SPX Technologies (SPXC) Q2 2024 earnings summary

Executive summary

• Q2 2024 delivered record results with revenue up 18.4% to $501.3M, driven by strong HVAC growth (organic and acquisitions), while Detection & Measurement declined.

• Adjusted EBITDA grew 45% to $109M, with 400 bps margin expansion; adjusted EPS rose 34% to $1.42, excluding an $8.4M legal settlement charge.

• Net income increased to $44.2M, up from $36.0M year-over-year; operating income rose to $74.6M from $51.3M.

• Strong demand in HVAC cooling, data centers, healthcare, and institutional markets; operational improvements and successful integration of Ingénia, ASPEQ, and TAMCO supported growth.

• Value creation initiatives advanced, including new product introductions and productivity gains.

Financial highlights

• Q2 2024 revenue was $501.3M (+18.4% year-over-year); organic growth 9%, acquisitions 9.5%.

• Adjusted EBITDA reached $109M (21.7% margin), highest post-spin; adjusted operating income margin improved to 20.5%.

• Adjusted free cash flow for Q2 was $58M; net operating cash flow from continuing operations was $58.7M.

• Q2 2024 net income: $44.2M; diluted EPS: $0.96 (GAAP), $1.42 (adjusted).

• Gross margin for Q2 2024: 40.1%, up from 38.6% year-over-year.

Outlook and guidance

• Full-year 2024 guidance raised: revenue $1.97–$2.02B, adjusted EBITDA $410–$430M (35% growth), adjusted EPS $5.45–$5.60 (28% growth at midpoint).

• Segment income margin guidance: HVAC 23–24%, Detection & Measurement 20.75–21.75%.

• HVAC revenue and margin guidance raised due to strong cooling volumes and improved efficiency.

• Detection & Measurement segment faces near-term headwinds but is expected to benefit from favorable mix and improvement initiatives.

• Net leverage expected to fall below 1.5x by year-end.