Forgent Power Solutions, Inc. Class A(FPS)
$22.15-2.42 (-9.85%)
FPS
Forgent Power Solutions, Inc. Class A earnings date
$22.15
At close:-2.42 (-9.85%)
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Forgent Power Solutions, Inc. Class A (FPS) Q1 2027 Earnings Report
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FPS Q1 2027 EPS Results
- Actual EPS
- $0.24
- Consensus EPS
- $0.20
- Beat/Miss
- Beat by +$0.04
- One Year Ago EPS
- $0.13
FPS Q1 2027 Revenue Results
- Actual Revenue
- $478.57M
- Expected Revenue
- $462.30M
- Beat/Miss
- Beat by +$16.27M
- YoY Revenue Growth
- ―
Earnings Announcement Details
- Quarter
- Q1 2027
- Date
- 11/12/2026
- Time
- Before Open
- Conference Call
- Thursday, November 12, 2026
FPS Upcoming Earnings
Forgent Power Solutions, Inc. Class A's next earnings date is estimated for March 22, 2027, based on past reporting schedules.
Q1 2027 Earnings Call Audio
FPS Q1 2027 Earnings Call
0:00 / 0:00
Q1 2027 Earnings Slide Deck
Q1 2027 Earnings Call Summary
Earnings Call Sentiment|Positive
The call was strongly positive, supported by record first-quarter revenue, substantial year-over-year growth in revenue, adjusted EBITDA, EPS and orders, raised fiscal 2027 guidance, strong backlog coverage and progress with AI labs and hyperscalers. The principal challenges were near-term softness in renewables and battery storage, regulatory and project-timing uncertainty, a seasonally low first-quarter margin and lengthy direct-customer qualification cycles. The positive developments significantly outweighed the stated challenges.
Company Guidance
Forgent raised fiscal 2027 guidance to revenues of $2.45 billion to $2.65 billion, $50 million higher than prior guidance and representing 80% growth at the midpoint; adjusted EBITDA of $587 million to $637 million, $12 million higher than prior guidance, representing 90% growth and implying an adjusted EBITDA margin of 24%; and adjusted EPS of $1.30 to $1.44, $0.04 higher than prior guidance and representing 101% growth at the midpoint. For the second quarter of fiscal 2027, it expects revenues of $560 million to $590 million, representing 94% growth year-over-year and approximately 20% growth versus the first quarter at the midpoint, adjusted EBITDA of $127 million to $137 million, representing 119% growth year-over-year and approximately 26% growth versus the first quarter at the midpoint, and an adjusted EBITDA margin of approximately 23%, up roughly 260 basis points year-over-year and roughly 110 basis points sequentially. The company continues to expect revenue and adjusted EBITDA to increase sequentially throughout the year with margins expanding as production ramps, free cash flow greater than $300 million, and approximately 40% of current backlog beyond fiscal 2027, the majority in fiscal 2028.
- Record First-Quarter RevenueFirst-quarter revenue increased 69% year-over-year to $479 million, marking the highest quarterly revenue in Forgent's history. Revenue was approximately $24 million above the midpoint of guidance and exceeded the high end of the range.
- Strong Adjusted EBITDA and EPS GrowthAdjusted EBITDA increased 61% year-over-year to $105 million, the company's second-highest quarterly result, while adjusted EPS increased 83% year-over-year to $0.24.
- Production Ramp Exceeded ExpectationsForgent exceeded the high end of first-quarter guidance through disciplined execution of its production ramp. The company increased throughput and utilization across new facilities while maintaining focus on quality, efficiency and cost control.
- Strong Order MomentumFirst-quarter orders were approximately 2x the level of the prior-year quarter, representing roughly 100% year-over-year growth. Data center was the strongest contributor, followed by industrial and other, while grid moderated.
- Data Center Demand Remains StrongManagement said data center demand remains very strong and that customers are not planning to build less capacity because of potential regulation. Customers indicated that regulation may affect where, when and how data centers are built, and Forgent has recently seen requests for a few projects to be pulled in rather than pushed out.
- Supply-Constrained Electrical Equipment MarketDemand for medium-voltage switchgear, transformers and other critical electrical equipment materially exceeds available industry capacity. Management said that even if 20% of more than 100 gigawatts of forecast incremental U.S. data center capacity from 2027 through 2031 disappeared because of regulatory constraints, roughly 80 gigawatts would remain, more than 6x the data center capacity expected to be added this year before retrofits, expansion or replacement demand.
- Upstream Power Commitments Support Future DemandPower-generation suppliers, including turbine and fuel-cell providers, have multiyear backlogs and in many cases have already committed significant capital to orders. Forgent said these upstream commitments provide confidence that generation capacity will ultimately require transformers, switchgear and power-distribution equipment.
- Backlog Provides Visibility Through Fiscal 2027 and Into Fiscal 2028The backlog extends through fiscal 2027 and into fiscal 2028, consists of firm purchase orders often supported by nonrefundable deposits, milestone payments and other contractual protections, and fully covers the updated fiscal 2027 outlook. Management said purchase orders generally arrive after permitting is complete and, in many cases, after construction has started.
- Customer Base Is DiversifiedNo single customer represented more than 10% of first-quarter revenue. Approximately 15% of backlog is with neoclouds and intermediaries serving them, while the remaining 85% includes colocations, EPCs, grid customers, other OEMs, intermediaries, emerging hyperscalers and OpenAI.
- Direct AI Lab and Hyperscaler TractionForgent secured a volume order from one AI lab and an initial direct order from a second AI lab in fiscal 2027 to date. Two hyperscalers have moved beyond master service agreements and signed specific product agreements, while a third hyperscaler has entered the qualification process.
- Progression Toward Larger Direct Customer ProgramsThe first Frontier AI lab customer's initial order led to a volume order. Management expects direct AI lab orders in the first half of fiscal 2027 and direct hyperscaler orders in the second half, with the potential for these relationships to become a meaningful growth driver in fiscal 2028 and beyond.
- Industrial Demand Is BroadeningIndustrial demand is accelerating beyond large mega projects, with increased activity from smaller projects, facility expansions and follow-on investments across multiple verticals. Forgent reported strong industrial orders and a meaningful increase in the number of customers placing orders.
- Platform Built Ahead of IPO PlanOver approximately 30 months, Forgent built a broader product portfolio, vertically integrated manufacturing capacity, engineering capabilities, customization-at-scale and short-lead-time offerings, and experienced commercial leadership. Management said the company is now a full year ahead of its IPO plan on revenue.
- Operating Optimization Initiatives Are Producing SavingsBringing supply-chain, project-management and finance roles in-house reduced reliance on outside professional services and generated more than $5 million of annualized savings. Renegotiated payment terms with vendors representing more than 80% of material spend generated more than $30 million of working-capital improvement. Replacing higher-cost contract labor with full-time employees generated approximately $5 million of additional annualized savings.
- New Leadership and Financial InfrastructurePresident of Solutions & Service Juan Macias joined in August with more than 30 years of industrial leadership experience, and President of Transformers Jamie Brown joined in September with 25 years of manufacturing and operations leadership. CFO Amy Ard said Forgent has strengthened reporting, controls, governance, forecasting, systems and plant-level margin analytics.
- Revenue Growth Across All OfferingsCustom products grew 73% to $354 million, Powertrain Solutions grew 62% to $106 million, Standard products grew 18% to $11 million, and Services more than doubled to $8 million. Management expects growth to accelerate in the second quarter, particularly in Powertrain Solutions.
- First-Quarter EBITDA Margin Outperformed ExpectationsAdjusted EBITDA margin was 21.9%, ahead of expectations. Adjusted EBITDA growth was supported by higher throughput and better cost absorption, while adjusted EPS growth outpaced adjusted EBITDA growth because of operating leverage and lower net interest expense.
- Fiscal 2027 Guidance RaisedForgent raised fiscal 2027 revenue guidance to $2.45 billion-$2.65 billion, $50 million higher than prior guidance and representing 80% growth at the midpoint. Adjusted EBITDA guidance increased to $587 million-$637 million, $12 million higher than prior guidance and representing 90% growth with an implied adjusted EBITDA margin of 24%. Adjusted EPS guidance increased to $1.30-$1.44, $0.04 higher than prior guidance and representing 101% growth at the midpoint.
- Strong Second-Quarter OutlookSecond-quarter revenue guidance is $560 million-$590 million, representing 94% year-over-year growth and approximately 20% growth versus the first quarter at the midpoint. Adjusted EBITDA guidance is $127 million-$137 million, representing 119% year-over-year growth and approximately 26% sequential growth at the midpoint. The implied adjusted EBITDA margin is approximately 23%, up roughly 260 basis points year-over-year and roughly 110 basis points sequentially.
- Expected Sequential Margin ExpansionManagement expects revenue and adjusted EBITDA to increase sequentially throughout fiscal 2027, with margins expanding as production ramps. The company said its plan to expand adjusted EBITDA margin sequentially through fiscal 2027 is progressing as expected.
- Backlog Supports Fiscal 2028Approximately 40% of the current backlog is scheduled beyond fiscal 2027, with the majority expected in fiscal 2028. Management said additional orders expected in the second and third quarters should support fiscal 2028.
- Operating Cash Flow Outlook MaintainedForgent maintained its expectation for free cash flow greater than $300 million. Management said the first-quarter cash result should not be annualized directly because deposit and milestone-payment timing is not perfectly ratable.
- Capital Allocation OptionalityCapital allocation priorities remain organic growth, inorganic growth and then share buybacks. Management said cash generation has created additional optionality while keeping those priorities unchanged.
- Customer Delivery Trends Remain ConstructiveForgent entered fiscal 2027 with approximately $250 million of book-and-ship capability, which management said was substantially exhausted by first-quarter order rates. Most new orders are therefore expected to be for fiscal 2028, although some customers have requested products to be pulled in and management has not seen scheduled deliveries pushed out.
FPS Earnings History
| Report Date | Fiscal Quarter | Forecast / EPS | Last Year's EPS | EPS YoY Change | Press Release |
|---|---|---|---|---|---|
| Mar 22, 2027 | 2027 (Q2) | 0.28- | 0.12 | ― | ― |
| Nov 12, 2026 | 2027 (Q1) | 0.200.24 | 0.13 | 84.62% (+0.11) | |
| Sep 15, 2026 | 2026 (Q4) | 0.240.25 | ― | ― | |
| May 14, 2026 | 2026 (Q3) | 0.160.18 | 0.02 | 682.61% (+0.16) | |
| Mar 16, 2026 | 2026 (Q2) | 0.120.12 | 0.01 | 700.00% (+0.10) |
The table shows recent earnings report dates and whether the forecast was beat or missed. See the change in forecast and EPS from the previous year.
Beat Missed
