Forgent Power CEO Sees AI Lab, Hyperscaler Orders Building Through 2028 – Firm Raises Fiscal 2027 Earnings Guidance

• The company raised its fiscal 2027 revenue forecast to $2.45 billion to $2.65 billion from $2.40 billion to $2.60 billion.
• Forgent highlighted ongoing sales discussions with two AI labs and three hyperscalers.
• Q1 adjusted EPS of $0.24 exceeded consensus estimates of $0.20.

Forgent Power Solutions (FPS) was on investors’ radar on Thursday after the company raised its fiscal 2027 earnings outlook, with CEO Gary Niederpruem highlighting growing demand from AI companies and hyperscalers.

The electrical equipment manufacturer raised its fiscal 2027 revenue forecast to $2.45 billion to $2.65 billion from $2.40 billion to $2.60 billion, and increased its adjusted earnings per share (EPS) outlook to $1.30 to $1.44 from $1.26 to $1.40.

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Forgent attributed its updated outlook to increased production capacity and an order backlog that fully covers its fiscal 2027 revenue forecast.

FPS In Discussion With 2 AI Labs, 3 Hyperscalers

Niederpruem said the company is gaining traction with several companies through its direct sales strategy. “We are also gaining meaningful traction with multiple frontier AI labs and hyperscalers through our direct sales strategy, and we expect orders from these important customers to build through fiscal 2027 and into fiscal 2028.”

In its latest earnings presentation, Forgent highlighted ongoing sales discussions with two AI labs and three hyperscalers.

Forgent Posts Biggest Ever Quarterly Revenue  

Forgent reported a 69% increase in first-quarter (Q1) revenue to $479 million, beating Wall Street’s estimate of about $462 million, according to Fiscal.ai. This was the company’s highest quarterly revenue in history. Adjusted EPS of $0.24 also exceeded consensus estimates of $0.20.

However, the cost of revenue jumped 73% to $320.3 million, driven by an increase in material and labor costs related to higher sales volumes and an increase in fixed overhead costs.

FPS shares were down more than 7% in pre-market trading.

Retail Turns Bullish On FPS

Despite the pre-market slump, retail sentiment for FPS on Stocktwits improved to ‘bullish’ from ‘bearish’ over the past 24 hours, amid ‘high’ message volumes.

One user believes the stock is being dragged down by the entire AI sector, even though the fundamentals aren’t broken.

Another user noted that the broader AI sentiment is poor and FPS’s concentration of business is heavily tied to the sector.

FPS shares have declined more than 15% since its February listing.

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