Modine Manufacturing Company (MOD) Q2 2025 earnings summary

Executive summary

• Net sales rose 6% year-over-year to $658M in Q2 FY2025, driven by Climate Solutions, data center demand, and the Scott Springfield acquisition.

• Adjusted EBITDA increased 23% to $99.8M, with margin up 210 basis points to 15.2%.

• Operating income grew 15% to $75.3M, despite higher SG&A and restructuring costs.

• Data center business revenues more than doubled year-over-year, with significant organic and acquisition-driven growth.

• Strategic focus on high-growth, high-margin businesses and 80/20 discipline continues to drive value.

Financial highlights

• Q2 net sales: $658M (+6% YoY); gross profit: $165.6M (25.2% margin); adjusted EBITDA: $99.8M (15.2% margin).

• Adjusted EPS rose 9% to $0.97; reported EPS was $0.86.

• Free cash flow for Q2 was $44M; year-to-date $58M; net debt reduced to $327M.

• SG&A expenses increased to $85.8M, mainly from higher compensation and acquisition-related costs.

• Leverage ratio improved to 0.9x; operating margin for Q2 was 11.4%.

Outlook and guidance

• FY25 net sales expected to grow 6–11% to $2.55B–$2.67B; adjusted EBITDA guidance: $375M–$395M.

• Adjusted EPS guidance maintained at $3.65–$3.95; effective tax rate expected at 26%–28%.

• Free cash flow for the year anticipated to be in line or above prior year; sufficient liquidity with $78.6M in cash and $190.8M in available credit.

• Q3 expected to be seasonally lower, with a rebound in Q4.

• Management expects to remain in compliance with debt covenants for FY2025 and beyond.