Provide more color on the strategic fit of Air Enterprises, Rahn Industries, and Thermolec, their commercial synergies, and their revenue/profitability contribution to the 2026 outlook.

Air Enterprises (custom air handling) and Rahn Industries (coil manufacturing) strengthen engineered air movement, offering product and channel synergies. Thermolec (duct heating) is complementary to Indeeco, expanding Canadian presence and U.S. cross-selling. Thermolec is expected to contribute $35 million in revenue, and Air Enterprises/Rahn combined low $80s million, totaling about $110 million for 11 months in 2026, with slightly higher segment income margins. “what I would guide you to is $35 million in revenue at the Thermolec business and something in the low 80s for the Air Enterprise and Rahn business combined. That's on an annual basis. Obviously, we're going to own both of these businesses for 11 months. So that kind of gets you to something just shy of about $110 million. Segment income margins for both these businesses are slightly higher than our segment average.”

How should the $20 million revenue pull-forward in D&M be modeled in 2026, and what is the growth outlook for the business given the strong backlog?

A $20 million project was pulled from 2026 into 2025, creating a 5% growth headwind for D&M in 2026, making the segment's growth appear flattish. The impact should be modeled as a reduction in Q1 2026 revenue. The run-rate business is growing mid-single digits, and backlog is at record levels, but the timing shift affects the top-line comparison. “It's about a 5% growth headwind. And so as you look at it, that would be a the reason we're more flattish. If we look across the business, as a reminder, about 2/3 of this business is run rate. And we actually are seeing nice growth in our run rate business.”

Update on OlympusMAX bookings and reception, and how NVIDIA's Rubin chip announcement impacts the demand for SPX's cooling solutions.

OlympusMAX has been very successful, exceeding its $50 million booking target for 2025 and converting to revenue in 2026. Management is bullish on its advantages. The Rubin chip, while potentially reducing chiller needs in some cases, does not reduce the need for external heat rejection, which is SPX's market. Increased heat generation from AI chips like Rubin is positive for SPX, driving demand for water-cooled chilling and free cooling solutions. “The Rubin chip really has no impact on us. I would say it's actually some positive impact in some of the architectures that we have seen. So the other thing, as a reminder, as chips move towards the AI chips, like the Rubin chip, they generate a lot more heat. And that heat is linear. The more electricity, the more kilowatts, you're going to need more cooling towers.”

SPXC

SPX Technologies (SPXC) Q4 FY25 earnings call: guidance and Q&A

Earnings call· Dec 2025 (Q4 FY25)· Materials· Feb 24, 2026

Source: earnings call transcript

Executive summary

SPX Technologies Q4 FY25 — Strong Growth and Strategic Capacity Expansion

SPX Technologies closed FY25 with robust performance, driven by strong organic growth and strategic acquisitions in its HVAC segment. The company is actively expanding capacity to meet surging demand, particularly in data center cooling, and has introduced optimistic FY226 guidance implying significant adjusted EBITDA and EPS growth. Management remains focused on both organic and inorganic initiatives to drive shareholder value.

Highlights

Full year adjusted EBITDA grew 21% with strong performance by both segments.
Full year adjusted EPS grew 21% to $6.76, at the upper end of guidance.
Q4 revenue grew 19.4% year-over-year, driven by acquisitions and organic growth.
Q4 adjusted EBITDA increased approximately 22% year-over-year with 50 basis points of margin expansion.
HVAC segment backlog increased 22% organically year-over-year to $585 million.

Concerns

Detection & Measurement project timing shift
HVAC new plant start-up costs
Tariff impact
Supply chain bottlenecks

Guidance & targets

Category	Target	Timeline	Confidence
Full year 2026 Revenue	$2.535 billion to $2.605 billion high materiality	FY26	High
Full year 2026 Segment Income Margin	24.6% to 25.1% high materiality	FY26	High
Full year 2026 Adjusted EBITDA	$590 million to $620 million high materiality	FY26	High
Full year 2026 Adjusted EPS	$7.60 to $8 high materiality	FY26	High
HVAC segment 2026 Revenue	$1.8 billion to $1.84 billion medium materiality	FY26	High
HVAC segment 2026 Margin	24.5% to 25% medium materiality	FY26	High
Detection & Measurement segment 2026 Revenue	$735 million to $765 million medium materiality	FY26	High
Detection & Measurement segment 2026 Margin	24.75% to 25.25% medium materiality	FY26	High
HVAC capacity expansion investment	$100 million medium materiality	FY26	High
Q1 2026 Revenue, Segment Income, Adjusted EPS	similar to prior year as percentage of full year 2026 guidance midpoint low materiality	Q1 · FY26	Medium

Segment performance

Segment	Revenue	YoY	QoQ	Margin
HVAC Revenue growth driven by inorganic growth and solid organic growth in both cooling and heating. Segment income and margin increases were largely driven by higher volume and associated operating leverage. Organic revenue growth: 10.3%Inorganic revenue growth: 5.5%Segment income growth: 18%Segment income: $17 millionBacklog: $585 millionOrganic backlog growth: 22% YoY	—	16.4%	—	40 bps increase
Detection & Measurement Revenue increase primarily driven by the KTS acquisition and higher project volumes. Segment income and margin increases were primarily driven by higher volume, including the benefit of KTS. KTS acquisition contribution to growth: 23.2%Organic revenue growth: 1.7%Segment income growth: 27%Segment income: $10 millionBacklog: $350 millionOrganic backlog growth: 43% YoY	—	26.3%	—	20 bps increase

SPXC operating KPIs by quarter

SPXC operating KPIs stated on its earnings calls, by fiscal quarter
KPI	Mar 2026 Q1 FY26	Jun 2026 Q2 FY26	Change vs prior quarter
Backlog HVAC	$755M Segment backlog at quarter end was $755 million, up 38% organically year-over-year, primarily driven by data center demand. Source: earnings call transcript	$919M Segment backlog at quarter end was $919 million, up 59% organically year-over-year, primarily driven by strong data center demand. Source: earnings call transcript	+21.7%
Backlog Detection & Measurement	$333M Segment backlog at quarter end was $333 million, down modestly year-over-year. Source: earnings call transcript	$312M Segment backlog at quarter end was $312 million, down year-over-year, primarily driven by higher project volumes in the quarter. Source: earnings call transcript	-6.3%

Operating figures the company stated on at least two of the calls shown, checked against each call's transcript. Click a figure to read the sentence. A dash means it was not stated that quarter.

Orderbook & backlog

HVAC segment backlog $585 million Q4 FY25 end

up 22% organically YoY

Detection & Measurement segment backlog $350 million Q4 FY25 end

up 43% organically YoY

Product announcements

Product	Type	Timeline	Details
OlympusMAX	launch	—

Deals & partnerships

Thermlec Strengthens position in electric heat market, adding complementary custom duct heating solutions and broader geographic reach.

Located in Montreal, it is a leader for duct heating in Canada. Provides channel synergies for U.S. products into Canada and vice versa.

Air Enterprises and Rahn Industries (formerly Air Handling segment of Crawford United) Advances strategy in engineered air movement market by expanding portfolio of custom air handling solutions and enhancing coil offering.

Air Enterprises is a premium provider of custom air handling units with a blue-chip customer base. Rahn Industries is a coil manufacturer. Strengthens ability to serve healthcare, institutional, and commercial markets.

Capital programs

Madison, Alabama facility underway

Period spend: $100 million

Start: Q4 FY25 (purchase)

Benefit:flexible manufacturing capabilities for custom air handling and data center solutions; adds to $700 million incremental capacity across all HVAC expansions

Completed purchase in Q4 2025. Assembly capabilities expected toward latter half of 2026, initial production capabilities in H1 2027. Part of $100 million capital investment in 2026 for HVAC expansions.

TAMCO highly engineered aluminum dampeners facility (Tennessee) underway

Benefit:produce TAMCO highly engineered aluminum dampeners for data center market

Production expected to begin by the end of Q1 2026 and steadily ramp throughout the year. Part of $100 million capital investment in 2026 for HVAC expansions.

Risks & headwinds

Detection & Measurement project timing shift FY26

$20 million revenue shifted from 2026 to 2025, creating a 5% growth headwind for D&M in 2026.

Mitigation:Management acknowledges the impact on top-line comparison but notes strong underlying run-rate business growth and record backlog.

HVAC new plant start-up costs FY26

Approximately 50 basis points temporary margin impact in 2026.

Mitigation:Expected to be temporary; operating leverage will outstrip initial costs as facilities ramp up to full capacity.

Tariff impact Ongoing

Not a material impact in 2025.

Mitigation:Largely offset through price, sourcing, or continuous improvement initiatives. Company is primarily U.S.-based and North American business is covered under USMCA.

Supply chain bottlenecks FY26

No material concerns.

Mitigation:Ongoing line-item bill of materials review to ensure scalability for growing products; no red flags identified.

What to watch in Q1 FY26

HVAC segment margin trajectory

next quarter

Current 40 bps increase in Q4 FY25

Target Impact of ~50 bps temporary margin headwind from start-up costs

Why it matters

To assess the initial impact of new plant start-up costs on HVAC profitability and the pace of recovery.

I think we suggested maybe in the last call, but we've sort of indicated that there'll be start-up costs related to the -- bringing these plants online really in 2026. These are going to be temporary in nature. But I would kind of gauge them as around 50 basis points of a temporary impact.

Find out whether SPXC delivers this. Inve re-checks your case every morning.

Q&A highlights

What was data center revenue growth in 2025, what percentage of total revenue is it, and what is the sales growth expectation for 2026?

Data center revenue was over $200 million in 2025, representing about 9% of total revenue, up from 7%. It is expected to grow approximately 50% in 2026, reaching around 12% of total revenue.

“So in the neighborhood of $200 million, maybe a little bit more than $200 million. That's up quite a bit. We'd given the number of 7% prior. And we would anticipate that to be, as we'd said, low double digits, say, 12%. So we'd expect nice growth here, probably in the 50% neighborhood for our data centers going into '26.”

asked by Bryan Blair · answered by Eugene Lowe

3 min read 6 chapters

Detailed narrative

Data Center Demand & OlympusMAX Success

Demand for custom air handling and data center cooling products remains strong, with data center revenue expected to grow approximately 50% in FY26, reaching about 12% of total revenue from 9% in FY25. The OlympusMAX product, designed for data center cooling, has been highly successful, securing material bookings from three customers and exceeding the $50 million booking target for FY25.

Management is bullish on its advantages in tonnage, flexibility (dry to adiabatic upgrade), integrated controls, and robust mechanical equipment, positioning it well for future demand.

HVAC Capacity Expansion Initiatives

SPX is investing significantly in expanding its HVAC capacity to meet growing demand. This includes a new 459,000 sq ft facility in Madison, Alabama, purchased in Q4 FY25, which will produce custom air handling and data center solutions, with assembly capabilities by H2 FY26 and initial production by H1 FY27.

Another facility in Tennessee for TAMCO dampeners is expected to begin production by the end of Q1 FY26. Total expansion-related investments are projected to be $100 million in FY26, following $60 million in FY25, aiming to add roughly $700 million of incremental capacity by FY28.

Strategic HVAC Acquisitions

In Q1 FY26, SPX completed two strategic acquisitions in its HVAC segment: Thermolec, and Air Enterprises and Rahn Industries (from Crawford United). Thermolec strengthens the electric heat strategy, adding custom duct heating and expanding geographic reach in Canada, with potential for U.S. growth.

Air Enterprises and Rahn Industries enhance the engineered air movement market position by expanding custom air handling solutions and coil offerings, serving healthcare, institutional, and commercial markets. These acquisitions are expected to contribute approximately $110 million in revenue for 11 months in FY26.

Detection & Measurement Performance and Outlook

The Detection & Measurement segment reported strong Q4 FY25 revenue growth of 26.3% (23.2% from KTS acquisition, 1.7% organic) and segment income growth of 27%. Segment backlog reached a record $350 million, up 43% organically YoY. However, FY26 revenue guidance for D&M is impacted by a $20 million project pull-forward from FY26 to FY25, creating a 5% growth headwind.

Despite this, the run-rate business is seeing mid-single-digit growth, and management expects margin expansion driven by mix and cost optimization initiatives.

M&A Pipeline and Capital Allocation

SPX maintains a robust M&A pipeline, particularly in engineered air movement and electric heat, as well as Detection & Measurement platforms. With a pro forma leverage ratio of approximately 1x net debt to EBITDA, the company has significant capacity for further strategic acquisitions. Management expressed confidence in the probability of more investment opportunities in FY26, building on the successful Q1 FY26 transactions.

Non-Data Center HVAC Market Dynamics

Outside of data centers, the HVAC segment is experiencing mixed market conditions. Strong demand is observed in healthcare, power, heavy industrial aftermarket, institutional, and higher education sectors. Conversely, softer demand is noted in battery, automotive, semiconductor, chemical, and commercial real estate markets. Despite these variations, the overall non-data center, non-air handling parts of the HVAC business are expected to achieve low single-digit growth in FY26.

Summary of the company's earnings call; see how call summaries are prepared. Not investment advice.