Powell Industries, Inc. (NASDAQ: POWL) kicked off fiscal year 2026 with a high-voltage performance, reporting first-quarter results on February 3, 2026, that handily beat earnings expectations. While revenue saw a modest seasonal dip, the company’s massive order intake and record-shattering backlog suggest that the “electrification of everything” from data centers to LNG terminals is hitting a new gear.
Key Financial Highlights
Revenues of $251 million increased 4%.
Gross profit of $71 million, or 28.4% of revenue, increased 20%.
Net income of $41 million, or $3.40 per diluted share, increased 19%.
New orders (1) totaled $439 million, an increase of 63%.
Backlog (2) as of December 31, 2025 totaled $1.6 billion, an increase of 16%.
Cash and short-term investments as of December 31, 2025 totaled $501 million.
Key Takeaways
The Data Center “Megaproject” Era
The most significant takeaway from the quarter was Powell’s successful pivot into the high-growth data center market.
The Milestone: During Q1, Powell booked its first-ever data center megaproject, an order valued at approximately $75 million.
Portfolio Shift: Total data center orders for the quarter exceeded $100 million, and the “Commercial & Other Industrial” segment now makes up 22% of the total backlog.
The “AI” Tailwind: Management noted that the rapid expansion of AI infrastructure is requiring larger, more complex custom-engineered power solutions, a niche where Powell’s high-voltage expertise commands premium margins.
Margin Expansion Amid Seasonality
Traditionally, Q1 is Powell’s weakest quarter due to fewer working days and holiday shutdowns. However, the company achieved a 28.4% gross margin, a massive improvement over the 24.7% reported in the same period last year.
Why it happened: CEO Brett Cope credited “solid project execution” and a stable pricing environment. The company is effectively leveraging its volume, allowing more profit to drop to the bottom line even on modest revenue growth.
The Cash Fortress: Powell ended the quarter with $501 million in cash and short-term investments and zero debt, providing the ultimate “liquidity moat” to fund capacity expansions.
LNG & Utility Resilience
While the data center buzz stole the headlines, Powell’s “bread and butter” sectors remained robust:
LNG Recovery: After a subdued 2024, the LNG market is heating up again. Powell won a major LNG megaproject award along the U.S. Gulf Coast this quarter.
Electric Utility: Revenue in this segment jumped 35% year-over-year, driven by the ongoing national effort to modernize the aging U.S. electrical grid.
Management Commentary
On the February 4th conference call, management’s tone was one of “prepared confidence.”
Brett A. Cope, Chairman & CEO said, “This quarter’s $439 million in awards was the highest quarterly total in over two years. The average project size we are pursuing has grown substantially, and our results demonstrate Powell’s unique ability to deliver engineered-to-order solutions at scale.”
Investor “Watch Items” for 2026:
Capacity Expansion: To meet the $1.6B backlog, Powell is leasing additional facilities and ramping up its supply chain.
Dividend Hike: Signaling confidence, the board raised the quarterly dividend to $0.27 per share ($1.08 annualized).
Conclusion
Powell Industries is no longer just a “cyclical oil and gas” play. By diversifying into data centers and grid modernization, the company has attached itself to the most durable secular growth trends of the decade. With a book-to-bill ratio of 1.7x and enough cash to buy its way into even more capacity, Powell is entering 2026 from a position of immense strength.
