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FPS Q4 Earnings Beat Estimates on Powertrain Solutions Growth
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Key Takeaways
FPS posted 94% revenue growth in fiscal Q4, led by custom products and Powertrain Solutions.
Bookings hit a record $1.50B as backlog climbed to $3.02B and book-to-bill reached a record 3.3x.
Forgent expects fiscal 2027 revenues of $2.4-$2.6B and adjusted earnings of $1.26-$1.40 per share.
Forgent Power Solutions, Inc. (FPS - Free Report) reported fourth-quarter fiscal 2026 adjusted earnings of 25 cents per share, which beat the Zacks Consensus Estimate by 8.7%.
Revenues of $462 million rose 94% year over year. Growth was led by custom products and Powertrain Solutions for data center customers. Backlog reached a record $3 billion.
FPS' Product Mix Drives Strong Q4 Growth
Powertrain Solutions revenues climbed 187% year over year to $147 million, while custom products revenues rose 73% to $292 million. Services revenues increased 69% to $12 million, and standard products revenues advanced 3% to $11 million.
Management said the quarterly growth was fully organic, supported by market expansion, share gains and a faster-than-expected production ramp at new facilities. Powertrain Solutions accounted for nearly one-third of quarterly revenues.
Forgent Power Solutions, Inc. Price, Consensus and EPS Surprise
Fourth-quarter bookings reached a record $1.50 billion, up 375% year over year and 73% sequentially. The book-to-bill ratio increased to 3.3x from 2.3x in the third quarter, marking the highest level in the company's history.
Backlog increased 256% year over year and 53% sequentially to $3.02 billion. Management said backlog consists of firm purchase orders rather than letters of intent or memoranda of understanding, with pricing remaining broadly consistent.
FPS Expands Profitability as Volumes Scale
Gross profit rose 109% to $166.70 million. Adjusted EBITDA increased 163% year over year to $112.74 million. The adjusted EBITDA margin reached 24.4%, expanding 640 basis points year over year and 200 basis points sequentially as higher volumes improved operating leverage.
Cash flow from operations was $74 million, while capital expenditures totaled $31 million. Most quarterly capital spending is related to the 2025-2026 capacity expansion.
Forgent Deepens Data Center Customer Reach
FPS received its first direct order from a frontier AI lab during the quarter and signed a master service agreement with a hyperscaler. The initial AI-lab award covers medium-voltage transformers and switchgear for a campus expected to exceed one gigawatt.
Management also highlighted broader wallet-share gains as existing customers increasingly buy multiple product lines and integrated solutions. Powertrain Solutions represented about 40% of year-end backlog, while service backlog was approximately three times fiscal 2026 service revenues.
FPS Adds Capacity to Support Modular Demand
Forgent announced a $35 million investment in a dedicated 385,000-square-foot Powertrain Solutions facility at its Tijuana campus. The project is expected to increase Powertrain Solutions manufacturing capacity by more than 50% and come online in the fourth quarter of fiscal 2027.
The expansion is expected to raise total revenue capacity to approximately $5.8 billion, an increase of about $800 million. Management said modular solutions are becoming a larger part of customer deployment plans, supporting the decision to add capacity beyond the recently completed expansion.
Forgent Sets Strong Fiscal 2027 Outlook
For fiscal 2027, Forgent expects revenues of $2.4-$2.6 billion, adjusted EBITDA of $575-$625 million and adjusted earnings of $1.26-$1.40 per share. At the midpoint, these ranges imply revenue growth of 76%, adjusted EBITDA growth of 86% and adjusted earnings growth of about 95%.
For the first quarter of fiscal 2027, FPS projects revenues of $445-$465 million and adjusted EBITDA of $90-$100 million. The quarter is expected to include about $10 million of one-time hiring, training and startup costs. Management expects quarterly revenues and adjusted EBITDA to rise sequentially through fiscal 2027, with operating cash flow exceeding $300 million and capital expenditures totaling about $87 million.
Shares of Lumentum have surged 127.8% year to date. The Zacks Consensus Estimate for LITE’s fiscal 2027 earnings is pegged at $21.30 per share, up by 3 cents over the past 30 days, indicating an increase of 145.7% year over year.
Shares of Applied Materials have jumped 63.9% year to date. The Zacks Consensus Estimate for AMAT’s fiscal 2026 earnings is pegged at $12.76 per share, up by 1.3% over the past 30 days, indicating a rise of 35.5% year over year.
Analog Devices shares have risen 33.6% year to date. The Zacks Consensus Estimate for ADI’s fiscal 2026 earnings is pegged at $12.96 per share, up by 4.3% cents over the past 30 days, indicating an increase of 66.4% year over year.
View the Zacks #1 Rank List
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FPS Q4 Earnings Beat Estimates on Powertrain Solutions Growth
Key Takeaways
Forgent Power Solutions, Inc. (FPS - Free Report) reported fourth-quarter fiscal 2026 adjusted earnings of 25 cents per share, which beat the Zacks Consensus Estimate by 8.7%.
Revenues of $462 million rose 94% year over year. Growth was led by custom products and Powertrain Solutions for data center customers. Backlog reached a record $3 billion.
FPS' Product Mix Drives Strong Q4 Growth
Powertrain Solutions revenues climbed 187% year over year to $147 million, while custom products revenues rose 73% to $292 million. Services revenues increased 69% to $12 million, and standard products revenues advanced 3% to $11 million.
Management said the quarterly growth was fully organic, supported by market expansion, share gains and a faster-than-expected production ramp at new facilities. Powertrain Solutions accounted for nearly one-third of quarterly revenues.
Forgent Power Solutions, Inc. Price, Consensus and EPS Surprise
Forgent Power Solutions, Inc. price-consensus-eps-surprise-chart | Forgent Power Solutions, Inc. Quote
Forgent's Order Momentum Strengthens Visibility
Fourth-quarter bookings reached a record $1.50 billion, up 375% year over year and 73% sequentially. The book-to-bill ratio increased to 3.3x from 2.3x in the third quarter, marking the highest level in the company's history.
Backlog increased 256% year over year and 53% sequentially to $3.02 billion. Management said backlog consists of firm purchase orders rather than letters of intent or memoranda of understanding, with pricing remaining broadly consistent.
FPS Expands Profitability as Volumes Scale
Gross profit rose 109% to $166.70 million. Adjusted EBITDA increased 163% year over year to $112.74 million. The adjusted EBITDA margin reached 24.4%, expanding 640 basis points year over year and 200 basis points sequentially as higher volumes improved operating leverage.
Cash flow from operations was $74 million, while capital expenditures totaled $31 million. Most quarterly capital spending is related to the 2025-2026 capacity expansion.
Forgent Deepens Data Center Customer Reach
FPS received its first direct order from a frontier AI lab during the quarter and signed a master service agreement with a hyperscaler. The initial AI-lab award covers medium-voltage transformers and switchgear for a campus expected to exceed one gigawatt.
Management also highlighted broader wallet-share gains as existing customers increasingly buy multiple product lines and integrated solutions. Powertrain Solutions represented about 40% of year-end backlog, while service backlog was approximately three times fiscal 2026 service revenues.
FPS Adds Capacity to Support Modular Demand
Forgent announced a $35 million investment in a dedicated 385,000-square-foot Powertrain Solutions facility at its Tijuana campus. The project is expected to increase Powertrain Solutions manufacturing capacity by more than 50% and come online in the fourth quarter of fiscal 2027.
The expansion is expected to raise total revenue capacity to approximately $5.8 billion, an increase of about $800 million. Management said modular solutions are becoming a larger part of customer deployment plans, supporting the decision to add capacity beyond the recently completed expansion.
Forgent Sets Strong Fiscal 2027 Outlook
For fiscal 2027, Forgent expects revenues of $2.4-$2.6 billion, adjusted EBITDA of $575-$625 million and adjusted earnings of $1.26-$1.40 per share. At the midpoint, these ranges imply revenue growth of 76%, adjusted EBITDA growth of 86% and adjusted earnings growth of about 95%.
For the first quarter of fiscal 2027, FPS projects revenues of $445-$465 million and adjusted EBITDA of $90-$100 million. The quarter is expected to include about $10 million of one-time hiring, training and startup costs. Management expects quarterly revenues and adjusted EBITDA to rise sequentially through fiscal 2027, with operating cash flow exceeding $300 million and capital expenditures totaling about $87 million.
Zacks Rank and Stocks to Consider
At present, FPS carries a Zacks Rank #4 (Sell).
Some better-ranked stocks in the broader Zacks Computer and Technology sector are Lumentum (LITE - Free Report) , Applied Materials (AMAT - Free Report) and Analog Devices (ADI - Free Report) , each carrying a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Shares of Lumentum have surged 127.8% year to date. The Zacks Consensus Estimate for LITE’s fiscal 2027 earnings is pegged at $21.30 per share, up by 3 cents over the past 30 days, indicating an increase of 145.7% year over year.
Shares of Applied Materials have jumped 63.9% year to date. The Zacks Consensus Estimate for AMAT’s fiscal 2026 earnings is pegged at $12.76 per share, up by 1.3% over the past 30 days, indicating a rise of 35.5% year over year.
Analog Devices shares have risen 33.6% year to date. The Zacks Consensus Estimate for ADI’s fiscal 2026 earnings is pegged at $12.96 per share, up by 4.3% cents over the past 30 days, indicating an increase of 66.4% year over year.