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- **Data Center Growth Acceleration**: FY26 data center revenue expected to grow +60%, with $2+ billion target by FY28. 5 new U.S. chiller lines coming online in Q4.
- **Margin Recovery Path**: Q3 margin improvement (down 225bps) leading to normalized Q4 margins. Incremental margins ~30% once at scale.
- **Climate Solutions Expansion**: 24% segment growth driven by 3 acquisitions and modular data center launches. 1,200 new hires for production ramp-up.
- **Performance Tech Resilience**: -4% revenue but +3% EBITDA despite market weakness, with 14.7% margin and $7M SG&A savings.
- **Global Capacity Buildout**: New facilities in India, U.K., and Middle East to support APAC, Europe, and hyperscale customer demand.

**【CEO Summary Section】**
- **Data Center Expansion Acceleration**: Launched 2 chiller lines in Grenada, Mississippi, with 5 lines planned by end of fiscal year. Franklin, Wisconsin, and Dallas, Texas, facilities are on track for Q4 production ramp-up. 
- **Climate Solutions Growth**: 24% revenue increase driven by 42% data center sales growth and 3 acquisitions (AbsolutAire, L.B. White, Climate by Design). Organic sales up 15%.
- **Challenges and Investments**: Hired 1,200 employees for data center expansion, causing temporary margin erosion. Q3 margin improvement expected, with significant revenue jump in Q4.
- **Long-Term Vision**: Targeting over $2 billion in data center revenue by FY28, with modular data centers and liquid cooling solutions as growth drivers.

**【CFO Financial Commentary】**
- **Revenue and Profitability**: Total company sales up 12% to $1.2 billion. Climate Solutions segment revenue grew 24%, while Performance Technologies (PT) revenue declined 4% but EBITDA margin improved 90bps to 14.7%.
- **Margin Dynamics**: Climate Solutions EBITDA margin contracted due to $10-12 million in incremental costs for capacity expansion. PT margin improvement driven by cost reductions and operational efficiency.
- **Cash Flow and Leverage**: Free cash flow negative $30 million in Q2 due to inventory builds and CapEx. Leverage ratio at 1.2, expected to decline by year-end. 
- **FY26 Outlook**: Raised revenue guidance to 15-20% growth, with Climate Solutions up 35-40% (data center +60%). Adjusted EBITDA target $440-470 million.

**【Q&A Highlights】**
- **Margin Normalization**: Sequential margin improvement expected in Q3 (down 225-250bps due to launch costs) and Q4 (normalized levels). Incremental margins for data center products ~30% once at scale.
- **Customer Demand**: Over 60% data center revenue growth in FY26, with hyperscalers and neocloud providers driving demand. Modular data centers and liquid cooling solutions gaining traction.
- **PT Segment**: Flat to -7% revenue outlook for FY26, with focus on cost control and margin improvement despite weak end markets. Divestiture process ongoing but no updates provided.
- **Global Expansion**: New facilities in India and U.K. to support APAC and European growth. Middle East projects being serviced through existing capacity.


Modine Manufacturing Company (MOD) Q2 2026 Earnings Call Transcript

Revenue

Sales and Services Revenue

Financing Services Revenue

Other Revenue

Cost of Revenue

Cost of Goods and Services

Cost of Financing Services

Other Cost

Gross Profit

Other Operating Income

Operating Expenses

Selling, General and Administrative Expenses

Selling and Marketing Expenses

General and Administrative Expenses

Research and Development Expenses

Loss on Bad Debts

Loss on Impairment of Other Assets

Loss on Disposal of Assets

Other Operating Expenses

Operating Income

Non-Operating Income (Loss)

Income (Loss) from Affiliates

Income (Loss) from Associates

Income (Loss) from Joint ventures

Gain (Loss) on Other Investment

Gain (Loss) on Change in Fair Value

Gain (Loss) on Foreign Currency Exchange

Other Non-Operating Income (Loss)

Net Interest Expense

Interest Expense

Interest Income

Pretax Income From Continuing Operations

Income Tax Expense

Current Income Tax

Deferred Income Tax

Income Tax Adjustments

Net Income from Continuing Operations

Income from Discontinued Operations

Other Items Before Net Income

Net Income

Net Income Attributable to Minority Interests

Net Income Attributable to Owners of the Company

Preferred Stock Dividends

Other Adjustments

Net Income Attributable to Common Stockholders

Other Comprehensive Income

Total Comprehensive Income

Total Comprehensive Income Attributable to Minority Interests

Total Comprehensive Income Attributable to Owners of the Company

Basic EPS

Basic EPS from Continuing Operations

Basic EPS from Discontinued Operations

Diluted EPS

Diluted EPS from Continuing Operations

Diluted EPS from Discontinued Operations

MOD

MOD fundamentals

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