SPX Technologies (NYSE:SPXC) reported a strong finish to 2025, highlighted by double-digit revenue growth, higher margins, and a 21% increase in full-year adjusted earnings. Management also outlined a 2026 outlook that implies another year of significant growth, supported by continued strength in HVAC demand—particularly tied to data centers—and record backlog in the company’s Detection & Measurement segment.
Fourth-quarter and full-year performance
Chief Financial Officer Mark Carano said fourth-quarter adjusted earnings per share rose 25% year over year to $1.88, while full-year adjusted EPS increased 21% to $6.76, landing toward the upper end of the company’s prior guidance range of $6.65 to $6.80.
Segment results: HVAC and Detection & Measurement
In the HVAC segment, fourth-quarter revenue grew 16.4%, including 5.5% inorganic growth and a modest foreign exchange tailwind. Organic revenue increased 10.3%, with management citing solid performance in both cooling and heating. Segment income rose $17 million, or 18%, and segment margin improved 40 basis points, which the company attributed primarily to higher volume and operating leverage. Segment backlog ended the quarter at $585 million, up 22% organically year over year.
In Detection & Measurement (D&M), revenue increased 26.3% year over year. Carano said the KTS acquisition contributed 23.2% of growth, with a modest FX tailwind, while organic revenue increased 1.7% primarily due to higher project volumes. Segment income grew $10 million, or 27%, and margin increased 20 basis points. D&M backlog finished at $350 million, up 43% organically year over year, which management described as record year-end levels with a higher percentage of multiyear projects.
Capital investment and capacity expansion tied to HVAC demand
CEO Gene Lowe emphasized ongoing investment to expand HVAC capacity, particularly for custom air handling and data center cooling products. The company completed the purchase of a 459,000 square-foot facility in Madison, Alabama during the fourth quarter. Lowe said the site will have flexible manufacturing capabilities for custom air handling and data center solutions, including the company’s OlympusMAX product. SPX expects assembly capability in the latter half of 2026 and initial production capability in the first half of 2027.
Management also discussed a previously announced Tennessee facility intended to produce TAMCO highly engineered aluminum dampers used in data centers. Production is expected to begin by the end of the first quarter of 2026 and ramp through the year.
SPX expects expansion-related investments across HVAC facilities to require approximately $100 million of capital in 2026, in addition to about $60 million invested in 2025. Lowe said these investments are expected to enable nearly half of HVAC segment revenue growth in 2026 and add roughly $700 million of incremental capacity once at full production, supporting growth in both data center and custom air handling volume. On the Q&A, management said it could be sometime in 2028 before full production capacity is realized across the major expansions discussed.
Acquisitions and data center commentary
Management highlighted recent HVAC acquisitions, including Thermelec and Air Enterprises and Rahn Industries. Lowe described Air Enterprises as a premium custom air handling provider with a blue-chip customer base, and said Rahn’s coil manufacturing capabilities could support both Air Enterprises and Ingenia, where the company has historically sourced coils externally. On Thermelec, Lowe said the business strengthens SPX’s duct heating position by expanding reach in Canada, where Thermelec is described as a leader.
Carano provided revenue context for the deals, pointing to approximately $35 million in annual revenue for Thermelec and “something in the low $80 million” for Air Enterprises and Rahn combined, noting SPX expects to own both businesses for 11 months in 2026. He added that segment income margins for both were “slightly higher” than SPX’s HVAC segment average.
On data centers, Lowe said data center revenue in 2025 was “in the neighborhood of $200 million, maybe a little bit more,” representing about 9% of total revenue (up from a previously discussed 7%). For 2026, Lowe said SPX anticipates data centers will move into the low double digits as a percentage of revenue—he cited about 12%—and said the company expects data center sales growth “probably in the 50% neighborhood” going into 2026.
Lowe also discussed the OlympusMAX product, saying SPX had been awarded by three customers for “material amounts.” He said the company targeted $50 million of bookings last year and achieved that, with conversion to revenue expected in 2026.
2026 guidance, cash flow, and key modeling considerations
SPX ended 2025 with $366 million of cash and $502 million of total debt. Carano said leverage under the bank credit agreement was approximately 0.3x at year-end, and about 1.0x including the effect of the recently announced acquisitions. Full-year adjusted free cash flow was $294 million, reflecting 90% conversion of adjusted net income, inclusive of the capacity-related investments.
For 2026, management issued guidance inclusive of Thermelec and Air Enterprises and Rahn Industries. Carano noted Crawford United’s Industrial and Transportation Products businesses are not included in guidance and will be reported in discontinued operations while SPX seeks a buyer.
- Revenue: $2.535 billion to $2.605 billion
- Segment income margin: 24.6% to 25.1%
- Adjusted EBITDA: $590 million to $620 million (about 20% growth at the midpoint; ~23.5% margin)
- Adjusted EPS: $7.60 to $8.00 (about 15% growth at the midpoint)
By segment, SPX guided to HVAC revenue of $1.8 billion to $1.84 billion with a segment margin of 24.5% to 25%, and D&M revenue of $735 million to $765 million with a segment margin of 24.75% to 25.25%.
Management also reiterated that 2026 growth will be affected by approximately $20 million of project revenue that was pulled into 2025 from 2026, creating what Lowe described as about a 5% growth headwind in D&M. On cadence, Carano said first-quarter revenue and segment income for both segments, as well as adjusted EPS, are expected to be similar to the prior year as a percentage of the full-year midpoint, and that first-half/second-half gating should be similar to last year.
In response to questions on margins, Carano said D&M’s expected margin expansion in 2026 is driven primarily by mix (about two-thirds) and cost optimization initiatives (about one-third), including engineering, R&D, sourcing, and footprint rationalization efforts. On HVAC, he said temporary startup costs related to bringing new plants online could create roughly a 50-basis-point headwind in 2026.
About SPX Technologies (NYSE:SPXC)
SPX Technologies (NYSE:SPXC) is a diversified global supplier of highly engineered products and solutions serving industrial, municipal, energy and utility markets. The company designs, manufactures and supports a broad range of equipment that helps customers monitor, control and manage critical processes in water distribution, power generation, HVAC, refrigeration and industrial applications.
The company’s Detection & Measurement Technologies segment offers leak detection systems, pipe and asset assessment tools, fluid flow measurement devices, gas detection equipment and related services.
