What the changes say
- Power results now emphasize project timing, cost estimates, fixed-price exposure, and customer concentration, including 80.1% of Fiscal 2026 revenue.
What changed since the prior 10-K
New
- NewRisks Related to Our Business
Our financial results may fluctuate due to the timing of large construction projects
Large Power projects may start, progress, or finish unevenly, causing significant period-to-period swings in revenue, cash flow, earnings, and EPS.
- NewRisks Related to Our Business
The preparation of consolidated financial statements in conformity with U.S. GAAP requires management to make estimates, assumptions, and judgments that affect the reported amounts of assets and liabilities, revenues and expenses, and related disclosures
Monthly changes in fixed-price contract costs, change orders, disputes, goodwill, taxes, credit losses, and legal accruals could materially reverse recognized revenue or profit.
- NewRisks Related to Our Business
Disruptions or unfavorable changes in power market economics, including reductions in spark spreads or changes in capacity market pricing, could reduce demand for new power generation projects in certain regions
Lower spark spreads, capacity-market prices, or unfavorable capacity rules could make new utility-scale generation projects uneconomic and reduce demand for the company’s EPC work.
- NewRisks Related to Our Business
We may use artificial intelligence, machine learning, and similar technologies (“AI”), including AI-enabled features in third-party products, to support our business processes. Although our current use of AI is limited, we may expand our use of these technologies over time
AI tools could expose customer and contract data, create evolving compliance liabilities, or let competitors gain an advantage through faster adoption.
- NewRisks Related to Our Market
Changes in electricity generation resource mix could affect demand for new natural gas-fired power plant projects
Faster growth of renewable generation and energy storage could reduce the number or size of new natural gas-fired power plant projects.
- NewRisks Related to the Regulatory Environment
Changes in U.S. trade policy, including the imposition of tariffs, could increase our costs, disrupt supply chains, and reduce demand for construction projects
Tariffs, trade restrictions, and import disruptions could raise material and equipment costs, delay projects, strain supply chains, or cause customers to cancel work.
- NewRisks Related to the Regulatory Environment
Delays or failures in obtaining required regulatory approvals, including permits, interconnection agreements, and pipeline approvals, could delay or prevent energy projects and adversely affect our results
Delayed or denied permits, interconnection agreements, or natural gas pipeline approvals could postpone or prevent customers’ energy projects.
- NewRisks Related to Our Operational Execution
Our dependence upon third parties to perform portions of our work and supply materials and equipment could adversely affect our project performance and profitability
Failures or delays by subcontractors, manufacturers, and suppliers of specialized labor, equipment, or materials could disrupt schedules and reduce fixed-price project margins.
- NewRisks Related to Our Operational Execution
Future acquisitions or investments may not occur, and any acquisitions we complete may not be successfully integrated, which could limit our growth and adversely affect our results
Unavailable acquisition targets, financing, or acceptable cash or equity consideration could prevent strategic acquisitions and limit growth.
- NewRisks Related to Our Operational Execution
Changes in tax laws or tax rates could increase our tax expense
Changes in U.S. or foreign tax laws, treaties, rates, interpretations, or enforcement could increase tax expense and compliance costs.
Dropped
- DroppedRisks Related to Our Business
Our dependence on large construction contracts may result in uneven financial results
- DroppedRisks Related to Our Business
Actual results could differ from the assumptions and estimates used to prepare our consolidated financial statements
- DroppedRisks Related to Our Business
Continuing disruptions to capacity auctions and corresponding prices could reduce the demand for power plants in a primary business region
Concentration in a limited number of large projects and cost-based revenue recognition could produce uneven results.
- DroppedRisks Related to Our Business
Artificial intelligence poses risks that could adversely affect our business, results of operations, and financial condition
Broad accounting estimates and judgments could cause reported financial statement amounts to differ from actual outcomes.
- DroppedRisks Related to Our Market
The continuous rise in renewables could possibly reduce the number of future gas-fired power plant projects
- DroppedRisks Related to the Regulatory Environment
Expectations of customers and investors may change with respect to sustainability practices, which may impose costs or impact our ability to obtain financing
- DroppedRisks Related to the Regulatory Environment
The imposition of tariffs by the Trump Administration may impact the construction of power plants or other construction projects of our subsidiaries
- DroppedRisks Related to the Regulatory Environment
Future construction projects may depend on the continuing acceptability of the hydraulic fracturing process in certain states
- DroppedRisks Related to the Regulatory Environment
The inability of power project developers to receive or to avoid delay in receiving the applicable regulatory approvals relating to energy projects, including new natural gas pipelines, may result in lost or postponed revenues for us
Disruptions to PJM capacity auctions and prices could reduce regional demand for natural gas-fired power plants.
- DroppedRisks Related to Our Operational Execution
These risks tend to be exacerbated for longer-term contracts because there is increased risk that the circumstances under which we based our original cost estimates or project schedules will change. In such events, our financial condition and results of operations could be negatively impacted
General risks from the company’s limited and potentially expanding use of artificial intelligence.
- DroppedRisks Related to Our Operational Execution
Our dependence upon third parties to complete many of our contracts may adversely affect our performance under current and future construction contracts
- DroppedRisks Related to Our Operational Execution
Future acquisitions and/or investments may not occur, which could limit the growth of our business, and the integration of acquired companies may not be successful
- DroppedRisks Related to Our Operational Execution
We may be subject to increased corporate taxes in the future
Reworded
- 99% rewrittenRisks Related to Our Market
If the price of natural gas increases or becomes more volatile, the demand for our construction services could decline
The risk now directly emphasizes developer financing and project cancellations, and identifies domestic supply-demand, LNG exports, and production regulation as price drivers.
Was: If the price of natural gas increases, the demand for our construction services could decline
- 99% rewrittenRisks Related to Our Operational Execution
We may experience reduced profits or incur losses under fixed-price contracts if costs increase above estimates
The wording adds labor productivity and schedule assumptions, while expressly noting unrecoverable overruns, losses, reputational harm, and reduced future opportunities.
- 99% rewrittenRisks Related to Our Market
Intense global competition for engineering, procurement, and construction contracts could reduce our market share
The risk adds well-capitalized competitors, skilled labor and equipment access, technology use, and potential pressure to accept lower margins or greater contract risk.
- 98% rewrittenRisks Related to Our Business
Future revenues are dependent on the awards of utility-scale natural gas-fired and renewable energy EPC projects to us, the receipt of corresponding full notices-to-proceed, and our ability to successfully complete the projects that we start
Power generated 80.1% of Fiscal 2026 revenue versus 79.3% previously, and the risk now highlights notices to proceed, cancellations, and project execution.
- 95% rewrittenRisks Related to Our Operational Execution
Our failure to protect our management information systems against security breaches could adversely affect our business and results of operations
The risk adds third-party-hosted systems and describes AI as creating additional cybersecurity risks that may be difficult to anticipate or mitigate.
- 95% rewrittenRisks Related to Our Business
Future bonding requirements may adversely affect our ability to compete for certain projects
The risk now identifies alternative bonding responses, including other sureties, joint ventures, non-bonded clients, letters of credit, and cash security.
Was: Future bonding requirements may adversely affect our ability to compete for new energy plant construction projects
- 94% rewrittenRisks Related to Our Operational Execution
We may be involved in litigation, liability claims, and contract disputes which could reduce our profits and cash flows
Claims now specifically include schedules, workmanship, change orders, and termination, and the risk expands to other lawsuits involving directors, officers, or employees.
- 86% rewrittenRisks Related to Our Business
Demand for our services may decrease during economic downturns or unpredictable economic cycles, which could affect our businesses adversely
The risk adds customers’ reduced ability or willingness to fund capital expenditures and explicitly covers delays, reductions, or cancellations of important projects.
Was: Demand for our services may decrease during economic downturns or unpredictable economic cycles, which would most likely affect our businesses adversely
- 80% rewrittenRisks Related to Our Business
Our results could be adversely affected by natural disasters, human-made disasters or other catastrophic events
- 78% rewrittenRisks Related to the Regulatory Environment
We are required to comply with environmental laws and regulations that may add unforeseen costs to our businesses
- 76% rewrittenRisks Related to Our Operational Execution
Our continued success depends on our ability to attract, hire and retain talented personnel
Was: Our continued success requires us to retain and hire talented personnel
- 68% rewrittenRisks Related to an Investment in Our Securities
Our officers, directors and certain unaffiliated stockholders may have meaningful control over the Company
Was: Our officers, directors and certain unaffiliated stockholders have meaningful control over the Company
- 60% rewrittenRisks Related to Our Operational Execution
Certain of our tax positions may be successfully challenged by tax authorities which could result in additional income tax expense
- 60% rewrittenRisks Related to Our Market
Unexpected changes in the foreign countries in which we operate could result in project disruptions, increased costs and potential losses
Was: Unexpected and adverse changes in the foreign countries in which we operate could result in project disruptions, increased costs and potential losses
- 54% rewrittenRisks Related to Our Business
Unsuccessful efforts to develop energy plant projects could result in write-offs and the loss of future business
- 52% rewrittenRisks Related to an Investment in Our Securities
Our acquisition strategy may result in dilution to our stockholders
- 44% rewrittenRisks Related to an Investment in Our Securities
Future restricted stock issuances and stock option exercises will dilute the ownership of the Company’s current stockholders
Was: Future stock option exercises and restricted stock issuances will dilute the ownership of the Company’s current stockholders
- 38% rewrittenRisks Related to Our Operational Execution
Violations of the Foreign Corrupt Practices Act or similar anti-bribery laws may harm our business
Was: We could be adversely affected by violations of the Foreign Corrupt Practices Act and similar anti-bribery laws
- 35% rewrittenRisks Related to an Investment in Our Securities
We may discontinue the repurchase of our common stock in the future
- 33% rewrittenRisks Related to an Investment in Our Securities
We may not pay cash dividends in the future
- 27% rewrittenRisks Related to Our Operational Execution
If we guarantee the timely completion or the performance of a project, we could incur additional costs to fulfill such obligations
- 22% rewrittenRisks Related to an Investment in Our Securities
Provisions of our certificate of incorporation and Delaware law could deter takeover attempts
- 22% rewrittenRisks Related to Our Market
Soft demand for electrical power may cause deterioration in our financial outlook
- 22% rewrittenRisks Related to Our Operational Execution
Our failure to recover adequately on contract variations submitted to project owners could have a material effect on our financial results
- 21% rewrittenRisks Related to Our Operational Execution
The shortage of skilled craft labor may negatively impact our ability to execute on our long-term construction contracts
All 38 risk factors
Headings as the filing states them, in filing order.
Risks Related to Our Business
- 01Demand for our services may decrease during economic downturns or unpredictable economic cycles, which could affect our businesses adversely86% rewritten
- 02Future revenues are dependent on the awards of utility-scale natural gas-fired and renewable energy EPC projects to us, the receipt of corresponding full notices-to-proceed, and our ability to successfully complete the projects that we start98% rewritten
- 03Our financial results may fluctuate due to the timing of large construction projectsNew
- 04The preparation of consolidated financial statements in conformity with U.S. GAAP requires management to make estimates, assumptions, and judgments that affect the reported amounts of assets and liabilities, revenues and expenses, and related disclosuresNew
- 05Project backlog amounts may be uncertain indicators of future revenues as project realization may be subject to unexpected adjustments, delays and cancellations
- 06Unsuccessful efforts to develop energy plant projects could result in write-offs and the loss of future business54% rewritten
- 07Future bonding requirements may adversely affect our ability to compete for certain projects95% rewritten
- 08Our results could be adversely affected by natural disasters, human-made disasters or other catastrophic events80% rewritten
- 09Disruptions or unfavorable changes in power market economics, including reductions in spark spreads or changes in capacity market pricing, could reduce demand for new power generation projects in certain regionsNew
- 10We may use artificial intelligence, machine learning, and similar technologies (“AI”), including AI-enabled features in third-party products, to support our business processes. Although our current use of AI is limited, we may expand our use of these technologies over timeNew
Risks Related to Our Market
- 11If the price of natural gas increases or becomes more volatile, the demand for our construction services could decline99% rewritten
- 12Soft demand for electrical power may cause deterioration in our financial outlook22% rewritten
- 13Intense global competition for engineering, procurement, and construction contracts could reduce our market share99% rewritten
- 14Changes in electricity generation resource mix could affect demand for new natural gas-fired power plant projectsNew
- 15Unexpected changes in the foreign countries in which we operate could result in project disruptions, increased costs and potential losses60% rewritten
Risks Related to the Regulatory Environment
- 16We are required to comply with environmental laws and regulations that may add unforeseen costs to our businesses78% rewritten
- 17Changes in U.S. trade policy, including the imposition of tariffs, could increase our costs, disrupt supply chains, and reduce demand for construction projectsNew
- 18Delays or failures in obtaining required regulatory approvals, including permits, interconnection agreements, and pipeline approvals, could delay or prevent energy projects and adversely affect our resultsNew
Risks Related to Our Operational Execution
- 19We may experience reduced profits or incur losses under fixed-price contracts if costs increase above estimates99% rewritten
- 20Our continued success depends on our ability to attract, hire and retain talented personnel76% rewritten
- 21The shortage of skilled craft labor may negatively impact our ability to execute on our long-term construction contracts21% rewritten
- 22If we guarantee the timely completion or the performance of a project, we could incur additional costs to fulfill such obligations27% rewritten
- 23We may be involved in litigation, liability claims, and contract disputes which could reduce our profits and cash flows94% rewritten
- 24Our failure to recover adequately on contract variations submitted to project owners could have a material effect on our financial results22% rewritten
- 25Our dependence upon third parties to perform portions of our work and supply materials and equipment could adversely affect our project performance and profitabilityNew
- 26Failure to maintain safe work sites could result in significant losses as we work on projects that are inherently dangerous
- 27Work stoppages, union negotiations and other labor problems could adversely affect us
- 28Future acquisitions or investments may not occur, and any acquisitions we complete may not be successfully integrated, which could limit our growth and adversely affect our resultsNew
- 29Our failure to protect our management information systems against security breaches could adversely affect our business and results of operations95% rewritten
- 30Changes in tax laws or tax rates could increase our tax expenseNew
- 31Certain of our tax positions may be successfully challenged by tax authorities which could result in additional income tax expense60% rewritten
- 32Violations of the Foreign Corrupt Practices Act or similar anti-bribery laws may harm our business38% rewritten
Risks Related to an Investment in Our Securities
- 33Our acquisition strategy may result in dilution to our stockholders52% rewritten
- 34Future restricted stock issuances and stock option exercises will dilute the ownership of the Company’s current stockholders44% rewritten
- 35Our officers, directors and certain unaffiliated stockholders may have meaningful control over the Company68% rewritten
- 36We may not pay cash dividends in the future33% rewritten
- 37We may discontinue the repurchase of our common stock in the future35% rewritten
- 38Provisions of our certificate of incorporation and Delaware law could deter takeover attempts 22% rewritten
Other Argan 10-Ks
- FY2025 10-K risk factors41 risks
Argan relies heavily on large utility-scale natural gas and renewable EPC projects through its power industry segment. Fixed-price contracts and cost overruns present major operational risks for complex energy construction. Supply chain volatility, labor shortages, and regulatory hurdles threaten project margins and backlog realization.
Filed Mar 27, 2025
About this page
The headings are the filing's own. The one-line readings and the overview are automated and can be wrong: read Item 1A of the 10-K for the exact wording.