Forgent Power Solutions, Inc. Class A

Greetings, and welcome to the Fortunate Power Solutions Fiscal Second Quarter 2026 Earnings Conference Call. At this time, all participants are in a listen-only mode. A question-and-answer session will follow the formal presentation. If anyone should require operator assistance during the conference, press star zero on your telephone keypad. As a reminder, this conference is being recorded. It is now my pleasure to introduce Kate Africk, Vice President of Investor Relations. Thank you. You may begin.

Thank you, Operator, and thank you, everyone, for joining us today for Forgent Power Solutions' second fiscal quarter 2026 earnings call. With me today are Gary Niederperum, our Chief Executive Officer, and Ryan Fiedler, our Chief Financial Officer. On this call, management will be making forward-looking statements based on current expectations and assumptions, which are subject to risks and uncertainties. Actual results could differ materially, from our forward-looking statements if any of our key assumptions are incorrect because of various factors, including those discussed in today's earnings release and during this conference call and in our latest filings with the Securities and Exchange Commission, each of which can be found on our website. Today's presentation also includes references to non-GAAP financial measures, including adjusted EBITDA, adjusted EBITDA margin, and adjusted net income. you should refer to the information contained in the company's earnings release and presentation for definitional information and reconciliation of historical non-GAAP measures to the comparable GAAP financial measures. And with that, I will turn the call over to Gary.

Thank you, Kate, and good morning, everyone. Given that this is our first earnings call as a public company and that we have many new investors listening in, I'll begin with a brief introduction to Forgent and what makes us unique before I turn it over to Ryan to discuss our second quarter 2026 results. Then, I'll pick it back up to provide an update on our markets, growth initiatives, and operational dynamics, and Ryan will wrap up with our fiscal 2026 guidance. Let's turn to slide five. Forgent is a leading designer and manufacturer of electrical distribution equipment used in data centers, the power grid, and energy intensive industrial facilities. The category encompasses all of the equipment that is needed to deliver electricity safely and efficiently from the power plant all the way through to the end device. Electrical distribution equipment is not an optional purchase. Customers have to buy it, and because it has a high consequence of failure, reliability and safety are more important to the customer than price. The market for electrical distribution equipment is very large and includes everything from power plants to your home. But we focus on the most technically demanding segments of the market. Said differently, We make the equipment for the highest value applications that are the hardest to do. What are some of those? It's data centers, semiconductor fabs, battery energy storage projects, all areas that are seeing tremendous investment now. Those applications are hard, and only a few companies can do them because they require a significant amount of upfront engineering work. You also have to comply with multiple standards, and therefore, making this equipment requires specialized labor. Because of the safety aspect, these have to be zero defect products. And oftentimes, customers require them to be made in the US, either because of cybersecurity or to be eligible for incentives, which is a big benefit to us. When you combine these mission-critical products targeted at technically demanding applications that only a few companies can do, you get the financial profile that you see on this page. Over the last 12 months, we've generated a billion dollars of revenue, 212 million of adjusted EBITDA, which is a 21% margin, and we had a $1.5 billion backlog at the end of December 31st, 2025. Now, On slide six, there are three things that really differentiate our business from other companies in the industry. The first is our market focus. Approximately 85% of our revenue comes from three end markets, data centers, grid, and industrial. Each has seen a step change in infrastructure investment. Data centers are being fueled by cloud and AI demand, the grid by modernization and replacement of aging assets alongside new generation to meet load growth, and industrial by the reshoring of manufacturing driven by trade policy and geopolitics. We believe this focus exposure positions us to grow materially faster than the broader electrical equipment industry, while our diversification across all three end markets gives us multiple ways to win. The second thing that differentiates us is our combination of product breadth and manufacturing depth. We make everything our customers need in-house, and we have the capacity to meet their demand at scale. That means that we can take share from our competitors who can't deliver fast enough because they rely on third-party suppliers for key equipment categories or just don't have the capacity at all. The third thing that differentiates us is our focus on custom products. Approximately 90% of our revenue comes from engineer to order products. Engineer to order means products that are designed to a customer specification rather than built from a standard pre-config design. To put our focus on customization in context, our average batch count is 15. Batch count is how many units we manufacture per design. For most of our peers who focus on standard products, that number would be in the hundreds or even thousands. Focusing on custom products allows us to earn higher margins because customers are willing to pay more to get it their way. The result of our differentiated market focus, scaled manufacturing capacity, and customization capabilities is that we can grow faster than the overall market, take share from our competitors, and earn attractive margins. Each of those themes are reflected in our fiscal second quarter results, which Ryan will address next. Over to you, Ryan.