Powell Industries Announces First Quarter Fiscal 2025 Results

Rhea-AI Summary

Powell Industries (NASDAQ: POWL) reported strong Q1 fiscal 2025 results with revenues of $241.4 million, up 24% year-over-year. The company achieved a net income of $34.8 million, or $2.86 per diluted share, representing a 44% increase from the previous year. New orders grew 36% to $269 million, with strong activity across all market sectors.

Revenue growth was driven by increases across all major sectors: Oil & Gas up 14% to $95.7 million, Electric Utility up 26% to $51.2 million, and Commercial & Other Industrial up 80% to $44.3 million. The company maintained a robust backlog of $1.3 billion and reported cash and short-term investments of $373 million.

Manufacturing capacity upgrades are on track for completion by mid-fiscal 2025, supporting organic growth and new product commercialization. The company's diversification efforts have expanded opportunities across markets including data centers, utilities, carbon capture, and hydrogen.

Positive

• Revenue increased 24% YoY to $241.4 million
• Net income grew 44% YoY to $34.8 million
• New orders increased 36% to $269 million
• Strong cash position with $373 million in cash and short-term investments
• Maintained substantial backlog of $1.3 billion
• Gross profit increased 24% YoY to $59.5 million

Negative

• Sequential revenue decline of 12% from Q4 2024
• Sequential gross margin decreased from 29.2% to 24.7%
• Sequential net income decrease of 25% from Q4 2024

Insights

Financial Analyst

Powell Industries' Q1 FY2025 results demonstrate exceptional operational execution and strategic positioning in high-growth markets. The 24% revenue growth to $241.4 million and 44% increase in net income to $34.8 million underscore the company's ability to capitalize on robust industrial tailwinds.

Three key factors stand out in this earnings report:

• The substantial $373 million cash position provides significant flexibility for capital investments and potential strategic acquisitions while maintaining a strong balance sheet.
• The stable $1.3 billion backlog, combined with new orders of $269 million, indicates sustained demand and provides excellent revenue visibility for the coming quarters.
• The planned manufacturing capacity upgrades, scheduled for completion mid-2025, position the company to capture additional market share in emerging sectors like data centers, carbon capture and hydrogen infrastructure.

The diversification into multiple industrial sectors is particularly noteworthy, as it reduces cyclical risks while expanding the addressable market. The Oil & Gas sector's 14% growth to $95.7 million and the impressive 80% growth in Commercial & Other Industrial to $44.3 million demonstrate successful market penetration across various segments.

Despite seasonal patterns affecting quarterly performance, the maintained gross margin of 24.7% suggests strong pricing power and operational efficiency. The company's strategic focus on high-value engineered solutions and expanding applications for custom products should support sustained profitability levels.

Industrial Market Analyst

The Q1 results reveal Powell's strategic advantage in capturing opportunities across the energy transition landscape. The secured LNG project along the U.S. Gulf Coast exemplifies the company's strong position in traditional energy infrastructure, while simultaneous expansion into renewable and sustainable technologies demonstrates forward-thinking market adaptation.

The diversification strategy is particularly well-timed, targeting three important growth vectors:

• Traditional energy infrastructure modernization, evidenced by the 14% growth in Oil & Gas revenue
• Grid reliability and expansion projects, reflected in the 26% growth in Electric Utility sector
• Industrial electrification and data center infrastructure, driving the remarkable 80% growth in Commercial & Other Industrial segment

The planned manufacturing capacity upgrades are strategically aligned with emerging market opportunities in data centers, carbon capture and hydrogen infrastructure. This positions Powell to capitalize on the accelerating industrial electrification trend and the growing demand for reliable power distribution solutions in critical infrastructure applications.

HOUSTON, Feb. 06, 2025 (GLOBE NEWSWIRE) -- Powell Industries, Inc. (NASDAQ: POWL), a leading supplier of custom-engineered solutions for the management, control and distribution of electrical energy, today announced results for the first quarter fiscal 2025 ended December 31, 2024. All comparisons are to the first quarter of fiscal 2024, unless otherwise noted.

First Quarter Key Financial Highlights:

• Revenues totaled $241 million, an increase of 24%;
• Gross profit of $60 million, or 24.7% of revenue;
• Net income of $35 million, or $2.86 per diluted share, increased 44%;
• New orders⁽¹⁾ totaled $269 million;
• Backlog⁽²⁾ as of December 31, 2024 remained at $1.3 billion;
• Cash and short-term investments as of December 31, 2024 totaled $373 million.

Brett A. Cope, Powell’s Chairman and Chief Executive Officer, stated, “Powell recorded a strong start to Fiscal 2025 highlighted by new order growth of 36%. We saw strong order activity across each of our market sectors, as our Electric Utility and Oil & Gas markets continue to benefit from robust tailwinds that support our expectation for volume growth in 2025. We were awarded a large LNG project situated along the U.S. Gulf Coast during the quarter as we expect this market sector to see improved activity levels relative to Fiscal 2024. Revenue also grew 24% and we delivered earnings per diluted share of $2.86 despite what is typically a seasonally softer first quarter. Overall, we remain very encouraged by both our backlog as well as the volume and composition of projects in our pipeline.”

First Quarter Fiscal 2025 Results   
Revenues totaled $241.4 million, an increase of 24% compared to $194.0 million in the prior year, and a 12% decline compared to $275.1 million in the fourth quarter of Fiscal 2024, as the first quarter has historically been seasonally lower than the remainder of the fiscal year. The increase compared to the prior year was driven by higher revenue levels across all major market sectors. Revenue from the Oil & Gas sector increased 14% to $95.7 million, while revenue from the Electric Utility and Commercial & Other Industrial sectors grew 26% to $51.2 million and 80% to $44.3 million, respectively.

Gross profit of $59.5 million, or 24.7% of revenue, increased 24% compared to $48.2 million, or 24.8% of revenue, in the prior year, but decreased 26% compared to $80.4 million, or 29.2% of revenue, in the fourth quarter. Gross margin improved compared to the prior year, primarily due to higher revenues with the gross profit margin percentage remaining flat, while the sequential decline in gross margin was mainly driven by typical seasonality we have historically experienced during the first fiscal quarter.

New orders totaled $269 million compared to $198 million in the prior year and $267 million in the fourth quarter. The growth compared to the prior year was driven by robust order activity in the Oil & Gas market sector as well as strong bookings within the Electric Utility market sector.

Backlog totaled $1.3 billion as of December 31, 2024, essentially remaining the same as the backlog at both September 30, 2024 and December 31, 2023.

Net income of $34.8 million, or $2.86 per diluted share, increased 44% compared to $24.1 million, or $1.98 per diluted share, in the prior year, and decreased 25% compared to $46.1 million, or $3.77 per diluted share, in the fourth quarter.

Cope added, “Our planned manufacturing capacity upgrades remain on track to be completed during the middle of fiscal 2025, which will help to facilitate organic growth within our targeted markets and commercialize new products. Our diversification efforts continue to present new opportunities and awards for Powell across markets such as data centers, utilities, carbon capture, hydrogen, and more. As a result, our backlog today is more diverse across market sectors than ever before, increasingly comprised of rapidly expanding applications for our custom-engineered products.”

OUTLOOK

Commenting on the Company's outlook, Michael Metcalf, Powell’s Chief Financial Officer, said, “As we look ahead to the remainder of Fiscal 2025, we are encouraged by the sustained commercial momentum across our end markets through the first fiscal quarter, which has allowed us to maintain both the quality and quantity of our backlog. Combined with our ongoing focus on optimizing margin levers and the strength of our balance sheet, Powell is well-positioned to deliver robust revenue and earnings throughout the rest of Fiscal 2025.”

CONFERENCE CALL
Powell Industries has scheduled a conference call for Friday, February 7, 2025 at 11:00 a.m. Eastern time. To participate in the conference call, dial 1-833-953-2431 (domestic) or 1-412-317-5760 (international) at least 10 minutes before the call begins and ask for the Powell Industries conference call. A telephonic replay of the conference call will be available through February 14, 2025 and may be accessed by calling 1-877-344-7529 (domestic) or 1-412-317-0088 (international) and using passcode 2987033#.

Investors, analysts and the general public will also have the opportunity to listen to the conference call over the Internet by visiting powellind.com. To listen to the live call on the web, please visit the website at least 15 minutes before the call begins to register, download and install any necessary audio software. For those who cannot listen to the live webcast, an archive will be available shortly after the call and will remain available for approximately 90 days at powellind.com.

About Powell Industries
Powell Industries, Inc., headquartered in Houston, Texas, develops, designs, manufactures and services custom-engineered equipment and systems that distribute, control and monitor the flow of electrical energy and provide protection to motors, transformers and other electrically powered equipment. Powell Industries, Inc. primarily serves the oil and gas and petrochemical markets, the electric utility market, and commercial and other industrial markets. Beyond these major markets, we also provide products and services to the light rail traction power market and other markets that include universities and government entities. We are continuously developing new channels to electrical markets through original equipment manufacturers and distribution market channels. For more information, please visit powellind.com.

Any forward-looking statements in the preceding paragraphs of this release, including those related to our outlook, are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Investors are cautioned that such forward-looking statements involve risks and uncertainties in that actual results may differ materially from those projected in the forward-looking statements. In the course of operations, we are subject to certain risk factors, competition and competitive pressures, sensitivity to general economic and industrial conditions, international political and economic risks, availability and price of raw materials and execution of business strategy. For further information, please refer to the Company's filings with the Securities and Exchange Commission, copies of which are available from the Company without charge.

POWELL INDUSTRIES, INC. & SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

	Three Months Ended December 31,
	2024				2023
(In thousands, except per share data)
	(Unaudited)
Revenues	$	241,431			$	194,017
Cost of goods sold	181,907				145,823
Gross profit		59,524				48,194
Selling, general and administrative expenses	21,476				20,347
Research and development expenses	2,476				1,967
Operating income	35,572				25,880
Other expenses (income):
Interest income, net	(3,865)				(3,998)
Income before income taxes	39,437				29,878
Income tax provision	4,674				5,793
Net income	$	34,763			$	24,085
Earnings per share:
Basic	$	2.89			$	2.02
Diluted	$	2.86			$	1.98
Weighted average shares:
Basic	12,037				11,941
Diluted	12,152				12,174
SELECTED FINANCIAL DATA:
Depreciation	$	1,755			$	1,641
Capital Expenditures	$	2,189			$	1,235
Dividends Paid	$	3,185			$	3,124

POWELL INDUSTRIES, INC. & SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS

	December 31, 2024				September 30, 2024
(In thousands)
	(Unaudited)
Assets:
Cash, cash equivalents and short-term investments	$	373,397			$	358,392
Other current assets	388,539				418,089
Property, plant and equipment, net	101,957				103,421
Long-term assets	48,782				48,278
Total assets	$	912,675			$	928,180
Liabilities and equity:
Current liabilities	$	396,669			$	428,015
Deferred and other long-term liabilities		19,674				17,092
Stockholders’ equity	496,332				483,073
Total liabilities and stockholders’ equity	$	912,675			$	928,180
SELECTED FINANCIAL DATA:
Working capital	$	365,267			$	348,466

^{(1) New orders (bookings) represent the estimated value of contracts added to existing backlog (unsatisfied performance obligations).
(2) The amounts recorded in backlog may not be a reliable indicator of our future operating results and may not be indicative of continuing revenue performance over future fiscal quarters or years primarily due to unexpected contract adjustments, cancellations or scope reductions.}

Contacts:	Michael W. Metcalf, CFO
	Powell Industries, Inc.
	713-947-4422
	Robert Winters or Ryan Coleman
	Alpha IR Group
	POWL@alpha-ir.com
	312-445-2870

FAQ

What were POWL's Q1 2025 earnings per share?

Powell Industries reported earnings of $2.86 per diluted share in Q1 fiscal 2025, up 44% from $1.98 in the same quarter last year.

How much revenue did Powell Industries generate in Q1 2025?

Powell Industries generated total revenues of $241.4 million in Q1 fiscal 2025, representing a 24% increase from the previous year.

What is Powell Industries' current backlog as of December 2024?

Powell Industries maintained a backlog of $1.3 billion as of December 31, 2024, remaining stable compared to both September 30, 2024 and December 31, 2023.

How much were POWL's new orders in Q1 2025?

Powell Industries received new orders totaling $269 million in Q1 2025, up 36% from $198 million in the prior year.

What was POWL's cash position at the end of Q1 2025?

Powell Industries reported cash and short-term investments of $373 million as of December 31, 2024.