Powell Industries, Inc.

In fiscal 2026 third quarter, Powell reported revenue of $312 million, up 9% from $286 million a year ago. Gross profit was $95 million, and gross margin was 30.6%, roughly flat year over year; SG&A was $27 million, up $1.6 million. Net income was $52.2 million, or $1.42 per diluted share, versus $48.2 million, or $1.32 per diluted share, last year. New orders were a record $934 million, nearly 3x prior year and nearly double last quarter, while backlog reached a record nearly $2.4 billion, up $967 million year over year and $619 million sequentially. For the next 12 months, management said roughly $1.3 billion of backlog, or just under 54%, is convertible; they also said the quarterly book-and-burn cadence averages about $75 million a quarter. Management did not give formal quarterly or full-year revenue/EPS guidance, but said they believe Powell is well positioned to deliver another year of strong financial performance in fiscal 2027.

Brett Cope emphasized that the quarter reflected broad-based demand and strong execution, with activity “very active” across commercial, utility, and industrial end markets. He highlighted that the company’s backlog now extends into fiscal 2028, and said Powell is responding with capacity additions in Ohio, Houston, and Jacintoport, while also evaluating a potential owned facility and M&A opportunities. His tone was constructive and confident, but he repeatedly framed the strategy as long term, noting labor availability and industry capacity expansion as risks that need to be managed over time.

Mike Metcalf focused on the quarter’s financial quality: revenue of $312 million, gross profit of $95 million, gross margin of 30.6%, SG&A of $27 million, and EPS of $1.42. He said operating cash flow was $100 million, capex was $6.5 million, and Powell ended the quarter with $634 million of cash, cash equivalents, and short-term investments and no debt. He also pointed to moderate inflation in commodities and engineered components, but said hedging and commercial discipline are helping offset it; project closeouts contributed roughly 100 basis points year to date versus about 130 basis points a year ago.

Analysts pressed management on whether gross margins have peaked, and Brett Cope said he does not think they have, citing continued opportunity in commercial/data center work, speed-to-market, and services/automation. They also asked about the modest revenue shortfall versus expectations; Mike Metcalf said project timing creates normal lumpiness and that the business should not be expected to show double-digit revenue growth every quarter given current backlog conversion. Other questions focused on data center cadence, with management saying the $400 million-plus project should burn over roughly 2 to 2.5 years and could lead to future phases, and on capacity/labor, where Cope warned craft labor could become a challenge in fiscal 2027 and 2028 even though it is not yet a near-term issue.