Q2 2026 SPX Technologies Inc Earnings Call Transcript
Key Points
- SPX Technologies Inc (SPXC) delivered strong Q2 2026 results with 23% revenue growth and 20% adjusted EBITDA growth, driven by robust organic growth in both segments.
- The company raised its full-year 2026 adjusted EPS guidance by $0.45 to a midpoint of $8.40, reflecting higher data center volume, stronger Detection & Measurement performance, and the Neptronic acquisition.
- Data center capacity expectations were increased to $1.1 billion from $750 million, supported by better-than-expected throughput at Olathe and Springfield facilities and the launch of assembly at the new Madison, Alabama plant.
- The strategic acquisition of Neptronic expands SPX Technologies Inc (SPXC)'s HVAC capabilities into controls, humidification, and electric duct heaters, with high-single-digit growth potential and strong margins in the low 40s.
- Detection & Measurement segment income grew 43% year-over-year with a 610 basis point margin improvement, driven by high-margin project volumes and synergy initiatives.
- The company maintains a strong balance sheet with a leverage ratio of 1.4 times pro forma for Neptronic, providing ample capacity for future acquisitions.
- Backlog in HVAC grew 59% organically year-over-year, driven by strong data center demand, providing good visibility into future revenue.
- HVAC segment margin declined by 260 basis points year-over-year in Q2, impacted by capacity expansion start-up costs, net tariff effects, and modest inflationary headwinds.
- Detection & Measurement backlog declined year-over-year due to higher project volumes in the quarter, which could impact future revenue visibility.
- The company noted that a portion of D&M's strong Q2 performance was due to a project pulled forward from Q3, which may create lumpiness in quarterly results.
- SPX Technologies Inc (SPXC) faces potential customer concentration risk in the data center market, as a small number of hyperscalers represent a significant portion of demand.
- The company's data center capacity expansion to $1.1 billion is dependent on successful execution of plant ramps, with the Madison facility not expected to reach full production until the second half of 2028.
- The D&M segment is expected to be relatively flat in 2026, with growth returning only in 2027, indicating a slower year for that business.
- The company's guidance implies a significant ramp in margins in the back half of the year, which may be challenging to achieve if tariffs or start-up costs persist.
Thank you for standing by and welcome to SPX Technologies Second Quarter 2026 Earnings Conference Call. Currently, all participants are in a listen only mode. After the speaker's presentation, there will be a question and answer session. To ask a question during the session, you will need to press *11 on your telephone. To remove yourself from the queue, you may press *11 again. I would now like to hand the call over to Johann Rawlinson, Investor Relations. Please go ahead.
Thank you, operator, and good afternoon, everyone. Thanks for joining us. With me on the call today is Gene Lowe, our President and Chief Executive Officer and Mark Carano, our Chief Financial Officer. A press release containing our second quarter results was issued today after market close. You can find the release and our earnings slide presentation, as well as a link to a live webcast of this call in the news section of our website at spx.com. I encourage you to review our disclosure and discussion of GAAP results
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