Argan (NYSE:AGX) Inc. reported robust third-quarter earnings for fiscal 2025, significantly exceeding analyst expectations. The company posted an earnings per share (EPS) of $2, compared to the forecasted $1.12. Revenues reached $257 million, marking a 57% increase year-over-year. Following the announcement, Argan's stock rose by 2.03% in after-hours trading, reflecting strong market confidence.
Key Takeaways
- Argan's EPS of $2 surpassed forecasts by 78.6%.
- Revenues increased by 57% year-over-year to $257 million.
- The stock price rose by 2.03% in after-hours trading.
- The company reported a significant improvement in gross margin to 17.2%.
- Argan's project backlog grew to $800 million, with expectations to exceed $1 billion.
Company Performance
Argan Inc. showcased impressive performance in Q3 of fiscal 2025, with revenues jumping 57% compared to the same period last year. The company's strategic focus on both traditional and renewable energy projects has paid dividends, as evidenced by the substantial increase in net income and improved gross margins. Compared to its peers in the energy sector, Argan's diverse project portfolio and strong execution capabilities have positioned it favorably.
Financial Highlights
- Revenue: $257 million, up 57% year-over-year.
- Earnings per share: $2, compared to $1.12 forecasted.
- Net Income: $28 million, a substantial increase from the previous year.
- Gross Margin: 17.2%, improved from 11.7% last year.
- EBITDA: $37.5 million, up from $12.2 million last year.
Earnings vs. Forecast
Argan's actual EPS of $2 significantly exceeded the forecasted $1.12, representing a surprise percentage of 78.6%. This earnings beat highlights the company's strong operational execution and ability to capitalize on industry trends. Compared to previous quarters, this quarter's performance marks one of the most significant earnings surprises in recent history for Argan.
Market Reaction
Following the earnings announcement, Argan's stock experienced a 2.03% increase in after-hours trading, reaching $152. This movement reflects positive investor sentiment, driven by the company's robust financial performance and optimistic outlook. The stock's current price is close to its 52-week high of $165.33, indicating strong market confidence.
Company Outlook
Looking ahead, Argan expects its project backlog to exceed $1 billion by early next year, with multiple gas-fired projects set to commence in the next eight months. The company remains focused on expanding its capabilities in both domestic and renewable energy projects, anticipating continued growth in energy demand and infrastructure needs.
Executive Commentary
"This is a very exciting time for our company," said David Watson, CEO. "We are one of only a few companies with the capabilities and experience to build all types of power facilities." CFO Josh Bacher added, "Project success for our customers is the number one way to get repeat business and future gross margins."
Q&A
During the earnings call, analysts inquired about the drivers behind the improved gross margins and the company's capacity to manage multiple projects. Executives highlighted strong project execution and a robust pipeline of opportunities, particularly in Texas, as key factors.
Risks and Challenges
- Supply Chain Issues: Potential disruptions could impact project timelines and costs.
- Market Saturation: Increasing competition in the renewable energy sector.
- Macroeconomic Pressures: Economic downturns could affect project funding and demand.
- Regulatory Changes: Shifts in energy policies could impact project viability.
- Labor Shortages: Difficulty in hiring skilled workers for power plant construction jobs.
Full transcript - Argan (AGX) Q3 2025:
Conference Operator: Good evening, ladies and gentlemen, and welcome to the Oregon, Inc. Earnings Release Conference Call for the 3rd Fiscal Quarter Ended October 31, 2024. This call is being recorded. All participants have been placed on a listen only mode. Following management's remarks, the call will be open for questions.
There is a slide presentation that accompanies today's remarks, which can be accessed via the webcast. At this time, it is my pleasure to turn the floor over to your host for today, Jennifer Belodeau of IMF Investor Relations. Please go ahead.
Jennifer Belodeau, Investor Relations, Argan, Inc.: Thank you. Good evening, and welcome to our conference call to discuss Argan's results for the 3rd fiscal quarter ended October 31, 2024. On the call today, we have David Watson, Chief Executive Officer and Josh Bacher, Chief Financial Officer. I will take a moment to read the Safe Harbor statements. Statements made during this conference call and presented in the presentation that are not based on historical facts are forward looking statements.
Such statements include, but are not limited to, projections or statements of future goals and targets regarding the company's revenues and profits. These statements are subject to known and unknown factors and risks. The company's actual results, performance or achievements may differ materially from those expressed or implied by these forward looking statements and some of the factors and risks that could cause or contribute to such material differences have been described in this afternoon's press release and in AARGAN's filings with the U. S. Securities and Exchange Commission.
These statements are based on information and understandings that are believed to be accurate as of today, and we do not undertake any duty to update such forward looking statements. Earlier this afternoon, the company issued a press release announcing its Q3 fiscal 2025 financial results and filed its corresponding Form 10 Q report with the Securities and Exchange Commission. Okay. With that out of the way, I will turn the call over to David Watson, CEO of Arcan. Go ahead, David.
David Watson, Chief Executive Officer, Argan, Inc.: Thanks, Jennifer, and thank you, everyone, for joining today. I'll start by reviewing some of the highlights of our operations and activities, and Josh Bacher, our CFO will go over our financial results for the 3rd fiscal quarter ended October 31, 2024. Then we'll open up the call for a brief Q and A. Our Q3 results were the 2nd highest in company history and I'm very proud of our team's accomplishment. We are looking forward to continued success in the coming years.
We delivered strong execution in the quarter as evidenced by consolidated revenue growth of 57% to $257,000,000 with gross margin of 17.2 percent substantially improved net income of $28,000,000 or $2 per diluted share and EBITDA of 37,500,000 dollars Our Power Services segment had a particularly strong quarter as evidenced by revenue growth of 75 percent to $212,000,000 with a gross margin of 18.3 percent demonstrating our ability to drive enhanced profitability on our renewable as well as on our natural gas projects. TRC has delivered a solid quarter with revenue growth of 8% and our telecommunications segment recorded revenue performance consistent with last year's Q3. Project backlog of $800,000,000 at the close of the quarter represents an increase of 6% compared to backlog at the beginning of the year and includes $478,000,000 of renewable projects reflecting the market appeal of our energy agnostic capabilities and our ability to diversify our backlog mix. Additionally, our balance sheet reflected $506,000,000 of cash and investments, net liquidity of $281,000,000 and no debt at October 31, 2024. During the quarter, our Board of Directors approved a 25% increase in our quarterly dividend amount to $0.375 per common share or $1.50 annually from the previous quarter dividend amount of $0.30 per common share.
This increase comes just 1 year after our previous dividend raise and reflects our confidence in the business and our favorable view of the growing pipeline of opportunities we're seeing as the industry mobilizes to build the facilities both traditional gas fired and renewable that will be needed to meet the anticipated surge in energy demand that has been widely projected. Now on to the operational review. Slides 45 present our 3 reportable business segments. Our Industry Services is comprised of our Gemma (EGX:ECAP) Power Systems Analytic Projects Company operating units, which focus on the construction of multiple types of power facilities, including efficient gas fired power plants, solar energy fields, biomass facilities and wind farms. Power Industry Services revenues increased 75 percent to $212,000,000 for the current quarter as compared to $121,300,000 for the Q3 of fiscal 2024.
The segment represented 83% of our 3rd quarter revenues and reported pretax book income of $36,000,000 Industrial Construction Services, which is represented by TRC had a solid quarter with revenue growth of 8% to $41,300,000 or 16 percent of our 3rd quarter consolidated revenues and pre tax book income of $2,700,000 TRC primarily provides solutions for industrial construction projects with a concentration in agriculture, petrochemical, pulp and paper, water and power and has seen a great deal of market interest for our capabilities as a project partner as many companies onshore or expand their U. S. Manufacturing operations. CRC has a strong footprint in the Southeast region of the U. S.
Which is a notably high growth region for its focus industries. Finally, we have our Telecommunications Infrastructure Services Group, our smallest segment, which contributed 1% of our 3rd quarter revenues. SMC Infrastructure Solutions is our operating brand in this segment, providing outside construction services for the utility and telecommunications sectors as well as inside the premises wiring services primarily for federal government locations and military installations requiring high level security clearance. During the past year, we've commented and many media and industry publications have noted that energy demand in the U. S.
And around the globe is expected to grow substantially in the near term. In the U. S. As more data centers come online and manufacturing operations are reassured, our power grid is going to need additional energy resources to function reliably and securely in generating high quality power to meet 20 fourseven demand. Additionally, EVs are steadily increasing as a percentage of new cars sold and with that growth, we can expect more homes and commercial spaces to install EV chargers adding another element of demand to the power grid.
With these considerations in mind, it is widely acknowledged that energy infrastructure needs to be expanded and strengthened to meet anticipated increased capacity demands. With our energy agnostic capabilities, RGN is uniquely positioned to facilitate the construction of any type of power facility. So as it has become more evident that the most efficient way to ensure stable grids and reliable power generation is through a combination of traditional gas fired power plants as well as renewables, we're well suited for any and all projects that bolster energy generation. We're optimistic about the pipeline of opportunities we're seeing and look forward to playing a leading role in the ensuing build out of the power resources we need in order to meet the expected significant growth in demand. We have been a long time leader in supporting the establishment of cleaner power resources.
Renewable projects represented approximately $478,000,000 of our $800,000,000 backlog at October 31, 2024 and 92% of our current project backlog supports 0 or low carbon emissions. Over the last few years, the company has intentionally diversified our backlog to include increasing portion of renewable projects. Nonetheless, we expect gas fired and other thermal power plants to remain the core of our business for many years to come, especially as the industry seeks to provide consistent and high quality power sources. We are committed to adding additional power plant construction jobs over the next 8 months and we'll focus on executing for our customers while growing our team to ensure we're well staffed for the opportunities ahead. As I mentioned earlier, our team drove strong execution this quarter and I'd
Josh Bacher, Chief Financial Officer, Argan, Inc.: like to provide some project updates.
David Watson, Chief Executive Officer, Argan, Inc.: Gemma is at peak construction on the Trumbull Energy Center project in Lordstown, Ohio, where we're providing EPC services for a 9 50 Megawatt natural gas fired power plant. Trumbull is a combined cycle power station that will assist in fulfilling electricity needs as the region phases out several coal fired plants. From start to finish, the project will entail design, procurement, construction and commissioning. Trumbull is designed to be one of the cleanest and most efficient combined cycle gas turbine projects in the PJM market and we expect to complete it in the Q4 of fiscal 2026. A shorter term project we're currently working on is for the installation of 5 90 Megawatt gas turbines at a LNG facility in Louisiana.
This is a JEMMA run project with collaboration from both TRC and APC and demonstrates our ability to bring comprehensive solutions to the market quickly. We began this LNG project earlier this year and expect completion during calendar 2025. We also have full notice to proceed on a utility scale solar field in Illinois that will provide 405 megawatts of electrical power and will use pre existing transmission and utility infrastructure from a nearby retired coal power plant. Spanning more than 2,000 acres, this is our largest solar project to date. Given the current energy demand environment, it is an opportune time to be an established, well regarded, full service construction partner with proven expertise for both traditional and renewable power projects.
We're excited by the pipeline of opportunities we're seeing and optimistic about what the future holds for Arcan. With that, I'll turn the call over to Josh Bacher to take us through the Q3 financials. Go ahead, Josh.
Josh Bacher, Chief Financial Officer, Argan, Inc.: Thanks, David, and good afternoon, everyone. On Slide 11, we present our consolidated statements of earnings for the Q3 of fiscal 2025. 3rd quarter revenues increased 57% to $257,000,000 reflecting particularly strong performance in our Power Industry Services segment and solid growth in our Industrial Construction segment as compared to the Q3 of fiscal 2024, as David detailed earlier. Project wise, the increase in revenues primarily related to increased quarterly construction activities for the Midwest solar and battery projects, the Trumbull Energy Center, the 405 Megawatt Midwest Solar Project and Louisiana LNG facility. For the 3 month period ended October 31, 2024, ARGAN reported consolidated gross profit of approximately $44,300,000 which represented a gross margin of approximately 17.2% and reflected contributions for all three reportable business segments.
Consolidated gross profit for the comparative quarter ended October 31, 2023 was $19,200,000 representing a gross margin of 11.7%. The increased gross profit and improved gross margin percentage for the current year quarter reflects the changing mix of projects, including increased U. S. Based revenues, strong execution and certain positive job closeouts. During the prior year Q3, gross profit was negatively impacted by a loss on the Kilroy project, which reduced gross profit by approximately $10,700,000 Selling, general and administrative expenses of $14,000,000 for the Q3 of fiscal 2025 increased as compared to SG and A of $11,400,000 for the comparable prior year period.
But these expenses decreased as a percentage of revenues to 5.4% for the Q3 of fiscal 2025 as compared to 6.9% of the Q3 of fiscal 2024. Net income for the Q3 of this fiscal year was $28,000,000 or $2 per diluted share compared to $5,500,000 or $0.40 per diluted share for the last year's comparable quarter. EBITDA, earnings before interest, taxes, depreciation and amortization for the quarter ended October 31, 2024 was $37,500,000 compared to $12,200,000 reported for the same period of last year. Other income for the 3 months ended October 31, 2024 was $6,600,000 and included investment income of $4,800,000 compared to other income of $3,700,000 in the prior year period. Looking at our year to date performance, revenues for the 1st 9 months of fiscal 2025 increased by 57% to $642,000,000 as compared to revenues of $409,000,000 for the prior year period.
The overall improvement in revenues was due to increased revenues in all three of our reportable segments. Our consolidated gross margin of 14.6% for the 1st 9 months of the fiscal 2025 increased as compared to gross margin of 14% in the 1st 9 months of fiscal 2024, primarily due to the same reasons described for the quarter. Gross margins in our Power Industry Services, our Industrial Services and our Telecommunications Infrastructure Services were 14.8%, 12.5% and 26.8% respectively for the 1st 9 months of fiscal 2025 as compared to 14%, 12.8% and 25.1% respectively for the 1st 9 months of the prior fiscal year. SG and A expenses increased to $37,800,000 for the 1st 9 months of fiscal 2025 as compared to $32,500,000 for the 1st 9 months of fiscal 2024, but decreased 25% as a percentage of revenues. Net income for the 1st 9 months of this fiscal year was $54,100,000 or $3.91 per diluted share compared to $20,300,000 or $1.50 per diluted share for the 1st 9 months of last fiscal year.
EBITDA was $74,200,000 for the 1st 9 months ended October 31, 2024 compared with EBITDA of $33,800,000 for the 1st 9 months of fiscal 2024. With that, I'll turn the call back to David.
David Watson, Chief Executive Officer, Argan, Inc.: Thanks, Josh. Turning to Slide 12, our consolidated project backlog was 0 point $8,000,000,000 at October 31, 2024, representing growth of 6% compared to the prior fiscal year end. As expected, backlog is down slightly sequentially from the $1,000,000,000 recorded at July 31, 2024 due to the conversion of backlog into revenue and the timing of new project contracts and starts. Nonetheless, as I've said in the past, while the project pipeline continues to strengthen, it takes some time to win and negotiate contracts for the large and complex projects we compete for. Our backlog includes a healthy group of longer term fully committed projects in both the Power Industry Services and Industrial Services segments and as I mentioned earlier, approximately $478,000,000 of the backlog is comprised of renewable projects.
On Slide 13, we show certain major projects currently included in our project backlog. Earlier, I discussed the Trumbull Energy Center in Ohio and we continue to make progress at the 3 solar plus battery projects in Illinois, which have full notices to proceed. Additionally, we have the full notice to proceed on a utility scale solar field in Illinois that will provide 405 megawatts of electrical power. On this slide, you also see our full notice to proceed on a subcontract to install 5 90 Megawatt gas turbines to provide dedicated power to an LNG facility in Louisiana. We've included here a 1.2 gigawatt natural gas project in Texas that is currently under letter of intent and we've listed 2 separate water treatment plant projects being performed by TRC.
Over in Ireland, the 3 ESB Flexion peaker power plants and the Shannon Bridge thermal plants are complete. There is undoubtedly growing urgency around standing up the infrastructure we need to meet the forecasted growth in energy demand and as a result, the industry is seeing strong demand particularly for natural gas projects. We believe our backlog illustrates the scope of our expertise and capabilities and the ongoing demand for our services around traditional gas fired builds and renewable projects. Our balance sheet remains strong. At October 31, 2024, we had approximately $506,000,000 in cash, cash equivalents and investments generating meaningful investment yields.
Our net liquidity was $281,000,000 and we had no debt. Stockholders' equity was $329,000,000 at October 31, 2024. This liquidity bridge demonstrates that our business model ordinarily requires a low level of capital expenditures. Our net liquidity of $281,000,000 at October 31, 2024 has increased $36,100,000 compared with net liquidity at January 31, 2024. Since November 2021, we have returned a total of approximately $101,600,000 to shareholders as we've repurchased approximately 2,700,000 shares of our common stock or approximately 17% of shares outstanding at the beginning of the program and an average price of $37.67 per share.
Additionally, in September 2024, we increased the company's quarterly dividend 25 percent from $0.30 to $0.375 per share, reflecting the strength of our business and increasing our annual run rate to $1.50 per share. This increase comes just a year after we raised our dividend to $0.30 per share in September of 2023. Together, these two dividend increases represent an aggregate 50% increase in our annual dividend run rate in less than 2 years. Our company is dedicated to driving long term value creation for shareholders. While our operating results can vary from quarter to quarter related to the timing of contracts, our pipeline is stronger than it has ever been and we remain focused on delivering long term value to shareholders.
Since 2008, we have increased our tangible book value and cumulative dividends per share considerably. This is a very exciting time for our company. With the forecasted significant growth in energy demand, Argan is one of only a few companies with the capabilities and experience to build all types of power facilities. Gemma is well known as a partner of choice for not only complex combined cycle natural gas plants, but also for its expertise with renewable projects. Both types of energy resources will need to be built in the coming years to meet the projected demand for reliable high quality power and we stand ready to help our customers build them.
To close, we remain focused on our long term growth strategy, leverage our core competencies to capitalize on existing and emerging market opportunities, maintain disciplined risk management, the goal of improving our project management effectiveness and minimizing costly project overruns, strengthen our position as a partner of choice the construction of low and net zero emission power generation facilities as the industry transitions to cleaner energy alternatives while maintaining grid reliability and last but not least, drive organic growth while also being alert for acquisition opportunities that make sense for our business through thoughtful capital allocation. To date in fiscal 2025, we have delivered strong execution across our business segments and we remain focused on driving the momentum we're seeing in our industry and our business. We are energized to continue leveraging our core skill set, proven track record to maximize the opportunities we're seeing across our pipeline of traditional natural gas fired and renewable power projects. Additionally, as the restoring and manufacturing operations continue to gain traction, we're also seeing a robust project pipeline for our Industrial segment. I'd like to thank our employees for their dedication to executing each job on time and on budget and to thank our shareholders for their continued support.
With that, operator, let's open it up for questions.
Conference Operator: Thank you. The first question today is coming from Chris Moore from CJS Securities. Chris, your line is live.
Chris Moore, Analyst, CJS Securities: Good afternoon, guys. That was impressive quarter, that's for sure.
David Watson, Chief Executive Officer, Argan, Inc.: Thanks, Chris.
Chris Moore, Analyst, CJS Securities: All right. Maybe we can start with gross margins. I mean, the overall gross margin was probably 300 basis points higher than I was thinking about. Power and Industry Services, 18.3%. It's early for Trumbull to be getting excess margin.
So can you break down a little bit further where that 18.3% in Power and Industry came from?
David Watson, Chief Executive Officer, Argan, Inc.: Yes. I mean, in short, Chris, strong execution across the board, certain positive project closeouts, the project mix in the shift towards domestic revenues and economies of scale. You've heard me say this before, but we are 1st and foremost focused on project success and success for our customers is the number one way to get repeat business in future gross margins. So based on our historically, I've told you we fluctuate between 13% 20% based on our 10/31 project backlog, which is significantly larger portion of T and M and renewable work than we normally have. Gross margins would like to be more in line with the average of the last two quarters we just completed, meaning kind of in that 14% to 16% range or slightly higher over the next couple of quarters.
But this quarter was really strong and it really came down to strong execution.
Chris Moore, Analyst, CJS Securities: Got it. That makes sense. I appreciate that. You have previously discussed being able to handle perhaps 4 to 5 good sized natural gas projects simultaneously at different stages of construction. Just what's the limiting factor?
Is it skilled labor? And how much of a crossover is the labor pool between the natural gas projects and your renewable projects?
David Watson, Chief Executive Officer, Argan, Inc.: Yes. I mean, we've been making headway by adding headcount to the business in anticipation of this natural gas build out in addition to maintaining our renewable footprint and continuing to execute strongly there. Is there some crossover between gas and renewable? The answer is yes, but primarily we're trying to keep the renewable teams together and the gas teams together, but we do have certain labor that has the skill set to do both, including project managers. So the number of projects that we can do at any given time holistically is kind of in that probably that 10 plus range, if you kind of blend the gas and renewables.
And of course, it depends on the size of projects as well.
Chris Moore, Analyst, CJS Securities: That makes sense. Backlog, dollars 800,000,000 dollars down about $200,000,000 You had indicated that likely after Q2. Expectations, I know you're looking for some big projects in calendar 2025. Expectations for Q4, probably down a little bit further before coming back in calendar 2025 or just any thoughts there?
David Watson, Chief Executive Officer, Argan, Inc.: Yes. If you recall last quarter, I kind of gave some guidance of 5 to 10 months as kind of the general timeline. We're now sitting here in the beginning of December in the guidance that I said earlier in my prepared remarks was, we're expecting to start multiple gas fired jobs over the course of the next 8 months and expect our backlog to be significantly in excess of $1,000,000,000 by early next year and beyond. So as you can note, I've dropped the lower end of the floor. So we're working really hard, but you got to remember, we don't control the start of these new projects, but we're really remain bullish as to our ability to convert a number of these opportunities in the jobs again over the course of the next 8 months.
Chris Moore, Analyst, CJS Securities: Got it. Helpful. I'll leave it there. Appreciate it.
David Watson, Chief Executive Officer, Argan, Inc.: Absolutely.
Conference Operator: Thank you. The next question is coming from Rob Brown from Lake Street Capital. Rob, your line is live.
Rob Brown, Analyst, Lake Street Capital: Good afternoon and congratulations on a strong quarter.
Josh Bacher, Chief Financial Officer, Argan, Inc.: Thanks, Rob.
Rob Brown, Analyst, Lake Street Capital: You talked a little bit about the pipeline kind of over the next 8 months, but how is the sort of activity level changed since you last updated things? Is it the same projects you're working on and timing is always hard to predict? Or are there new things kind of coming in and is activity sort of increasing in terms of bidding and work and such?
David Watson, Chief Executive Officer, Argan, Inc.: There continues to be new opportunities that come in and the opportunities are throughout the United States with a large nexus in Texas as you can imagine. A lot of the jobs that we have been tracking and or negotiating continue to progress through all their development hurdles. And so we remain really excited about what things look like for us over the coming 8 months and then looking out further. So I would say that the I guess in short, the level activity remains extremely elevated.
Rob Brown, Analyst, Lake Street Capital: Yes. Okay. And then in the Texas Gas Plant, particularly that you have an LOI for, what's the timing of that? And is that a 2025, one of the 2025 opportunities?
David Watson, Chief Executive Officer, Argan, Inc.: Yes. And I guess as a reminder to all the callers, I mean, we will if there is a new job, we will always kind of put out either a press release and or an 8 ks, as because we want to provide updates since these jobs are meaningful. So as for that Texas job that we have the letter of intent on, we can again, they continue to meet their developmental milestones and we have been working closely with them to help them with that and hope to have an executed EPC contract and start at least doing some work on that job over the next couple of months.
Rob Brown, Analyst, Lake Street Capital: Okay, great. And then maybe on the kind of the backlog burn rate on the solar projects versus the gas projects, what's the kind of your average or typical quarterly or if you have so much backlog in solar, how long does it take to burn off versus a gas job?
David Watson, Chief Executive Officer, Argan, Inc.: Yes. We've that's a tough question to answer because we have different sized solar jobs and they tend to burn at different rates typically though. The more small to medium sized solar jobs and small solar jobs for us are still relatively meaningful. They're going to typically be completed within a year, a little bit longer than that. But for our larger solar jobs, they can last a couple of years, if not a little bit more.
So yes, I think that their consistency of revenue backlog converting into revenue is a little bit more even versus the more peakishness of a gas job since gas jobs are really reflected bell curve of revenue. Solar jobs are a little bit more consistent.
Rob Brown, Analyst, Lake Street Capital: Okay, great. Thank you. That's helpful. Let me maybe on the industrial business a little bit. I know that will jump around each quarter, but how is that looking in terms of the pipeline in the industrial side?
And can that kind of continue to grow into, call it, dollars 200,000,000 annual revenue business? Does the environment support that sort of direction?
David Watson, Chief Executive Officer, Argan, Inc.: Yes. I mean they generated $41,000,000 of revenues this past quarter and they've generated $175,000,000 of revenues on a TTM basis. But to what you're pointing out, their backlog has dropped down to about $66,000,000 or so. And based on current visibility, I do kind of expect revenues to come down some for the next couple of quarters for the segment and that backlog may continue to reduce some before rebounding in Q1 and Q2 of fiscal 2026. And that's really based on the expected timing of future project awards as I just had a long call with my team there this morning and they're super excited about the number of opportunities that they're seeing and have already bid right now.
And so we do expect for there to be a meaningful rebound there.
Rob Brown, Analyst, Lake Street Capital: Okay, great. Thank you. I'll turn it over. Okay.
Conference Operator: Thank you. There were no other questions at this time. I would now like to hand the call back to David Watson for closing remarks.
David Watson, Chief Executive Officer, Argan, Inc.: Thank you all for participating in today's call and I hope everyone had a great Thanksgiving. We wish everyone a happy and healthy holiday season and look forward to speaking with you again when we report our Q4 fiscal 2025 results. Have a great evening.
Conference Operator: Thank you. This does conclude today's conference. You may disconnect your lines at this time. Have a wonderful day. Thank you for your participation.
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