SPX Technologies, Inc. Q4 FY2025 earnings call

• Strong close to 2025 with full year adjusted EBITDA and adjusted EPS growing by 21%. • Advancing value creation initiatives, including organic capacity expansion in HVAC segment and inorganic acquisitions like Thermalek, Air Enterprises, and Ron Industries. • Investing in expanding capacity at existing HVAC facilities and recently added new facilities. • Completing purchase of a new facility in Madison, Alabama for data center and custom air handling solutions. • Continuing inorganic growth initiatives with strategic acquisitions strengthening positions in electric heating and engineered air movement markets.

For the fourth quarter, total company revenues increased 19.4% year over year. HVAC segment revenue grew by 16.4% year over year, with 5.5% inorganic growth and a modest FX tailwind. On an organic basis, revenue increased 10.3%. Segment income grew by $17,000,000, or 18%, while segment margin increased 40 basis points. Detection and Measurement segment revenue increased 26.3% year over year. The KTS acquisition contributed growth of 23.2% and FX was a modest tailwind. On an organic basis, revenue increased 1.7%. Segment income grew by $10,000,000, or 27%. Margin increased 20 basis points.

• Total company revenue in range of $2,535,000,000 to $2,605,000,000 and segment income margin in range of 24.6% to 25.1%. • Adjusted EBITDA in range of $590,000,000 to $620,000,000, implying ~20% year over year growth at midpoint. • Adjusted EPS guidance range of $7.60 to $8.00, reflecting ~15% growth at midpoint. • HVAC segment revenue in range of $1,800,000,000 to $1,840,000,000 and segment margin in range of 24.5% to 25%. • Detection and Measurement segment revenue in range of $735,000,000 to $765,000,000 and segment margin in range of 24.75% to 25.25%.

• Impact of tariffs and metal price volatility on costs. • Potential timing issues with equipment deliveries affecting CapEx. • Uncertainty related to project execution and shifting of revenue from one year to another.

Q: How much did data center revenue grow in 2025, what percentage of revenue is now driven by data centers, and how is DC sales growth within initial 2026 guidance?

A: 2025 data center revenue was ~$200,000,000, ~9% of revenue. Anticipate low double digits, ~12% growth in 2026 with data centers growing ~50%.

Q: How do Air Enterprises, Ron, and Thermalek strengthen HVAC positioning and what's baked in for revenue and profitability in 2026?

A: Air Enterprises has premium custom air handling, Ron is coil manufacturer for synergies, Thermalek complements electric heat in Canada. Baked in $35,000,000 revenue for Thermalek and low $80,000,000 combined for Air Enterprise and Ron, with segment income margins slightly higher than average.

Q: How to model $20,000,000 pull-forward of revenue in 2026 for Detection and Measurement?

A: Pulled forward from 2026 to 2025, so 2026 has ~$20,000,000 headwind, model it as removed from back half of 2026.

Q: Feedback, bookings, and applications beyond data centers for Olympus Max?

A: Awarded three customers, targeted $50,000,000 bookings in 2025, converting to revenue in 2026, with applications beyond data centers and positive outlook.

Q: Impact of Rubin announcement on Olympus Max?

A: Rubin announcement has no negative impact, as it still requires external heat rejection where Olympus Max plays.

Q: Capacity additions timeline and contribution to revenue growth in 2026?

A: Tamco facility comes online end of Q1 2026 and ramps through year, Madison facility has assembly in second half of 2026 and full production in 2027, full production at full capacity in 2028, contributing to revenue growth.

Q: Bridge D&M margin expansion in 2026?

A: ~2/3 from project mix margin profile, ~1/3 from cost optimization initiatives.

Q: Commentary on HVAC margins in guide?

A: Start-up costs related to new plants in 2026, temporary 50 basis point impact, but operating leverage will outstrip initial costs.

Q: M&A pipeline?

A: Very active, two transactions in Q1 2026, good M&A pipeline with capacity for more, particularly in engineered air movement, electric heat, and Detection and Measurement platforms.

Q: Non-data center end markets in HVAC and D&M and procyclicality?

A: HVAC has strength in data centers, healthcare, power, heavy industrial, aftermarket, institutional/higher ed; D&M has improving global market conditions.

Q: Cadence of earnings growth as capacity comes online?

A: Similar cadence to last year on percentage basis for revenue, segment income, and EPS, with capacity expansions ramping incrementally, benefits more evident in back half.

Q: Implications of higher voltages in data centers on cooling?

A: Higher voltages still generate more heat, so cooling needs remain.

Q: Tariffs and metal prices?

A: Tariffs not material in 2025, largely offset, watchful; metals, HVAC is configured to order, no long lead-time exposures.

Q: What customers are asking for in data centers?

A: Demand increasing, hyperscalers pushing for acceleration, robust demand in existing and new bid situations.

Q: Supply chain bottlenecks?

A: No material concerns today, gone through bills of materials to ensure scaling.

Q: Drone detection and jamming outlook?

A: Controp business in niche, effective product, playing more on military side, steady outlook.

Q: CapEx timing and cash out?

A: Plan to meet CapEx guidance, primary swing factor is timing of equipment deliveries.

Q: Capacity expansion and future phases?

A: Current expansions provide runway over next couple of years, no imminent need for additional expansion soon unless accelerating demand.

Q: Organic growth in HVAC ex-data center and ex-Ingenia?

A: Low single-digit growth in non-data center, non-custom air handling parts.

Q: D&M margin target?

A: Some margin improvement from mix and structural opportunities, still within previous 22%–24% range, will revisit.