Forgent Power shares fall 9.8% despite Q1 revenue beat

Forgent Power Solutions (FPS) shares fell 9.8% at 3:59 p.m. ET, from a $24.57 close, despite posting fiscal first-quarter 2027 revenue of $478.57 million, above the $466.99 million consensus. The company also raised its full-year outlook.

Adjusted EPS of 24 cents beat the 20-cent consensus. Revenue rose 69% from $283.27 million a year earlier.

Here's how the company did:

• Revenue: $478.57 million vs. $283.27 million a year earlier
• Adjusted EPS: 24 cents vs. 20 cents expected
• Net income: $54.82 million vs. $15.56 million a year earlier
• Adjusted EBITDA: $104.90 million vs. $65.10 million a year earlier

Net income rose 252% to $54.82 million. Adjusted EBITDA rose 61% to $104.90 million, a 21.9% margin, ahead of expectations. Higher gross profit drove the gains, partly offset by higher selling, general and administrative costs.

Gary Niederpruem, Chief Executive Officer, said: "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."

2027 guidance

Forgent now expects fiscal 2027 revenue of $2.45 billion to $2.65 billion, up from $2.40 billion to $2.60 billion.

Adjusted EBITDA is now forecast at $587 million to $637 million, from $575 million to $625 million, representing 90% growth at the midpoint.

Adjusted EPS is now expected at $1.30 to $1.44 per share, from $1.26 to $1.40 per share.

Cash flow

Operating cash flow was $136 million, up $130 million from a year earlier, and capital expenditures were $32 million.

First-quarter operating cash flow benefited from higher earnings and favorable timing of customer deposits and milestone payments. Working capital, primarily inventory, rose to support the production ramp.

Finance leadership

Amy Ard was promoted to chief financial officer. She previously served as Executive Vice President of Finance.