Forgent Power Solutions posts record orders and lifts capacity as FY27 outlook surges

Forgent is a newly public, engineered-to-order electrical distribution manufacturer aimed at data centers, the power grid and energy-intensive industry; the strategic task is turning strong data-center and grid demand into more production capacity. Demand for customized electrical equipment has been rising as customers face tighter power-availability, uptime and integration requirements.

The quarter materially beat the company’s own last published targets. Revenue, adjusted EBITDA and adjusted net income all exceeded the high end of the May guidance, with Q4 revenue of $462 million versus guidance of $392–432 million and adjusted EBITDA of $113 million versus $100–110 million. The beat was not just accounting noise: revenue rose 94% year over year while adjusted EBITDA margin expanded to 24.4% from 18.0%. 〔0〕

*The filing gives the Q4 year-over-year cash-flow change, not a standalone prior-year Q4 figure. Filing figures from the Financial Highlights, Income Statement, Adjusted EBITDA reconciliation, Adjusted EPS reconciliation and Cash Flow statement.

The demand signal is stronger than the earnings beat alone. Fourth-quarter bookings reached a company record of $1.5 billion, lifting book-to-bill to 3.3x and backlog to $3.0 billion. That makes the FY27 growth reset more credible than a guidance increase based only on management optimism, although backlog still depends on production timing and conversion into revenue.

FY27 is being reset to a much larger operating footprint. Initial guidance calls for $2.4–2.6 billion of revenue, $575–625 million of adjusted EBITDA and $1.26–1.40 of adjusted EPS, implying roughly 69%–83% revenue growth and 78%–94% adjusted EBITDA growth from FY26 midpoint-to-midpoint comparisons. The company also expects revenue and adjusted EBITDA to rise sequentially through FY27, but warned that Q1 will carry meaningful personnel and facility investment before later production ramps.

Capacity is becoming the key execution test. Forgent is adding $35 million for a Tijuana expansion expected online in Q4 FY27, increasing Powertrain Solutions capacity by more than 50% and total revenue capacity to approximately $5.8 billion. This advances the business story because Powertrain Solutions revenue grew 259% in FY26 and now represents nearly one-third of Q4 revenue, but it also confirms that the company must keep spending ahead of demand to avoid capacity becoming the constraint.

Cash generation improved, but growth is consuming substantial working capital and capital spending. FY26 operating cash flow was $109.1 million, while capital expenditures were $115.9 million; receivables and inventory also increased sharply as production ramped. The balance sheet ended with $121.7 million of cash and restricted cash, alongside $582.2 million of total debt and a $338.9 million tax receivable agreement liability. Those figures do not undermine the quarter, but they mean the growth plan is not yet self-funding on a free-cash-flow basis.

Bottom line: This is a genuine business upgrade, not merely a favorable presentation: Forgent beat its own targets, entered FY27 with unusually strong order coverage and raised the scale of its capacity plan. The main question shifts from demand discovery to executing the production ramp without losing margin or cash control.