What Management Said
Read the full Q2 2026 transcript ↗You can find the release and our earnings slide presentation, as well as a link to a live webcast of this call in the news section of our website at spx.com. Our adjusted earnings per share exclude intangible amortization expense, acquisition and integrated related costs, and non-service pension items, among other items. On the call today, we'll provide you with an update on our consolidated and segment results for the second quarter of 2026, as well as an update on our full-year outlook. We had a strong second quarter with year-over-year growth in adjusted EBITDA of 20% and adjusted EPS of 22%.
Inorganically, we recently announced the addition of Neptronic to the HVAC segment. This strategic acquisition complements our existing product offering and expands our capabilities into new adjacencies. Touching on our full-year guidance, we are increasing the midpoint of our range to reflect higher data center volume, stronger performance from our Detection & Measurement Segment, and the Neptronic acquisition. The midpoint of our updated guidance now implies 27% adjusted EBITDA growth.
We grew revenue by 23% and adjusted EBITDA increased 20% year-over-year, primarily driven by strong organic growth in both segments and the benefit of recent acquisitions. As always, I'd like to update you on our value creation initiatives, starting with our organic growth activities. The capacity expansions across our HVAC facilities to meet the strong demand for our data center and constant air handling solutions are progressing well. They remain on track with the timeline and capital requirements previously outlined.
What went well
- Revenue grew 23% year-over-year (17% organic) with adjusted EBITDA up 20% and adjusted EPS up 22% to $2.02, a strong quarter across both segments.
- Management raised expected total data center capacity to approximately $1.1 billion at full production, up from a prior $750 million, on better-than-expected throughput of OlympusMAX and Everest cooling products at Olathe and Springfield.
- Full-year data center revenue expectations were raised again to $430 million (from $350 million last quarter and an original $300 million), representing roughly 115% growth.
- The Detection & Measurement segment posted 13% revenue growth, 43% segment-income growth and a 610 basis point margin expansion, aided by favorable high-margin project mix, a pulled-forward project and synergy initiatives.
- SPX raised full-year adjusted EPS guidance by $0.45 to a midpoint of $8.40, implying 27% adjusted EBITDA growth at the midpoint.
- The Neptronic acquisition was added to HVAC, extending SPX up the controls stack with intelligent controls, electric duct heaters, humidification and actuated valves at a high (mid-40%s EBITDA) margin, purchased at roughly 12.5x.
What went wrong
- HVAC segment margin declined 260 basis points year-over-year, driven by capacity-expansion startup costs, net tariff impact, a tough prior-year comp and modest inflation (~50 bps), all largely as expected.
- Detection & Measurement backlog fell year-over-year to $312 million as higher project volumes were burned down in the quarter, and D&M book-to-bill was just below 1x.
- The strong D&M quarter was partly a timing benefit: roughly half the 610 bps came from favorable project mix and the balance largely from a ~$15 million high-margin project pulled forward from Q3 into Q2.
- D&M is expected to be roughly flat for the full year before returning to its normal growth path in 2027.
- The $1.1 billion capacity is not expected to reach full production until roughly the second half of 2028, and success depends on executing multi-plant ramps and staffing.
Guidance Changes
| Metric | Period | Current guidance |
|---|---|---|
| Full-year adjusted EPS | FY2026 | raised $0.45 to a midpoint of $8.40 |
| Implied adjusted EBITDA growth | FY2026 | ~27% at the midpoint |
| Full-year data center revenue | FY2026 | $430M (~115% growth) |
| Total data center capacity at full production | Long-term (2H 2028) | ~$1.1B |
| D&M segment margin | FY2026 | ~26.5% for the year (~25% structural after normalizing project mix) |
| Full-year capex | FY2026 | $135M-$165M, back-half weighted (regular-way ~1.5%-2% of sales plus expansion) |
| Neptronic contribution | FY2026 (~5 months) | ~$75M annual revenue; ~$0.05-$0.06 of accretion; +25 bps to HVAC full-year margin |
Performance Breakdown
| Metric | YoY | Note |
|---|---|---|
| Total company revenue | +23% (17% organic) | Strong organic growth in both segments plus the benefit of recent acquisitions. |
| Adjusted EPS | +22% to $2.02 | Higher volume and segment income across HVAC and D&M. |
| Consolidated segment income | +23% to $167.1M (margin flat at 24.6%) | HVAC volume growth and D&M margin expansion offset HVAC startup/tariff costs. |
| HVAC revenue | +27.6% (18.9% organic, 8.5% inorganic) | Double-digit growth in both cooling and heating, driven by strong data center demand. |
| HVAC segment income / margin | +15% ($14M); margin -260 bps | Higher volume offset by capacity-expansion startup costs, net tariffs, a tough comp and modest inflation. |
| HVAC backlog | +59% organic to $919M | Primarily strong data center demand. |
| Detection & Measurement revenue | +13% | High-margin project volumes including a project pulled forward, plus continued run-rate demand. |
| D&M segment income / margin | +43%; margin +610 bps | Favorable project mix (~half), a ~$15M project shifted from Q3, and platform synergy initiatives. |
| D&M backlog | Down to $312M | Higher project volumes executed in the quarter; book-to-bill just below 1x. |
| Adjusted free cash flow | ~$72M in Q2 | Strong operational cash generation; leverage 0.7x (1.4x pro forma for Neptronic). |
Earnings Call Themes & Trends
| Topic | Previous mention | Current period | Trend |
|---|---|---|---|
| Data center cooling capacity ramp | ~$750M capacity target; $350M FY revenue | $1.1B capacity target (full production ~2H 2028); FY revenue raised to $430M; OlympusMAX and Everest throughput exceeding expectations via lean/flow work at Olathe, Springfield, Madison (just started) and Tamco (Tennessee). | — |
| M&A / capital deployment | Active acquisition pipeline | Neptronic added to HVAC; leverage 1.4x pro forma (below 1.5x-2.5x target); active pipeline across engineered air movement, electric heat, D&M location/inspection, Comtech and transportation with more expected in the next six months. | — |
| Neptronic strategic fit | — | About half the business overlaps SPX core (electric duct heating, humidification); the newest piece is advanced third-party/OEM configured controls, moving SPX up the controls stack; expected high-single-digit growth, low-40%s segment income margin, mid-40%s EBITDA margin, with data center exposure similar to or slightly above HVAC. | — |
| Data center customer relationships & LTAs | — | Long-term agreements in place with several hyperscaler customers (with protections that free capacity if POs are not placed); wins with hyperscalers, colos and neo-clouds; market shifting toward SPX's dry, adiabatic and cooling-tower solutions as liquid cooling grows. | — |
| Supply chain resilience | — | In-house engineering of fans, gear reducers and heat exchangers gives supply-chain flexibility; a strong supply-chain team scrubs every bill-of-material item before taking large data center orders given hyperscaler concentration. | — |
| Leadership / board changes | John Swann leading D&M | John Swann to retire year-end; Eric Kaled (transportation/contact platform lead since 2019) succeeds him; Brian Deck (CEO of JBT Marel) joins the board as an independent director. | — |
Q&A Summary
Andrew Obin (Bank of America) asked how much of D&M strength was project-timing pull-forward versus durable demand, and the back-half cadence.
Carano said about half the 610 bps came from favorable project mix (known coming in) and most of the balance from a ~$15M high-margin project that shifted from Q3 into Q2, which leverages the fixed-cost base; he expects Q4 revenue larger than Q3 with similar margins across both quarters.
Jamie Cook (Truist) asked how SPX reached the $1.1B data center capacity and to break down the Q2 HVAC margin decline.
Lowe cited throughput gains on OlympusMAX (Olathe/Madison) and the Everest core cooling product via lean and flow work; Carano attributed the 260 bps decline to net tariffs, startup costs and a tough comp (~80 bps each) plus ~50 bps of inflation, and said the full-year HVAC margin raise was the +25 bps from Neptronic.
Bryan Blair (Oppenheimer) asked about 2027 visibility, the timeline to ramp to $1.1B, and Neptronic's growth/margins and TAM impact.
Lowe said the market is shifting toward SPX's solutions with strong hyperscaler visibility, feeling very good about 2027; Carano said full production is expected ~2H 2028 with a possible earlier bias; Neptronic is expected to grow high-single-digits with low-40%s segment / mid-40%s EBITDA margins.
Amit Mehrotra (UBS) asked about data center contribution margins and Neptronic's data center exposure, plus the M&A pipeline.
Carano said data center incrementals are consistent with the HVAC segment (high-20% to low-30%); Lowe said Neptronic's data center mix is similar to or a tad higher than HVAC with growth opportunity; leverage under 1x pre-deal leaves ample capacity and an attractive pipeline.
Brad Hewitt (Wolfe) asked whether D&M margins should rise year-over-year in 2027 and about visibility to the $1.1B capacity.
Carano framed FY2026 D&M at ~26.5%, ~25% structurally after normalizing the Q1 scope expansion and favorable mix, but declined 2027 guidance; Lowe said SPX has a lot of demand visibility and feels very good about sustained growth to $1.1B.
Joe Giordano (TD Cowen) asked for book-to-bill and how SPX stress-tested Neptronic's mid-40%s EBITDA margins.
Carano said HVAC book-to-bill was ~1.4x and D&M just below 1x; Lowe said HVAC segment income is ~25% versus Neptronic's low-40%s (not double) and, knowing the electric-heat and humidification margins well, believes they are real and sustainable; Carano detailed ~$0.05-$0.06 of 2026 accretion at ~12.5x purchase.
Walter Liptak (Seaport) asked what it takes to reach the high end of capex guidance and how much must be in place by 2027.
Carano said expansion capex was contemplated and is back-half weighted, some could slip to 2027 but is currently forecast in 2026, with regular-way capex at 1.5%-2% of sales; ramping plants in 2027 hinges on getting the right teams staffed and up to speed.
Piyush Khaitan (JPMorgan) asked about HVAC back-half growth cadence ex-data-center and the drivers of high back-half incrementals.
Carano confirmed the non-data-center HVAC business is tracking ~5%-6%, expects similar Q3/Q4 revenue growth with higher Q4 margins, driven by volume leverage, the Neptronic contribution and moderating startup-cost and tariff headwinds.
Jeff Van Sinderen (B. Riley) asked about long-term agreements in data center cooling and supply-chain steps.
Lowe said SPX has long-term agreements with several customers (not backlog until formal POs, with protections to reallocate capacity), and stressed careful supply-chain management given in-house component engineering and hyperscaler concentration.
Zachary Schechtman (Wells Fargo) asked about the D&M product mix (Comtech, AtoN) behind the margin jump and the pull-forward, plus military/drone-detection opportunities.
Carano said the pulled-forward project was customer-driven and that Comtech is largely project-based with mix-driven margins while AtoN blends run-rate and profitable project activity; Lowe cited good activity in TCI/Comtech and transportation and a new AtoN product late next year, with D&M roughly flat this year before returning to normal growth.
More on SPX Technologies, Inc.
Reported 2026-07-30 · figures from the SPX Technologies, Inc. Q2 2026 earnings call.
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