Executive Summary

Q4 2025 delivered record profitability: revenue $298.0M (+8% YoY, +4% QoQ), gross margin 31.4% (+215 bps YoY), and diluted EPS $4.22 (+12% YoY); orders were $271M and backlog ended at $1.4B .
Results beat consensus: EPS $4.22 vs $3.78* and revenue $298.0M vs $292.8M*; EBITDA also exceeded consensus ($65.0M vs $59.3M*) with upper‑20s gross margin profile guided as sustainable into FY26 (seasonally softer Q1) .
Strategic catalysts: utility revenue doubled YoY and traction power +85% YoY; data center demand cited as growing in size and urgency; LNG cycle underpinning O&G investment and capacity expansion at JacintoPort for FY26 .
Capital and cash: $476M cash/short‑term investments and zero debt provide flexibility for organic capex ($12.4M JacintoPort plus $5–$7M maintenance in FY26) and ongoing dividend ($0.2675/sh) .
Inorganic growth: acquisition of Remsdaq (electrical automation/SCADA RTUs) closed, expected to be margin‑accretive with quotations underway in North America and integration in the U.K. .

Note: Asterisk indicates values retrieved from S&P Global.

What Went Well and What Went Wrong

What Went Well

Record margin and EPS driven by “continued strong project execution” and favorable project closeouts; CFO quantified +100 bps margin tailwind from closeouts in Q4 and ~125 bps YTD .
Utility and traction power outperformed: “electric utility sector doubled versus the same period one year ago, while… light rail traction increased by 85%” (CEO prepared remarks reinforced structural strength in utility) .
Backlog quality and cash generation: backlog $1.4B, book‑to‑bill 1.0x for FY25, $61M operating cash flow in Q4, and $476M cash/short‑term investments with no debt; “composition, margin profile and schedule of our current backlog” cited as supportive of FY26 .

What Went Wrong

Petrochemical and O&G revenue declined YoY in Q4 (‑25% and ‑10% respectively) on tough comps from large 2023 awards executed in 2024; Commercial & Other Industrial was down 9% on timing .
SG&A up ~$5.5M YoY in Q4 to $27M (9.1% of revenue) with ~$3M variable compensation catch‑up and just under $2M acquisition costs, lifting expense ratio vs prior year .
Order cadence normalized: Q4 orders $271M (0.9x book‑to‑bill) lacked “mega projects,” after a strong Q3 ($362M, 1.3x); backlog declined 2% sequentially from June to September on revenue recognition .

Financial Results

Quarterly Performance vs Prior Periods and Estimates

Metric	Q2 2025	Q3 2025	Q4 2025
Revenue ($USD Millions)	$278.6	$286.3	$298.0
YoY Δ	+9%	-1%	+8%
QoQ Δ	+15% vs Q1	+3% vs Q2	+4% vs Q3
Gross Margin %	29.9%	30.7%	31.4%
YoY Δ (bps)	+530 bps	+230 bps	+215 bps
Operating Income ($USD Millions)	$58.9	$60.1	$63.2
Net Income ($USD Millions)	$46.3	$48.2	$51.4
Diluted EPS ($USD)	$3.81	$3.96	$4.22
EPS YoY Δ	+38%	+4%	+12%
EPS QoQ Δ	+33% vs Q1	+4% vs Q2	+7% vs Q3

Actual vs Consensus	Q2 2025	Q3 2025	Q4 2025	FY 2025
EPS Actual ($)	$3.81	$3.96	$4.22	$14.86
EPS Consensus Mean ($)	$3.57*	$3.77*	$3.78*	$14.41*
Revenue Actual ($)	$278.6M	$286.3M	$298.0M	$1.104B
Revenue Consensus Mean ($)	$282.7M*	$301.7M*	$292.8M*	$1.099B*
EBITDA Actual ($)	$60.6M [GetEstimates]*	$61.9M [GetEstimates]*	$65.0M [GetEstimates]*	$224.8M [GetEstimates]*
EBITDA Consensus Mean ($)	$51.6M*	$58.4M*	$59.3M*	$221.1M*

Values retrieved from S&P Global.

Highlights:

Q4: EPS beat (+$0.44), revenue beat (+$5.1M), EBITDA beat (+$5.7M)* .
Q3: EPS beat (+$0.19) but revenue miss (‑$15.4M)* .
Q2: EPS beat (+$0.24), revenue slight miss (‑$4.0M)* .

Segment and Market Dynamics

Market	Q2 2025	Q3 2025	Q4 2025
Electric Utility	+48% YoY to $70.3M revenue	+31% YoY	+100% YoY
Commercial & Other Industrial	+16% YoY to $40.4M revenue	-9% YoY (timing)	-9% YoY
Light Rail Traction Power	—	+61% YoY	+85% YoY (smaller base)
Oil & Gas	—	-10% YoY	-10% YoY
Petrochemical	-13% YoY to $43.7M revenue	-36% YoY	-25% YoY

KPIs

KPI	Q2 2025	Q3 2025	Q4 2025
New Orders (Bookings)	$249M	$362M	$271M
Backlog	$1.3B	$1.4B (+7% QoQ)	$1.4B (‑2% QoQ; +3% YoY)
Book‑to‑Bill	—	1.3x	0.9x (FY25: 1.0x)
Operating Cash Flow	—	—	$61M
Cash & Short‑Term Investments	$389.3M	$433.0M	$475.5M
Working Capital	$405.8M	$452.8M	$485.3M

Note: Gross profit reported as $93.5M in 8‑K and “$94M” on the call (rounding) .

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Gross Margin % (GAAP)	FY 2026	n/a	“Upper 20s” realistic for FY26; FY25 margin profile sustainable entering FY26	Raised clarity (sustainable)
Seasonality	Q1 FY 2026	n/a	Expect typical seasonal softness in fiscal Q1 (Oct–Dec)	Maintained pattern
Backlog Conversion	FY 2026	n/a	~60% of backlog convertible in FY26	New datapoint
CapEx	FY 2026	n/a	~$12.4M JacintoPort expansion plus $5–$7M maintenance/productivity	New plan
Acquisition Costs	FY 2026	n/a	None expected; incurred in FY25	Lowered
Dividend	Q4 2025	$0.2675/sh	$0.2675/sh payable Dec 17, 2025 (record Nov 19)	Maintained

No explicit revenue/EPS guidance was provided; management emphasized backlog quality, execution, and stable pricing .

Earnings Call Themes & Trends

Topic	Previous Mentions (Q2 2025)	Previous Mentions (Q3 2025)	Current Period (Q4 2025)	Trend
Utility demand	Strong growth; R&D to penetrate utilities	+31% YoY revenue; largest utility order $60M; backlog mix increasing	Utility revenue doubled; backlog equal‑weighted vs O&G; robust outlook	Improving
Data centers/AI power	Emphasis on product roadmap to compete in C&I	Growing opportunities; quoting big projects	“Power availability/reliability constraints” cited; opportunities growing in size/volume	Improving
LNG/Natural gas cycle	New greenfield LNG award noted	Awards in offshore modules; strong O&G	LNG pipeline supportive; JacintoPort expansion to capture wave	Stable‑to‑Improving
Pricing & margin sustainability	Sequential margin rebound to 29.9%	Stable pricing; closeouts tailwind	Upper‑20s margin for FY26 realistic; stable pricing	Stable
SG&A & acquisition costs	SG&A 8.6% YTD (vs 8.4%)	SG&A up; mix includes M&A costs	Q4 SG&A $27M (9.1%); $3M variable comp catch‑up; < $2M M&A costs	Normalizing
R&D execution	Building products; capex supports commercialization	Continued investment	Expect new products in FY26; iterative through FY27‑28	Improving
International revenue	—	+38% YoY on higher volume	Continued diversified backlog across geographies	Stable

Management Commentary

“Our fourth quarter marked a solid finish to another record year… record quarterly earnings per share of $4.22” (CEO) .
“Electric utility sector doubled… light rail traction increased by 85%… commercial & other industrial lower by 9% on project timing” (CFO) .
“We believe… margins in the upper 20s for the total year of fiscal 2026 are realistic” (CFO) .
“We closed the acquisition of Remsdaq… confident in our ability to scale… at margin accretive economics” (CEO) .
“Seasonality… we do anticipate… first quarter… is softer” (CFO) .
“Backlog and project schedules are well balanced… book‑to‑bill of 1.0x for the full year” (CEO/CFO) .

Q&A Highlights

Market mix and pricing: Utility demand more speed‑driven/less price‑sensitive; some O&G subsectors (Canada, North Sea) more price‑sensitive amid softness .
Margin drivers: ~100 bps from project closeouts in Q4; ~125 bps YTD; upper‑20s margin sustainable in FY26 given backlog composition and stable pricing .
SG&A clarity: ~$3M variable comp catch‑up; just under $2M acquisition‑related services; acquisition costs largely behind and not expected in FY26 .
Backlog conversion and capex: ~60% of backlog deliverable in FY26; JacintoPort capex ~$12.4M plus $5–$7M maintenance in FY26 to position for LNG wave .
Data center architecture: Powell’s DC switchgear/breaker portfolio positions it to participate in potential DC distribution evolution; R&D may be required around rectifier solutions .

Estimates Context

Versus S&P Global consensus:
- Q4 EPS $4.22 vs $3.78* (beat), revenue $298.0M vs $292.8M* (beat), EBITDA $65.0M vs $59.3M* (beat) .
- Q3 EPS $3.96 vs $3.77* (beat), revenue $286.3M vs $301.7M* (miss)* .
- Q2 EPS $3.81 vs $3.57* (beat), revenue $278.6M vs $282.7M* (miss)* .
- FY25 EPS $14.86 vs $14.41* (beat), revenue $1.104B vs $1.099B* (beat) .
Implications: EPS estimates should adjust upward to reflect execution and closeout dynamics; revenue estimates may need tighter quarter‑by‑quarter phasing given timing in C&I and O&G.
Values retrieved from S&P Global.

Key Takeaways for Investors

Momentum shift toward non‑industrial markets (utility, traction) is durable and diversifying risk; backlog is now roughly equal‑weighted between utility and O&G .
Margin quality is high: stable pricing, disciplined execution, and favorable closeouts support upper‑20s gross margins in FY26; watch for seasonal Q1 softness .
Orders cadence normalized after Q3 mega awards; Q4’s 0.9x book‑to‑bill suggests near‑term revenue recognition from backlog with continued healthy funnel .
Data center power constraints are a real tailwind; Powell is quoting larger opportunities and has technology positioning to participate in evolving DC architectures .
LNG cycle and JacintoPort expansion set up medium‑term O&G upside; monitor FIDs and project timing risk .
Balance sheet strength ($476M cash, no debt) enables capex, R&D, and selective M&A while maintaining dividend ($0.2675/sh) .
Near‑term trading: potential positive reaction to estimate beats and margin sustainability; medium‑term thesis hinges on converting robust backlog, capturing utility/data center growth, and sustaining execution amid segment timing volatility .

POWELL INDUSTRIES INC (POWL)·Q4 2025 Earnings Summary