Powell Industries targets record $1 billion revenue on data center demand

Powell Industries said it is on track to surpass $1 billion in annual revenue, supported by demand for medium-voltage electrical equipment from data centers, utilities and industrial customers.

The company, in its fiscal third-quarter release, pointed to a record backlog that provides multi-year revenue visibility as orders accelerate across its end markets.

Revenue rose 9 percent year over year to $311.7 million in the quarter ended June 30, while net income climbed 8 percent to $52.2 million. Adjusted earnings of $1.42 a share trailed the $1.47 consensus estimate. New orders surged 158 percent to $934 million, lifting the backlog 69 percent to $2.4 billion and pushing the book-to-bill ratio to 3.0 times. Gross margin held at 30.6 percent. The quarter included a data center order worth more than $400 million.

Powell, founded in 1947, designs and builds custom-engineered electrical equipment including switchgear, motor control centers and power control room substations. The company serves onshore and offshore production, liquefied natural gas terminals, pipelines, petrochemical plants and electric utilities, with data centers emerging as a fast-growing end market as AI workloads drive demand for electrical capacity.

Shares traded at $191.79, up 0.84 percent, and have gained 80 percent this year. The record backlog, equal to roughly two years of revenue, positions the Houston-based company to benefit from the AI infrastructure buildout as utilities and data center operators expand electrical capacity, a tailwind also lifting peers such as Vertiv Holdings and nVent Electric.

Analysts remain constructive even after trimming targets. Cantor Fitzgerald maintained a Neutral rating while cutting its price target to $235 from $320, and Argus kept a Buy rating with a $239 target, below the $280 average on Wall Street.

The guidance raise points to sustained demand as AI infrastructure investment continues. Investors will watch the fiscal fourth-quarter report, due in November, for updated margin and order trends.

This article is for informational purposes only and does not constitute investment advice.