Powell Industries Announces Second Quarter Fiscal 2025 Results

Rhea-AI Summary

Powell Industries (POWL) reported strong Q2 FY2025 results with revenues of $279 million, up 9% year-over-year. Net income reached $46.3 million, or $3.81 per diluted share, marking a 38% increase from the previous year. The company achieved a gross profit of $83.4 million, representing a 29.9% margin. Notable sector performance included Electric Utility growing 48% to $70.3 million and Commercial/Industrial rising 16% to $40.4 million. New orders totaled $249 million, including major projects for a Gulf Coast LNG facility and a Canadian mining project. The company maintains a robust backlog of $1.3 billion and strong cash position of $389 million. Powell's Houston facility expansion is progressing on schedule, aimed at enhancing manufacturing capacity and R&D capabilities.

Positive

• Revenue increased 9% YoY to $279 million
• Net income grew 38% YoY to $46.3 million ($3.81 per share)
• Gross margin improved significantly to 29.9% (530 basis points increase)
• Electric Utility sector revenue grew 48% to $70.3 million
• Strong backlog maintained at $1.3 billion
• Secured two major project awards in LNG and mining sectors
• Healthy cash position of $389 million

Negative

• Petrochemical sector revenue declined 13% to $43.7 million
• New orders decreased sequentially from $269M to $249M

Insights

Financial Analyst

Exceptional quarter with 38% profit growth and dramatic margin expansion to 29.9% demonstrates superior operational efficiency.

Powell Industries posted exceptional Q2 FY2025 results with remarkable year-over-year improvements across key financial metrics. Revenue grew 9% to $278.6 million, while net income surged 38% to $46.3 million ($3.81 per diluted share).

The standout achievement was the dramatic gross margin expansion to 29.9%, a substantial 530 basis point improvement from 24.6% in the prior year period. This margin expansion, attributed to "broad-based operating efficiencies" and project closeouts, drove a 33% increase in gross profit dollars despite relatively modest revenue growth.

Sequential performance showed equally impressive momentum with 15% revenue growth and 40% gross profit growth compared to Q1 FY2025. The company maintained its robust backlog at $1.3 billion while securing $249 million in new orders, including two major projects - a greenfield LNG facility and a large Canadian mining project.

Sector performance revealed strategic shifts, with Electric Utility revenue surging 48% to $70.3 million and Commercial/Industrial growing 16% to $40.4 million, while Petrochemical declined 13% to $43.7 million.

With $389 million in cash and short-term investments, Powell maintains exceptional financial flexibility while completing its Houston facility expansion. Management's outlook emphasized continued execution discipline and cost efficiency initiatives, suggesting continued strong performance through the remainder of fiscal 2025.

Industrial Sector Specialist

Powell's margin surge demonstrates exceptional operational execution while strategic positioning in utilities and data centers drives diversified growth.

Powell's Q2 results showcase remarkable operational execution in the electrical equipment manufacturing sector. The company's ability to expand gross margins to nearly 30% demonstrates exceptional manufacturing discipline and production efficiency that significantly outpaces industry norms for custom-engineered electrical solutions.

The 48% growth in the Electric Utility sector reflects Powell's strategic alignment with accelerating grid modernization investments. Similarly, the 16% expansion in Commercial and Other Industrial sectors indicates successful market diversification, particularly as they target high-growth opportunities in data centers - a market experiencing unprecedented demand for electrical distribution infrastructure.

The strategic timing of Powell's Houston facility expansion positions the company to capitalize on both their substantial backlog and emerging opportunities in key growth markets. This manufacturing capacity enhancement serves dual purposes: supporting efficient execution of their $1.3 billion backlog while enabling increased R&D initiatives aimed at commercializing new products for Electric Utilities and Commercial Markets.

Powell's ability to secure major projects, including a new LNG facility along the U.S. Gulf Coast and a large mining operation in Canada, demonstrates continued industrial sector demand for their specialized electrical solutions across diverse applications. These project wins validate their technical leadership in mission-critical electrical systems while maintaining a balanced customer portfolio.

The operational efficiency improvements that drove gross margin expansion showcase a manufacturing operation running at peak performance, positioning Powell to maintain strong profitability even as they execute their substantial backlog through the remainder of FY2025.

HOUSTON, May 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 second quarter of Fiscal 2025 ended March 31, 2025. All comparisons are to the second quarter of Fiscal 2024, unless otherwise noted.

Second Quarter Key Financial Highlights:

• Revenues totaled $279 million, an increase of 9%;
• Gross profit of $83 million, or 29.9% of revenue;
• Net income of $46 million, or $3.81 per diluted share, increased 38%;
• New orders⁽¹⁾ totaled $249 million;
• Backlog⁽²⁾ as of March 31, 2025 was unchanged at $1.3 billion;
• Cash and short-term investments as of March 31, 2025 totaled $389 million.

Brett A. Cope, Powell’s Chairman and Chief Executive Officer, stated, “Our second quarter marked another solid quarter of project execution and robust operational efficiency. Powell delivered a 33% increase in gross profit dollar growth on revenue growth of 9%, leading to a gross margin improvement of 530 basis points compared to the prior year. Order activity in the quarter was also strong, highlighted by two large project awards which included a new greenfield LNG facility to be located along the U.S. Gulf Coast and a large mining project in Canada.”

Second Quarter Fiscal 2025 Results 
Revenues totaled $278.6 million, an increase of 9% compared to $255.1 million in the prior year, and a 15% increase compared to $241.4 million in the first quarter of Fiscal 2025. The increase compared to the prior year was driven by higher revenue levels across the Electric Utility sector which grew 48% to $70.3 million, and the Commercial and Other Industrial sector, which grew 16% to $40.4 million. This was partially offset by a revenue decline in the Petrochemical sector of 13% to $43.7 million.

Gross profit of $83.4 million, or 29.9% of revenue, increased by 33% compared to $62.7 million, or 24.6% of revenue in the prior year, and also increased by 40% compared to $59.5 million, or 24.7% of revenue, in the first quarter of Fiscal 2025. The improvement compared to the prior year was primarily due to broad-based operating efficiencies generating increased productivity, in addition to project closeouts.

New orders totaled $249 million compared to $235 million in the prior year and $269 million in the first quarter. The growth compared to the prior year was again driven by strong bookings in the Commercial and Other Industrial Sector as well as continued robust activity in the Oil & Gas sector.

Backlog totaled $1.3 billion as of March 31, 2025, essentially unchanged compared to backlog at both December 31, 2024 and March 31, 2024.

Net income of $46.3 million, or $3.81 per diluted share, increased 38% compared to $33.5 million, or $2.75 per diluted share, in the prior year, and increased 33% compared to $34.8 million, or $2.86 per diluted share, in the first quarter of Fiscal 2025.

Cope added, “The expansion project at our Electrical Products facility in Houston is nearing completion and on schedule as we continue to augment our manufacturing footprint to both service our project backlog and better position Powell for future growth. This incremental capacity will also play a critical role in advancing our key strategic priority to commercialize new products through organic investment in our R&D function, positioning us to better compete and capture greater share in key sectors like Electric Utilities and Commercial Markets including data centers.”

OUTLOOK
Commenting on the Company's outlook, Michael Metcalf, Powell’s Chief Financial Officer, said, “Achieving gross profit of 29.9% of revenue in the second fiscal quarter marked a sequential 520 basis point improvement from our seasonally low first quarter of Fiscal 2025. As we look forward, our primary focus remains on execution discipline and customer fulfillment, while also continuing to drive cost efficiencies across the business. These initiatives, along with our healthy backlog, strong balance sheet, and proven operational excellence, have positioned Powell well to deliver robust revenue and earnings throughout the remainder of Fiscal 2025.”

CONFERENCE CALL
Powell Industries has scheduled a conference call for Wednesday, May 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 May 14, 2025 and may be accessed by calling 1-877-344-7529 (domestic) or 1-412-317-0088 (international) and using passcode 9753600#.

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, the impact of tariffs 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 March 31,								Six Months Ended March 31,
	2025				2024				2025				2024
(In thousands, except per share data)
	(Unaudited)
Revenues	$	278,631			$	255,108			$	520,062			$	449,125
Cost of goods sold	195,199				192,388				377,106				338,211
Gross profit		83,432				62,720				142,956				110,914
Selling, general and administrative expenses	21,767				20,947				43,243				41,294
Research and development expenses	2,746				2,284				5,222				4,251
Operating income	58,919				39,489				94,491				65,369
Other expenses (income):
Interest income, net	(3,555		)		(4,428		)		(7,420		)		(8,426		)
Income before income taxes	62,474				43,917				101,911				73,795
Income tax provision	16,144				10,429				20,818				16,222
Net income	$	46,330			$	33,488			$	81,093			$	57,573
Earnings per share:
Basic	$	3.84			$	2.79			$	6.73			$	4.81
Diluted	$	3.81			$	2.75			$	6.67			$	4.73
Weighted average shares:
Basic	12,069				11,992				12,053				11,966
Diluted	12,174				12,191				12,163				12,167
SELECTED FINANCIAL DATA:
Depreciation	$	1,718			$	1,724			$	3,473			$	3,365
Capital Expenditures	$	4,074			$	903			$	6,263			$	2,138
Dividends Paid	$	3,227			$	3,175			$	6,412			$	6,299

POWELL INDUSTRIES, INC. & SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS
	March 31, 2025				September 30, 2024
(In thousands)
	(Unaudited)
Assets:
Cash, cash equivalents and short-term investments	$	389,292			$	358,392
Other current assets	421,338				418,089
Property, plant and equipment, net	105,402				103,421
Long-term assets	49,336				48,278
Total assets	$	965,368			$	928,180
Liabilities and equity:
Current liabilities	$	404,844			$	428,015
Deferred and other long-term liabilities		19,161				17,092
Stockholders’ equity	541,363				483,073
Total liabilities and stockholders’ equity	$	965,368			$	928,180
SELECTED FINANCIAL DATA:
Working capital	$	405,786			$	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 Powell Industries (POWL) earnings per share in Q2 2025?

Powell Industries reported earnings of $3.81 per diluted share in Q2 FY2025, up 38% from $2.75 in the prior year.

How much revenue did POWL generate in Q2 2025?

Powell Industries generated revenues of $278.6 million in Q2 FY2025, a 9% increase from $255.1 million in the prior year.

What is Powell Industries' current backlog as of Q2 2025?

Powell Industries maintained a backlog of $1.3 billion as of March 31, 2025, unchanged from both the previous quarter and year.

How much cash does Powell Industries have on hand?

Powell Industries reported cash and short-term investments of $389 million as of March 31, 2025.

What was POWL's gross profit margin in Q2 2025?

Powell Industries achieved a gross profit margin of 29.9% in Q2 FY2025, up from 24.6% in the prior year.