Powell Industries (POWL) Q2 2026 earnings summary

Executive summary

• Revenues reached $297 million in Q2 FY2026, up 6% year-over-year, with strong operational efficiency and robust activity in LNG, electric utility, and data center projects.

• Net income for Q2 FY2026 was $45.9 million ($1.25 per diluted share), slightly down from $46.3 million ($1.27) in Q2 FY2025 but up 11% sequentially.

• Order momentum continued with $490 million in new orders in Q2 and a record $400 million+ data center project awarded post-quarter, the largest in company history.

• Backlog reached $1.8 billion, up 33% year-over-year, providing visibility into fiscal 2028.

• Diversification into electric utility and commercial/industrial markets is reducing business cyclicality.

Financial highlights

• Q2 FY2026 revenue was $297 million, up from $279 million in Q2 FY2025, a 6% increase year-over-year.

• Gross margin was 29.6%, down 30 bps year-over-year but up 120 bps sequentially; gross profit for Q2 was $87.9 million.

• Operating income for the quarter was $57.6 million.

• Cash and short-term investments totaled $545 million at quarter end, with no debt outstanding as of March 31, 2026.

• Working capital reached $561 million, with a current ratio of 2.3:1 as of March 2026.

Outlook and guidance

• Sustained commercial activity and a strong backlog position the company for robust cash flow and earnings in the second half of fiscal 2026.

• The $400 million+ data center order will be reflected in Q3 results and is expected to run through fiscal 2028.

• Management expects continued favorable market activity, especially in data centers, AI, and electric utility sectors, with ongoing investments in capacity and talent.

• Margins are anticipated to remain consistent with prior year levels, supported by backlog composition.

• Dividend increased for the third consecutive year, with a consistent quarterly payout for 51 quarters.