Powell Industries

Post-call

Reported

EPS$1.25missed · vs $1.34 est (-6.7%)

Q2 Revenue$297M

Q2 Gross margin29.6%

Q2 New orders$490M

Mega project 1 value (data center)in excess of $75M

Mega project 2 value (electric utility generation)in excess of $75M

Backlog$1.8B

Backlog growth vs prior quarter12%

Backlog growth vs one year ago33%

Electric utility market backlog %30%

Oil and gas market backlog % (excluding petrochemical)29%

Commercial and other industrial markets backlog %29%

Largest project award in history (data center)in excess of $400M

Q2 International revenues$64M

Q2 Commercial and other industrial market revenue growth YoY35%

Q2 Electric utility market revenue growth YoY14%

Q2 Oil and gas market revenue growth YoY11%

Q2 Net income$45.9M

Q2 Diluted EPS$1.25

Q2 Operating cash flow$51M

Forward guidance

Potential larger facility investment$70M to $100M

Jacinto Port expansion investment$12M to $13M

What to take away from the call5 themes

★ Key shift

Record $400M+ data center mega-order signals step-change

Powell announced a single purchase order exceeding $400 million for a greenfield data center campus — the largest in company history — awarded post-quarter-end and not yet reflected in reported backlog. This dwarfs prior mega-order thresholds ($75M) and represents a qualitative shift in the scale of projects Powell can win and execute. The behind-the-meter complexity of the project also expands Powell's addressable market beyond simple utility-connect data center work.

“This project award is in excess of $400 million. This project now marks the largest project award in Powell Industries, Inc.'s history.”

Other takeaways

Behind-the-meter complexity expands data center TAM

“The TAM on behind-the-meter is going up for Powell Industries, Inc., beyond a straight utility connect. We are interested in both—it is not that we will not pursue both models—but the behind-the-meter opportunity for Powell Industries, Inc.”

What management didn't answerdodged questions + withheld commitments

withheldMultiple planned phases: volume not yet quantified, over time.

Constraints this callworld-model · 6 hardened/eased

↑TightensDC Power & Cooling›↑TightensPower Distribution Equipment›↑TightensData Center Permitting›↑TightensPower Transformers

Generated 3d agoresearch read-through, not price prediction

New government and defense market entry announced

“We have recently begun investing in resources to build a wider funnel of government-related work, including U.S. military and defense applications.”

Capacity constraints emerging as primary execution risk

“We had to react on some of the short-term needs—unlock some needs that may be not optimal, if I am completely honest, but they will absolutely get a good return and were needed.”

Competitive landscape hardening with PE-backed new entrants

“It has become much more competitive the last couple of years. There are a lot of new entrants, some new private equity money coming in and trying to build up new models.”

›

↑TightensGrid Demand Growth›

↑TightensGas Turbines★ Key shift›