Forgent Power Solutions Q4 Revenue Jumps 94% to $462M

Forgent Power Solutions, Inc. (FPS) posted a significant financial performance in the fourth quarter of fiscal 2026, with revenue reaching $462 million, a 94% increase from the same period last year. The company reported adjusted earnings per share of 25 cents, outperforming the Zacks Consensus Estimate by 8.7%. This growth was primarily attributed to the rapid expansion of its custom products segment and its Powertrain Solutions division, which cater to data center infrastructure needs.

Bookings for the quarter hit a record high of $1.50 billion, representing a 375% year-over-ear rise and a 73% sequential increase. Consequently, the company's backlog climbed to $3.02 billion, up 256% year over year. The book-to-bill ratio reached an all-time high of 3.3x, up from 2.3x in the previous quarter, indicating that new orders significantly outpaced revenue recognition during the period.

Powertrain Solutions Drive Organic Growth

Powertrain Solutions emerged as a key growth engine, with revenues jumping 187% year over year to $147 million. This segment accounted for nearly one-third of the company’s total quarterly revenue. Custom products revenues also rose 73% to $292 million. Management stated that this growth was fully organic, resulting from market expansion, share gains, and a faster-than-expected production ramp at new facilities.

Profitability Expands With Operating Leverage

Operational efficiency improved as volumes scaled, leading to a 109% increase in gross profit to $166.70 million. Adjusted EBITDA rose 163% year over year to $112.74 million, pushing the adjusted EBITDA margin to 24.4%. This margin represents an expansion of 640 basis points year over year and 200 basis points sequentially. Cash flow from operations stood at $74 million, while capital expenditures totaled $31 million, largely tied to capacity expansion projects.

Fiscal 2027 Outlook Targets Higher Revenue

Looking ahead, Forgent provided guidance for fiscal 2027, projecting revenues between $2.4 billion and $2.6 billion. The company expects adjusted earnings per share to fall in the range of $1.26 to $1.40. This forward-looking view follows the receipt of its first direct order from a frontier AI lab for medium-voltage transformers and switchgear, serving a campus expected to exceed one gigawatt in capacity.

Strategic partnerships deepened during the quarter as FPS signed a master service agreement with a hyperscaler. Management noted that Powertrain Solutions now represents about 40% of the year-end backlog, while service backlog is approximately three times the fiscal 2026 service revenues. These developments underscore the company's expanding reach in the data center market and its ability to capture broader wallet share from existing customers.