% (vs. 17.2% last year).
-   **EPS:** $2.17 (vs. $2.00 last year).
-   Reasons: Better project mix, strong pricing power, and fewer competitors.

**3\. Why Is It a Key Player in AI Infrastructure? 🏭**

Management made it clear in the call: AI data centers and reshoring manufacturing require **24/7 uninterrupted** power supply.

-   Wind/solar are intermittent and must rely on **natural gas power** to stabilize the grid.
-   Argan is one of the few EPC firms capable of handling such complex combined-cycle gas plants, with deeper moat than expected.

**4\. Rock-Solid Balance Sheet 🛡️**

-   **Zero debt**.
-   Cash and investments total **$726 million**.
-   Dividend raised 33%, with ongoing share buybacks.

**💡 Bottom Line:**

Argan is riding the "supercycle" of energy infrastructure. If you're bullish on AI-driven long-term power demand, this $3B-backlog, zero-debt company belongs on your watchlist.

$Argan(AGX.US) 

[AGX Q3FY26 Earnings Summary](https://open.substack.com/pub/sumo1015/p/argan-inc-agx-2026?utm_source=share&utm_medium=android&r=4pwcj7)

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---

> **Disclaimer**: This article is for reference only and does not constitute any investment advice.