Forgent Power Solutions (NYSE: FPS) reported fiscal Q4 2026 revenue of $461.7 million, up 94% year over year, and diluted EPS of $0.21 for the quarter ended June 30, 2026. GAAP net income swung to $66.1 million from a $4.8 million loss, while adjusted EBITDA rose 163% to $112.7 million. Record bookings and backlog indicate sustained demand, but also increase the importance of capacity execution and working-capital discipline.
Core Financial Results
Gross profit more than doubled as revenue grew faster than operating costs. Selling, general and administrative expenses increased only about 7% to $62.6 million, helping operating income rise to $91.9 million from $8.3 million.
The operating leverage also appeared on a sequential basis. Net income margin reached 14.3%, about 800 basis points above Q3, while adjusted EBITDA margin increased about 200 basis points sequentially to 24.4% as new campuses moved closer to target production rates.
| Metric | Fiscal Q4 2026 | Fiscal Q4 2025 | Year-Over-Year Change |
|---|---|---|---|
| Revenue | $461.7 million | $237.6 million | +94% |
| Gross profit and margin | $166.7 million / approximately 36.1% | $79.7 million / approximately 33.5% | Approximately +109% / +260 bps |
| Operating income and margin | $91.9 million / approximately 19.9% | $8.3 million / approximately 3.5% | Approximately +$83.6 million / +1,640 bps |
| Net income | $66.1 million | $(4.8) million | Swing to profit |
| Adjusted net income | $77.3 million | $20.6 million | +275% |
| Adjusted EBITDA | $112.7 million | $42.8 million | +163% |
| Operating cash flow | $74 million | Approximately $(7) million | +$81 million |
Adjusted net income and adjusted EBITDA are non-GAAP measures. Forgent said revenue, adjusted EBITDA and adjusted net income all exceeded the high end of its May guidance.
Record Orders Are Driving Additional Powertrain Capacity
Quarterly bookings reached $1.503 billion, up 375% year over year and 73% sequentially. The book-to-bill ratio rose to 3.3x from 2.3x in Q3, meaning new orders substantially exceeded the revenue recognized during the quarter.
Backlog reached a record $3.0 billion at June 30, increasing 256% from a year earlier and 53% from March 31. Management attributed the order momentum to continued demand for electrical distribution equipment, wider adoption of Forgent’s products and market-share gains.
Powertrain Solutions was a central part of the growth. The business generated nearly one-third of Q4 revenue, while its fiscal 2026 revenue increased 259%. These figures use different reporting periods but together show that Powertrain Solutions has become a more significant contributor to Forgent’s overall business.
To support modular e-House and Powerskid demand, Forgent announced a further $35 million investment at its Tijuana campus. The expansion is expected to become operational in fiscal Q4 2027, increase Powertrain Solutions capacity by more than 50% and lift Forgent’s total revenue capacity by approximately $800 million to about $5.8 billion.
Profitability, Cash Flow and the Balance Sheet
Q4 operating cash flow improved to $74 million even as Forgent continued investing in working capital for the production ramp. Quarterly capital expenditures were $31 million, substantially all related to the company’s existing 2025–2026 capacity expansion.
For the full fiscal year, operating cash flow was $109.1 million, compared with $45.0 million in fiscal 2025. Full-year capital expenditures were $115.9 million, up from $84.1 million, meaning capacity investment remained slightly above annual operating cash generation.
The balance sheet reflects the scale of the ramp. Accounts receivable increased to $329.6 million from $160.0 million, while inventory rose to $249.8 million from $117.6 million. Deferred revenue also increased to $263.9 million from $110.9 million, providing a partial offset to the working-capital use associated with receivables and inventory.
Cash and cash equivalents declined to $97.5 million from $111.3 million. Total current and long-term debt was approximately $582.2 million, up from about $502.1 million a year earlier.
Fiscal 2027 Guidance
Forgent initiated fiscal 2027 guidance based on its backlog, planned production schedules and current business conditions. At the midpoints, the outlook calls for faster adjusted EBITDA and adjusted EPS growth than revenue growth, though management expects significant first-quarter spending on personnel and facilities to support subsequent production increases.
| Metric | Fiscal 2027 Guidance | Context |
|---|---|---|
| Revenue | $2.4 billion–$2.6 billion | 76% growth at the midpoint |
| Adjusted EBITDA | $575 million–$625 million | 86% growth at the midpoint |
| Adjusted EPS | $1.26–$1.40 | 95% growth at the midpoint |
| Capital expenditures | Approximately $87 million | Includes capacity projects and maintenance spending |
The company expects revenue and adjusted EBITDA to increase sequentially in each quarter of fiscal 2027. It also expects full-year operating cash flow to rise from fiscal 2026 as higher earnings offset continued investment requirements. Adjusted EBITDA and adjusted EPS guidance are non-GAAP measures.
Recent Insider Transactions
The supplied six-month insider summary records seven purchase transactions totaling 41,299,902 shares and three sales totaling 126,772,000 shares, resulting in net sales of 85,472,098 shares. The detailed data identifies the seven transactions categorized as purchases as zero-price stock awards rather than open-market purchases; the three sales were indirect transactions by NEOS Partners LP, a beneficial owner of more than 10%.
| Date | Insider | Role | Transaction | Ownership | Price / Reported Value |
|---|---|---|---|---|---|
| Sep. 1, 2026 | Gary John Niederpruem | Chief Executive Officer | Stock award | Direct | $0.00 / $0 |
| Sep. 1, 2026 | Tyson K. Hottinger | Officer | Stock award | Direct | $0.00 / $0 |
| Sep. 1, 2026 | Inez Lund | Officer | Stock award | Direct | $0.00 / $0 |
| Sep. 1, 2026 | Ryan S. Fiedler | Chief Financial Officer | Stock award | Direct | $0.00 / $0 |
| Jul. 6, 2026 | NEOS Partners LP | More-than-10% beneficial owner | Sale | Indirect | $47.50 / $2,073,375,000 |
| Jul. 6, 2026 | NEOS Partners LP | More-than-10% beneficial owner | Stock award | Indirect | $0.00 / $0 |
| Jun. 1, 2026 | NEOS Partners LP | More-than-10% beneficial owner | Sale | Indirect | $56.35 / $2,739,849,700 |
| Jun. 1, 2026 | NEOS Partners LP | More-than-10% beneficial owner | Stock award | Indirect | $0.00 / $0 |
| Mar. 30, 2026 | NEOS Partners LP | More-than-10% beneficial owner | Sale | Indirect | $27.97 / $964,965,000 |
| Mar. 30, 2026 | NEOS Partners LP | More-than-10% beneficial owner | Stock award | Indirect | $0.00 / $0 |
These records describe the transactions objectively and do not, by themselves, establish the insiders’ views of Forgent’s prospects.
Risks Investors Need to Watch
- Backlog conversion: The $3.0 billion backlog may not convert into revenue or profit at the expected level or on the expected schedule. Long sales cycles and changes or cancellations of large orders could also increase quarterly volatility.
- Capacity execution: Forgent’s fiscal 2027 outlook depends on production ramps and additional capacity. Delays at existing campuses or in the new Tijuana expansion could limit revenue conversion and reduce anticipated operating leverage.
- Working capital and leverage: Receivables and inventory more than doubled year over year, while total debt increased. Continued growth may require further working-capital investment before customer payments are collected.
- Input costs and trade policy: Higher electrical steel, carbon steel, aluminum, copper or labor costs could pressure margins if Forgent cannot pass them through to customers. Tariffs or import restrictions could also affect supply and component costs.
- Demand and customer concentration: Growth depends partly on continued data-center, AI infrastructure and new-construction investment. Expanding Powertrain Solutions could also concentrate more revenue among fewer large customers.
Summary
Forgent’s fiscal Q4 2026 combined rapid revenue growth with a shift to GAAP profitability, higher margins and improved operating cash flow. Bookings and backlog grew much faster than recognized revenue, supporting the fiscal 2027 outlook while creating a need for additional Powertrain Solutions capacity. The main factors to monitor are backlog conversion, execution of the production ramp, first-quarter investment costs and the working capital required to support growth.
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