Forgent Power Solutions Q4FY26 Results: Revenue up 94% YoY to $461.67 million
- Revenue rose 94% YoY to $461.67 million, beating the $429.94 million estimate
- Adjusted EPS hit 25 cents, surpassing the 24 cent consensus estimate
- Bookings surged 375% YoY to $1.5 billion, resulting in a 3.3x book-to-bill ratio
- Adjusted EBITDA margin expanded 200 bps to 24.4%, reaching $113 million
- Full-year EPS guidance raised to $1.26-$1.40, above the $1.14 estimate
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Forgent Power Solutions, Inc. (NYSE: FPS) shares rose 8.10% to $33.90 on Wednesday after the company reported record fourth quarter and full year 2026 results. The capital goods firm posted a 94% year-over-year revenue jump, driven by strong demand for its powertrain testing solutions.
Q4 Financial Highlights
Forgent Power Solutions delivered a significant earnings beat in the fourth quarter. Adjusted earnings per share reached 25 cents, surpassing the consensus estimate of 24 cents. Total revenue for the quarter stood at $461.67 million, exceeding the market expectation of $429.94 million.
Operational profitability expanded sharply alongside top-line growth. Adjusted EBITDA rose 163% year-over-year to $113 million. This increase pushed the adjusted EBITDA margin up by roughly 200 basis points to 24.4%. Both revenue and adjusted net income exceeded the high end of the company’s guidance issued in May.
| Metric | Q4 Actual | Consensus Estimate | YoY Change |
|---|---|---|---|
| Revenue | $461.67 million | $429.94 million | +94% |
| Adj. EPS | 25 cents | 24 cents | N/A |
| Adj. EBITDA | $113 million | N/A | +163% |
| Adj. EBITDA Margin | 24.4% | N/A | +200 bps |
Order Inflow and Backlog Growth
The company’s order book momentum accelerated significantly during the period. Forgent recorded $1.5 billion in bookings for the fourth quarter, representing a 375% year-over-year increase. This inflow resulted in a book-to-bill ratio of 3.3x.
Total backlog reached $3 billion, up 256% year-over-year. CEO Gary Niederpruem noted that the quarterly bookings exceeded the company’s total revenue for the full fiscal year, highlighting strong product demand and market share gains.
What the Numbers Show
The divergence between current revenue conversion and future order inflow signals substantial near-term growth visibility. With Q4 bookings of $1.5 billion against quarterly revenue of $461.67 million, the company has secured orders equivalent to over three times its current run rate. This suggests that the $3 billion backlog provides a robust pipeline for revenue realization in subsequent quarters, reducing dependency on new customer acquisition for immediate growth.
Capacity Expansion and Guidance
Forgent announced a $35 million investment to expand manufacturing capacity at its Tijuana, Mexico campus. The expansion is expected to come online in the fourth quarter of fiscal 2027 and will increase total revenue capacity to approximately $5.8 billion.
Looking ahead, the company provided full-year adjusted earnings guidance of $1.26 to $1.40 per share, which is above the analyst estimate of $1.14 per share.
Analyst Reaction
Following the results, TD Cowen analyst Michael Elias maintained a Buy rating on Forgent Power Solutions. He raised the price target from $73 to $76, citing the strength of the quarterly performance.
How will the $35 million capacity expansion in Tijuana impact Forgent's cost structure and margins once it comes online in Q4 FY2027?
Given the 3.3x book-to-bill ratio, what operational risks does Forgent face in converting the $3 billion backlog into revenue without straining supply chains?
Will the current surge in demand for powertrain testing solutions sustain through FY2027, or is there a risk of order normalization as EV adoption rates fluctuate?
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