Forgent Power Solutions (FPS) Q4 2026 earnings summary

Executive summary

• Achieved record Q4 and FY26 results, with Q4 revenues up 94% to $462 million and full-year revenues up 89% to $1.42 billion, exceeding guidance.

• Adjusted EBITDA grew 163% in Q4 to $113 million and 91% for the year to $323 million, with margin expansion driven by operating leverage.

• Backlog reached $3 billion at year-end, up 256% year-over-year, providing strong visibility for fiscal 2027.

• Powertrain Solutions now represent 40% of backlog and nearly one-third of Q4 revenue, reflecting rapid growth in modular solutions.

• Expanded manufacturing capacity five-fold, adding over 1.8M sq. ft. and nearly doubling workforce to support growth.

Financial highlights

• Q4 adjusted net income increased 275% to $77 million; full-year adjusted net income rose 136% to $208 million.

• Q4 adjusted EBITDA margin expanded 200 basis points sequentially to 24.4%.

• Bookings in Q4 hit $1.5 billion, up 375% year-over-year, with a record book-to-bill ratio of 3.3x.

• Operating cash flow increased to $109 million in FY26.

• Q4 net income margin reached 14.3%, up 800 basis points quarter-over-quarter.

Outlook and guidance

• FY27 revenue guidance: $2.4–$2.6 billion (76% growth at midpoint); adjusted EBITDA: $575–$625 million (86% growth at midpoint); adjusted EPS: $1.26–$1.40 (95% growth at midpoint).

• Backlog covers over 90% of FY27 revenue guidance; additional capacity and hiring planned in Q1.

• Q1 2027 guidance: revenue $445–$465 million, adjusted EBITDA $90–$100 million; ~$10 million in one-time ramp costs expected.

• Expect margin expansion of over 100 basis points year-over-year, driven by operating leverage.

• Capital expenditures expected to decline to 3% of sales in 2027, with FY27 capex projected at $85–$90 million.