Forgent Power Solutions — Fiscal First Quarter 2027 Earnings Summary

Financial Performance:

• Revenues reached $479 million, a 69% year-over-year increase, representing the highest quarterly revenue in company history.
• Net Income was $55 million, a 252% year-over-year increase, driven primarily by higher gross profit partially offset by higher selling, general, and administrative costs.
• Net Income margin was 11.5%.
• Adjusted EBITDA was $105 million, a 61% year-over-year increase, with an Adjusted EBITDA margin of 21.9%.
• Diluted EPS was $0.18; Adjusted EPS was $0.24.
• Cash flow from operations improved $130 million year-over-year to $136 million, benefiting from higher earnings and favorable timing of customer deposits and milestone payments.
• Capital expenditures were $32 million.
• Inventory increased to $346.2 million from $249.8 million, reflecting planned investment to support production ramp.
• Deferred revenue increased to $423.3 million from $263.9 million.
• Total debt (current and long-term) was $581.3 million as of September 30, 2026.

Guidance and Future Outlook:

• Raised full-year Fiscal 2027 revenue guidance to $2,450–$2,650 million, representing 80% year-over-year growth at the midpoint.
• Raised full-year Fiscal 2027 Adjusted EBITDA guidance to $587–$637 million, representing 90% year-over-year growth at the midpoint.
• Raised full-year Fiscal 2027 Adjusted EPS guidance to $1.30–$1.44, representing 101% year-over-year growth at the midpoint.
• Management cited backlog fully covering fiscal 2027 guidance as a key driver for the outlook revision.
• Expectations indicate orders from frontier AI labs and hyperscalers will build through fiscal 2027 and into fiscal 2028.
• Future focus includes converting expanded scale into operating leverage through process standardization, productivity improvements, and sourcing discipline.

Business Segments and Product Lines:

• Forgent designs and manufactures electrical distribution equipment for data centers, the power grid, and energy-intensive industrial facilities.
• The company specializes in "engineered-to-order" custom products with high customization levels and short lead times.
• New manufacturing capacity is now online, enabling a shift in focus toward performance optimization.
• Direct sales strategy is gaining traction with multiple frontier AI labs and hyperscalers.
• Leadership changes include Amy Ard as Chief Financial Officer, Juan Macias as President of Solutions & Services, and Jamie Brown as President of Transformers.

Market and Competitive Landscape:

• The company positions itself as one of a small number of firms capable of manufacturing all electrical distribution equipment required for a data center or large manufacturing facility's powertrain.
• Strong customer demand is noted as a primary factor in the strong commercial execution.
• The market environment includes robust investment in new data centers and construction activity.

Risks and Challenges:

• Forward-looking statements are subject to risks including changes in demand, supply, and pricing for electrical distribution equipment.
• Potential volatility in raw material prices, labor costs, and the ability to pass these costs to customers.
• Risks related to regulatory developments, opposition to data center development, and government policies including tariffs and duties.
• Supply chain disruptions, delays in manufacturing operations, and completion of expansion projects.
• Risks associated with long sales cycles, unpredictable order changes, and concentration of sales with fewer customers.
• Potential product liability claims, technology changes, and geopolitical conflicts.

Management Commentary and Tone:

• CEO Gary Niederpruem expressed confidence in the higher outlook due to robust demand and strong production ramp execution.
• Management highlighted that first quarter results exceeded the high end of guidance ranges for revenues and Adjusted EBITDA.
• CFO Amy Ard emphasized her role in advancing performance optimization initiatives across margins, working capital, and cash flow.
• The tone is confident, citing "meaningful margin expansion" over the next several years as a result of executing performance optimization initiatives.

Other Key Points:

• The company completed a follow-on offering of Class A common stock, generating $695.4 million in proceeds, which were used to purchase Opco LLC Interests from existing shareholders.
• Equity-based compensation was $13.9 million for the quarter.
• Non-recurring costs such as sponsor fees, public company readiness costs, earnout expenses, and integration fees were zero in the current quarter, whereas they were present in the prior year period.
• The company hosts a conference call on November 12, 2026, at 11:00 a.m. Eastern Time to discuss results.