Forgent Power Solutions posts record fiscal 2026 on 3.3x book-to-bill as Tijuana expansion lifts capacity ceiling
Forgent Power Solutions (NYSE: FPS) is in focus after reporting record fourth-quarter and full-year fiscal 2026 results, with revenue rising 94% to $462 million in the quarter and adjusted EBITDA climbing 163% to $113…
Key takeaways
- Forgent Power Solutions reported record fiscal 2026 fourth-quarter revenue of $462 million, up 94%, with adjusted EBITDA up 163% to $113 million.
- Fourth-quarter bookings topped $1.5 billion (up 375% year over year), lifting year-end backlog to $3 billion and the book-to-bill ratio to 3.3 times.
- Full-year fiscal 2026 revenue rose 89% to $1.42 billion, adjusted EBITDA rose 91% to $323 million, and adjusted net income climbed 136% to $208 million.
- The company announced a 385,000-square-foot Powertrain Solutions facility at its Tijuana, Mexico campus, expected to raise total revenue capacity by about $800 million to $5.8 billion and begin operations in the fourth quarter of fiscal 2027.
- Management guided fiscal 2027 revenue to $2.4 billion–$2.6 billion, with more than 90% already covered by backlog, and adjusted EPS to $1.26–$1.40.
Forgent Power Solutions (NYSE: FPS) is in focus after reporting record fourth-quarter and full-year fiscal 2026 results, with revenue rising 94% to $462 million in the quarter and adjusted EBITDA climbing 163% to $113 million. Fourth-quarter bookings exceeded $1.5 billion, a 375% increase year over year, pushing year-end backlog to $3 billion and the book-to-bill ratio to 3.3 times. Management guided fiscal 2027 revenue to $2.4 billion to $2.6 billion, with more than 90% of that range already covered by backlog.
Backlog composition and the capacity constraint
CEO Gary Niederpruem said the backlog consists entirely of firm customer purchase orders, with no letters of intent or memoranda of understanding included. That distinction matters on a supply-side read: there is no paper cushion in this number, and pricing has held consistent without meaningful project delays or customer push-outs. Powertrain Solutions, the company's prefabricated, modular systems business, made up roughly 40% of the backlog at fiscal year-end and posted its own acceleration, with revenue rising 187% year over year and 48% sequentially to $147 million in the fourth quarter. Niederpruem cited customer feedback showing modular construction can compress portions of data center build schedules by 30% to 50% compared with traditional field approaches.
To relieve the coming capacity ceiling, Forgent announced a 385,000-square-foot dedicated Powertrain Solutions facility at its Tijuana, Mexico campus. The project is expected to lift Powertrain Solutions manufacturing capacity by more than 50% to more than 1 million square feet and raise total revenue capacity by approximately $800 million to $5.8 billion. The facility is expected to begin operations in the fourth quarter of fiscal 2027.
Fiscal 2027 setup
Full-year fiscal 2026 revenue increased 89% to $1.42 billion, adjusted EBITDA rose 91% to $323 million, and adjusted net income climbed 136% to $208 million. Niederpruem said results exceeded the high end of guidance the company had raised in May.
Management guided fiscal 2027 adjusted EPS to $1.26 to $1.40, representing approximately 95% growth at the midpoint. CFO Ryan Fiedler said first-quarter adjusted EBITDA margin is expected near 21% as approximately $10 million in hiring and capacity-investment costs weigh on the period, with margin expected to expand by "a couple of hundred basis points" in the second quarter as volume rises. Operating cash flow is projected to exceed $300 million in fiscal 2027, against $109 million in fiscal 2026, with Fiedler noting cash generation is expected to be weighted toward the second half.
Capital expenditures are expected to fall to roughly 3% of sales in fiscal 2027 from 8% in fiscal 2026. Forgent also disclosed that it received its first direct order from a frontier artificial intelligence lab during the fourth quarter and signed a master services agreement with a hyperscaler; Niederpruem said the AI lab customer's first campus is expected to exceed one gigawatt, with broader opportunity potentially spanning multiple gigawatts.
What to watch: first-quarter fiscal 2027 results against management's guidance of $445 million to $465 million in revenue and $90 million to $100 million in adjusted EBITDA. Beginning in fiscal 2027, Forgent will report orders and backlog annually rather than quarterly, citing larger average order sizes that can distort the quarterly view.
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Filed via finance.yahoo.com