Modine Data Center Sales Nearly Double as Quarterly Orders Top $1 Billion
Total sales rose 35 percent to $994.4 million. Data center orders set a record for a fourth straight quarter, and Modine now expects $3.1 billion to $3.2 billion in sales for the fiscal year.
Modine's sales to data center customers rose 95 percent to $439.7 million in the quarter ended Sept. 30, the second of its 2027 fiscal year, and the segment took in more than $1 billion of orders, a record for the fourth straight quarter. Total sales rose 35 percent to $994.4 million, the Racine, Wis., company reported Nov. 3.
Hyperscale customers in North America drove the gain. Americas data center sales rose 132 percent while EMEA fell 6 percent, according to Modine's earnings presentation, which also lists a $400 million program award from a "strategic hyperscale customer." Chiller sales in the segment declined on shipment timing, and Modine said it expects them to rise significantly in the second half.
The segment's gross margin fell 470 basis points to 19.7 percent, which Modine attributed mainly to higher material, component and tariff costs. Operating income still rose 70 percent to $61.2 million.
"We have bolstered our supply chain by entering into long-term agreements with multiple strategic suppliers to secure critical components to meet our existing backlog and future business needs," President and CEO Neil Brinker said.
Calgary Plant and a Coil Business Selling to Its Sister Segment
Modine started production at a third dedicated data center plant, in Calgary, for air handling units. Commercial HVAC sales rose 23 percent to $285.5 million on coils, coatings, and heating and ventilation products, with anti-corrosive coating revenue up 28 percent. That segment now builds V-Block subassemblies for the data center business and has qualified as an evaporator supplier to it. Modine said it is quoting more work for data center customers as a tier two coil supplier, and that sales in its HVAC Technologies unit grew on a rebound in Canadian demand.
Commercial HVAC gross margin slipped 140 basis points to 23.1 percent on mix and higher material and tariff costs.
The Company After the Gentherm Deal
Modine completed the spin-off of its Performance Technologies business, which serves vehicle, off-highway and power generation customers, on Oct. 1 and combined it with Gentherm in a Reverse Morris Trust transaction. Modine received $199 million from Gentherm at closing and used it to repay debt. Restructuring steps for the separation added $29.5 million of income tax expense in the quarter, and net earnings fell 32 percent to $30.3 million. Adjusted earnings rose to $1.35 a share from $1.06. Shareholders vote Nov. 13 on renaming the company Modexus Solutions.
Excluding Performance Technologies from both years, Modine now expects fiscal 2027 sales of $3.1 billion to $3.2 billion, up 50 to 55 percent, and adjusted EBITDA of $470 million to $500 million. It sees Data Centers sales up 80 to 90 percent and Commercial HVAC up 10 to 15 percent.
Free cash flow for the first six months was a use of $145.6 million, which Modine tied to capital spending and inventory for data center demand, and it expects $150 million to $200 million of capital expenditures for the year.
Why This Matters to Contractors
Modine's chiller output is the number to track on a project schedule. The company has 13 active chiller lines in North America and says it is on track for 20 by the end of its fiscal year on March 31, so the deferred chiller shipments from this quarter land in a window when its chiller capacity is still growing by more than half. Longer-term revenue and earnings targets come at Modine's Analyst and Investor Day on Nov. 18.
Sources
- Modine Manufacturing, "Modine Reports Second Quarter Fiscal 2027 Results," Nov. 3, 2026 (SEC Exhibit 99.1). sec.gov
- Modine Manufacturing, "Second Quarter Fiscal 2027" earnings presentation, Nov. 4, 2026 (SEC Exhibit 99.2). sec.gov
- Modine Manufacturing, Form 8-K/A on completion of the Performance Technologies spin-off and Gentherm combination, October 2026. sec.gov