Financial Analysis

NOTE 14 ACQUISITION On July 31, 2026, the Company acquired all of the membership interests of ValCor, a Connecticut limited liability company, for total consideration of approximately $9.4 million, consisting of $8.0 million in cash, $0.5 million of our common stock issued from treasury, and $0.9 million for the acquisition-date fair value of contingent consideration. Transaction costs related to the acquisition were not material. The purchase price is subject to customary post-closing adjustments, including those related to net working capital and indemnification obligations. ValCor provides installation, maintenance, and repair services for information, communication, and data networks serving defense and aerospace customers throughout New England. The acquisition expands the geographic footprint, business opportunities, and market presence of Companys Teledata segment. The acquisition was accounted for as a business combination in accordance with Accounting Standards Codification (ASC) 805, Business Combinations. The results of ValCors operations will be included in the Companys consolidated financial statements and reported within the Teledata segment from the date of the acquisition. The preliminary allocation of the consideration transferred resulted in $4.7 million of acquired customer relationships and $2.6 million of goodwill. The estimated purchase price and allocation are preliminary and may change during the measurement period. The acquisition was not material to …

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NOTE 7 FINANCING ARRANGEMENTS On May 24, 2024, the Company and Bank of America, N.A. (the Bank) executed the Second Amended and Restated Replacement Credit Agreement with an expiration date of May 31, 2027 (the Credit Agreement), which was amended on October 23, 2025. The Credit Agreement has a base lending commitment amount of $35.0 million and establishes the interest rate for revolving loans at the Secured Overnight Financing Rate ( SOFR ) plus 1.85%. In addition to the base commitment, the credit facility includes an accordion feature that allows for an additional commitment amount of $30.0 million, subject to certain conditions. The Company may use the borrowing ability to cover other credit instruments issued by the Bank for the Companys use in the ordinary course of business as defined in the Credit Agreement. Further, on May 31, 2024, the Company entered into a companion facility, in the amount of $25.0 million, pursuant to which an overseas subsidiary of the Company may cause the Banks European entity to issue letters of credit on its behalf that will be secured by a blanket parent company guarantee that was issued by Argan to the Bank. As of July 31, 2026 and January 31, 2026, the Company did not have any borrowings outstanding under the Credit Agreement. However, the Bank has issued a letter of credit in the outstanding amount of $0.5 million as of July 31, 2026. As of January 31, 2026, the outstanding total amount of the letter of credit was $0.3 million. The Comp …

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Three Months Ended July 31, Six Months Ended July 31, 2026 2025 2026 2025 United States $ 323,650 $ 214,195 $ 577,503 $ 395,301 Republic of Ireland 42,759 17,244 66,900 27,132 United Kingdom 17,567 6,304 30,527 8,970 Consolidated revenues $ 383,976 $ 237,743 $ 674,930 $ 431,403 …

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NOTE 10 STOCK-BASED COMPENSATION Stock-based compensation expense amounts for the three and six months ended July 31, 2026 were $2.4 million and $4.5 million respectively, and they were $2.3 million and $3.5 million for the three and six months ended July 31, 2025, respectively. As of July 31, 2026, there was $17.1 million in unrecognized compensation costs related to outstanding stock awards that the Company expects to recognize over the next three years. During the six months ended July 31, 2026, the Company awarded performance-based restricted stock units covering a target of 596 shares of common stock, earnings per share performance-based restricted stock units covering a target of 12,583 shares of common stock, and time-based restricted stock units covering 12,024 shares of common stock. The number of shares of common stock to be issued under certain awards may exceed the number of target shares if certain performance goals are exceeded. The changes in the maximum number of shares of common stock issuable pursuant to outstanding restricted stock units for the six months ended July 31, 2026 are presented below (shares in thousands): Weighted- Average Grant-Date Fair Value Shares Per Share Outstanding, February 1, 2026 231 $ 53.19 Granted 42 $ 271.74 Issued (90) $ 41.21 Outstanding, July 31, 2026 183 $ 109.24 During the six months ended July 31, 2026, the Company awarded nonqualified stock options to purchase 955 shares of common stock at a weighted-average exercise price …

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NOTE 4 FAIR VALUE MEASUREMENTS The following table presents the Companys financial instruments as of July 31, 2026 and January 31, 2026 that are measured and recorded at fair value on a recurring basis: July 31, 2026 January 31, 2026 Level 1 Level 2 Level 3 Level 1 Level 2 Level 3 Inputs Inputs Inputs Inputs Inputs Inputs Cash equivalents: Money market funds $ 135,288 $ $ $ 149,597 $ $ Available-for-sale securities: U.S. Treasury notes 480,557 403,599 Totals $ 135,288 $ 480,557 $ $ 149,597 $ 403,599 $ …

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NOTE 11 PROVISION FOR INCOME TAXES The Companys effective income tax rate (ETR) for the six months ended July 31, 2026 and 2025 was 17.6% and 11.6%, respectively. The Companys ETR for the six months ended July 31, 2026 and 2025 differed from the U.S. federal statutory rate of 21% primarily due to the favorable tax benefit resulting from stock option exercises and other share-based award settlements during the periods. For the six months ended July 31, 2026 and 2025, the amount of cash paid for income taxes, net of refunds received, was $15.1 million and $8.0 million, respectively. Valuation Allowance As of July 31, 2026, the Company maintained a valuation allowance of $10.3 million against certain deferred tax assets of its U.K. subsidiary, consisting primarily of net operating loss carryforwards. The Company assesses the realizability of these deferred tax assets each reporting period, considering all available positive and negative evidence, including its recent history of operating results in that jurisdiction, the expected reversal of taxable temporary differences, and projections of future taxable income. The Companys U.K. operations have generated taxable income in recent periods. If that trend continues, it is reasonably possible that the Company could release all or a portion of this valuation allowance within the next 12 months, which would result in a material income tax benefit in the period of release. The amount and timing of any release will depend on the level …

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NOTE 9 LEGAL CONTINGENCIES In the normal course of business, the Company may have pending claims and legal proceedings. The Company maintains accrued expense balances for the estimated amounts of legal costs expected to be billed related to any significant matter. In the opinion of management, based on information available at this time, there are no current claims and proceedings that would have a material adverse effect on the consolidated financial statements. However, the outcomes of such legal claims and proceedings are subject to inherent uncertainties. In March 2025, the U.K. subsidiary of the Company sued EP NI Energy Limited and EP UK Investment Limited (together referred to as EP) in the High Court of Justice, Business and Property Courts of England and Wales for EPs breach of contract and failure to remedy various events which negatively impacted the schedule and costs of an overseas project, resulting in EP receiving the benefits of the construction efforts of the Companys U.K. subsidiary and the corresponding progress on the project without making payments to which the Companys U.K. subsidiary was contractually entitled. The Companys U.K. subsidiary provided the project owner notice to terminate because of project owner breaches of the contract. Those breaches were not resolved, as a result of which the contract terminated on May 3, 2024. Subsequently, the project owner made a draw for the full amount of a $9.8 million irrevocable letter of credit, or on-demand p …

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Recently Issued Accounting Pronouncements In November 2024, the Financial Accounting Standards Board (the FASB) issued Accounting Standards Update (ASU) 2024-03, Income StatementReporting Comprehensive IncomeExpense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses , which requires public business entities to disclose specific information about certain costs and expenses. The amendments in this update are effective for fiscal years beginning after December 15, 2026, and interim periods within fiscal years beginning after December 15, 2027. Early adoption is permitted. The Company is currently evaluating the effects, if any, that the adoption of ASU 2024-03 may have on its financial position, results of operations, cash flows, or disclosures. There are no other recently issued accounting pronouncements that have not yet been adopted that the Company considers material to its condensed consolidated financial statements. …

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NOTE 2 REVENUES FROM CONTRACTS WITH CUSTOMERS Disaggregation of Revenues The following table presents consolidated revenues for the three and six months ended July 31, 2026 and 2025, disaggregated by the geographic area where the corresponding projects were located: Three Months Ended July 31, Six Months Ended July 31, 2026 2025 2026 2025 United States $ 323,650 $ 214,195 $ 577,503 $ 395,301 Republic of Ireland 42,759 17,244 66,900 27,132 United Kingdom 17,567 6,304 30,527 8,970 Consolidated revenues $ 383,976 $ 237,743 $ 674,930 $ 431,403 Revenues for projects located in Ireland and the U.K. are attributed to the Power segment. The major portions of the Companys consolidated revenues are recognized pursuant to fixed-price contracts with most of the remaining portions earned pursuant to time-and-material contracts. Consolidated revenues are disaggregated by reportable segment in Note 16 to the condensed consolidated financial statements. Contract Assets and Liabilities During the six months ended July 31, 2026 and 2025, there were no material unusual or one-time adjustments to contract assets or contract liabilities balances. The Company recognized the following revenues that were included in the contract liabilities balances at the beginning of the respective period: Three Months Ended July 31, Six Months Ended July 31, 2026 2025 2026 2025 Revenues recognized from contract liabilities $ 291,394 $ 143,116 $ 417,948 $ 244,884 Contract retentions are billed amounts which, pursu …

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NOTE 16 SEGMENT REPORTING Segments represent components of an enterprise for which discrete financial information is available that is evaluated regularly by the Companys chief executive officer, who is the Companys chief operating decision maker (the CODM), in determining how to allocate resources and in assessing performance. The Companys reportable segments recognize revenues and incur expenses and are organized as separate business units, each with distinct management teams, customers, workforces, and service offerings. The Companys reportable segments may include more than one operating segment. Income before income taxes is the measure of segment profit or loss used by the CODM. The CODM reviews segment income before income taxes on a monthly basis, comparing actual results to the annual operating plan and to prior periods. The CODM uses the resulting analysis in deciding the level of capital resources to allocate to each segment, in evaluating the performance of segment management, and in determining incentive compensation. In addition to income before income taxes, the CODM uses gross profit to evaluate project execution and uses income from operations to evaluate the management of selling, general and administrative expenses. Amounts for these measures, and reconciliations of each to the Companys consolidated results, are presented in the tables below. Intersegment revenues and the related cost of revenues are netted against the corresponding amounts of the segment r …

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NOTE 13 STOCKHOLDERS EQUITY During the six months ended July 31, 2026 and during Fiscal 2026, the Company paid dividends to stockholders as follows: Record Date Payment Date Amount Per Share July 23, 2026 July 31, 2026 $ 0.500 April 22, 2026 April 30, 2026 0.500 January 22, 2026 January 31, 2026 0.500 October 23, 2025 October 31, 2025 0.500 July 23, 2025 July 31, 2025 0.375 April 22, 2025 April 30, 2025 0.375 On April 8, 2026, the board of directors of Argan increased the total authorization to repurchase shares of the Companys common stock by $50 million, bringing the aggregate authorized amount to $200 million. Pursuant to its established program and authorizations provided by Argans board of directors, the Company repurchased shares of its common stock during the six months ended July 31, 2026 and 2025 and added the shares to treasury stock. During these periods, the Company repurchased 17,717 shares and 56,117 shares of common stock, all on the open market, for aggregate prices of approximately $9.6 million, or $544.62 per share, and $7.0 million, or $125.60 per share, respectively. …

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