#United States #financial results #Modine #Thermal Management #Racine

Modine Reports Strong Second Quarter Fiscal 2026 Results

Modine (NYSE: MOD), a prominent player in thermal management technology, released its financial performance for the second quarter of Fiscal 2026, ending September 30, 2025. The company highlighted notable revenue momentum propelled by growth within the Climate Solutions sector and strategic acquisitions, resulting in an optimistic outlook for overall full-year revenue.

Financial Performance Highlights

Net Sales & Earnings

In the quarter, Modine reported net sales of $738.9 million, marking an impressive 12% increase compared to the previous year’s results of $658.0 million. However, net earnings fell slightly to $44.8 million, a decrease of 3% from the previous year’s earnings of $46.4 million. Despite the drop in net earnings, the adjusted earnings per share (EPS) increased by 9%, amounting to $1.06.

Adjusted EBITDA

The adjusted EBITDA also showcased promising growth, reaching $103.8 million, up 4% from $99.8 million in the same quarter last year, indicating strong operational performance, albeit slightly tempered by challenges in the Performance Technologies segment.

Revenue Outlook

Incremental growth is anticipated, with Modine forecasting a 15% to 20% increase in net sales, up from a previous estimate of 10% to 15%. This positive revision underscores the company's confidence in capturing increasing demand for data center solutions and other thermal technologies as it expands manufacturing capacity.

Segment Performance

Climate Solutions

The Climate Solutions segment was a significant driver of revenue, achieving sales of $454.4 million, reflecting a striking 24% increase over the previous year's $366.4 million. This growth was notably supported by a 42% surge in data center solutions and a 25% increase in HVAC Technologies, which also benefited from newly acquired businesses, generating an additional $28.1 million in sales.

Despite the growth, the gross margin for this segment decreased by 440 basis points from the previous year, settling at 24.6%. Factors contributing to this decline included rising costs associated with rapid capacity expansion and the absence of favorable commercial pricing settlements seen in the earlier year.

Performance Technologies

Conversely, the Performance Technologies segment experienced a contraction, reporting sales of $286.3 million, a 4% decrease from prior year sales of $297.5 million. This drop was largely attributed to reduced demand from commercial vehicle customers. Nevertheless, adjusted EBITDA improved slightly to $42.2 million, up 3% from last year.

Operational Efficiency and Challenges

The report additionally noted operational challenges due to increased costs from capacity expansion initiatives, particularly in the Climate Solutions segment. These temporary inefficiencies are expected to be temporary hurdles as the company gears up for enhanced production capabilities in the latter half of fiscal 2026.

Strategic Outlook

Modine remains committed to enhancing its product offerings and expanding market reach. As articulated by President and CEO Neil D. Brinker, the focus will remain on aligning manufacturing efforts with the accelerating demand for data center solutions. This includes plans to further bolster capacity and improve operational efficiencies while navigating the complexities of current market conditions.

Conclusion

In summary, Modine’s second quarter financial results underscore a dynamic and adaptive approach to growth amid shifting market conditions. The combination of strong revenue growth, an optimistic demand forecast, and strategic capacity enhancements positions the company well for sustained long-term success as it continues to innovate in the thermal management sector.

For more detailed insights and updates, Modine will host a conference call on October 29, 2025, at 10:00 a.m. Central Time, encouraging participants to join and stay informed of their strategies and market performance.