SPX's Q1 2025 Earnings Call: Navigating Tariff Impacts and Contradictions in Demand and Revenue Growth

Tariff impact and financial guidance, order flow and demand sustainability, detection & measurement segment growth and run-rate orders, data center revenue contribution, and tariff impact and timing are the key contradictions discussed in SPX's latest 2025Q1 earnings call.



Strong Financial Performance:
- SPX Technologies reported adjusted EBITDA increased by 12% and adjusted EPS by 10% for Q1 2025.
- The growth was driven by a solid performance in the HVAC segment, the benefit of recent acquisitions, and effective management of tariff-related impacts.

Acquisition and Growth Strategy:
- The acquisition of Sigma and Omega expanded the HVAC segment, with complementary products enhancing value to customers and positioning the company for future growth.
- The transaction is expected to be modestly accretive to adjusted EPS, with opportunities for leveraging combined channels to drive growth in attractive end markets.

Segment Performance and Backlog:
- The HVAC segment reported revenue growth of 6.8% year-on-year, with a 3% increase in segment backlog at quarter end.
- The Detection & Measurement segment saw a 56% sequential increase in segment backlog, driven by strong project execution and new bookings.

Tariff Impact and Mitigation:
- Tariffs are estimated to have a net impact of approximately $0.08 to $0.12 on adjusted EPS, with gross costs offset by price increases and surcharges.
- The company is actively managing price and sourcing relationships to mitigate tariff effects and plans to offset all costs through price adjustments by next year.