Forgent Q1 Revenue Jumps 69% to $479M, Raises FY27 Outlook

Forgent Power Solutions, Inc. (NYSE: FPS) reported fiscal first quarter 2027 revenue of $479 million on 12 November 2026, a 69% increase from $283 million a year earlier, and net income of $55 million, up 252%. The Dayton, Minnesota-based maker of engineered-to-order electrical distribution equipment said results exceeded the high end of its own guidance ranges and raised full-year fiscal 2027 revenue guidance to $2,450-$2,650 million.

Context — why this matters now

The quarter is the first since Forgent began scaling new manufacturing capacity, and management framed the beat as evidence that the ramp is converting into throughput. Revenue of $479 million was the highest quarterly figure in the company's history, according to the release. The prior-year quarter produced $283 million.

The comparison that matters most is against the company's own October communication. Forgent had already told investors that first quarter results would exceed the high end of its guidance for revenue and Adjusted EBITDA, citing stronger production ramp execution, higher throughput and better cost absorption. The 12 November release confirmed that signal with hard numbers rather than revising it.

The guidance raise is the second-order event. Full-year revenue guidance moved to $2,450-$2,650 million from a prior $2,400-$2,600 million. Adjusted EBITDA guidance moved to $587-$637 million from $575-$625 million. Adjusted EPS guidance moved to $1.30-$1.44 from $1.26-$1.40.

Management tied the raise directly to backlog. Chief Executive Officer Gary Niederpruem said backlog fully covers the fiscal 2027 guidance, and that demand from frontier AI labs and hyperscalers is building through fiscal 2027 and into fiscal 2028. That claim is the company's own expectation, not a booked order figure; Forgent did not disclose the dollar value of that pipeline or the names of those customers.

Macro context for the quarter is the data center construction cycle, which drives demand for the switchgear, transformers and powertrain equipment Forgent builds. The report does not cite rate levels, power prices or grid capital expenditure figures, so no external macro comparison is available from the release itself.

Data — what the numbers show

Metric	Q1 FY2027	Q1 FY2026	Change
Revenues	$478.6M	$283.3M	+69%
Net Income	$54.8M	$15.6M	+252%
Adjusted EBITDA	$104.9M	$65.1M	+61%
Diluted EPS	$0.18	N/A	N/A
Adjusted EPS	$0.24	N/A	N/A

The margin picture is mixed. Net income margin was 11.5% versus 5.5% a year earlier, but Adjusted EBITDA margin slipped to 21.9% from 23.0%. The company attributed the EBITDA margin level to higher throughput and better cost absorption, and described it as ahead of its own expectations, even though it sits below the prior-year rate.

Gross profit rose to $158.3 million from $98.0 million. Operating expenses climbed to $79.1 million from $66.8 million, with selling, general and administrative costs at $72.0 million versus $53.6 million. Equity-based compensation of $13.9 million was a large part of that increase, against $0.6 million a year earlier.

Cash flow from operations was $136.1 million, an improvement of $130 million year-over-year. Capital expenditures were $31.7 million. Inventory rose to $346.2 million from $249.8 million at 30 June 2026, and deferred revenue climbed to $423.3 million from $263.9 million, reflecting customer deposits and milestone payments.

Total assets reached $2,685.8 million, up from $2,230.8 million at 30 June 2026. Long-term debt, net of discount and deferred financing costs, was $575.3 million, essentially flat.

Analysis — what it means for markets / sectors / tickers

The read-through is to the data center supply chain. Forgent sells electrical distribution equipment into data centers, the power grid and energy-intensive industrial facilities, so its order commentary is a demand signal for the same construction cycle that drives transformer, switchgear and electrical component suppliers. The company's statement that it is gaining traction with frontier AI labs and hyperscalers points at AI training and inference buildout as a demand source, though Forgent gave no order values.

The counter-argument sits in the margin line. Adjusted EBITDA margin fell 110 basis points year-over-year even as revenue grew 69%, which means costs are scaling alongside revenue rather than behind it. Equity-based compensation, up sharply, and the working capital build in inventory both consume cash that would otherwise drop through. Management's stated next phase is performance optimization — standardizing processes, improving productivity, strengthening sourcing discipline — which is an admission that operating use has not yet arrived.

The balance sheet carries a second constraint. The payable pursuant to the Tax Receivable Agreement rose to $483.0 million from $338.9 million, a real future cash obligation tied to the company's structure. Non-controlling interests of $72.5 million also mean a portion of consolidated profit does not accrue to Class A holders; net income attributable to Forgent was $48.2 million against $54.8 million consolidated.

Positioning follows the guidance direction. A raise backed by backlog coverage tends to attract momentum flow into industrial and electrical equipment names levered to data center capex, while the margin compression invites scrutiny from investors who weight Adjusted EBITDA margin over revenue growth.

Outlook — what to watch next

Forgent's own targets are the primary catalyst set. Fiscal 2027 revenue of $2,450-$2,650 million implies 80% year-over-year growth at the midpoint, Adjusted EBITDA of $587-$637 million implies 90% growth at the midpoint, and Adjusted EPS of $1.30-$1.44 implies 101% growth at the midpoint. Those are company expectations, not commitments, and Forgent does not reconcile forward-looking non-GAAP measures to GAAP figures.

The company will host a conference call on 12 November 2026 at 11:00 a.m. Eastern Time, with a replay available for one year. Management commentary on margin trajectory and order conversion is the next datapoint. The report gives no date for the fiscal second quarter release.

Investors should watch the Adjusted EBITDA margin line for evidence that optimization is working, and deferred revenue for evidence that customer deposits keep funding the inventory build. The report names no price levels or technical thresholds for the stock.

Frequently Asked Questions

Why did Forgent's net income rise so much faster than revenue?

Net income grew 252% to $54.8 million while revenue rose 69%. The gap comes from gross profit rising to $158.3 million from $98.0 million, while operating expenses grew more slowly in absolute terms. Interest expense also fell to $9.8 million from $13.9 million. Depreciation and amortization within operating expenses dropped to $7.1 million from $13.2 million, which further widened the net income gain relative to revenue.

What does the guidance raise mean for Forgent's fiscal 2027 growth rate?

The company now expects revenue of $2,450-$2,650 million, Adjusted EBITDA of $587-$637 million and Adjusted EPS of $1.30-$1.44. At the midpoint, those figures represent 80%, 90% and 101% year-over-year growth respectively. The prior guidance was $2,400-$2,600 million in revenue, $575-$625 million in Adjusted EBITDA and $1.26-$1.40 in Adjusted EPS, so the raise is modest in dollar terms but confirms the direction.

Does Forgent pay a dividend or hold much debt?

The report shows no dividend declaration or payment in the quarter. Long-term debt, net of discount and deferred financing costs, stood at $575.3 million with a $6.0 million current portion, roughly flat versus 30 June 2026. The company made $1.5 million in debt payments during the quarter. Cash and cash equivalents rose to $199.9 million from $97.5 million, helped by a follow-on equity offering.

Bottom Line

Forgent beat its own first quarter guidance and raised full-year targets on backlog coverage, but falling Adjusted EBITDA margin shows operating use has not yet arrived.

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