Forgent Power Solutions shares jumped about 10% Tuesday after the electrical-equipment maker reported a surge in data-center orders, finished fiscal 2026 with $3 billion of backlog and forecast another year of unusually rapid growth.
Fiscal fourth-quarter revenue reached $461.7 million, up 94% from a year earlier and comfortably above the roughly $430 million analysts had expected. Adjusted earnings came in around 25 cents a share, compared with a 24-cent consensus estimate.
The revenue result also exceeded Forgent’s own May forecast of $392 million to $432 million.
Adjusted EBITDA rose 163% to $112.7 million, slightly above management’s $100 million to $110 million guidance range, while adjusted EBITDA margin reached 24.4%.
The larger surprise came from what Forgent expects next.
Management guided for fiscal 2027 revenue of $2.4 billion to $2.6 billion, representing 76% growth at the midpoint, and adjusted EBITDA of $575 million to $625 million. Adjusted EPS is expected between $1.26 and $1.40. Wall Street had been looking for roughly $2.1 billion of revenue and about $1.14 of EPS before the report.
Forgent shares were trading around $31.60 late Tuesday morning, up more than 10% from Monday’s $28.64 close. The stock had fallen sharply in recent months after secondary offerings and post-IPO selling increased the available supply of shares, leaving expectations considerably lower heading into the report.
Orders Are Growing Much Faster Than Revenue
The most important number in the quarter was not revenue.
Forgent booked $1.50 billion of new orders during the three months ended June 30, nearly four times the year-earlier amount and more than three times the revenue it actually recognized during the quarter.
That produced a book-to-bill ratio of 3.3 times, up from 2.3 times in the previous quarter.
Backlog consequently increased to a record $3.0 billion, 256% above the prior year and roughly 53% higher than at the end of March.
The order growth gives Forgent considerably more visibility into fiscal 2027 than it had even three months ago.
At the end of March, backlog stood at $1.98 billion. Forgent subsequently added roughly $1 billion during a single quarter despite simultaneously shipping almost $462 million of product.
Data centers remain the largest driver.
They accounted for approximately 59% of fiscal 2026 revenue, with grid customers contributing 21% and industrial markets about 10%. One customer accounted for roughly 11% of annual revenue, introducing some concentration risk but leaving the broader customer base relatively diversified.
The company manufactures transformers, switchgear, power distribution systems and modular electrical infrastructure used to move electricity through data centers and other large industrial facilities.
That has placed Forgent directly in the path of the current data-center construction cycle, where access to electrical equipment has become one of the constraints on adding computing capacity.
Powertrain Products Are Becoming a Bigger Business
One of Forgent’s fastest-growing categories is Powertrain Solutions, which packages electrical infrastructure into modular systems such as e-Houses and Powerskids.
Powertrain revenue increased 259% during fiscal 2026 and represented nearly one-third of fourth-quarter sales.
Demand has grown quickly enough that Forgent is expanding capacity again almost immediately after completing a much larger manufacturing buildout.
The company will spend another $35 million at its Tijuana campus to increase Powertrain production capacity by more than 50%. The project is expected to begin operating during the fourth quarter of fiscal 2027.
Once completed, management estimates Forgent will have enough manufacturing capacity to support roughly $5.8 billion of annual revenue, up from approximately $5 billion under its existing footprint.
That capacity is considerably larger than the $1.42 billion of revenue Forgent generated during fiscal 2026.
It also underscores the assumption embedded in the company’s expansion strategy: that the current wave of data-center and power-infrastructure investment remains strong long enough for Forgent to fill those factories.
Margins Are Improving as New Plants Fill Up
The quarter also showed why volume matters so much to Forgent’s earnings.
Full-year revenue increased 89% to $1.42 billion, while adjusted EBITDA rose 91% to $322.9 million.
Profitability accelerated further during the fourth quarter.
Adjusted EBITDA margin reached 24.4%, roughly two percentage points higher than the previous quarter. Management said newer manufacturing campuses moved closer to their targeted production rates while revenue grew faster than operating costs.
Fiscal 2027 guidance implies more operating leverage.
At the midpoint, Forgent expects revenue to increase 76%, but adjusted EBITDA to rise about 86%. The implied adjusted EBITDA margin would be roughly 24%, compared with 22.7% for fiscal 2026.
Management expects revenue and adjusted EBITDA to increase sequentially throughout the coming fiscal year, although it cautioned that the first quarter will carry heavier personnel and facility costs as the company prepares for later production ramps.
Cash Flow Is the Important Counterweight
Rapid growth is still consuming substantial cash.
Forgent generated $109.1 million of operating cash flow during fiscal 2026 but spent approximately $115.9 million on capital expenditures.
On that simple operating-cash-flow-minus-capex basis, the company remained slightly negative for the year despite sharply higher earnings.
Working capital is part of the reason. Forgent has been increasing inventory and receivables ahead of substantially higher expected production volumes.
The company ended June with about $121.7 million of cash, cash equivalents and restricted cash and roughly $582 million of total debt. Most of its borrowing is tied to variable-rate credit facilities, making financing costs another item to watch if interest rates remain elevated.
Capital spending should moderate after the current capacity program winds down, although the new Tijuana project adds another $35 million of investment.
Backlog Is Strong, but It Is Not Guaranteed Revenue
The $3 billion backlog gives Forgent unusually strong visibility, but it should not be treated as $3 billion of guaranteed sales.
The company states in its annual filing that customers can delay or cancel projects and that orders may ultimately generate different margins or revenue timing than originally expected.
That risk matters in data centers, where extremely large construction projects can shift between quarters as power availability, financing, permitting or customer schedules change.
For now, order activity is moving in the opposite direction.
Fourth-quarter bookings alone exceeded Forgent’s entire $1.42 billion of fiscal 2026 revenue, and management is expanding manufacturing capacity again before its previous expansion has fully matured.
Tuesday’s results therefore shift the immediate investment debate.
Demand is no longer the main issue Forgent needs to prove. The $3 billion backlog and $2.4 billion to $2.6 billion revenue forecast already provide substantial evidence of it.
The next test is execution: converting those orders into shipments while maintaining margins, controlling working capital and turning rapid earnings growth into durable free cash flow.
Fiscal first-quarter results will offer the first read on that transition. Management has already warned that spending will be heavier early in the year, making the pace of the production ramp—and whether backlog continues growing while Forgent works through it—the most important numbers to watch next.