Snapshot
SPX Technologies, Inc. reported $637M of revenue in Q4 2025, up 19.4% year over year, with diluted EPS of $1.54 and an operating margin of 15.7%.
- Revenue
- $637M
- YoY growth
- +19.4%
- Diluted EPS
- $1.54
- Operating margin
- 15.7%
What management said
- •A press release containing our fourth quarter and full year results was issued today after market close.
- •You can find the release in 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 intangible amortization expenses, acquisition and integration-related costs, non-service pension items, changes in estimated value of equity security, among other items.
- •On the call today, we'll provide you with an update on our consolidated and segment results for the fourth quarter and full year of 2025.
- •We grew full year adjusted EBITDA and adjusted EPS by 21%, with a strong performance by both segments.
- •Organically, we made further progress on our efforts to expand capacity within our HVAC segment to meet the growing demand for our highly engineered solutions.
- •Inorganically, we recently announced the additions of Thermelec, Air Enterprises, and Rahn Industries to the HVAC segment.
- •Today, we are introducing our 2026 midpoint guidance, which implies approximately 20% Adjusted EBITDA growth at the midpoint.
- •For the fourth quarter, we grew revenue by 19.4%, driven by the benefit of recent acquisitions and organic growth in both segments.
- •Adjusted EBITDA increased by approximately 22% year-over-year, with 50 basis points of margin expansion.
- •Demand for our customer handling and data center cooling products remains strong.
- •During last quarter's call, we announced the addition of a facility in Tennessee that will produce TAMCO highly engineered aluminum dampers, which are seeing strong demand within the data center market.
What went well
- •Strong close to 2025 with full-year adjusted EBITDA and adjusted EPS each up 21%, and Q4 adjusted EPS up 25% to $1.88; full-year adjusted EPS of $6.76 finished toward the upper end of the $6.65-$6.80 guidance range.
- •Q4 total revenue grew 19.4%, driven by the KTS and Sigma & Omega acquisitions plus organic growth, with consolidated segment income up 21% to $156 million.
- •Detection & Measurement Q4 revenue grew 26.3% (KTS contributed 23.2%) and segment backlog rose 43% organically to $350 million, a record year-end level.
- •HVAC backlog reached $585 million, up 22% organically year-over-year, with Q4 organic revenue up 10.3% on solid cooling and heating growth.
- •Strong cash generation with full-year adjusted free cash flow of $294 million (90% conversion of adjusted net income) and year-end leverage of approximately 0.3x (about 1.0x including recently announced acquisitions).
What went wrong
- •Approximately $20 million of D&M project sales originally slated for 2026 were pulled into 2025, creating about a 5% growth headwind for D&M in 2026.
- •2026 HVAC guidance implies startup costs of roughly 50 basis points of temporary margin impact from bringing new plants online.
- •Crawford United's Industrial and Transportation Products businesses are being held in discontinued operations while the company seeks a buyer, and are excluded from 2026 guidance.
- •Core HVAC growth (excluding data center and custom air handling) is expected to be only low single digits in 2026.
Guidance changes
| Metric | Period | Previous | Current | Change |
|---|---|---|---|---|
| Total company revenue | FY2026 | not previously issued | $2.535 billion-$2.605 billion | |
| Adjusted EBITDA | FY2026 | not previously issued | $590 million-$620 million (about 20% growth at midpoint, ~23.5% margin) | |
| Adjusted EPS | FY2026 | not previously issued | $7.60-$8.00 (about 15% growth at midpoint) | |
| HVAC revenue | FY2026 | not previously issued | $1.8 billion-$1.84 billion; segment margin 24.5%-25% | |
| Detection & Measurement revenue | FY2026 | not previously issued | $735 million-$765 million; segment margin 24.75%-25.25% |
Performance breakdown
| Metric | YoY change | Reason |
|---|---|---|
| Q4 adjusted EPS | +25% to $1.88 | Higher volume, operating leverage, and acquisition contribution. |
| Full-year adjusted EPS | +21% to $6.76 | Strong performance by both segments through the year. |
| Q4 total revenue | +19.4% | KTS and Sigma & Omega acquisitions plus organic growth in both segments. |
| Q4 HVAC revenue | +16.4% (10.3% organic, 5.5% inorganic) | Higher volume in cooling and heating, plus modest FX tailwind. |
| Q4 D&M revenue | +26.3% (1.7% organic) | KTS acquisition contributed 23.2%, with higher project volumes and modest FX. |
| Q4 HVAC segment income | +18% (+$17 million) | Higher volume and associated operating leverage; margin up 40 basis points. |
| Q4 D&M segment income | +27% (+$10 million) | Higher volume including the benefit of KTS; margin up 20 basis points. |
Earnings call themes & trends
| Topic | Previous mention | Current period | Trend |
|---|---|---|---|
| Capacity expansion | Tennessee facility for TAMCO announced; Ingenia Mirabel and Olathe expansions underway | Madison, Alabama 459,000 sq ft facility purchased in Q4; roughly $100 million of expansion capital planned for 2026 (plus ~$60 million in 2025), adding roughly $700 million of incremental capacity at full production | |
| Data center | About $200 million (7%) of revenue, growing | About 9% of 2025 revenue (a little over $200 million); expected to grow about 50% in 2026 to roughly low double digits (around 12%) of revenue | |
| M&A | KTS and Sigma & Omega closed in 2025 | Thermelec, Air Enterprises, and Rahn Industries closed in Q1 2026 (about $110 million combined revenue for 11 months); pipeline remains very full in engineered air movement, electric heat, and D&M | |
| OlympusMAX product | Targeting $50 million of bookings in 2025 | Achieved the $50 million booking target, converting to revenue in 2026; awarded with three customers, one with multiple years of locked-up demand; management more bullish |
Q&A summary
How much did data center revenue grow in 2025, what percent of revenue is it, and what is baked into 2026?
Gene Lowe said data center was about 9% of 2025 revenue, in the neighborhood of a little more than $200 million, up from a prior 7%. He expects it to reach low double digits (about 12%) of revenue in 2026, with growth around 50%.
How should we model the $20 million D&M project pull-forward and the segment's growth given backlog up 43% organically?
Gene Lowe explained a roughly $20 million project the customer pulled forward makes 2025 about $20 million higher and 2026 about $20 million lower, roughly a 5% growth headwind that makes D&M look flattish; about two-thirds of the business is run rate seeing GDP-plus growth. Mark Carano said the impact is best modeled by taking it out of the back half (or Q1) versus normal seasonality, and that absent the shift 2025 D&M would have been mid-single-digit growth.
What can be read from the new Rubin announcement for OlympusMAX and cooling demand?
Gene Lowe said the Rubin chip has essentially no impact and may be a slight positive in some architectures; SPX is not aware of circumstances where Rubin reduces the need for external heat rejection, which is where SPX plays. As AI chips generate more heat linearly with electricity, more cooling towers are needed, and the market is shifting toward water-cooled, free cooling, and adiabatic solutions that favor SPX.
Confirm the $700 million capacity figure and the timeline to full production.
Mark Carano confirmed roughly $700 million of revenue capacity at full production. The TAMCO Tennessee facility comes online at the end of Q1 and ramps through the year; the Madison facility comes online in the second half (assembly only), reaching production in 2027, with full production capacity across the expansions sometime in 2028.
What drove the D&M 2026 margin expansion of about 140 basis points at the midpoint?
Mark Carano bucketed it into two areas: roughly two-thirds from favorable project/business mix forecast for 2026, and the remaining third from durable cost optimization initiatives leveraging engineering, R&D, sourcing, and footprint rationalization.