Forgent Reports Fiscal First Quarter 2027 Results Above High End of Guidance; Raises Full-Year Outlook on Strong Commercial and Operational Execution
Forgent Power Solutions, Inc. (FPS) filed an SEC Form 8-K — Results of Operations and Financial Condition. Exhibit 99.1 Forgent Reports Fiscal First Quarter 2027 Results Above High End of Guidance; Raises Full-Year Outlook on Strong Commercial and Operational Execution Fiscal First Quarter 2027 Highlights • Revenues of $479 million , an increase of 69% year-over-year • Net Income of $
How this was made
The 30-second read
Why it matters
The raised guidance may attract growth‑oriented investors and support a price advance, though execution risk remains.
Market read
First‑hand earnings and guidance raise from the company itself, providing fresh material for traders.
What to watch
Higher SG&A costs and inventory buildup could pressure margins despite revenue growth.
Forgent reports record fiscal Q1 2027 revenue of $478,566 thousand, up 69%, and raises full-year fiscal 2027 guidance
Revenue rose 69% year over year to $478,566 thousand and net income rose 252%. Adjusted EBITDA rose 61%, operating cash flow improved by $130 million year over year, and the company raised all three full-year fiscal 2027 guidance ranges. The company states that Q1 results exceeded the high end of its guidance ranges for revenues and Adjusted EBITDA.
Key metrics
shortened, hover for the filing’s print| Metric | Value | q/q | y/y |
|---|---|---|---|
| Revenues, three months ended Sep 30, 2026GAAP | $478.6M | – | 69% |
| Cost of revenues, three months ended Sep 30, 2026GAAP | $320.3M | – | – |
| Gross profit, three months ended Sep 30, 2026GAAP | $158.3M | – | – |
| Selling, general and administrative expenses, three months ended Sep 30, 2026GAAP | $71.97M | – | – |
| Depreciation and amortization (operating expense line), three months ended Sep 30, 2026GAAP | $7.13M | – | – |
| Total operating expenses, three months ended Sep 30, 2026GAAP | $79.10M | – | – |
| Income from operations, three months ended Sep 30, 2026GAAP | $79.18M | – | – |
| Interest expense, three months ended Sep 30, 2026GAAP | −$9.83M | – | – |
| Income tax expense, three months ended Sep 30, 2026GAAP | −$15.34M | – | – |
| Net income, three months ended Sep 30, 2026GAAP | $54.82M | – | 252% |
| Net income margin, three months ended Sep 30, 2026GAAP | 11.5% | – | – |
| Net income attributable to Forgent Power Solutions, Inc., three months ended Sep 30, 2026GAAP | $48.24M | – | – |
| Diluted EPS, three months ended Sep 30, 2026GAAP | $0.18 | – | – |
| Basic EPS, three months ended Sep 30, 2026GAAP | $0.18 | – | – |
| Adjusted EBITDA, three months ended Sep 30, 2026non-GAAP | $104.9M | – | 61% |
| Adjusted EBITDA margin, three months ended Sep 30, 2026non-GAAP | 21.9% | – | – |
| Adjusted EPS, three months ended Sep 30, 2026non-GAAP | $0.24 | – | – |
| Adjusted Net Income, three months ended Sep 30, 2026non-GAAP | $72.00M | – | – |
| Net cash provided by operating activities, three months ended Sep 30, 2026GAAP | $136.1M | – | $130 million increase |
| Purchases of property and equipment (capital expenditures), three months ended Sep 30, 2026GAAP | $31.71M | – | – |
| Total assets, as of Sep 30, 2026GAAP | $2.69B | – | – |
| Total stockholders' equity, as of Sep 30, 2026GAAP | $782.9M | – | – |
Amounts quoted below without a unit are in thousands, as in the filing’s tables. Per-share figures are as printed.
Fiscal 2027 (full year, updated) outlook
- Revenue$2,450 - $2,650 million
- NotePrior revenue range: $2,400 - $2,600 million
- NoteAdjusted EBITDA (non-GAAP): $587 - $637 million (prior $575 - $625 million)
- NoteAdjusted EPS (non-GAAP): $1.30 - $1.44 (prior $1.26 - $1.40)
- NoteRevenue range described as representing 80% YoY growth at the midpoint
- NoteAdjusted EBITDA range described as representing 90% YoY growth at the midpoint
- NoteAdjusted EPS range described as representing 101% YoY growth at the midpoint
Capital returns
- Proceeds from issuance of Class A common stock in a follow-on offering, net of underwriting discounts and commissions: $695,409 thousand
- Purchase of Opco LLC Interests from existing shareholders with proceeds from follow-on offering: $(695,409) thousand
- Distribution to member: nil in the quarter (shown as a dash); $(1,440) thousand in the prior-year quarter
- No dividends or share repurchases are reported in the release
What drove it
- Company's explanation: Net Income increased primarily due to higher gross profit, partially offset by higher selling, general and administrative costs.
- Company's explanation: Adjusted EBITDA increased primarily due to higher gross profit, partially offset by higher selling, general and administrative costs.
- Company's explanation: Adjusted EBITDA margin of 21.9% was ahead of the Company's expectations due to higher throughput and better cost absorption.
- Company's explanation: first quarter results exceeded the high end of guidance ranges for revenues and Adjusted EBITDA, as strong production ramp execution drove higher throughput and better cost absorption.
- Company's explanation: first quarter cash flow from operations benefited from higher earnings and favorable timing of customer deposits and milestone payments.
- Company's explanation: the Company continued planned investment in working capital, primarily inventory, to support the production ramp.
- Company's statement: backlog fully covers fiscal 2027 guidance, which the Company cites as a basis for raising the outlook.
- Company's statement: the Company is gaining traction with multiple frontier AI labs and hyperscalers through its direct sales strategy and expects orders from these customers to build through fiscal 2027 and into fiscal 2028.
Concerns
- Inventory rose to $346,218 thousand from $249,817 thousand, and the operating cash flow statement shows an inventory outflow of $(98,801) thousand in the quarter.
- Accounts receivable rose to $380,161 thousand from $329,628 thousand, with a $(51,208) thousand outflow in operating cash flow.
- Quarterly operating cash flow of $136,115 thousand includes a $159,408 thousand inflow from deferred revenue, and the Company states this partly reflects favorable timing of customer deposits and milestone payments.
- Payable under the Tax Receivable Agreement increased to $483,027 thousand from $338,925 thousand.
- Deferred tax assets increased to $465,152 thousand from $280,971 thousand.
- Income tax expense was $(15,336) thousand, against $(2,934) thousand in the prior-year quarter.
- Equity-based compensation was $13,884 thousand, against $560 thousand in the prior-year quarter, and is added back in Adjusted EBITDA.
- The Company describes its next phase as converting expanded scale into operating leverage and states that Adjusted EBITDA margin of 21.9% compares with 23.0% in the prior-year quarter as printed.
What to watch
- Conversion of the Q1 revenue and backlog into the raised fiscal 2027 ranges: revenues $2,450 - $2,650 million and Adjusted EBITDA $587 - $637 million.
- Whether inventory and receivables growth converts into operating cash flow as the production ramp continues.
- Adjusted EBITDA margin trajectory, given the Company's stated aim of meaningful margin expansion over the next several years.
- Order flow from frontier AI labs and hyperscalers that the Company expects to build through fiscal 2027 and into fiscal 2028.
- Growth in selling, general and administrative expenses relative to gross profit.
- Tax Receivable Agreement payable and deferred tax asset balances.
Balance sheet and cash flow
- Cash and cash equivalents: $199,916 thousand at Sep 30, 2026 versus $97,477 thousand at June 30, 2026
- Cash, cash equivalents and restricted cash at end of period: $222,779 thousand versus $81,371 thousand in the prior-year quarter
- Accounts receivable, net: $380,161 thousand at Sep 30, 2026 versus $329,628 thousand at June 30, 2026
- Inventory, net: $346,218 thousand at Sep 30, 2026 versus $249,817 thousand at June 30, 2026
- Deferred revenue: $423,267 thousand at Sep 30, 2026 versus $263,859 thousand at June 30, 2026
- Long-term debt, current portion: $6,000 thousand at Sep 30, 2026 and $6,000 thousand at June 30, 2026
- Long-term debt, net of discount and deferred financing costs, less current portion: $575,340 thousand at Sep 30, 2026 versus $576,175 thousand at June 30, 2026
- Payable pursuant to the Tax Receivable Agreement: $483,027 thousand at Sep 30, 2026 versus $338,925 thousand at June 30, 2026
- Deferred tax assets: $465,152 thousand at Sep 30, 2026 versus $280,971 thousand at June 30, 2026
- Net cash used in investing activities: $(31,706) thousand versus $(29,889) thousand in the prior-year quarter
- Net cash used in financing activities: $(3,343) thousand versus $(5,997) thousand in the prior-year quarter
- Operating cash flow components in the quarter: inventory change $(98,801) thousand, accounts receivable change $(51,208) thousand, deferred revenue change $159,408 thousand (prior-year quarter: $(27,487) thousand, $(29,005) thousand and $(5,898) thousand)
- Equity-based compensation add-back: $13,884 thousand versus $560 thousand in the prior-year quarter
Analysis
Forgent reported fiscal first quarter 2027 revenues of $478,566 thousand, against $283,274 thousand in the prior-year quarter, a 69% increase that the release describes as the highest quarterly revenue in the Company's history. Net income was $54,823 thousand, up 252% from $15,556 thousand, and net income margin was 11.5% against 5.5%. Adjusted EBITDA was $104,896 thousand, up 61% from $65,100 thousand, with an Adjusted EBITDA margin of 21.9% against 23.0% in the prior-year quarter. The company states that first quarter results exceeded the high end of its guidance ranges for revenues and Adjusted EBITDA.
On the income statement, gross profit rose to $158,279 thousand from $97,952 thousand, while selling, general and administrative expenses rose to $71,965 thousand from $53,583 thousand. Depreciation and amortization in operating expenses fell to $7,132 thousand from $13,206 thousand, and income from operations reached $79,182 thousand against $31,163 thousand. Interest expense was $(9,829) thousand against $(13,873) thousand, and income tax expense was $(15,336) thousand against $(2,934) thousand. Diluted and basic EPS were each $0.18, and Adjusted EPS was $0.24. The release prints no prior-year GAAP or Adjusted EPS, because the period preceded the IPO and reorganization.
Cash generation improved. Operating cash flow was $136,115 thousand against $5,935 thousand, and the company states the improvement reflects higher earnings and favorable timing of customer deposits and milestone payments, alongside planned working capital investment, primarily inventory, to support the production ramp. Capital expenditures were $31,706 thousand, and the company completed a follow-on offering with $695,409 thousand of net proceeds, which were used to purchase Opco LLC Interests from existing shareholders. Inventory, receivables, deferred revenue and the Tax Receivable Agreement payable all increased on the balance sheet, and total assets rose to $2,685,839 thousand from $2,230,765 thousand at June 30, 2026.
Guidance was raised across all three metrics. Fiscal 2027 revenue is now $2,450 to $2,650 million against a prior $2,400 to $2,600 million, Adjusted EBITDA is $587 to $637 million against $575 to $625 million, and Adjusted EPS is $1.30 to $1.44 against $1.26 to $1.40. The company ties the raise to backlog that it says fully covers the fiscal 2027 guidance and to expected orders from frontier AI labs and hyperscalers. Management also says its focus is shifting to operating leverage, productivity and margin expansion over the next several years. The release does not provide a quarterly guide, a free cash flow figure or a segment breakdown, so the reader will need to track the next quarter for the conversion of backlog and the path of margins.
Management, verbatim
Based on our strong first quarter commercial and operational execution, together with backlog that fully covers our fiscal 2027 guidance, we are raising our full-year outlook,
Gary Niederpruem, Chief Executive Officer
With much of our new manufacturing capacity now online, we are increasing our focus on performance optimization.
Gary Niederpruem, Chief Executive Officer
Having been part of Forgent's leadership from the beginning, I am incredibly honored to step into this role at such an important point in the Company's evolution,
Amy Ard, Chief Financial Officer
Not in the filing
stated, not guessed- Prior-year Diluted EPS, Basic EPS and Adjusted EPS: the release prints N/A for these periods.
- Prior-year Net income margin change, Adjusted EBITDA margin change and any year-over-year percentage change for Net income attributable to Forgent Power Solutions, Inc.: not printed.
- Prior-year Adjusted Net Income change: not printed.
- Prior-quarter (June 30, 2026 quarter) income statement figures: not printed; only the June 30, 2026 balance sheet is shown.
- Segment or product-line revenue breakdown: not reported.
- Free cash flow: not reported as a figure; only operating cash flow and capital expenditures are printed.
- Gross margin percentage: not printed as a figure.
- Quarterly guidance for the fiscal second quarter: not provided.
- Prior-year, prior-quarter and year-over-year changes for cash and cash equivalents: not in the income-statement table format; balance sheet comparison is to June 30, 2026 only.
- Vs prior guidance comparison: the prior guidance is full-year fiscal 2027, while the reported actuals are for the first quarter, so no like-for-like verdict is given.
- Market reaction and analyst consensus estimates: not included in the filing and not provided.
Written by an AI language model from the company’s SEC earnings filing (Form 8-K Item 2.02, or Form 6-K for a foreign private issuer). Every figure is checked against the filing text, and a metric the filing does not print, or whose value, prior period and change do not add up, is dropped from the metrics. The model can still misread a table, in the metrics or in the text, so check a number in the filing before you rely on it. Consensus estimates, price targets and share-price reactions are not shown because they are not in the filing. AI-generated research, not investment advice.
Background
Forgent Power Solutions (NYSE: FPS) disclosed its fiscal Q1 2027 results, showing 69% YoY revenue growth and a 252% jump in net income, and subsequently updated its FY2027 guidance upward.
Ticker impact
Forgent Power Solutions reported Q1 FY2027 results above the high end of guidance and raised full‑year revenue and adjusted EBITDA outlook.
likely upward pressure as investors price in higher revenue and EBITDA expectations
The company beat its own guidance and increased its FY2027 revenue target to $2.45‑$2.65 B, which typically supports a price rally.
Market effects
Positive for data‑center power‑distribution equipment sector, may lift peers.
U.S. industrial and technology investors may increase exposure to hardware infrastructure stocks.
Limited to markets tracking U.S. industrial growth and AI‑related infrastructure demand.
Counterpoint
If the raised outlook is already priced in, the stock could face short‑term profit‑taking.
Key entities
- ExecutiveGary Niederpruem
CEO of Forgent Power Solutions, quoted on the raised outlook.
- ExecutiveAmy Ard
New CFO, highlighted focus on margin expansion.
