Modine Manufacturing Company (MOD) Q4 2026 earnings summary

Executive summary

• Achieved fourth consecutive year of record revenue and adjusted EBITDA, with strong Q4 performance and strategic transformation through three acquisitions, data center capacity expansion, and the announced spin-off and merger of Performance Technologies with Gentherm.

• Secured a landmark long-term agreement to supply over $4 billion in data center cooling products from 2027–2029, validating capacity expansion investments.

• Q4 net sales reached $954.4 million, up 47% year-over-year; full-year net sales were $3.2 billion, up 23% year-over-year.

• Q4 net earnings rose 47% to $73.6 million, though full-year net earnings fell 34% to $123.3 million due to a $116.1 million non-cash pension termination charge.

• Adjusted EBITDA reached $146.1 million in Q4 (up 40%) and $471.0 million for the year (up 20%).

Financial highlights

• Q4 FY26 net sales increased 47% to $954.4M; adjusted EBITDA up 40% to $146.1M; adjusted EPS up 53% to $1.71.

• FY26 net sales rose 23% year-over-year to $3.18B; adjusted EBITDA up 20% to $471M.

• Q4 gross profit increased 29% to $214.7 million, though gross margin declined 320 bps to 22.5% due to expansion costs and higher tariffs/material costs.

• Free cash flow was $153 million in Q4, including a $165 million upfront payment from the LTA, recorded as a contract liability.

• Net debt rose to $363 million at year-end, reflecting acquisitions and data center investments.

Outlook and guidance

• Fiscal 2027 net sales expected to grow 20–35% to $3.82B–$4.29B; adjusted EBITDA guidance of $650–$680 million (up 38–44%).

• Data Centers segment projected to grow 60–80%; Commercial HVAC up 5–10%; Performance Technologies flat to +5%.

• Free cash flow expected at 4–6% of net sales; capital expenditures estimated at $150–$200M.

• Outlook includes Performance Technologies for all of fiscal 2027; will be updated post-spin-off.

• Sequential margin and earnings improvement anticipated throughout the year.