Snapshot
SPX Technologies, Inc. reported $593M of revenue in Q3 2025, up 22.6% year over year, with diluted EPS of $1.29 and an operating margin of 16.4%.
- Revenue
- $593M
- YoY growth
- +22.6%
- Diluted EPS
- $1.29
- Operating margin
- 16.4%
What management said
- •You can find the release and our earnings slide presentation, as well as a link to a live webcast of this call in the Investor Relations section of our website at spx.com.
- •Our adjusted earnings per share exclude amortization expense, acquisition-related costs, non-service pension items, mark-to-market changes, and other items.
- •We grew third-quarter adjusted EPS by 32% and drove significant profit and margin growth in both segments.
- •To reflect our strong performance in Q3 and the outlook for the fourth quarter, we are raising our full-year guidance range.
- •We now anticipate adjusted EBITDA to exceed $500 million, at the midpoint of our updated range, implying approximately 20% growth year-over-year.
- •During Q3, we raised additional capital through an equity offering and increased the capacity of our revolving credit facility.
- •These actions provide us with more than $1 billion of additional liquidity to support our organic and inorganic value creation initiatives and do not have a dilutive effect on our 2025 EPS.
- •We also continue to progress on several key organic initiatives, including the expansion plans for our engineered air movement businesses and launch of the Olympus Max product, a new large-scale cooling solution.
- •Turning to our high-level results, in the third quarter, we grew revenue by 23%, driven by strong organic growth in both segments and the benefit of recent acquisitions.
- •Adjusted EBITDA increased by approximately 31% year-over-year, with 150 basis points of margin expansion.
- •Over the past quarter, we've continued to gain traction on our growth and new product initiatives.
- •We're making meaningful progress on expansion plans for our engineered air movement businesses, where we see significant demand in excess of our current production capacity.
What went well
- •Strong Q3 with adjusted EPS up 32% to $1.84 and significant profit and margin growth in both segments; consolidated segment income up 28% to $146 million with 110 basis points of margin expansion.
- •Total revenue grew 23%, driven by strong organic growth in both segments plus acquisitions; adjusted EBITDA rose about 31% with 150 basis points of margin expansion.
- •Detection & Measurement revenue surged 38.4% (26.5% organic) with segment income up 53% and margin up 240 basis points, driven by higher project volumes and KTS.
- •Raised full-year 2025 adjusted EPS guidance to $6.55-$6.80 (from $6.35-$6.55), implying about 21% growth at the midpoint, with adjusted EBITDA now expected to exceed $500 million.
- •Strengthened the balance sheet via a $575 million equity offering (no dilution to 2025 EPS) and a $500 million revolver increase to $1.5 billion, adding more than $1 billion of liquidity; leverage at approximately 0.5x.
What went wrong
- •Approximately $20 million of D&M project sales were accelerated from early 2026 into 2025, creating a modest growth headwind for next year.
- •D&M Q4 revenue is expected to be modestly lower sequentially due to the timing of project deliveries between Q3 and Q4.
- •Some D&M margin initiatives (NPI and others) shifted out of 2025 into 2026 due to prioritization of management time and resources.
- •Run-rate D&M demand remains only modestly growing, with geographic variation (U.S. stronger, continental Europe more flattish).
Guidance changes
| Metric | Period | Previous | Current | Change |
|---|---|---|---|---|
| Adjusted EPS (full year 2025) | FY2025 | $6.35-$6.55 | $6.55-$6.80 (about 21% growth at midpoint) | |
| Adjusted EBITDA (implied) | FY2025 | approximately 20% growth implied | expected to exceed $500 million, about 20% growth | |
| Detection & Measurement full-year margin | FY2025 | lower prior range | 23.25%-23.75% (midpoint raised to 23.5%, up 140 bps YoY) | |
| HVAC revenue and margin | FY2025 | prior guidance | maintained, confident in Q4 forecast |
Performance breakdown
| Metric | YoY change | Reason |
|---|---|---|
| Adjusted EPS | +32% to $1.84 | Significant profit growth in both segments. |
| Total revenue | +23% | Higher project sales in D&M plus inorganic growth from KTS and Sigma & Omega. |
| Adjusted EBITDA | approximately +31% | 150 basis points of margin expansion on higher volume. |
| HVAC revenue | +15.5% (9% organic, 6.7% inorganic) | Solid growth in cooling and heating with nominal FX impact. |
| HVAC segment income | +18% (+$14 million) | Higher volume and associated operating leverage; margin up 50 basis points. |
| D&M revenue | +38.4% (26.5% organic) | Higher compact project volumes plus 11.6% from the KTS acquisition and modest FX. |
| D&M segment income | +53% (+$18 million) | Operating leverage on higher organic sales and the KTS acquisition; margin up 240 basis points. |
Earnings call themes & trends
| Topic | Previous mention | Current period | Trend |
|---|---|---|---|
| Capacity expansion | Expansion plans for engineered air movement businesses progressing | Tennessee leased facility (150,000 sq ft) for TAMCO production closed, starting late next quarter; Ingenia U.S. site targeted in the Southeast with details next quarter (Ingenia $140 million run rate targeted in Q4, $300 million combined run rate by Q4 2027) | |
| Olympus Max | Receiving excellent feedback and engagement | On track to book $50 million of orders in 2025 for 2026 revenue; market shifting toward water-cooled chiller solutions that expand SPX's addressable opportunity | |
| Balance sheet and capital | Leverage expected to decline below target range | $575 million equity offering and revolver increase to $1.5 billion add more than $1 billion of liquidity with no 2025 EPS dilution; leverage about 0.5x; available capacity exceeds $1.6 billion | |
| M&A pipeline | Robust pipeline with several attractive opportunities | Very high activity with multiple processes underway, most active in HVAC (engineered air movement, electric heat) plus some D&M; no change in strategy or discipline (about 11x average multiple) |
Q&A summary
What is your visibility into 2026 and where are you most confident across platforms and end markets?
Gene Lowe said the company feels very good overall, with sustained strength in data centers, healthcare, and institutional, modest growth in industrial markets, and more power activity, while commercial buildings and hotels remain lower. Initiatives like OlympusMAX and TAMCO/Ingenia/Marley capacity expansions support above-market HVAC growth. D&M run rate is steady with modest growth, stronger in the U.S. Mark Carano added both segments are at or near record backlog, with about 40% of backlog scheduled to deliver in 2026.
What is the opportunity in nuclear for the HVAC business?
Gene Lowe said of about 100 U.S. nuclear plants, roughly half have cooling towers and SPX has a very high share of those. Upgrading cooling towers can unlock 50-80 MW of power quickly, creating retrofit opportunities across nuclear, gas, and coal. New combined-cycle plants (sometimes paired with data centers) offer cooling tower opportunities, but brand-new nuclear is not expected within the next two to three years.
Are you seeing any push-outs on large data center projects given industry capacity constraints?
Gene Lowe said SPX has not seen anything out of the ordinary; large projects always have some timing imperfection, but demand from key customers is very high and they are pushing SPX to meet timelines. There are always minor push-outs but nothing unusual.
Does the $1 billion of added balance sheet capacity signal a more actionable M&A funnel or appetite for a larger deal?
Gene Lowe said nothing has really changed in strategy; the raise was driven by EBITDA outgrowing the revolver, which risked constraining execution on opportunities. Typical deals range from about $50 million to $500 million enterprise value, where 90%-plus of opportunities lie.
What drove the strong D&M margin in the quarter and is the run rate sustainable into 2026?
Mark Carano broke the 240 basis points of YoY improvement into about 40-50 bps from KTS performing above forecast, with the remaining roughly 200 bps split about 50/50 between strong operating leverage (aided by the $20 million pulled-forward project) and NPI/other initiative costs that shifted into 2026.