Forgent Power Solutions (FPS) Q2 2026 earnings summary

Executive summary

• Q2 2026 revenues rose 69% year-over-year to $296 million, driven by strong demand and market share gains in data center, grid, and industrial segments, with organic growth and new facilities ramping up.

• Bookings/orders surged 268% year-over-year, with backlog doubling to $1.5 billion, up 45% sequentially, reflecting rapid demand acceleration.

• Accelerated hiring and capacity expansion underway, with manufacturing headcount up 80% year-over-year to meet demand and support growth.

• Adjusted EBITDA increased 51% to $60 million, margin at 20.4%, impacted by under-absorbed labor and overhead from rapid expansion.

• Net loss for the quarter was $0.1 million, mainly due to a $10 million write-off of deferred financing costs from refinancing activities.

Financial highlights

• Q2 revenues: $296 million (+69% YoY), all organic growth.

• Adjusted EBITDA: $60 million (+51% YoY), margin 20.4%.

• Adjusted Net Income: $36 million (+66% YoY).

• Gross profit for Q2: $101.8 million, up 60% year-over-year.

• Book-to-bill ratio at 2.6x, up from 1.6x a year ago.

Outlook and guidance

• FY2026 revenue guidance: $1.275–$1.325 billion (+73% YoY); Adjusted EBITDA: $300–$310 million (+80% YoY); Adjusted Net Income: $190–$200 million (+120% YoY).

• H2 2026 revenue guidance: $695–$745 million; margin expansion to 25% expected as new hires reach productivity.

• Majority of $1.5 billion backlog expected to convert to revenue within 12 months.

• Margins expected to expand sequentially in Q3 and Q4 as production volumes increase and startup costs roll off.

• Management anticipates higher operating expenses as investments in growth and public company infrastructure continue.