SPX CORP 2026 Q2
Earnings Overview & AI Insights

Earnings Performance

Summary of Financial Performance: SPX Technologies delivered a strong Q2 2026, with revenue up 23% year over year and 17% organic growth. Adjusted EBITDA rose 20%, adjusted EPS increased 22% to $2.02, and consolidated segment income grew 23% to $167.1 million while margin held at 24.6%. HVAC revenue grew 27.6% and D&M revenue grew 13%; D&M margin expanded 610 bps, while HVAC margin declined 260 bps due to startup costs and tariffs. Q2 adjusted free cash flow was about $72 million, with cash of $168 million and debt of $615 million.

Company Outlook & Strategy: Management raised full-year 2026 adjusted EPS guidance by $0.45 to a midpoint of $8.40, implying 27% adjusted EBITDA growth at the midpoint. The outlook was lifted by higher data center volume, stronger D&M performance, and accretion from the Thermolec acquisition. Strategy remains focused on organic capacity expansion in HVAC, scaling data center-related offerings, integrating acquisitions, and pursuing additional M&A opportunities to strengthen high-value, control-enabled HVAC solutions.

Key Industry Trends: Demand remains robust in data center cooling and customer handling solutions, supporting higher capacity expectations. In D&M, run-rate demand stayed healthy and project-oriented businesses showed an active backlog. Management described core end markets as healthy, with strong underlying conditions supporting the 2026 outlook.

Operational Highlights: HVAC capacity expansion initiatives are progressing on schedule, including the new Madison, Alabama facility where OlympusMAX assembly began in July and production will expand in 1H 2027. Tampa and Tennessee operations are ramping as expected, and throughput in Olathe and Springfield exceeded initial expectations. As a result, SPX now expects total data center capacity of $1.1 billion at full production, up from $750 million previously. Thermolec expands the HVAC product portfolio into controls, heaters, humidification, and actuated valves.

Challenges & Risks: HVAC margins were pressured by startup costs from capacity expansion and tariff impacts, though management said this was in line with expectations. D&M’s strong quarter was partly driven by timing of a high-margin project, creating some quarter-to-quarter noise. Management also noted acquisition integration work ahead, regulatory/tariff pressure, and the need to execute on rapid capacity expansion without disrupting operations.

Key Analyst Questions & Responses: Analysts asked about the sustainability of D&M strength; management said about half the margin improvement came from favorable project mix and most of the rest from a $15 million high-margin project pulled into Q2, plus ongoing synergy gains. For the back half, management expects Q4 to be larger than Q3 with similar margins. On data center capacity, management said the increase to $1.1 billion reflects strong demand and operational efficiencies from expansions, with growth supported by OlympusMAX and other capacity additions. On HVAC margins, management reiterated that Q2 pressure from startups and tariffs was expected and suggested some margin improvement in the second half.