Modine Manufacturing Company (MOD) Q2 2027 earnings summary

Executive summary

• Q2 FY27 net sales rose 35% YoY to $994.4M; adjusted EBITDA increased 31% to $136.2M, while net earnings attributable to shareholders fell to $30.0M from $44.4M.

• Data Centers and Commercial HVAC sales grew 95% and 23%, respectively; continuing-business guidance was raised after the Performance Technologies spin-off.

Financial highlights

• Operating income increased 33% to $97.8M; gross profit rose 25% to $205.4M, while gross margin declined 160 bps to 20.7%.

• Adjusted EPS rose 27% to $1.35 from $1.06; diluted EPS was $0.56 versus $0.83, reflecting in part the spin-related tax charge.

• SG&A was $104.6M, including $14.1M of spin-off disposition costs; SG&A as a share of sales declined 90 bps to 10.5%.

• Q2 income tax expense included $29.5M tied to legal-entity restructuring for the spin-off.

Outlook and guidance

• FY2027 continuing-business sales guidance is $3.1B–$3.2B, up 50%–55% YoY excluding Performance Technologies from both periods; adjusted EBITDA guidance is $470M–$500M, with growth above 50%.

• Data Centers sales growth is forecast at 80%–90% and Commercial HVAC at 10%–15%; second-half margin improvement is assumed in both continuing segments.

• FY2027 free cash flow is forecast from flat to $25M and capital expenditures at $150M–$200M; ranges include Performance Technologies for H1.

• An additional $20M–$25M of transaction costs is expected in H2 FY2027.

• Data Centers adjusted EBITDA margin is expected to improve 100–200 bps sequentially in Q3 and reach 20% or higher in Q4.