Business Model

Forgent designs and manufactures the gear that sits between the utility grid and a customer’s load — automatic transfer switches (ATS), low- and medium-voltage switchgear, multiple transformer classes (substation, padmount, PDU, VPI), and modular eHouses (prefab steel-enclosed substations that arrive on a truck and bolt into a slab). The product line is rounded out by aftermarket services: maintenance, testing, retrofits, commissioning. Customers are described as “technology, power, utility, and industrial” — shorthand for hyperscalers (Microsoft, AWS, Meta, Google), regulated utilities, and large industrial loads (refineries, semiconductor fabs, EV battery plants).

The economics are typical of industrial-equipment makers: capital-intensive manufacturing, multi-quarter order backlogs, gross margins likely in the 20–35% range depending on product mix (services usually carry higher margins than commodity switchgear), and free cash flow that lags revenue by the working-capital cycle.

Industry Position

The constraint on data-center growth today is not compute — it is power. Specifically:

Lead times on large transformers and medium-voltage switchgear have stretched to 1–3 years at incumbent suppliers (Eaton, Hitachi Energy, Siemens Energy). Order books extend into 2027.
Hyperscalers are buying entire substations — land, transformers, switchgear — to lock in physical delivery slots that would otherwise go to the next bidder.
eHouses compress site deployments from roughly 18 months to 6 because the electrical equipment is wired and commissioned in the factory, then trucked to site. Backlogs at modular specialists are now multi-year.

Forgent’s positioning is the fast alternative: a focused, data-center-centric supplier that can scale on demand without the legacy plant footprint of the incumbents. Whether that holds up depends on two things:

Execution at scale. Incumbents are pouring capex into expansion (Eaton ~$1B+ annually; Hubbell and Schneider similar). The window for pure capacity arbitrage will close.
Differentiation beyond speed. Once incumbents catch up, Forgent needs a structural edge — deeper hyperscaler integration, more standardized eHouse SKUs, denser aftermarket service network, or a technology niche (medium-voltage solid-state, immersion-cooled gear, etc.).

Segment estimates (model estimate — not from company disclosure)

Forgent is too young for granular segment reporting in public filings, so the table below is an analyst-style estimate based on the product line and customer mix described in the company’s summary — not from a 10-K. Treat as directional.

End market	Revenue %	Income %	Growth %	Notes
Hyperscale data centers	~55%	~60%	50–80%	Demand > supply; pricing power; concentrated customers
Power grid / utilities	~25%	~22%	8–12%	Long sales cycles, regulated capex
Industrial	~15%	~12%	5–10%	Energy-intensive (refineries, fabs, EV battery)
Aftermarket services	~5%	~6%	20–30%	High margin; grows with installed base

Key Watch Items

Customer concentration disclosure. A single hyperscaler at 30%+ of revenue is both a strength (recurring orders, large deals) and a single-customer-cliff risk.
Backlog and book-to-bill. Leading indicator for whether order intake keeps pace with capacity.
Gross margin trajectory. Capacity-constrained suppliers tend to expand margins; watch whether Forgent’s GM is rising with industry tailwinds or being squeezed by raw materials (copper, electrical steel) and freight.
Capex intensity. Building out manufacturing will pressure free cash flow even as revenue grows.
Disclosed end-market or segment splits. The estimates above are placeholders until the 10-K offers a real breakdown.

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