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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

Form 10-Q

(Mark One)

☒ | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2026
OR

☐ | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to
Commission File Number 001-12488

Powell Industries, Inc.
(Exact name of registrant as specified in its charter)

Delaware |  | 88-0106100
(State or other jurisdiction of incorporation or organization) |  | (I.R.S. Employer Identification No.)
8550 Mosley Road |  |
Houston |  |
Texas |  | 77075-1180
(Address of principal executive offices) |  | (Zip Code)

Registrant’s telephone number, including area code:
(713) 944-6900

Securities registered pursuant to Section 12(b) of the Act:

Title of each class |  | Trading Symbol |  | Name of each exchange on which registered
Common Stock, par value $0.01 per share |  | POWL |  | NASDAQ Global Market

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. ☒ Yes ☐ No
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). ☒ Yes ☐ No
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer | ☒ | Accelerated filer | ☐ | Non-accelerated filer | ☐ | Smaller reporting company | ☐ | Emerging growth company | ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). ☐ Yes ☒ No
At May 4, 2026, there were 36,431,649 outstanding shares of the registrant’s common stock, par value $0.01 per share.

1

POWELL INDUSTRIES, INC. AND SUBSIDIARIES
TABLE OF CONTENTS

| Page
Part I — Financial Information | 3
Item 1. Financial Statements | 3
Condensed Consolidated Balance Sheets (Unaudited) | 3
Condensed Consolidated Statements of Operations (Unaudited) | 4
Condensed Consolidated Statements of Comprehensive Income (Unaudited) | 5
Condensed Consolidated Statements of Stockholders’ Equity (Unaudited) | 6
Condensed Consolidated Statements of Cash Flows (Unaudited) | 7
Notes to Condensed Consolidated Financial Statements (Unaudited) | 8
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations | 25
Item 3. Quantitative and Qualitative Disclosures About Market Risk | 30
Item 4. Controls and Procedures | 30
Part II — Other Information | 31
Item 1. Legal Proceedings | 31
Item 1A. Risk Factors | 31
Item 5. Other Information | 31
Item 6. Exhibits | 31
Signatures | 33

2

PART I — FINANCIAL INFORMATION
Item 1. Financial Statements
POWELL INDUSTRIES, INC. AND SUBSIDIARIES
Condensed Consolidated Balance Sheets (Unaudited)
(In thousands, except share and per share data)

| March 31, 2026 |  | September 30, 2025
ASSETS |  |  |
Current Assets: |  |  |
Cash and cash equivalents | $ | 537,712 |  |  | $ | 450,739 |
Short-term investments | 7,177 |  |  | 24,788 |
Accounts receivable, less allowance for credit losses of $311 and $368, respectively | 238,315 |  |  | 217,065 |
Contract assets | 113,297 |  |  | 136,679 |
Inventories | 86,304 |  |  | 84,719 |
Prepaid expenses | 12,744 |  |  | 10,591 |
Other current assets | 12,837 |  |  | 7,135 |
Total Current Assets | 1,008,386 |  |  | 931,716 |
Property, plant and equipment, net | 111,822 |  |  | 111,049 |
Operating lease assets, net | 1,955 |  |  | 1,664 |
Goodwill | 6,039 |  |  | 6,125 |
Intangible assets, net | 5,606 |  |  | 6,138 |
Deferred income tax assets | 26,257 |  |  | 33,440 |
Other assets | 19,974 |  |  | 18,852 |
Total Assets | $ | 1,180,039 |  |  | $ | 1,108,984 |
LIABILITIES AND STOCKHOLDERS’ EQUITY |  |  |
Current Liabilities: |  |  |
Accounts payable | $ | 75,135 |  |  | $ | 67,080 |
Contract liabilities | 314,506 |  |  | 297,949 |
Accrued compensation and benefits | 24,278 |  |  | 39,184 |
Accrued product warranty | 6,637 |  |  | 6,356 |
Current operating lease liabilities | 880 |  |  | 882 |
Income taxes payable | 3,368 |  |  | 11,028 |
Other current liabilities | 22,476 |  |  | 23,908 |
Total Current Liabilities | 447,280 |  |  | 446,387 |
Deferred compensation | 14,831 |  |  | 13,707 |
Long-term operating lease liabilities | 1,075 |  |  | 782 |
Deferred income tax liabilities | 5,266 |  |  | 5,297 |
Other long-term liabilities | 2,518 |  |  | 2,041 |
Total Liabilities | 470,970 |  |  | 468,214 |
Commitments and Contingencies (Note G) |  |  |
Stockholders’ Equity: |  |  |
Preferred stock, par value $0.01; 5,000,000 shares authorized; none issued | — |  |  | — |
Common stock, par value $0.01; 90,000,000 shares authorized; Shares issued: 38,849,553 and 38,628,588, respectively Shares outstanding: 36,431,499 and 36,210,534, respectively | 129 |  |  | 129 |
Additional paid-in capital | 51,537 |  |  | 62,834 |
Retained earnings | 710,532 |  |  | 629,848 |
Treasury stock, 2,418,054 shares at cost | (24,999) |  |  | (24,999) |
Accumulated other comprehensive loss | (28,130) |  |  | (27,042) |
Total Stockholders’ Equity | 709,069 |  |  | 640,770 |
Total Liabilities and Stockholders’ Equity | $ | 1,180,039 |  |  | $ | 1,108,984 |

The accompanying notes are an integral part of these condensed consolidated financial statements.
3

POWELL INDUSTRIES, INC. AND SUBSIDIARIES
Condensed Consolidated Statements of Operations (Unaudited)
(In thousands, except per share data)

| Three months ended March 31, |  | Six months ended March 31,
| 2026 |  | 2025 |  | 2026 |  | 2025
Revenues | $ | 296,615 |  |  | $ | 278,631 |  |  | $ | 547,799 |  |  | $ | 520,062 |
Cost of goods sold | 208,679 |  |  | 195,199 |  |  | 388,445 |  |  | 377,106 |
Gross profit | 87,936 |  |  | 83,432 |  |  | 159,354 |  |  | 142,956 |
Selling, general and administrative expenses | 25,843 |  |  | 21,767 |  |  | 51,001 |  |  | 43,243 |
Research and development expenses | 4,289 |  |  | 2,746 |  |  | 7,556 |  |  | 5,222 |
Amortization of intangible assets | 223 |  |  | — |  |  | 445 |  |  | — |
Operating income | 57,581 |  |  | 58,919 |  |  | 100,352 |  |  | 94,491 |
Other expenses (income): |  |  |  |  |  |  |
Interest income, net | (4,203) |  |  | (3,555) |  |  | (8,468) |  |  | (7,420) |
Income before income taxes | 61,784 |  |  | 62,474 |  |  | 108,820 |  |  | 101,911 |
Income tax provision | 15,897 |  |  | 16,144 |  |  | 21,543 |  |  | 20,818 |
Net income | $ | 45,887 |  |  | $ | 46,330 |  |  | $ | 87,277 |  |  | $ | 81,093 |
Earnings per share: |  |  |  |  |  |  |
Basic | $ | 1.26 |  |  | $ | 1.28 |  |  | $ | 2.40 |  |  | $ | 2.24 |
Diluted | $ | 1.25 |  |  | $ | 1.27 |  |  | $ | 2.39 |  |  | $ | 2.22 |
Weighted average shares: |  |  |  |  |  |  |
Basic | 36,429 |  |  | 36,206 |  |  | 36,378 |  |  | 36,159 |
Diluted | 36,584 |  |  | 36,523 |  |  | 36,543 |  |  | 36,489 |
Dividends per share | $ | 0.0900 |  |  | $ | 0.0892 |  |  | $ | 0.1792 |  |  | $ | 0.1775 |

The accompanying notes are an integral part of these condensed consolidated financial statements.
4

POWELL INDUSTRIES, INC. AND SUBSIDIARIES
Condensed Consolidated Statements of Comprehensive Income (Unaudited)
(In thousands)

| Three months ended March 31, |  | Six months ended March 31,
| 2026 |  | 2025 |  | 2026 |  | 2025
Net income | $ | 45,887 |  |  | $ | 46,330 |  |  | $ | 87,277 |  |  | $ | 81,093 |
Foreign currency translation adjustments | (3,224) |  |  | 937 |  |  | (1,088) |  |  | (7,132) |
Comprehensive income | $ | 42,663 |  |  | $ | 47,267 |  |  | $ | 86,189 |  |  | $ | 73,961 |

The accompanying notes are an integral part of these condensed consolidated financial statements.
5

POWELL INDUSTRIES, INC. AND SUBSIDIARIES
Condensed Consolidated Statements of Stockholders’ Equity (Unaudited)
(In thousands)

|  |  |  |  |  |  |  |  |  |  |  |  | Accumulated |  |
|  |  |  |  | Additional |  |  |  |  |  |  |  | Other |  |
| Common Stock |  | Paid-in |  | Retained |  | Treasury Stock |  | Comprehensive |  |
| Shares |  | Amount |  | Capital |  | Earnings |  | Shares |  | Amount |  | Income/(Loss) |  | Totals
Balance, September 30, 2025 | 38,629 |  |  | $ | 129 |  |  | $ | 62,834 |  |  | $ | 629,848 |  |  | (2,418) |  |  | $ | (24,999) |  |  | $ | (27,042) |  |  | $ | 640,770 |
Net income | — |  |  | — |  |  | — |  |  | 41,390 |  |  | — |  |  | — |  |  | — |  |  | 41,390 |
Foreign currency translation adjustments | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 2,136 |  |  | 2,136 |
Stock-based compensation | 211 |  |  | — |  |  | 1,572 |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 1,572 |
Shares withheld in lieu of employee tax withholding | — |  |  | — |  |  | (14,036) |  |  | — |  |  | — |  |  | — |  |  | — |  |  | (14,036) |
Dividends | — |  |  | — |  |  | 351 |  |  | (3,297) |  |  | — |  |  | — |  |  | — |  |  | (2,946) |
Balance, December 31, 2025 | 38,840 |  |  | $ | 129 |  |  | $ | 50,721 |  |  | $ | 667,941 |  |  | (2,418) |  |  | $ | (24,999) |  |  | $ | (24,906) |  |  | $ | 668,886 |
Net income | — |  |  | — |  |  | — |  |  | 45,887 |  |  | — |  |  | — |  |  | — |  |  | 45,887 |
Foreign currency translation adjustments | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | (3,224) |  |  | (3,224) |
Stock-based compensation | 10 |  |  | — |  |  | 1,270 |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 1,270 |
Shares withheld in lieu of employee tax withholding | — |  |  | — |  |  | (459) |  |  | — |  |  | — |  |  | — |  |  | — |  |  | (459) |
Dividends | — |  |  | — |  |  | 5 |  |  | (3,296) |  |  | — |  |  | — |  |  | — |  |  | (3,291) |
Balance, March 31, 2026 | 38,850 |  |  | $ | 129 |  |  | $ | 51,537 |  |  | $ | 710,532 |  |  | (2,418) |  |  | $ | (24,999) |  |  | $ | (28,130) |  |  | $ | 709,069 |

|  |  |  |  |  |  |  |  |  |  |  |  | Accumulated |  |
|  |  |  |  | Additional |  |  |  |  |  |  |  | Other |  |
| Common Stock |  | Paid-in |  | Retained |  | Treasury Stock |  | Comprehensive |  |
| Shares |  | Amount |  | Capital |  | Earnings |  | Shares |  | Amount |  | Income/(Loss) |  | Totals
Balance, September 30, 2024 | 38,386 |  |  | $ | 128 |  |  | $ | 70,111 |  |  | $ | 462,194 |  |  | (2,418) |  |  | $ | (24,999) |  |  | $ | (24,361) |  |  | $ | 483,073 |
Net income | — |  |  | — |  |  | — |  |  | 34,763 |  |  | — |  |  | — |  |  | — |  |  | 34,763 |
Foreign currency translation adjustments | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | (8,069) |  |  | (8,069) |
Stock-based compensation | 226 |  |  | 1 |  |  | 1,512 |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 1,513 |
Shares withheld in lieu of employee tax withholding | — |  |  | — |  |  | (11,995) |  |  | — |  |  | — |  |  | — |  |  | — |  |  | (11,995) |
Dividends | — |  |  | — |  |  | 331 |  |  | (3,284) |  |  | — |  |  | — |  |  | — |  |  | (2,953) |
Balance, December 31, 2024 | 38,612 |  |  | $ | 129 |  |  | $ | 59,959 |  |  | $ | 493,673 |  |  | (2,418) |  |  | $ | (24,999) |  |  | $ | (32,430) |  |  | $ | 496,332 |
Net income | — |  |  | — |  |  | — |  |  | 46,330 |  |  | — |  |  | — |  |  | — |  |  | 46,330 |
Foreign currency translation adjustments | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 937 |  |  | 937 |
Stock-based compensation | 11 |  |  | — |  |  | 1,031 |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 1,031 |
Dividends | — |  |  | — |  |  | — |  |  | (3,267) |  |  | — |  |  | — |  |  | — |  |  | (3,267) |
Balance, March 31, 2025 | 38,623 |  |  | $ | 129 |  |  | $ | 60,990 |  |  | $ | 536,736 |  |  | (2,418) |  |  | $ | (24,999) |  |  | $ | (31,493) |  |  | $ | 541,363 |

The accompanying notes are an integral part of these condensed consolidated financial statements.
6

POWELL INDUSTRIES, INC. AND SUBSIDIARIES
Condensed Consolidated Statements of Cash Flows (Unaudited)
(In thousands)

| Six months ended March 31,
| 2026 |  | 2025
Operating Activities: |  |  |
Net income | $ | 87,277 |  |  | $ | 81,093 |
Adjustments to reconcile net income to net cash provided by operating activities: |  |  |
Depreciation and amortization | 4,331 |  |  | 3,473 |
Stock-based compensation | 2,842 |  |  | 2,544 |
Unrealized mark-to-market loss (gain) on derivative contracts | 3 |  |  | (23) |
Bad debt expense (recovery), net | (17) |  |  | (130) |
Deferred income taxes | 7,184 |  |  | (1,271) |
Changes in operating assets and liabilities: |  |  |
Accounts receivable, net | (21,364) |  |  | 9,963 |
Contract assets and liabilities, net | 39,822 |  |  | (16,927) |
Inventories | (1,683) |  |  | (3,962) |
Income taxes | (12,251) |  |  | (7,459) |
Prepaid expenses and other current assets | (3,278) |  |  | 2,810 |
Accounts payable | 7,172 |  |  | 257 |
Accrued liabilities | (16,244) |  |  | (13,713) |
Other, net | 1,017 |  |  | 2,825 |
Net cash provided by operating activities | 94,811 |  |  | 59,480 |
Investing Activities: |  |  |
Purchases of short-term investments | — |  |  | (22,614) |
Maturities of short-term investments | 17,824 |  |  | 33,421 |
Purchases of property, plant and equipment | (3,861) |  |  | (6,263) |
Proceeds from sale of property, plant and equipment | 4 |  |  | 20 |
Net cash provided by investing activities | 13,967 |  |  | 4,564 |
Financing Activities: |  |  |
Shares withheld in lieu of employee tax withholding | (14,495) |  |  | (11,995) |
Dividends paid | (6,513) |  |  | (6,412) |
Net cash used in financing activities | (21,008) |  |  | (18,407) |
Net increase in cash and cash equivalents | 87,770 |  |  | 45,637 |
Effect of exchange rate changes on cash and cash equivalents | (797) |  |  | (1,426) |
Cash and cash equivalents at beginning of period | 450,739 |  |  | 315,331 |
Cash and cash equivalents at end of period | $ | 537,712 |  |  | $ | 359,542 |

The accompanying notes are an integral part of these condensed consolidated financial statements.
7

POWELL INDUSTRIES, INC. AND SUBSIDIARIES
Notes to Condensed Consolidated Financial Statements (Unaudited)
A. Overview and Summary of Significant Accounting Policies
Overview
Powell Industries, Inc. (we, us, our, Powell or the Company) is a Delaware corporation founded by William E. Powell in 1947. We develop, design, manufacture and service 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. Our major subsidiaries, all of which are wholly owned, include Powell Electrical Systems, Inc.; Powell Canada Inc.; Powell (UK) Limited; and Powell Industries International Limited.
We are headquartered in Houston, Texas, and primarily serve 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.
Basis of Presentation
The unaudited condensed consolidated financial statements include the accounts of Powell and our wholly-owned subsidiaries. All intercompany accounts and transactions have been eliminated in consolidation.
The unaudited condensed consolidated financial statements have been prepared in accordance with the instructions to Form 10-Q and Rule 10-01 of Regulation S-X for interim financial information. Certain information and footnote disclosures, normally included in annual financial statements prepared in accordance with accounting principles generally accepted in the United States (U.S. GAAP), have been condensed or omitted pursuant to those rules and regulations. In the opinion of management, all adjustments, consisting only of normal recurring adjustments, necessary to fairly state the financial position, results of operations and cash flows with respect to the interim condensed consolidated financial statements have been included. The results of operations for the interim periods are not necessarily indicative of the results for the entire fiscal year. We believe that these financial statements contain all adjustments necessary so that they are not misleading.
The unaudited condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto of Powell and its subsidiaries included in Powell’s Annual Report on Form 10-K for the year ended September 30, 2025, which was filed with the Securities and Exchange Commission (SEC) on November 19, 2025.
References to Fiscal 2026 and Fiscal 2025 used throughout this report shall mean the current fiscal year ending September 30, 2026 and the prior fiscal year ended September 30, 2025, respectively.
Use of Estimates
The preparation of condensed consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the amounts reported in the condensed consolidated financial statements and accompanying footnotes. The most significant estimates used in our condensed consolidated financial statements affect revenue recognition and estimated cost recognition on our customer contracts, allowance for credit losses, provision for excess and obsolete inventory, warranty accruals and income taxes. The amounts recorded for warranties, legal, income taxes, impairment of long-lived assets, intangible assets and goodwill (when applicable), liquidated damages and other contingent liabilities require judgments regarding the amount of expenses that will ultimately be incurred. We base our estimates on historical experience, forecasts and various other assumptions, as well as the specific circumstances surrounding these contingent liabilities, in evaluating the amount of liability that should be recorded. Additionally, the basis for recognition of deferred tax assets requires estimates related to future income and other assumptions regarding timing and future profitability because the ultimate realization of net deferred tax assets is dependent on the generation of future taxable income during periods in which temporary differences become deductible. Estimates routinely change as new events occur, additional information becomes available or operating environments change. Actual results may differ from our prior estimates.
8

Common Stock Split
On March 31, 2026, the Company’s Board of Directors adopted an amendment to the Company’s Amended and Restated Certificate of Incorporation to proportionately increase the number of shares of the Company’s authorized common stock from 30,000,000 to 90,000,000 in connection with a forward stock split.
On April 2, 2026, the Company effected a three-for-one forward split of its common stock and proportionately increased the number of shares of authorized common stock from 30,000,000 to 90,000,000 (the Stock Split). Each shareholder of record as of the close of trading on March 20, 2026 (the Record Date) received, after the close of trading on April 2, 2026, two additional shares for every one share held on the Record Date. The shares of common stock retain a par value of $0.01 per share. Trading began on a split-adjusted basis at market open on April 6, 2026.
Share and per share amounts included in the accompanying consolidated financial statements and applicable disclosures throughout this Quarterly Report on Form 10-Q have been retroactively adjusted to reflect the Stock Split.
Accounting Standards Updates Issued but Not Yet Adopted
In December 2023, the FASB issued ASU 2023-09, Improvements to Income Tax Disclosures, which enhances the transparency of income tax disclosures. It requires greater disaggregation of information in the tax rate reconciliation and income taxes paid disaggregated by jurisdiction. This ASU is effective for fiscal years beginning after December 15, 2024, and should be applied on a prospective basis. Retrospective application and early adoption were permitted. We are currently evaluating the impacts of the new standard.
In November 2024, the FASB issued ASU No. 2024-03, Reporting Comprehensive Income – Expense Disaggregation Disclosures, which requires additional qualitative and quantitative information about specific expense categories in the notes to financial statements for both interim and annual reporting periods. In January 2025, the FASB further clarified the effective date for interim reporting periods. This ASU is effective for fiscal years beginning after December 15, 2026 and interim periods within those fiscal years beginning after December 15, 2027, with early adoption permitted. We are currently evaluating the impacts of the new standard.
B. Earnings Per Share
We compute basic earnings per share by dividing net income by the weighted average number of common shares outstanding during the period. Diluted earnings per common and potential common share include the weighted average of additional shares associated with the incremental effect of dilutive restricted stock and restricted stock units. Outstanding share and per-share amounts disclosed for all periods below have been retroactively adjusted to reflect the effect of the Stock Split.
The following table reconciles basic and diluted weighted average shares used in the computation of earnings per share (in thousands, except per share data), as adjusted for the Stock Split:

| Three months ended March 31, |  | Six months ended March 31,
| 2026 |  | 2025 |  | 2026 |  | 2025
Numerator: |  |  |  |  |  |  |
Net income | $ | 45,887 |  |  | $ | 46,330 |  |  | $ | 87,277 |  |  | $ | 81,093 |
Denominator: |  |  |  |  |  |  |
Weighted average basic shares | 36,429 |  |  | 36,206 |  |  | 36,378 |  |  | 36,159 |
Dilutive effect of restricted stock and restricted stock units | 155 |  |  | 317 |  |  | 165 |  |  | 330 |
Weighted average diluted shares | 36,584 |  |  | 36,523 |  |  | 36,543 |  |  | 36,489 |
Earnings per share: |  |  |  |  |  |  |
Basic | $ | 1.26 |  |  | $ | 1.28 |  |  | $ | 2.40 |  |  | $ | 2.24 |
Diluted | $ | 1.25 |  |  | $ | 1.27 |  |  | $ | 2.39 |  |  | $ | 2.22 |

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C. Detail of Selected Balance Sheet Accounts
Inventories
The components of inventories are summarized below (in thousands):

| March 31, 2026 |  | September 30, 2025
Raw materials, parts and sub-assemblies | $ | 92,881 |  |  | $ | 90,743 |
Work-in-progress | 2,057 |  |  | 2,222 |
Provision for excess and obsolete inventories | (8,634) |  |  | (8,246) |
Total inventories | $ | 86,304 |  |  | $ | 84,719 |

Property, Plant and Equipment
Property, plant and equipment are summarized below (in thousands):

| March 31, 2026 |  | September 30, 2025 |  |  |  |
Land | $ | 24,387 |  |  | $ | 24,436 |  |  |  |  |
Buildings and improvements | 133,187 |  |  | 133,455 |  |  |  |  |
Machinery and equipment | 100,534 |  |  | 99,840 |  |  |  |  |
Furniture and fixtures | 3,530 |  |  | 3,056 |  |  |  |  |
Construction in process | 5,728 |  |  | 2,110 |  |  |  |  |
| $ | 267,366 |  |  | $ | 262,897 |  |  |  |  |
Less: Accumulated depreciation | (155,544) |  |  | (151,848) |  |  |  |  |
Total property, plant and equipment, net | $ | 111,822 |  |  | $ | 111,049 |  |  |  |  |

There were no assets under finance lease as of March 31, 2026 or September 30, 2025.
Accrued Product Warranty
Activity in our product warranty accrual consisted of the following (in thousands):

| Three months ended March 31, |  | Six months ended March 31,
| 2026 |  | 2025 |  | 2026 |  | 2025
Balance at beginning of period | $ | 6,676 |  |  | $ | 6,106 |  |  | $ | 6,356 |  |  | $ | 5,822 |
Increase to warranty expense | 1,694 |  |  | 1,357 |  |  | 3,663 |  |  | 2,854 |
Deduction for warranty charges | (1,710) |  |  | (1,192) |  |  | (3,376) |  |  | (2,341) |
Change due to foreign currency translation | (23) |  |  | 13 |  |  | (6) |  |  | (51) |
Balance at end of period | $ | 6,637 |  |  | $ | 6,284 |  |  | $ | 6,637 |  |  | $ | 6,284 |

D. Revenue
Revenue Recognition
Our revenues are primarily generated from the manufacturing of custom-engineered products and systems under long-term fixed-price contracts under which we agree to manufacture various products such as traditional and arc-resistant distribution switchgear and control gear, medium-voltage circuit breakers, monitoring and control communications systems, motor control centers, switches and bus duct systems. These products may be sold separately as an engineered solution but are typically integrated into custom-built enclosures which we also build. These enclosures are referred to as power control room substations (PCRs®), custom-engineered modules or electrical houses (E-Houses). Some contracts may also include the installation and the commissioning of these enclosures.
Revenue from these contracts is generally recognized over time utilizing the cost-to-cost method. Under the cost-to-cost method, the extent of progress towards completion is measured based on the ratio of costs incurred to date to the total estimated
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costs at completion of the performance obligation. We believe that this method is the most accurate representation of our performance because it directly measures the value of the services transferred to the customer over time as we incur costs on our contracts. Contract costs include all direct materials, labor and indirect costs related to contract performance, which may include indirect labor, supplies, tools, repairs and depreciation costs.
We also have contracts to provide field service inspection, installation, commissioning, modification, and repair services, as well as retrofit and retrofill components for existing systems. If the service contract terms give us the right to invoice the customer for an amount that corresponds directly with the value of our performance completed to date (i.e., a service contract in which we bill a fixed amount for each hour of service provided), then we recognize revenue over time in each reporting period corresponding to the amount that we have the right to invoice. Our performance obligations are satisfied as the work progresses. Revenues from our custom-engineered products and value-added services transferred to customers over time accounted for approximately 95% of revenues for both the three and six months ended March 31, 2026, 95% of revenues for the three months ended March 31, 2025, and 96% of revenues for the six months ended March 31, 2025.
We also have sales orders for spare parts and replacement circuit breakers for switchgear that are obsolete or that are no longer produced by the original manufacturer. Revenues from these sales orders are recognized at the time we fulfill our performance obligation to the customer, which is typically upon shipment and represented approximately 5% of revenues for both the three and six months ended March 31, 2026, 5% of revenues for the three months ended March 31, 2025, and 4% of revenues for the six months ended March 31, 2025.
Additionally, some contracts may contain a cancellation clause that could limit the amount of revenue we are able to recognize over time. In these instances, revenue and costs associated with these contracts are deferred and recognized at a point in time when the performance obligation is fulfilled.
Selling and administrative costs incurred in relation to obtaining a contract are typically expensed as incurred. We periodically utilize a third-party sales agent to obtain a contract and will pay a commission to that agent. We record the full commission liability to the third-party sales agents at the order date, with a corresponding deferred asset. As the project progresses, we record commission expense based on percentage of completion rates that correlate to the project and reduce the deferred asset. Once we have been paid by the customer, we pay the commission, and the deferred liability is reduced.
Performance Obligations
A performance obligation is a promise in a contract or with a customer to transfer a distinct good or service. A contract’s transaction price is allocated to each distinct performance obligation and recognized as revenue as the performance obligations are satisfied. To determine the proper revenue recognition for contracts, we evaluate whether a contract should be accounted for as more than one performance obligation or, less commonly, whether two or more contracts should be combined and accounted for as one performance obligation. This evaluation of performance obligations requires significant judgment. The majority of our contracts have a single performance obligation where multiple engineered products and services are combined into a single custom-engineered solution. Our contracts include a standard one-year assurance warranty. Occasionally, we provide service-type warranties that will extend the warranty period. These extended warranties qualify as a separate performance obligation, and revenue is deferred and recognized over the warranty period. If we determine during the evaluation of the contract that there are multiple performance obligations, we allocate the transaction price to each performance obligation using our best estimate of the standalone selling price of each distinct good or service in the contract.
Remaining unsatisfied performance obligations, which we refer to as backlog, represent the estimated transaction price for goods and services for which we have a material right, but work has not yet been performed. As of March 31, 2026, we had backlog of $1.8 billion, of which approximately $1.1 billion is expected to be recognized as revenue within the next twelve months. Backlog may not be indicative of future operating results as orders may be cancelled or modified by our customers. Our backlog does not include service and maintenance-type contracts for which we have the right to invoice as services are performed.
Contract Estimates
Actual revenues and project costs may vary from previous estimates due to changes in a variety of factors. The cost estimation process is based on the professional knowledge and experience of our engineers, project managers and financial professionals. Factors that are considered in estimating the work to be completed and ultimate contract recovery include the availability and productivity of labor, the nature and complexity of the work to be performed, the availability of materials, and the effect of any delays on our project performance. We periodically review our job performance, job conditions, estimated profitability and final contract settlements, including our estimate of total costs and make revisions to costs and income in the period in which the revisions are probable and reasonably estimable. We bear the risk of cost overruns in most of our contracts, which may result in
11

reduced profits. Whenever revisions of estimated contract costs and contract values indicate that the contract costs will exceed estimated revenues, thus creating a loss, a provision for the total estimated loss is recorded in that period.
For the six months ended March 31, 2026 and 2025, our operating results were positively impacted by $14.2 million and $8.8 million, respectively, as a result of net changes in contract estimates related to projects in progress at the beginning of the respective period. These changes in estimates resulted primarily from favorable project execution, reduced cost estimates and negotiations of variable consideration, discussed below, as well as revenue recognized from project cancellations and other changes in facts and circumstances during these periods. Gross unfavorable changes in contract estimates were immaterial for both the six months ended March 31, 2026 and 2025.
Variable Consideration
It is common for our long-term contracts to contain variable consideration that can either increase or decrease the transaction price. Due to the nature of our contracts, estimating total cost and revenue can be complex and subject to variability due to change orders, back charges, spare parts, early completion bonuses, customer allowances and liquidated damages. We estimate the amount of variable consideration based on the expected value method, which is the sum of the probability-weighted amounts, or the most likely amount method which uses various factors including experience with similar transactions and assessment of our anticipated performance. Variable consideration is included in the transaction price if legally enforceable and to the extent it is probable that a significant reversal of cumulative revenue recognized will not occur once the uncertainty associated with the variable consideration is resolved.
Contract Modifications
Contracts may be modified for changes in contract specifications and requirements. We consider contract modifications to exist when the modification either creates new or changes the enforceable rights and obligations under the contract. Most of our contract modifications are for goods and services that are not distinct from the existing performance obligation. Contract modifications result in a cumulative catch-up adjustment to revenue based on our measure of progress for the performance obligation.
Contract Balances
The timing of revenue recognition, billings and cash collections affects accounts receivable, contract assets and contract liabilities in our Condensed Consolidated Balance Sheets.
Contract assets are recorded when revenues are recognized in excess of amounts billed for fixed-price contracts as determined by the billing milestone schedule. Contract assets are transferred to accounts receivable when billing milestones have been met, or we have an unconditional right to payment.
Contract liabilities typically represent advance payments from contractual billing milestones and billings in excess of revenue recognized. It is unusual to have advanced milestone payments with a term greater than one year, which could represent a financing component of the contract.
Our contract assets and liabilities are reported in a net position on a contract-by-contract basis at the end of each reporting period and are generally classified as current.
Contract assets and liabilities as of March 31, 2026 and September 30, 2025 are summarized below (in thousands):

| March 31, 2026 |  | September 30, 2025
Contract assets | $ | 113,297 |  |  | $ | 136,679 |
Contract liabilities | (314,506) |  |  | (297,949) |
Net contract liability | $ | (201,209) |  |  | $ | (161,270) |

Our net contract billing position remained a net liability at both March 31, 2026 and September 30, 2025, primarily due to favorable contract billing milestones. We typically allocate a significant percentage of the progress billing to the early stages of the contract. To determine the amount of revenue recognized during the period from contract liabilities, we first allocate revenue to the individual contract liability balance outstanding at the beginning of the period until the revenue exceeds that balance. During the six months ended March 31, 2026, we recognized revenue of $204.3 million that was related to contract liabilities outstanding at September 30, 2025.
The timing of our invoice process is typically dependent on the completion of certain milestones and contract terms and is subject to agreement by our customer. Payment is typically expected within 30 days of invoice. Any uncollected invoiced
12

amounts for our performance obligations recognized over time, including contract retentions, are recorded as accounts receivable in the Condensed Consolidated Balance Sheets. Certain contracts allow customers to withhold a small percentage of billings pursuant to retainage provisions, and such amounts are generally due upon completion of the contract and acceptance of the project by the customer. Based on our experience in recent years, the majority of these retainage balances are expected to be collected within approximately twelve months. As of March 31, 2026 and September 30, 2025, we had retention amounts of $6.0 million and $8.1 million, respectively. Of the retained amount at March 31, 2026, $5.8 million is expected to be collected in the next twelve months and is recorded in accounts receivable. The remaining $0.2 million is recorded in other assets.
Disaggregation of Revenue
The following tables present our disaggregated revenue by geographic destination and market sector for the three and six months ended March 31, 2026 and 2025 (in thousands):

| Three months ended March 31, |  | Six months ended March 31,
| 2026 |  | 2025 |  | 2026 |  | 2025
United States | $ | 232,272 |  |  | $ | 227,834 |  |  | $ | 427,150 |  |  | $ | 425,606 |
Canada | 29,823 |  |  | 33,970 |  |  | 62,282 |  |  | 65,664 |
Middle East and Africa | 13,618 |  |  | 8,282 |  |  | 23,490 |  |  | 12,840 |
Europe | 10,478 |  |  | 5,897 |  |  | 18,704 |  |  | 11,425 |
Asia/Pacific | 9,840 |  |  | 1,646 |  |  | 15,143 |  |  | 3,226 |
Mexico, Central and South America | 584 |  |  | 1,002 |  |  | 1,030 |  |  | 1,301 |
Total revenues by geographic destination | $ | 296,615 |  |  | $ | 278,631 |  |  | $ | 547,799 |  |  | $ | 520,062 |

| Three months ended March 31, |  | Six months ended March 31,
| 2026 |  | 2025 |  | 2026 |  | 2025
Oil and gas (excludes petrochemical) | $ | 112,744 |  |  | $ | 101,167 |  |  | $ | 210,633 |  |  | $ | 196,846 |
Electric utility | 80,479 |  |  | 70,339 |  |  | 149,752 |  |  | 121,579 |
Commercial and other industrial | 54,446 |  |  | 40,369 |  |  | 95,071 |  |  | 84,669 |
Petrochemical | 27,551 |  |  | 43,704 |  |  | 50,329 |  |  | 76,887 |
Light rail traction power | 9,048 |  |  | 10,008 |  |  | 17,662 |  |  | 18,236 |
All others | 12,347 |  |  | 13,044 |  |  | 24,352 |  |  | 21,845 |
Total revenues by market sector | $ | 296,615 |  |  | $ | 278,631 |  |  | $ | 547,799 |  |  | $ | 520,062 |

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E. Goodwill and Other Intangible Assets
Our intangible assets include goodwill of $6.0 million, which is not being amortized, and other intangible assets of $5.6 million being amortized over their estimated useful lives. No impairment expense has been recorded for the last three fiscal years.
Goodwill
The changes in the carrying amount of goodwill for the six months ended March 31, 2026 for our single reporting segment are as follows (in thousands):

|  | Total
Balance as of September 30, 2025 |  | $ | 6,125 |
Foreign currency translation adjustment |  | (86) |
Balance as of March 31, 2026 |  | $ | 6,039 |

Other Intangible Assets
Intangible asset balances, subject to amortization, at March 31, 2026 and September 30, 2025 consisted of the following (in thousands):

| March 31, 2026
| Weighted Average Remaining Useful Lives in Years |  | Gross Carrying Value |  | Accumulated Amortization |  | Net Carrying Value
Customer relationships | 12 |  | $ | 2,165 |  |  | $ | (113) |  |  | $ | 2,052 |
Technologies | 5 |  | 3,467 |  |  | (371) |  |  | 3,096 |
Trademarks | 10 |  | 467 |  |  | (30) |  |  | 437 |
Order backlog | 1 |  | 54 |  |  | (33) |  |  | 21 |
Total intangible assets |  |  | $ | 6,153 |  |  | $ | (547) |  |  | $ | 5,606 |
| September 30, 2025
| Weighted Average Remaining Useful Lives in Years |  | Gross Carrying Value |  | Accumulated Amortization |  | Net Carrying Value
Customer relationships | 12 |  | $ | 2,202 |  |  | $ | (23) |  |  | $ | 2,179 |
Technologies | 5 |  | 3,518 |  |  | (76) |  |  | 3,442 |
Trademarks | 10 |  | 475 |  |  | (6) |  |  | 469 |
Order backlog | 1 |  | 55 |  |  | (7) |  |  | 48 |
Total intangible assets |  |  | $ | 6,250 |  |  | $ | (112) |  |  | $ | 6,138 |

We have an additional technology intangible asset of $0.5 million associated with an intellectual property acquired in December 2023 which has not yet been subject to amortization.
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As of March 31, 2026, the estimated future amortization expense of intangible assets is as follows (in thousands):

Remainder of 2026 | $ | 431 |
2027 | 921 |
2028 | 921 |
2029 | 921 |
2030 | 846 |
Thereafter | 1,566 |
Total | $ | 5,606 |

F. Long-Term Debt
U.S. Revolver
We have a credit agreement with Bank of America, N.A. and Texas Capital Bank with an aggregate commitment of $150.0 million, consisting of $100.0 million committed by Bank of America and $50.0 million committed by Texas Capital Bank (the U.S. Revolver). The U.S. Revolver has an expiration date of October 4, 2028.
As of March 31, 2026, there were no amounts borrowed under the U.S. Revolver, and letters of credit outstanding were $78.7 million. There was $71.3 million available for the issuance of letters of credit and borrowings under the U.S. Revolver as of March 31, 2026.
As of March 31, 2026, we were in compliance with all of the financial covenants of the U.S. Revolver.
G. Commitments and Contingencies
Letters of Credit, Bank Guarantees and Bonds
Certain customers require us to post letters of credit, bank guarantees or surety bonds. These security instruments assure that we will perform under the terms of our contract. In the event of default, the counterparty may demand payment from the bank under a letter of credit or bank guarantee, or performance by the surety under a bond. To date, there have been no significant draws or claims related to security instruments for the periods reported. We were contingently liable for letters of credit of $78.7 million as of March 31, 2026. We also had surety bonds totaling $432.8 million that were outstanding, with additional bonding capacity of $767.2 million available, at March 31, 2026. We have strong surety relationships; however, a change in market conditions or the sureties’ assessment of our financial position could cause the sureties to require cash collateralization for undischarged liabilities under the bonds.
We have a $19.8 million facility agreement (Facility Agreement) between Powell (UK) Limited and a large international bank that provides Powell (UK) Limited the ability to enter into bank guarantees as well as forward exchange contracts and currency options. At March 31, 2026, we had outstanding guarantees totaling $6.4 million, with an additional capacity of $13.4 million available under this Facility Agreement. The Facility Agreement provides for customary events of default and carries cross-default provisions with the U.S. Revolver. If an event of default (as defined in the Facility Agreement) occurs and is continuing, per the terms and subject to the conditions set forth therein, obligations outstanding under the Facility Agreement may be accelerated and declared immediately due and payable. Additionally, we are required to maintain cash collateral for guarantees greater than two years. As of March 31, 2026, we were in compliance with all of the financial covenants of the Facility Agreement.
Litigation
We are involved in various legal proceedings, claims and other disputes arising from our commercial operations, projects, employees and other matters which, in general, are subject to uncertainties and in which the outcomes are not predictable. Although we can give no assurances about the resolution of pending claims, litigation or other disputes, and the effect such outcomes may have on us, management believes that any ultimate liability resulting from the outcome of such proceedings, to the extent not otherwise provided or covered by insurance, will not have a material adverse effect on our consolidated financial position, or results of operations or liquidity.
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Liquidated Damages
Certain of our customer contracts have schedule and performance obligation clauses that, if we fail to meet them, could require us to pay liquidated damages. Each individual contract defines the conditions under which the customer may make a claim against us. As of March 31, 2026, certain contracts had a probable exposure to liquidated damages claims of $4.4 million, which could possibly increase to $7.5 million under certain circumstances. Based on our actual or projected failure to meet these various contractual commitments, $3.8 million has been recorded as a reduction to revenue. We will attempt to obtain change orders, contract extensions or accelerate project completion, which may resolve the potential for any unrecorded liquidated damages claims. Should we fail to achieve relief on some or all of these contractual obligations, we could be required to pay additional liquidated damages, which could negatively impact our future operating results.
H. Stock-Based Compensation
Refer to our Annual Report on Form 10-K for the fiscal year ended September 30, 2025 for a full description of our existing stock-based compensation plans.
Restricted Stock Units
We issue restricted stock units (RSUs) to certain officers and key employees of the Company. The fair value of the RSUs is based on the price of our common stock as reported on the NASDAQ Global Market during a specified period prior to the grant dates. Typically, these grants vest over a three-year period from the date of issuance and are a blend of time-based and performance-based shares. The portion of the grant that is time-based typically vests over a three-year period on each anniversary of the grant date, based on continued employment. The performance-based shares vest based on the three-year revenue growth, earnings and safety performance of the Company following the grant date. At March 31, 2026, there were 166,431 RSUs outstanding, as adjusted for the Stock Split. The RSUs do not have voting rights but do receive dividend equivalents upon vesting, which are accrued quarterly. Additionally, the shares of common stock underlying the RSUs are not considered issued and outstanding until vested and common stock is issued.
Total RSU activity (number of shares), as adjusted for the Stock Split, for the six months ended March 31, 2026 is summarized below:

| Number of Restricted Stock Units |  | Weighted Average Grant Value Per Share
Outstanding at September 30, 2025 | 350,658 |  |  | $ | 21.60 |
Granted | 59,085 |  |  | 95.75 |
Vested | (243,312) |  |  | 12.74 |
Forfeited/canceled | — |  |  | — |
Outstanding at March 31, 2026 | 166,431 |  |  | $ | 55.84 |

During the six months ended March 31, 2026 and 2025, we recorded compensation expense of $2.5 million and $2.2 million, respectively, related to the RSUs.
Restricted Stock
Each year, every non-employee director receives restricted shares of the Company’s common stock with a grant-date value of $0.1 million. The number of granted shares is calculated by dividing the $0.1 million by the average of high and low prices of our common stock on the grant date. The shares shall vest on the earlier of the grant anniversary date or the date of the next annual meeting of stockholders, whichever occurs first. In February 2026, 4,200 shares of restricted stock were issued to our non-employee directors at a price of $184.83 per share, as adjusted for the Stock Split. During both the six months ended March 31, 2026 and 2025, we recorded compensation expense of $0.4 million related to restricted stock.
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I. Fair Value Measurements
We measure certain financial assets and liabilities at fair value. Fair value is defined as an “exit price,” which represents the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants as of the measurement date. As such, fair value is a market-based measurement that should be determined based on assumptions that market participants would use in valuing an asset or liability. The accounting guidance requires the use of valuation techniques to measure fair value that maximize the use of observable inputs and minimize the use of unobservable inputs. As a basis for considering such assumptions and inputs, a fair value hierarchy has been established which identifies and prioritizes three levels of inputs to be used in measuring fair value.
The three levels of the fair value hierarchy are as follows:
Level 1 — Observable inputs such as quoted prices (unadjusted) in active markets for identical assets or liabilities.
Level 2 — Inputs other than the quoted prices in active markets that are observable either directly or indirectly, including quoted prices for similar assets and liabilities in active markets; quoted prices for identical or similar assets and liabilities in markets that are not active or other inputs that are observable or can be corroborated by observable market data.
Level 3 — Unobservable inputs that are supported by little or no market data and require the reporting entity to develop its own assumptions.
Recurring Fair Value Measurements
The following table summarizes the fair value of our assets and liabilities that were accounted for at fair value on a recurring basis as of March 31, 2026 (in thousands):

| Fair Value Measurements at March 31, 2026
| Quoted Prices in Active Markets for Identical Assets (Level 1) |  | Significant Other Observable Inputs (Level 2) |  | Significant Unobservable Inputs (Level 3) |  | Fair Value at March 31, 2026
Assets: |  |  |  |  |  |  |
Cash and cash equivalents | $ | 537,712 |  |  | $ | — |  |  | $ | — |  |  | $ | 537,712 |
Short-term investments | 7,177 |  |  | — |  |  | — |  |  | 7,177 |
Rabbi trust assets | — |  |  | 15,050 |  |  | — |  |  | 15,050 |
Liabilities: |  |  |  |  |  |  |
Deferred compensation | — |  |  | 14,831 |  |  | — |  |  | 14,831 |
Contingent future payments related to the acquisition of Remsdaq | — |  |  | — |  |  | 2,574 |  |  | 2,574 |

The following table summarizes the fair value of our assets and liabilities that were accounted for at fair value on a recurring basis as of September 30, 2025 (in thousands):

| Fair Value Measurements at September 30, 2025
| Quoted Prices in Active Markets for Identical Assets (Level 1) |  | Significant Other Observable Inputs (Level 2) |  | Significant Unobservable Inputs (Level 3) |  | Fair Value at September 30, 2025
Assets: |  |  |  |  |  |  |
Cash and cash equivalents | $ | 450,739 |  |  | $ | — |  |  | $ | — |  |  | $ | 450,739 |
Short-term investments | 24,788 |  |  | — |  |  | — |  |  | 24,788 |
Rabbi trust assets | — |  |  | 13,931 |  |  | — |  |  | 13,931 |
Liabilities: |  |  |  |  |  |  |
Deferred compensation | — |  |  | 13,707 |  |  | — |  |  | 13,707 |
Contingent future payments related to the acquisition of Remsdaq | — |  |  | — |  |  | 2,344 |  |  | 2,344 |

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Fair value guidance requires certain fair value disclosures be presented in both interim and annual reports. The estimated fair value amounts of financial instruments have been determined using available market information and valuation methodologies described below.
Cash and cash equivalents – Cash and cash equivalents, primarily funds held in money market savings instruments, are reported at their current carrying value, which approximates fair value due to the short-term nature of these instruments and are included in cash and cash equivalents in our Condensed Consolidated Balance Sheets.
Short-term investments – Short-term investments include time deposits with original maturities of three months or more.
Rabbi trust assets and deferred compensation – We hold investments in an irrevocable rabbi trust for our deferred compensation plan. The assets are primarily related to company-owned life insurance policies and are included in other assets in the accompanying Condensed Consolidated Balance Sheets. Because the mutual funds and company-owned life insurance policies are combined in the plan, they are categorized as Level 2 in the fair value measurement hierarchy. The deferred compensation liability represents the investment options that the plan participants have designated to serve as the basis for measurement of the notional value of their accounts. Because the deferred compensation liability is intended to offset the plan assets, it is also categorized as Level 2 in the fair value measurement hierarchy.
Contingent future payments related to the acquisition of Remsdaq – The contingent future payments were calculated using a probability outcome model based on internally developed assumptions; accordingly, they are categorized as Level 3 in the fair value measurement hierarchy.
There were no transfers between levels within the fair value measurement hierarchy during the quarter ended March 31, 2026.
J. Leases
Our leases consist primarily of office and warehouse space and construction equipment. All of our future lease obligations are related to non-cancelable operating leases. The following table provides a summary of lease cost components for the three and six months ended March 31, 2026 and 2025, respectively (in thousands):

|  | Three months ended March 31, |  | Six months ended March 31,
Lease Cost |  | 2026 |  | 2025 |  | 2026 |  | 2025
Operating lease cost |  | $ | 299 |  |  | $ | 247 |  |  | $ | 583 |  |  | $ | 445 |
Variable lease cost(1) |  | 48 |  |  | 47 |  |  | 91 |  |  | 81 |
Short-term lease cost(2) |  | 620 |  |  | 668 |  |  | 1,211 |  |  | 1,307 |
Total lease cost |  | $ | 967 |  |  | $ | 962 |  |  | $ | 1,885 |  |  | $ | 1,833 |

(1) Variable lease cost represents common area maintenance charges related to our Canadian office space lease.
(2) Short-term lease cost includes leases and rentals with initial terms of one year or less.
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We recognize operating lease assets and operating lease liabilities representing the present value of the remaining lease payments for leases with initial terms greater than twelve months. Leases with initial terms of twelve months or less are not recorded in our Condensed Consolidated Balance Sheets. The following table provides a summary of the operating lease assets and operating lease liabilities included in our Condensed Consolidated Balance Sheets as of March 31, 2026 and September 30, 2025, respectively (in thousands):

Operating Leases |  | March 31, 2026 |  | September 30, 2025
Assets: |  |  |  |
Operating lease assets, net |  | $ | 1,955 |  |  | $ | 1,664 |
Liabilities: |  |  |  |
Current operating lease liabilities |  | $ | 880 |  |  | $ | 882 |
Long-term operating lease liabilities |  | 1,075 |  |  | 782 |
Total lease liabilities |  | $ | 1,955 |  |  | $ | 1,664 |

The following table provides the maturities of our operating lease liabilities as of March 31, 2026 (in thousands):

|  | Operating Leases |  |
Remainder of 2026 |  | $ | 557 |  |  |
2027 |  | 877 |  |  |
2028 |  | 529 |  |  |
2029 |  | 162 |  |  |
2030 |  | — |  |  |
Thereafter |  | — |  |  |
Total future minimum lease payments |  | $ | 2,125 |  |  |
Less: present value discount (imputed interest) |  | (170) |  |  |
Present value of lease liabilities |  | $ | 1,955 |  |  |

The weighted average discount rate as of March 31, 2026 and 2025 were 7.47% and 6.55%, respectively. The weighted average remaining lease term was 2.17 years and 2.34 years, respectively, at March 31, 2026 and 2025.
K. Segment Information
We manage our business as one reportable operating segment and our revenues are primarily generated from the development, design, manufacturing and servicing of custom-engineered equipment and systems for the distribution, control and monitoring of electrical energy.
Our chief operating decision maker (“CODM”) is our chief executive officer. The CODM manages and allocates resources on a total consolidated basis by assessing performance of revenues and earnings before interest and taxes (“EBIT”) using actual-to-actual, actual-to-plan and actual-to-forecast variance analysis. The measure of segment profit and loss regularly provided to the CODM that is most consistent with GAAP is consolidated net income, as presented in our Consolidated Statements of Operations. The CODM does not manage cost components by product, customer type or service type, nor does the CODM regularly receive disaggregated information at this level.
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For the three and six months ended March 31, 2026 and 2025, the summary of segment net income, including segment expenses, for our single reportable segment were as follows (in thousands):

| Three months ended March 31, |  | Six months ended March 31,
| 2026 |  | 2025 |  | 2026 |  | 2025
Revenues | $ | 296,615 |  |  | $ | 278,631 |  |  | $ | 547,799 |  |  | $ | 520,062 |
Segment operating expenses: |  |  |  |  |  |  |
Cost of goods sold | 208,679 |  |  | 195,199 |  |  | 388,445 |  |  | 377,106 |
General and administrative expenses | 17,646 |  |  | 14,624 |  |  | 34,938 |  |  | 29,475 |
Sales and marketing expenses | 8,365 |  |  | 6,933 |  |  | 16,110 |  |  | 13,664 |
Research and development expenses | 4,289 |  |  | 2,746 |  |  | 7,556 |  |  | 5,222 |
Amortization | 223 |  |  | — |  |  | 445 |  |  | — |
Realized currency (gain) loss | (168) |  |  | 210 |  |  | (47) |  |  | 104 |
Total segment operating expenses | 239,034 |  |  | 219,712 |  |  | 447,447 |  |  | 425,571 |
Operating income / EBIT | 57,581 |  |  | 58,919 |  |  | 100,352 |  |  | 94,491 |
Interest income, net | (4,203) |  |  | (3,555) |  |  | (8,468) |  |  | (7,420) |
Income tax provision | 15,897 |  |  | 16,144 |  |  | 21,543 |  |  | 20,818 |
Segment net income | $ | 45,887 |  |  | $ | 46,330 |  |  | $ | 87,277 |  |  | $ | 81,093 |
Gross profit | $ | 87,936 |  |  | $ | 83,432 |  |  | $ | 159,354 |  |  | $ | 142,956 |

Revenues by country represent sales to unaffiliated customers as determined by the ultimate destination of our products and services, summarized for the three and six months ended March 31, 2026 and 2025 (in thousands):

| Three months ended March 31, |  | Six months ended March 31,
| 2026 |  | 2025 |  | 2026 |  | 2025
United States | $ | 232,272 |  |  | $ | 227,834 |  |  | $ | 427,150 |  |  | $ | 425,606 |
Canada | 29,823 |  |  | 33,970 |  |  | 62,282 |  |  | 65,664 |
Middle East and Africa | 13,618 |  |  | 8,282 |  |  | 23,490 |  |  | 12,840 |
Europe | 10,478 |  |  | 5,897 |  |  | 18,704 |  |  | 11,425 |
Asia/Pacific | 9,840 |  |  | 1,646 |  |  | 15,143 |  |  | 3,226 |
Mexico, Central and South America | 584 |  |  | 1,002 |  |  | 1,030 |  |  | 1,301 |
Total revenues | $ | 296,615 |  |  | $ | 278,631 |  |  | $ | 547,799 |  |  | $ | 520,062 |

Long-lived assets by country consist of property, plant and equipment, net of accumulated depreciation and are determined based on the location of the tangible assets, summarized below (in thousands):

| March 31, 2026 |  | September 30, 2025
Long-lived assets: |  |  |
United States | $ | 72,540 |  |  | $ | 70,699 |
Canada | 32,102 |  |  | 32,744 |
United Kingdom | 7,180 |  |  | 7,606 |
Total | $ | 111,822 |  |  | $ | 111,049 |

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L. Income Taxes
The calculation of the effective tax rate is as follows (in thousands):

| Three months ended March 31, |  | Six months ended March 31,
| 2026 |  | 2025 |  | 2026 |  | 2025
Income before income taxes | $ | 61,784 |  |  | $ | 62,474 |  |  | $ | 108,820 |  |  | $ | 101,911 |
Income tax provision | 15,897 |  |  | 16,144 |  |  | 21,543 |  |  | 20,818 |
Net income | $ | 45,887 |  |  | $ | 46,330 |  |  | $ | 87,277 |  |  | $ | 81,093 |
Effective tax rate | 26 | % |  | 26 | % |  | 20 | % |  | 20 | %

Our income tax provision reflects an effective tax rate on pre-tax income of 26% and 20% for the three and six months ended March 31, 2026 and March 31, 2025. The effective tax rates for each period were favorably impacted by the estimated Research and Development (R&D) Tax Credit, which was offset by the tax expense related to certain nondeductible items. In addition, discrete items related to the vesting of RSUs recorded in the first quarters of Fiscal 2026 and Fiscal 2025 favorably impacted the effective tax rate for the six months ended March 31, 2026 and March 31, 2025.
M. Subsequent Events
Common Stock Split
On April 2, 2026, the Company effected a three-for-one forward split of its common stock and proportionately increased the number of shares of authorized common stock from 30,000,000 to 90,000,000. Each shareholder of record as of the close of trading on March 20, 2026 received, after the close of trading on April 2, 2026, two additional shares f or every one sha re held on the Record Date. The shares of common stock retain a par value of $0.01 per share. Trading began on a split-adjusted basis at market open on April 6, 2026. See Note A. Overview and Summary of Significant Accounting Policies for addition information regarding the Common Stock Split.
Quarterly Dividend Declared
On May 5, 2026, our Board of Directors declared a quarterly cash dividend on our common stock in the amount of $0.09 per share. The dividend is payable on June 17, 2026 to shareholders of record at the close of business on May 20, 2026.
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CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS
Unless otherwise indicated, all references to “we,” “us,” “our,” “Powell” or “the Company” include Powell Industries, Inc. and its consolidated subsidiaries.
This Quarterly Report on Form 10-Q contains “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended (the Exchange Act). All statements, other than statements of historical fact, included in this report are forward-looking statements. Such forward-looking statements include, but are not limited to, projections and estimates of the timing and success of specific projects and our future backlog (including our characterization of new orders as “large”or “mega,” which is used herein to indicate orders ranging from $10 to $50 million or larger than $50 million, respectively), revenues, income, acquisitions, liquidity and capital expenditures, the effect of tariffs, as well as other statements that are not historical facts contained in or incorporated by reference into this report. Statements that contain words such as “believes,” “expects,” “anticipates,” “intends,” “estimates,” “continue,” “should,” “could,” “may,” “plan,” “project,” “predict,” “potential,” “possible,” “would,” “outlook,” “will” or similar expressions are forward-looking statements.
These forward-looking statements speak only as of the date of this report. We disclaim any obligation to update or revise these statements unless required by applicable law, whether as a result of new information, future events or otherwise. We caution you not to unduly rely on them. We have based these forward-looking statements on expectations and assumptions of management at the time the statements were made. While our management considers these expectations and assumptions to be reasonable, they are inherently subject to significant business, economic, competitive, regulatory and other risks, contingencies and uncertainties that could cause actual results to differ materially from those included in this report, most of which are difficult to predict and many of which are beyond our control. These risks, contingencies and uncertainties include, but are not limited to, the potential failure to adequately predict costs (including in connection with our fixed-price contracts) and prevent cost overruns, including the impacts of inflation, the effect of tariffs, potentially disruptive or unanticipated changes in suppliers, the availability of cash on hand and other sources of liquidity to fund our operating expenses and capital expenditures, the impacts of future legislative and regulatory initiatives, the potential effects of ongoing military disputes (including current conflicts in Ukraine and Iran), electronic, cyber or physical security breaches, and other factors detailed herein and in our other SEC filings. Additional important risks, uncertainties and other factors are detailed below.
Risk Factors Related to our Business and Industry
•Our business is subject to the cyclical nature of the end markets that we serve. This cyclicality has had, and may continue to have, an adverse effect on our operating results.
•Our industry is highly competitive.
•Our backlog is subject to unexpected adjustments, cancellations and scope reductions and, therefore, may not be a reliable indicator of our future earnings.
•Failure to place competitive bids and adequately project future costs may result in losses on our fixed-price contracts with customers.
•Supplier concentration and limited supplier capacity may adversely impact our business and results of operations.
•Our business requires skilled and unskilled labor, and we may be unable to attract and retain qualified employees.
•Revenues recognized over time from our fixed-price contracts could result in volatility in our results of operations.
•We are exposed to risks relating to the use of subcontractors.
•Technological innovations may make existing products and production methods obsolete. The development or use of Artificial Intelligence (AI) by our competitors or other third parties may impair our ability to compete effectively and adversely affect our business, financial condition and results of operations.
•We may not be successful in our AI initiatives, which could adversely affect our business, reputation, and results of operations.
•Unforeseen difficulties with expansions, relocations, or consolidations of existing facilities could adversely affect our operations.
•Quality problems with our products could harm our reputation and erode our competitive position.
•Many of our contracts contain performance obligations that may subject us to penalties or additional liabilities.
•Growth and product diversification through strategic acquisitions involve a number of risks.
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•Misconduct by our employees or subcontractors, or a failure to comply with applicable laws or regulations, could harm our reputation, damage our relationships with customers and subject us to criminal and civil enforcement actions.
•Unsatisfactory safety performance may subject us to penalties, negatively impact customer relationships, result in higher operating costs, and negatively impact employee morale and turnover.
Risk Factors Related to our Financial Condition and Markets
•Global economic uncertainty and financial market conditions may impact our customer base, suppliers and backlog.
•Fluctuations in the price and supply of materials used to manufacture our products may reduce our profits and could adversely impact our ability to meet commitments to our customers.
•Obtaining surety bonds, letters of credit, bank guarantees, or other financial assurances, may be necessary for us to successfully bid on and obtain certain contracts.
•Failure to remain in compliance with covenants or obtain waivers or amendments under our credit agreement could adversely impact our business.
•We extend credit to customers in conjunction with our performance under fixed-price contracts which subjects us to potential credit risks.
•A significant portion of our revenues may be concentrated among a small number of customers and may be subject to the risks of particular industries.
•Our international operations expose us to risks that are different from, or possibly greater than, the risks we are exposed to domestically and may adversely affect our operations.
•Our ability to access credit and capital markets may be limited, which could adversely affect our liquidity, operations, and growth strategy.
Risk Factors Related to our Corporate Structure and our Common Stock
•Provisions of our charter documents or Delaware law could delay or prevent a change in control of our company, even if that change would be beneficial to our shareholders.
•The personal liability of our directors and officers for monetary damages for breach of their fiduciary duty of care is limited by the Delaware General Corporation Law and by our certificate of incorporation.
•The exclusive-forum provision contained in our bylaws could limit our stockholders’ ability to obtain a favorable judicial forum for disputes with us or our directors, officers or other employees.
•Our stock price could decline or fluctuate significantly due to unforeseen circumstances that may be outside of our control. These fluctuations may cause our stockholders to incur losses.
•There can be no assurance that we will declare or pay future dividends on our common stock.
•We may issue preferred stock on terms that could adversely affect the voting power or value of our common stock.
Risk Factors Related to Legal and Regulatory Matters
•Our operations could be adversely impacted by the effects of government regulations.
•Actual and potential claims, lawsuits and proceedings could ultimately reduce our profitability and liquidity and weaken our financial condition.
•Changes in tax laws and regulations may change our effective tax rate and could have a material effect on our financial results.
•Failure to develop, obtain, enforce, and protect intellectual property rights or third-party claims that we are infringing on their intellectual property could harm our business.
•Significant developments arising from tariffs and other economic proposals could adversely impact our business.
•Failures or weaknesses in our internal controls over financial reporting could adversely affect our ability to report on our financial condition and results of operations accurately or on a timely basis.
General Risk Factors
•We carry insurance against many potential liabilities, but our management of risk may leave us exposed to unidentified or unanticipated risks.
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•Catastrophic events, including natural disasters, health epidemics, acts of war and terrorism, climate change, among others, could disrupt our business.
•A failure in our business systems or cybersecurity attacks on any of our facilities, or those of third parties, could adversely affect our business, results of operations and reputation.
•Data privacy, data protection, and information security may require significant resources and present certain risks.
•Changes in and compliance with Environmental, Social, and Governance (ESG) initiatives could adversely impact our business.
•The departure of key personnel could disrupt our business.
Refer to “Risk Factors” in Part I. Item 1A of our Annual Report on Form 10-K for the year ended September 30, 2025, which was filed with the SEC on November 19, 2025. We can provide no assurance that the forward-looking statements contained in this report will occur as expected, and actual results may differ materially from those included in this report.
Investors should note that we announce material financial information in SEC filings, press releases and public conference calls. Based on guidance from the SEC, we may use the Investors section of our website to communicate with investors. It is possible that the financial and other information posted there could be deemed to be material information. The information on our website is not part of, and is not incorporated to, this Quarterly Report on Form 10-Q.
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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
The following discussion and analysis of our financial condition and results of operations should be read in conjunction with the accompanying condensed consolidated financial statements and related notes included in this Quarterly Report on Form 10-Q and with our Annual Report on Form 10-K for the fiscal year ended September 30, 2025, which was filed with the SEC on November 19, 2025 and is available on the SEC’s website at www.sec.gov.
Executive Overview
We develop, design, manufacture and service 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. We are headquartered in Houston, Texas and primarily serve 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.
In the second quarter of Fiscal 2026, we reported revenue of $296.6 million, net income of $45.9 million, and generated $51.2 million in cash from operating activities. As of March 31, 2026, we had total assets of $1.2 billion.
On April 2, 2026, we effected a three-for-one forward split of our common stock and proportionately increased the number of authorized common stock from 30,000,000 to 90,000,000 (the Stock Split). Each shareholder of record as of the close of trading on March 20, 2026 (the Record Date) received, after the close of trading on April 2, 2026, two additional shares for every one share held on the Record Date. Trading began on a split-adjusted basis at market open on April 6, 2026.
Market Outlook
Our backlog increased to $1.8 billion as of March 31, 2026, with approximately $1.1 billion expected to be recognized as revenue within the next twelve months. During the first half of Fiscal 2026, commercial activity remained favorable across most of our end markets, with particularly strong demand in the commercial and other industrial, electric utility, and oil and gas (excluding petrochemical) markets.
The diversification of our business over the past several years, including expansion into secular growth markets such as electric utility and data centers, has reduced the cyclicality of our business. This diversification allows us to see beyond the current cycle and invest alongside our customers with greater visibility. Customer relationships in these markets are increasingly strategic and consultative, with opportunities ranging from discrete project engagements to broader, infrastructure planning arrangements.
During the first half of Fiscal 2026, we secured four mega orders, including two data center projects, one Liquefied Natural Gas (LNG) project, and one project in the electric utility market, reflecting continued customer investment and strong activity across these end markets. Subsequent to the second fiscal quarter, we secured an additional mega order in the data center market with a value in excess of $400 million. We remain encouraged by the outlook for both the data center and electric utility end markets and the durability of the current investment cycles. Notwithstanding this momentum, we continue to monitor macroeconomic conditions and geopolitical developments that could affect customer spending behavior or the timing of project awards. While current demand indicators remain positive, these external factors could influence future levels of market activity.
Oil and gas and petrochemical markets. The North American oil and gas end markets continue to exhibit strong commercial activity levels in response to rising global demand for LNG and gas-to‑chemical processes that leverage low‑cost natural gas feedstocks. We believe the fundamentals of the U.S. natural gas market, through abundant supply and competitive cost, continue to support investments in LNG facilities and related gas processing infrastructure. These dynamics contributed to sustained order activity, including a mega LNG project award during the first fiscal quarter. Commercial activity in the petrochemical market has remained subdued over the past several quarters. However, we are cautiously optimistic that the petrochemical market may be entering the early stages of a cyclical inflection following an extended period of reduced investment activity. Beyond traditional crude oil refining and other oil and gas downstream operations, we have broadened our end markets into hydrogen production, carbon capture as well as alternative fuels, such as biofuels and sustainable aviation fuel, aligned with growing demand for cleaner energy solutions.
Electric utility market. Aligned with our strategy of end-market diversification, we continue to focus on growth in electrical distribution substations while also addressing a resurgence of power generation investment in this market. During the second quarter of Fiscal 2026, we secured a mega order of approximately $75 million, reflecting continued customer investment in grid modernization and generation capacity.
Commercial and other industrial markets. As a result of a mix of factors, we are experiencing strong growth in commercial facilities that provide for the production of various consumer goods and the expansion of data centers that support cloud computing and increasing investments in artificial intelligence. During the first half of Fiscal 2026, we were awarded projects
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related to data center infrastructure with a combined value exceeding $300 million, including two mega projects, each with an order value greater than $75 million. Subsequent to the second fiscal quarter, we secured an additional mega order in the data center market with a value in excess of $400 million. Commercial activity in this market sector reflects the continued investment in data center infrastructure, and we are also observing increased activity across other industrial end markets.
Business Environment
The markets in which we participate are capital-intensive and cyclical in nature. Cyclicality is predominantly driven by customer demand, global economic and geopolitical conditions and anticipated environmental, safety or regulatory changes that affect the manner in which our customers proceed with capital investments. Our customers analyze various factors, including the demand and price for oil, gas and electrical energy, the overall economic and financial environment, governmental budgets, regulatory actions and environmental concerns. These factors influence the release of new capital projects by our customers, which are traditionally awarded in competitive bid situations. Scheduling of projects is matched to customer requirements, and projects typically take a number of months to produce. Schedules may change during the course of any particular project, and our operating results can, therefore, be impacted by factors outside of our control.
Our operating results are impacted by several factors such as the timing of new order awards, project backlog, changes in project cost estimates, customer approval of final engineering specifications and delays in customer construction schedules, all of which contribute to short-term earnings variability and the timing of project execution. Our operating results also have been, and may continue to be, impacted by the timing and resolution of change orders and the resolution of potential contract claims and liquidated damages, all of which could improve or deteriorate gross margins during the period in which these items are resolved with our customers. Disruptions in the global supply chain have negatively impacted and may continue to negatively impact our business and operating results due to the limited supply of, delays for and uncertainty in the timing of the receipt of key component parts and commodities. We continue to remain focused on the variables that impact our markets as well as cost management, labor availability and supply chain challenges.
We are subject to inflation, which can cause increases in our costs of labor, indirect expenses and raw materials, primarily copper, aluminum and steel. Fixed-price contracts can limit our ability to pass these increases to our customers, thus negatively impacting our earnings and operations in future periods.
During the first half of Fiscal 2026, we continued experiencing high volatility in commodity prices, and ongoing supply chain delays for specific engineered components remained a persistent challenge for us. Moreover, ongoing and recently proposed changes to U.S. global trade policy (including legal changes thereto), along with potential international retaliatory measures, and concerns over inflation, recession and slowing growth have continued to cause high volatility in global markets and uncertainty around short- and long-term economic impacts in the United States and other markets we serve. We continue to evaluate and monitor the potential impacts of these changes and measures, including the imposition of tariffs, on our business and operations. We could potentially face the challenge of increased costs of raw materials and engineered components as well as negative impacts on our margins; however, it is not possible to predict the impact, if any, of any changes or proposed changes to the U.S. global trade policy, or any international retaliatory measures, on our business and operations. In response to the rising cost environment and persistent supply chain challenges, we are taking strategic measures to effectively manage our product pricing, refine delivery schedules, and manage bid validity dates with our customers. Our supplier engagement includes improving forecasting and negotiating favorable terms that allow us to meet or exceed customer timelines. Additionally, we remain focused on enhancing factory efficiencies and improving project execution to mitigate risks and maintain customer satisfaction.
Results of Operations
Quarter Ended March 31, 2026 Compared to the Quarter Ended March 31, 2025 (Unaudited)
Revenue and Gross Profit
Revenue increased by 6%, or $18.0 million, to $296.6 million in the second quarter of Fiscal 2026. Domestic revenue increased by 2%, or $4.4 million, to $232.3 million in the second quarter of Fiscal 2026. International revenue increased by 27%, or $13.5 million, to $64.3 million in the second quarter of Fiscal 2026, primarily driven by increased activities in the Middle East and Africa, Europe, as well as the Asia/Pacific regions. International revenue includes both revenue generated at our international facilities and export project revenue produced at our domestic facilities.
In the second quarter of Fiscal 2026, revenue growth was led by strength in our commercial and other industrial, electric utility, and oil and gas (excluding petrochemical) markets. Revenue from the commercial and other industrial market increased 35%, or $14.1 million, to $54.4 million; while revenue from the electric utility market grew by 14%, or $10.1 million, to $80.5 million. Revenue from the oil and gas market (excluding petrochemical) increased 11%, or $11.6 million, to $112.7 million. These
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increases were primarily driven by our strategic initiative to expand into higher-growth electric utility and commercial and other industrial markets, supported by strong backlog and robust booking activity in these end markets. Partially offsetting these increases, revenue from the petrochemical market declined by 37%, or $16.2 million, to $27.6 million, and revenue from the light rail traction power market decreased 10%, or $1.0 million, to $9.0 million. These declines were primarily attributable to lower booking activity, particularly within the petrochemical market. Revenue from all other markets combined decreased 5%, or $0.7 million, to $12.3 million in the second quarter of Fiscal 2026.
Gross profit increased 5%, or $4.5 million, to $87.9 million for the second quarter of Fiscal 2026. Gross profit as a percentage of revenue remained flat at 30% compared to the second quarter of Fiscal 2025. The increase in gross profit was primarily attributable to higher revenue.
Selling, General and Administrative Expenses
Selling, general and administrative expenses increased 19%, or $4.1 million, to $25.8 million in the second quarter of Fiscal 2026, primarily due to higher compensation expenses. As a percentage of revenue, selling, general and administrative expenses increased to 9% during the second quarter of Fiscal 2026, compared to 8% in the second quarter of Fiscal 2025.
Income Tax Provision
We recorded an income tax provision of $15.9 million in the second quarter of Fiscal 2026, compared to an income tax provision of $16.1 million in the second quarter of Fiscal 2025 resulting in an effective tax rate of 26% for the second quarters of Fiscal 2026 and Fiscal 2025. For each of the three months ended March 31, 2026 and 2025, the effective tax rates were favorably impacted by the estimated Research and Development (R&D) Tax Credit, which was offset by the tax expense related to certain nondeductible items. For additional information regarding our income taxes, see Note L. Income Taxes of Notes to Condensed Consolidated Financial Statements.
Net Income
In the second quarter of Fiscal 2026, we recorded net income of $45.9 million, or $1.25 per diluted share, compared to net income of $46.3 million, or $1.27 per diluted share (as adjusted for the Stock Split), in the second quarter of Fiscal 2025. The decrease in net income was primarily driven by higher selling, general and administrative expenses and increased research and development expenses, partially offset by higher gross profit in the second quarter of Fiscal 2026.
Backlog
The order backlog, which represents our remaining unsatisfied performance obligations, reflects the estimated transaction price for goods and services for which we have a material right but for which work has not yet been performed. Order backlog at March 31, 2026 totaled $1.8 billion, representing a 12% increase from $1.6 billion at December 31, 2025. This increase was mainly driven by growth in the commercial and other industrial and electric utility markets. As of March 31, 2026, the electric utility market represented 30% of total backlog, while the oil and gas market (excluding petrochemical) and the commercial and other industrial market each accounted for 29%.
Bookings, net of cancellations and scope reductions, increased 97% in the second quarter of Fiscal 2026 to $489.7 million, compared to $249.0 million in the second quarter of Fiscal 2025. This increase was primarily driven by stronger booking activity across most of our end markets, particularly within the commercial and other industrial and electric utility markets.
Six Months Ended March 31, 2026 Compared to the Six Months Ended March 31, 2025 (Unaudited)
Revenue and Gross Profit
Revenue increased 5%, or $27.7 million, to $547.8 million in the six months ended March 31, 2026. Domestic revenue increased modestly by 0.4%, or $1.5 million, to $427.2 million, while international revenue increased 27.7%, or $26.2 million, to $120.6 million. The increase in international revenue was primarily driven by increased activity in the Middle East and Africa region, as well as the Asia/Pacific and Europe regions. International revenue includes both revenue generated at our international facilities and export project revenue produced at our domestic facilities.
Revenue growth during the six months ended March 31, 2026 was led by strength in the electric utility, commercial and other industrial, and oil and gas (excluding petrochemical) markets. Revenue from the electric utility market increased 23%, or $28.2 million, to $149.8 million, while revenue from the commercial and other industrial market increased 12%, or $10.4 million, to $95.1 million. Revenue from the oil and gas market (excluding petrochemical) increased 7%, or $13.8 million, to $210.6 million. These increases were primarily driven by our strategic initiative to expand our business into the electric utility and
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commercial and other industrial markets, as well as improved market activities in these end markets. Partially offsetting these increases, revenue from the petrochemical market decreased 35%, or $26.6 million, to $50.3 million, and revenue from the light rail traction power market decreased 3%, or $0.6 million, to $17.7 million in the first half of Fiscal 2026. These declines were primarily attributable to a reduction in backlog within the petrochemical market following the completion of a large petrochemical order secured in Fiscal 2023, as well as lower booking activity in these markets. Revenue from all other markets combined increased 11%, or $2.5 million, to $24.4 million in the six months ended March 31, 2026.
Gross profit increased 11%, or $16.4 million, to $159.4 million for the six months ended March 31, 2026. Gross profit as a percentage of revenue increased to 29% in the first half of Fiscal 2026, as compared to 27% in the six months ended March 31, 2025. The increase in gross profit was primarily driven by higher revenues, as well as improved gross profit margin resulting from favorable volume leverage and strong project execution in a stable pricing environment.
Selling, General and Administrative Expenses
Selling, general and administrative expenses increased 18%, or $7.8 million, to $51.0 million in the six months ended March 31, 2026, primarily due to higher compensation expenses and increased infrastructure expenses. As a percentage of revenue, selling, general and administrative expenses increased to 9% during the first half of Fiscal 2026, compared to 8% during the first half of Fiscal 2025.
Income Tax Provision
We recorded an income tax provision of $21.5 million in the six months ended March 31, 2026, compared to an income tax provision of $20.8 million in the six months ended March 31, 2025 resulting in an effective tax rate of 20% for the first half of Fiscal 2026 and Fiscal 2025. For each of the six months ended March 31, 2026 and 2025, the effective tax rates were favorably impacted by discrete items related to the vesting of RSUs and the estimated R&D Tax Credit. The lower effective tax rates relative to statutory rates were primarily driven by higher stock prices associated with the vested RSUs. For additional information regarding our income taxes, see Note L. Income Taxes of Notes to Condensed Consolidated Financial Statements.
Net Income
In the six months ended March 31, 2026, we recorded net income of $87.3 million, or $2.39 per diluted share, compared to net income of $81.1 million, or $2.22 per diluted share (as adjusted for the Stock Split), in the six months ended March 31, 2025. The increase in net income was primarily driven by higher gross profit during the first half of Fiscal 2026.
Backlog
Order backlog, which represents our remaining unsatisfied performance obligations, reflects the estimated transaction price for goods and services for which we have a material right but for which work has not yet been performed. Order backlog at March 31, 2026 totaled $1.8 billion, representing a 28% increase from $1.4 billion at September 30, 2025. This increase was mainly driven by growth in the commercial and other industrial, electric utility and oil and gas (excluding petrochemical) markets. As of March 31, 2026, the electric utility market represented 30% of total backlog, while the oil and gas market (excluding petrochemical) and the commercial and other industrial market each accounted for 29%.
Bookings, net of cancellations and scope reductions, increased 79% to $928.5 million during the six months ended March 31, 2026, compared to $517.6 million during the six months ended March 31, 2025. This increase was primarily driven by stronger booking activity in the commercial and other industrial and electric utility markets as well as continued growth in the oil and gas market (excluding petrochemical).
Liquidity and Capital Resources
As of March 31, 2026, current assets exceeded current liabilities by 2.3 times.
Cash, cash equivalents and short-term investments increased to $544.9 million at March 31, 2026, compared to $475.5 million at September 30, 2025. The increase was primarily driven by our strong earnings performance, partially offset by cash payments related to shares withheld in lieu of employee tax withholding and dividend payments. We invest our cash, cash equivalents and short-term investments in accordance with the Company’s investment policy approved by the Board of Directors. We believe that our cash, cash equivalents and short-term investments, together with available borrowings under our U.S. credit facility, will be sufficient to support our ongoing operating activities, dividend payments and future organic and inorganic business growth, as well as research and development initiatives for the next twelve months and beyond.
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As we evaluate our capital allocation framework relative to our strategic objectives, we intend to continue deploying capital toward both organic and inorganic initiatives while maintaining a disciplined approach to other capital allocation strategies aimed at enhancing shareholder value. We regularly reassess our capital allocation priorities, which currently include funding working capital requirements, research and development, capital expenditures, and other organic growth opportunities, while also returning capital to shareholders and selectively pursuing strategic inorganic growth opportunities. Our capital allocation decisions are influenced by a number of factors, including market conditions, our financial position and capital requirements, competing uses of cash, and other relevant considerations.
Approximately $124.1 million of our cash, cash equivalents and short-term investments at March 31, 2026 was held outside of the U.S. to support our international operations. We intend to indefinitely reinvest all current and future foreign earnings internationally to ensure adequate liquidity and working capital for our international business. In the event that we elect to repatriate some or all of the foreign earnings that were previously deemed to be indefinitely reinvested outside the U.S., we may incur additional tax expense upon such repatriation under current tax laws.
U.S. Revolver
We have a credit agreement with Bank of America, N.A. and Texas Capital Bank with an aggregate commitment of $150.0 million, consisting of $100.0 million committed by Bank of America and $50.0 million committed by Texas Capital Bank (the U.S. Revolver). The U.S. Revolver has an expiration date of October 4, 2028.
As of March 31, 2026, there were no amounts borrowed under the U.S. Revolver, and letters of credit outstanding were $78.7 million. There was $71.3 million available for the issuance of letters of credit and borrowings under the U.S. Revolver as of March 31, 2026. For further information regarding our debt, see Notes F. Long-Term Debt and G. Commitments and Contingencies of Notes to Condensed Consolidated Financial Statements.
Cash Flows
Operating Activities
Operating activities provided net cash of $94.8 million during the six months ended March 31, 2026 and provided net cash of $59.5 million during the same period in Fiscal 2025. Cash flow from operations is primarily influenced by project volume and margins, working capital requirements, the timing of milestone payments from customers, and payment terms with suppliers. The increase in operating cash flow was primarily driven by improved earnings and higher milestone payments associated with strong booking activity.
Investing Activities
Investing activities provided $14.0 million of cash during the six months ended March 31, 2026 and provided $4.6 million of cash during the same period in Fiscal 2025. Cash provided by investing activities in the first six months of Fiscal 2026 was primarily due to maturities of short-term investments, partially offset by capital spending. We continue to progress the expansion of our Jacintoport fabrication yard in Houston, which is planned to be completed by the end of Fiscal 2026.
Financing Activities
Net cash used in financing activities was $21.0 million during the six months ended March 31, 2026 compared to $18.4 million used during the same period in Fiscal 2025. The increase in cash used in financing activities was primarily due to cash payments related to shares withheld in lieu of employee tax withholding, largely driven by the increase of our share price in the first half of Fiscal 2026 compared to the same period of Fiscal 2025.
Critical Accounting Policies and Estimates
The discussion and analysis of our financial condition and results of operations are based on our condensed consolidated financial statements, which have been prepared in accordance with U.S. GAAP. The preparation of our condensed consolidated financial statements requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosures of contingent assets and liabilities known to exist at the date of the condensed consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. We evaluate our estimates on an ongoing basis, based on historical experience and on various other assumptions that are believed to be reasonable under the circumstances. There can be no assurance that actual results will be consistent with those estimates. There have been no material changes to our critical accounting policies as disclosed in our Annual Report on Form 10-K for the fiscal year ended September 30, 2025, which was filed with the SEC on November 19, 2025.
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Item 3. Quantitative and Qualitative Disclosures About Market Risk
There have been no material changes to our market risks as of and for the three and six months ended March 31, 2026, as compared to the information previously reported under Part II, Item 7A within our Annual Report on Form 10-K for the fiscal year ended September 30, 2025.
Item 4. Controls and Procedures
Evaluation of Disclosure Controls and Procedures
We have established and maintain a system of disclosure controls and procedures that are designed to provide reasonable assurance that information required to be disclosed in our reports filed with the SEC pursuant to the Exchange Act, is recorded, processed, summarized and reported within the time periods specified in the rules and forms of the SEC and that such information is accumulated and communicated to our management, including our Chief Executive Officer (CEO) and Chief Financial Officer (CFO), as appropriate, to allow timely decisions regarding required disclosures.
Management, with the participation of our CEO and CFO, has evaluated the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) of the Exchange Act) as of the end of the period covered by this report. Based on such evaluation, our CEO and CFO have each concluded that, as of the end of the period covered by this report, our disclosure controls and procedures were effective to provide reasonable assurance that information required to be disclosed by us in reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms and that such information is accumulated and communicated to our management, including the CEO and CFO, as appropriate, to allow timely decisions regarding required disclosures.
Changes in Internal Control over Financial Reporting
There were no changes in our internal control over financial reporting identified in connection with the evaluation required by paragraph (d) of Rules 13a-15 or 15d-15 of the Exchange Act that occurred during the second quarter of Fiscal 2026 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
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PART II — OTHER INFORMATION
Item 1. Legal Proceedings
We are involved in various legal proceedings, claims and other disputes arising from our commercial operations, projects, employees and other matters which, in general, are subject to uncertainties and in which the outcomes are not predictable. Although we can give no assurances about the resolution of pending claims, litigation or other disputes, and the effect such outcomes may have on us, management believes that any ultimate liability resulting from the outcome of such proceedings, to the extent not otherwise provided or covered by insurance, will not have a material adverse effect on our consolidated financial position or results of operations or liquidity.
Item 1A. Risk Factors
There have been no material changes from the risk factors previously disclosed in the Company’s Annual Report on Form 10-K for the fiscal year ended September 30, 2025.
Item 5. Other Information
Insider Adoption or Termination of Trading Arrangements
On February 11, 2026, Richard E. Williams, Director of the Company, adopted a “Rule 10b5-1 trading arrangement,” as the term is defined in Item 408(a) of Regulation S-K, for the sale of up to 7,500 shares of the Company’s common stock as adjusted for the Stock Split, subject to certain conditions, from May 14, 2026 through December 31, 2026.
On February 27, 2026, Mohit Singh, Director of the Company, adopted a “Rule 10b5-1 trading arrangement,” as the term is defined in Item 408(a) of Regulation S-K, for the sale of up to 1,350 shares of the Company’s common stock as adjusted for the Stock Split, subject to certain conditions, from May 28, 2026 through February 26, 2027.
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Item 6. Exhibits

Number |  | Description of Exhibits
3.1 |  | — | Amended and Restated Certificate of Incorporation of Powell Industries, Inc. filed with the Secretary of State of the State of Delaware on February 19, 2025 (filed as Exhibit 3.1 to our Form 8-K filed February 19, 2025, and incorporated herein by reference).
3.2 |  | — | Second Amended and Restated Bylaws of Powell Industries, Inc. (filed as Exhibit 3.1 to our Form 8-K filed February 24, 2025, and incorporated herein by reference).
3.3 |  | — | Certificate of Amendment to Amended and Restated Certificate of Incorporation of Powell Industries, Inc. filed with the Secretary of the State of Delaware on March 31, 2026 (filed as Exhibit 3.1 to our Form 8-K filed March 31, 2026, and incorporated herein by reference).
*31.1 | — | Certification of Chief Executive Officer pursuant to Rule 13a-14(a)/15d-14(a).
*31.2 | — | Certification of Chief Financial Officer pursuant to Rule 13a-14(a)/15d-14(a).
**32.1 | — | Certification of Chief Executive Officer Pursuant to Section 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
**32.2 | — | Certification of Chief Financial Officer Pursuant to Section 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
*101 | — | The following financial statements from the Company’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2026, formatted in Inline XBRL: (i) Condensed Consolidated Balance Sheets (Unaudited); (ii) Condensed Consolidated Statements of Operations (Unaudited); (iii) Condensed Consolidated Statements of Comprehensive Income (Unaudited); (iv) Condensed Consolidated Statements of Stockholders’ Equity (Unaudited); (v) Condensed Consolidated Statements of Cash Flows (Unaudited); and (vi) Notes to Condensed Consolidated Financial Statements (Unaudited), tagged as blocks of text and including detailed tags.
*104 | — | The cover page from the Company’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2026, formatted in Inline XBRL (included as Exhibit 101).
§ Management contracts and compensatory plans or arrangements
* Filed herewith |
** Furnished herewith

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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

| POWELL INDUSTRIES, INC.
| (Registrant)
Date: May 5, 2026 | By: | /s/ Brett A. Cope
|  | Brett A. Cope
|  | President and Chief Executive Officer
|  | (Principal Executive Officer)
Date: May 5, 2026 | By: | /s/ Michael W. Metcalf
|  | Michael W. Metcalf
|  | Executive Vice President
|  | Chief Financial and Principal Accounting Officer
|  | (Principal Financial and Principal Accounting Officer)

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