SPX Technologies, Inc. Q2 FY26 Earnings Analysis

- Data center segment projected to grow from ~$200 million to $350 million in 2026, with potential capacity supporting up to $550 million in revenue as expansions complete by 2027-2028. - Overall HVAC segment organic growth anticipated at mid-single digits beyond data center strength. - Detection & Measurement (D&M) business expects mid-single-digit growth in 2026, supported by new product introductions and market demand. - Capacity expansions in Olathe, Springfield, Tennessee (TAMCO), Madison facilities to enable increased volumes and revenue. - New customer acquisitions in hyperscalers, colos, chip manufacturers expected to broaden market. - Semiconductor bidding activity increased, indicating potential growth in that segment. - Integration of acquisitions like Air Enterprises and Thermolec expected to contribute positively. - Overall confidence in continued growth with 21% adjusted EBITDA growth guidance for full year 2026.

- Strong start in Q1 2026 with adjusted EBITDA growth of 23% and adjusted EPS growth of 22%. - Raised full-year 2026 guidance, increasing adjusted EPS midpoint to $7.95, up by $0.15. - Adjusted EBITDA growth for full year 2026 expected at 21% at the midpoint. - Confident in delivering traditional incremental margins in HVAC through the back half of 2026 and into 2027, with expected operating leverage of 60 to 70 basis points ex-capacity and tariff impacts. - Inorganic growth expected to add 10 to 20 basis points to margin. - Tariff impacts (~$0.05 to $0.10 EPS headwind) anticipated predominantly in Q2 2026, no expected impact on 2027 earnings. - Continuing capacity expansions and strong demand, especially in data centers, underpin growth and profitability. - Robust M&A pipeline supports sustained earnings growth.

- Capacity expansion is ongoing primarily at the Olathe and Springfield facilities to meet accelerating demand, especially in data centers. - New lines have been added to expand production capabilities. - The company is investing in inorganic growth through acquisitions, maintaining discipline with average acquisition valuations around 10.5 to 11x EBITDA before synergies. - Efforts include expanding supply chains and adding new suppliers to support engineered, proprietary products like cooling towers and fans. - The Ing nia and Sigma & Omega businesses are shifting some manufacturing to the U.S. to create a country-for-country model and mitigate tariff impacts. - There is also investment in new product areas such as dry and adiabatic cooling technologies, targeting nascent growth in data center cooling. - Leveraging synergies from recent acquisitions like Air Enterprises, Rahn and Thermolec to enhance market position and channel growth.

The transcript does not mention any current or future fundraising plans through debt or equity. Key points related to capital and financial strategy are: - The company reports about 0.9x leverage, below their target leverage, indicating capacity to take on more debt if needed. - Their M&A strategy remains disciplined, focusing on acquisitions with valuations around 10.5 to 11x EBITDA before synergies. - No indication of planned equity issuance or debt raising was given. - Capital deployment is focused on strategic acquisitions and capacity expansions. - Existing capacity expansions and acquisitions aim to support growth without mention of external fundraising efforts. In summary, there are no disclosed plans for new debt or equity fundraising at this time.

- Data center order book is strong and accelerating, contributing to raised guidance and backlog growth for 2026 and into 2027. (Page 6) - HVAC backlog is stepping up due to solid data center orders, setting up well for 2026 and 2027 with strong momentum. (Page 6) - Bookings across all businesses and end markets are tracked closely; current bookings are slightly ahead of expectations. (Page 6) - Detection & Measurement order rates, particularly in the U.S., remain healthy with mid-single-digit growth forecasted. (Page 7) - Capacity expansions at Olathe and Springfield facilities have enabled meeting accelerating demand, especially for data centers. (Page 12) - The overall pipeline is very robust with strong opportunities in HVAC, Detection & Measurement, and data centers. (Page 8)