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Sep 30
Modine Q2 2026 Earnings Report
Modine reported its second quarter fiscal 2026 results, with strong revenue performance driven by organic growth in the Climate Solutions segment and strategic acquisitions, leading to a raised full-year revenue guidance.
Key Takeaways
Modine delivered a strong second quarter for fiscal year 2026, with net sales increasing by 12% to $738.9 million, primarily fueled by robust demand in the Climate Solutions segment, especially from data center customers, and contributions from recent acquisitions. Despite a slight decrease in net earnings and operating income due to temporary operating inefficiencies from capacity expansion and an impairment charge, adjusted EBITDA saw a 4% increase. The company also raised its full-year revenue guidance, reflecting confidence in continued growth.
Net sales increased by 12% to $738.9 million, compared to $658.0 million in the prior year, driven by strong performance in Climate Solutions.
Net earnings decreased by 3% to $44.8 million, while adjusted earnings per share increased by 9% to $1.06.
Adjusted EBITDA rose by 4% to $103.8 million, indicating underlying operational strength despite some temporary cost pressures.
The company raised its full-year fiscal 2026 net sales growth outlook to between 15% and 20%, up from the previous 10% to 15%.
Modine
Modine
Modine Revenue by Segment
Revenue by Segment
Climate Solutions Revenue
CapyFin.comPerformance Technologies Revenue
CapyFin.com Forward Guidance
Modine has raised its fiscal 2026 net sales growth outlook and reaffirmed its adjusted EBITDA guidance, anticipating accelerated organic growth in Climate Solutions, particularly in Data Centers.
Positive Outlook
- Net sales growth is projected to be between 15% to 20%, an increase from the prior outlook of 10% to 15%.
- Data Centers revenue is expected to grow by more than 60% year-over-year.
- Adjusted EBITDA is projected to be in the range of $440 million to $470 million, representing 12% to 20% growth.
- Expanded capacity is expected to meet growing demand for data center products.
- The company remains on track to achieve more than $2 billion in Data Centers revenue by fiscal 2028.
Challenges Ahead
- Temporary operating inefficiencies are being encountered as additional manufacturing capacity comes online.
- The company expects to record non-cash pension settlement charges totaling approximately $120 million to $125 million during the second half of fiscal 2026.
- The provisions of the One Big Beautiful Bill Act negatively impacted income tax expense for the second quarter of fiscal 2026 by $3.1 million.
- Estimates of other expenses and gains for the remainder of fiscal 2026 are not available due to low visibility and unpredictability.
- The prior year included a benefit from commercial pricing settlements from heat pump customers, which is absent in the current period.
Revenue & Expenses
Visualization of income flow from segment revenue to net income