SPX Technologies, Inc. (SPXC) | The Buildout — AI Infrastructure
The Verdict
SPX Technologies sells the thermal and air-movement layer of the data center. Its HVAC segment engineers, designs, manufactures, installs, and services package and process cooling products and engineered air movement and handling solutions — cooling towers, large engineered cooling units, highly engineered aluminum dampers, and custom air handling — for industrial, institutional, and commercial markets, with data center and power generation named inside the segment's own description. It does not sell chips, networking, power distribution, or in-row liquid-cooling units; it sits one step removed from AI compute. A second segment, Detection and Measurement, makes underground pipe and cable locators, inspection and rehabilitation equipment, robotic systems, transportation systems, communication technologies, and aids to navigation.
| Market Cap | — |
| Revenue (TTM) | $2.5B |
| Revenue Growth | +20.6% |
| EBITDA Margin (TTM) | 21.6% |
| Net Debt | $448M |
| Earnings Beats | 7 of 7 |
| P/E (TTM) | — |
| EV/EBITDA (TTM) | — |
What We Like
- Data center revenue is guided to $430M for FY2026, about 115% growth, raised twice in two quarters from the $300M plan set at the start of the year.
- Total data center capacity was raised to $1.1B once at full production, up about 47% from roughly $750M, on better throughput from capacity already in place.
- HVAC backlog was $919M, up 59% organically YoY, after $755M (+38% organic) the prior quarter. Q2 HVAC book-to-bill was about 1.4x.
- Adjusted EPS guidance was raised $0.45 to an $8.40 midpoint, the second consecutive raise. Implied adjusted EBITDA growth moved from 21% to 27%.
- Thermolec, acquired in January 2026, adds about $75M of annual revenue, roughly $5-6M of 2026 accretion, and a margin profile management puts in the low 40s for segment income.
What We’re Watching
- HVAC segment margin fell 260 bps YoY in Q2 — net tariffs, startup costs, and a tough prior-year comp each about 80 bps, plus about 50 bps of inflation. Management says the full-year HVAC margin raise came only from Thermolec; the balance of the forecast is unchanged.
- D&M revenue framing softened to 'relatively flattish' for 2026, and D&M backlog fell YoY to $312M. Q2's 26.5% D&M margin included a $15M high-margin project pulled from Q3 into Q2, and the company frames a structural level around 25%.
- Long-term agreements with several data center customers are not purchase orders; management says capacity frees up if POs are not placed within a defined window.
- Data center revenue is disclosed in dollars but never as a share of total revenue. The rest of HVAC grows mid-single-digit, and management agreed with an analyst's 5-6% ex-data-center characterization.
The thesis moved in one direction this quarter: capacity, revenue, backlog, and book-to-bill all reset higher at the same time, and management attributed the capacity raise to lean, productivity, and flow work on existing lines rather than a single new order. The softening is concentrated in one segment's growth framing and in near-term HVAC margin mix. Against that, data center revenue is disclosed only in dollars, never as a share of the total, and management declined to guide 2027. The open question is whether the $1.1B capacity ceiling is durable and how fast it converts to revenue as Olathe, TAMCO, and Madison ramp.
Earnings Beat
Q2 FY2026 (quarter ended 2026-06-27): total company revenue rose 23% YoY, with 17% organic growth, and consolidated segment income was $167.1M, up 23%, at a flat 24.6% segment margin. Adjusted EPS was $2.02, up 22%, and adjusted EBITDA rose 20%. HVAC revenue grew 27.6% (18.9% organic) while segment margin fell 260 bps; D&M revenue rose 13% with segment income up 43% and segment margin up 610 bps.
| Metric | Q2 FY2026 | Q1 FY2026 | Q2 FY2025 | YoY |
|---|---|---|---|---|
| Revenue | $679M | $567M | $552M | +22.9% |
| Gross margin | 40.2% | 40.7% | 41.4% | -120bps |
| EBITDA | $152M | $120M | $119M | +27.9% |
| EPS | $1.55 | $1.19 | $1.10 | +40.4% |
| HVAC book-to-bill | ~1.4x | n/a | n/a | — |
| HVAC backlog | $919M | $755M | n/a | +59% organic |
Organically, we continue to advance our capacity expansion initiatives and now expect $1.1 billion of total data center capacity once at full production up from our previous expectation of approximately $750 million.— Gene Lowe, President and CEO, 2026-07-30
Management tone: Management's tone stayed confident and specific across the two most recent calls, raising guidance twice and tying the raises to named operational levers. Two shifts are notable: D&M revenue framing moved from mid-single-digit growth to 'relatively flattish' for 2026, and management declined to guide 2027. The Q&A was direct — the CFO volunteered that about half of the D&M margin gain was favorable mix and the rest timing, and the CEO disclosed unprompted that long-term data center agreements are not purchase orders.
Management Guidance
On the Q2 call management raised adjusted EPS guidance by $0.45 to an $8.40 midpoint, citing additional data center volume, a revised D&M outlook, and modest Thermolec accretion. The midpoint implies 27% adjusted EBITDA growth, up from 21%. The full-year HVAC margin was raised 25 bps, all from Thermolec, with the balance unchanged. D&M margin is guided to 26.5%, with a structural level around 25%. Management expects Q3 and Q4 revenue growth rates similar to each other, with Q4 margins higher than Q3.
Trajectory
Revenue is stable at a higher level, with margins holding: gross margin was flat sequentially and operating and EBITDA margins were stable to slightly higher over the trailing quarters. Q2 FY2026 revenue was $679M, up 19.8% sequentially, after $567M in Q1, $637M in Q4 FY2025, and $593M in Q3 FY2025. The growth driver on the call is the data center cooling block — management says the entire delta between mid-single-digit core HVAC growth and the segment's 18.9% organic growth traces to data centers. Both quarters in FY2026 carried favorable one-off D&M project effects.
The Model
The model projects FY+1 revenue of 2765M and EBITDA of 653M, a 23.6% margin, and FY+2 revenue of 3210M and EBITDA of 780M, a 24.3% margin. The near term anchors on the $430M data center revenue guide and the raised FY2026 range; FY+2 extends the capacity build as Olathe, TAMCO Tennessee, and Madison move toward full production and D&M returns to its normal growth path.
| Metric | FY2025 | Next FY (E) | Following FY (E) |
|---|---|---|---|
| Revenue | $2.3B | $2.8B | $3.2B |
| YoY Growth | — | +22.1% | +16.1% |
| EBITDA | $475M | $653M | $780M |
| EBITDA Margin | 21.0% | 23.6% | 24.3% |
Projections are the median of 5 independent model runs. The model’s revenue sits 12.9% above analyst consensus.
On the Q2 call management raised adjusted EPS guidance by $0.45 to an $8.40 midpoint, citing additional data center volume, a revised D&M outlook, and modest Thermolec accretion. The midpoint implies 27% adjusted EBITDA growth, up from 21%. The full-year HVAC margin was raised 25 bps, all from Thermolec, with the balance unchanged. D&M margin is guided to 26.5%, with a structural level around 25%. Management expects Q3 and Q4 revenue growth rates similar to each other, with Q4 margins higher than Q3.
What Could Go Right — and Wrong
- The capacity ceiling moves higher again. Management said it sees 'some more levers we could pull' after the ~47% raise came from lean, productivity, and flow work on existing lines.
- Madison, Alabama ramps earlier than H2 2028. Management has 'a bias that it could be earlier' but said it is too early to make the call.
- 2027 data center revenue is formally guided above the current forward-year trajectory; management so far has declined to guide 2027.
- The core, non-data-center HVAC business lifts above its mid-single-digit rate as commercial, institutional, or electrical power end markets strengthen.
- D&M returns to its normal growth path with a rebuilt backlog and structural margins at or above about 25%.
- A hyperscaler capex pause. The data center block is guided to grow about 115% this year and, on estimate, is a mid-teens share of total revenue; the demand is a capex cycle, not an annuity.
- Section 232 tariffs, assessed on the full customs value of goods containing aluminum, steel, or copper rather than on metal content, cost more than guided. The Q2 call did not revisit the prior 'no 2027 tariff impact' statement.
- HVAC margin compression runs into 2027 — startup costs or inflation persist and the second-half recovery the guide implies does not arrive.
- D&M mix reverts toward the about 25% structural level and revenue stays flattish, below the 26.5% guide.
- Liquid cooling displaces air-movement spend faster than expected at the rack, shifting the thermal mix away from some of SPX's air-movement products.
Looking Ahead
Over the next 12 months the company is executing a capacity build across four sites. Management points to moderating startup costs and tariffs, volume leverage, and the Thermolec contribution for a second-half margin recovery, with Q4 margins above Q3. The clearest externally visible proof point is the November 3 investor site visit at Olathe. FIS Water, announced 2026-09-15 as an expansion of the cooling platform, is the next inorganic step, with no size, price, or close date disclosed.
- Q3 FY2026Q3 FY2026 earnings — Tests HVAC margin cadence and D&M Q3-vs-Q4 sequencing.
- November 3Olathe investor site visit — Externally visible proof of OlympusMAX and Marley Everest capacity.
- Year-end 2026D&M leadership transition — Eric Kaled succeeds John William Swann atop the D&M segment.
- H1 2027Madison production capabilities — New Alabama facility adds OlympusMAX and custom air-handling production.
- 2027TAMCO Tennessee full capacity — Damper lines reach full production; Olathe full capacity mid-2027.
- H2 2028Madison full production — Longest-dated site milestone in the data center capacity build.
Financials
Annual Summary
| Metric | FY2024 | FY2025 | TTM | YoY |
|---|---|---|---|---|
| Revenue | $2.0B | $2.3B | $2.5B | +14.2% |
| Gross Margin | 40.3% | 40.5% | 40.3% | +25bps |
| EBITDA | $400M | $475M | $534M | +18.7% |
| EBITDA Margin | 20.2% | 21.0% | 21.6% | +80bps |
| Net Income | $200M | $244M | $279M | +21.7% |
| Free Cash Flow | $248M | $241M | $303M | — |
| Net Cash | — | — | — | — |
Key Ratios (Trailing)
- P/E TTM—
- EV/EBITDA TTM—
- EV/Revenue TTM—
- Price/FCF TTM—
- Gross Margin (TTM)40.3%
- EBITDA Margin (TTM)21.6%
- Net Margin (TTM)11.3%
- ROIC11.4%
- FCF Conversion56.8%
- SBC / Revenue0.7%
The Company
SPX Technologies is 'a diversified, global supplier of highly specialized, engineered solutions serving the HVAC and detection and measurement markets.' Its HVAC segment engineers, designs, manufactures, installs, and services package and process cooling products and engineered air movement and handling solutions for industrial — the segment's own description names data center and power generation — institutional, and commercial markets, plus hydronic and electrical heating and ventilation products. Its Detection and Measurement segment makes underground pipe and cable locators, inspection and rehabilitation equipment, robotic systems, transportation systems, communication technologies, and aids to navigation.
The company operates in 16 countries with approximately 4,700 employees and runs 55 facilities: 34 in HVAC across 11 U.S. states and three foreign countries, 20 in D&M across eight U.S. states and five foreign countries, and one corporate site. About 90% of revenue is recognized at a point in time, so the P&L mostly reflects shipped product. On the supply side, management says it engineers its own fans, gear reducers, fill, and heat exchangers, and scrubs every bill-of-material item before taking on a large order.
Business Segments
Competitive Landscape
SPX competes across data center cooling and thermal management, cooling towers and evaporative cooling, and industrial dry cooling. Management describes its position on the Q1 call as 'the global leader in cooling towers for data centers,' and argues that 'the market is shifting towards our solutions,' with gigawatt-scale campuses fitting its capability in large, complicated cooling. The only documented competitive reference in the source material is a Comfort Systems USA 10-K that names SPX alongside Baltimore Aircoil as cooling-tower manufacturers in a commercial MEP system.
- Baltimore AircoilNamed alongside SPX in Comfort Systems USA's 10-K as a cooling-tower manufacturer in a commercial MEP system, and cited as an alternative supplier in the criticality assessment.
- EVAPCOListed as an inferred cooling-tower and evaporative competitor; not discussed by the company.
- Vertiv (VRT)Listed as an inferred data center thermal management competitor; not discussed by the company.
- Trane (TT)Listed as an inferred data center cooling competitor; also mapped as an inferred OEM/channel customer.
- Carrier (CARR)Listed as an inferred data center cooling competitor; also mapped as an inferred OEM/channel customer.
Supply Chain
SPX sits one step above the rack in the data center chain: it supplies cooling towers, engineered cooling units, dampers, and air handling to hyperscalers, colos, neo clouds, and chip manufacturers, largely through mechanical contractors. No neighbor in the source material names SPX, Marley, TAMCO, or Thermolec directly; the closest signal is Comfort Systems USA's 10-K.
More on SPXC: Earnings recap