SPXC Q2 Deep Dive: Data Center Cooling and M&A Drive Upgraded Outlook

August 12, 2025 at 23:41 PM EDT

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Industrial conglomerate SPX Technologies (NYSE: SPXC) reported Q2 CY2025 results beating Wall Street’s revenue expectations, with sales up 10.2% year on year to $552.4 million. The company’s full-year revenue guidance of $2.25 billion at the midpoint came in 1.5% above analysts’ estimates. Its non-GAAP profit of $1.65 per share was 13.6% above analysts’ consensus estimates.

Is now the time to buy SPXC? Find out in our full research report (it’s free).

SPX Technologies (SPXC) Q2 CY2025 Highlights:

Revenue: $552.4 million vs analyst estimates of $548.2 million (10.2% year-on-year growth, 0.8% beat)
Adjusted EPS: $1.65 vs analyst estimates of $1.45 (13.6% beat)
Adjusted EBITDA: $152 million vs analyst estimates of $115.6 million (27.5% margin, 31.5% beat)
The company slightly lifted its revenue guidance for the full year to $2.25 billion at the midpoint from $2.23 billion
Management raised its full-year Adjusted EPS guidance to $6.50 at the midpoint, a 4% increase
EBITDA guidance for the full year is $497.5 million at the midpoint, above analyst estimates of $482.7 million
Operating Margin: 15.7%, in line with the same quarter last year
Organic Revenue rose 2.1% year on year vs analyst estimates of 3.1% growth (97.3 basis point miss)
Market Capitalization: $8.94 billion

StockStory’s Take

SPX Technologies delivered a second quarter that surpassed Wall Street’s expectations, highlighted by robust year-on-year sales growth and a significant improvement in non-GAAP profitability. Management credited recent acquisitions and strength in its Detection & Measurement segment for driving top-line momentum, with CEO Gene Lowe noting, “We grew revenue by 10%, largely driven by the benefit of recent acquisitions and project sales in our Detection & Measurement segment.” Additionally, operational execution and favorable project mix in the HVAC division contributed to margin stability, while the company continued to make progress on capacity expansion and new product launches.

Management’s updated guidance for the year reflects growing confidence in SPX Technologies’ ability to capitalize on rising demand in data center cooling and ongoing M&A activity. CEO Gene Lowe emphasized that the outlook is supported by a healthy backlog, continued traction for new products like OlympusV Max, and a robust pipeline of acquisition targets. While the company anticipates incremental production capacity in the first half of next year, CFO Mark Carano cautioned that tariffs and investments in product development may pressure segment margins in the second half. Management believes that executing on these growth initiatives will be key to sustaining earnings momentum.

Key Insights from Management’s Remarks

Management attributed second quarter outperformance to successful integration of recent acquisitions, expanding demand in data center cooling, and project wins in Detection & Measurement. They also addressed tariff impacts and ongoing investment in new product launches.

Data center cooling expansion: The launch of OlympusV Max, a new cooling solution for large-scale data centers, has broadened SPX Technologies’ addressable market. Management reported strong early customer interest, with substantial bookings expected to contribute to revenue growth in 2026. The modular design allows for both dry and adiabatic operation, appealing to customers optimizing between water and energy usage.
Backlog and project momentum: Both HVAC and Detection & Measurement segments saw notable increases in backlog, with project wins in transportation and communications technology (CommTech) underpinning growth. Management highlighted that project deliveries previously slated for early 2026 have been accelerated into 2025, driving higher near-term sales.
M&A integration and pipeline: Recent acquisitions, including KTS and Sigma & Omega, are performing above expectations. CEO Gene Lowe noted that KTS’s digital interoperability technology is being integrated into core products, while Sigma & Omega’s heat pump offering is benefiting from expanded channel access in the U.S. The company continues to prioritize M&A as a growth lever, particularly in Engineered Air Movement and Detection & Measurement.
Tariff and pricing dynamics: Management discussed the impact of tariffs as a modest headwind, particularly in the Detection & Measurement segment. CFO Mark Carano explained that pricing actions, including surcharges, helped offset some, but not all, of the cost increases, and expects these effects to be back-half weighted.
Segment margin drivers: HVAC margins were boosted by favorable project execution and a more profitable product mix. However, management expects some normalization in the second half as these one-time benefits taper, with ongoing investments in new products and capacity expansion likely to weigh on margins temporarily.

Drivers of Future Performance

SPX Technologies’ outlook is anchored by continued strength in data center cooling, a robust acquisition pipeline, and ongoing investments in production capacity and product innovation.

Data center cooling momentum: Management expects increased demand for data center cooling solutions, particularly from the OlympusV Max launch, to drive double-digit growth in this vertical. CEO Gene Lowe described the product as a differentiator, anticipating rising order volumes from both dry and adiabatic configurations as new capacity comes online in 2026.
M&A as a growth engine: The company’s acquisition strategy remains central, with a strong pipeline in Engineered Air Movement and Detection & Measurement. Management believes these acquisitions will deliver cost synergies, technology integration, and expanded market access—helping sustain revenue and margin growth.
Tariff and investment headwinds: CFO Mark Carano cautioned that while tariffs are a modest overall headwind, their impact will be more pronounced in the second half of the year. In addition, investments in new product development and capacity expansion are expected to temporarily pressure segment margins and free cash flow, though management remains confident in meeting annual cash flow targets.

Catalysts in Upcoming Quarters

Looking ahead, the StockStory team will be closely tracking (1) order momentum and customer adoption for OlympusV Max and other data center cooling solutions, (2) continued execution on recent acquisitions, especially integration progress and synergy realization, and (3) backlog trends and project delivery cadence in both HVAC and Detection & Measurement. Developments in tariff policy and the pace of production capacity expansion will also be important markers for future performance.

SPX Technologies currently trades at $191.17, up from $182.19 just before the earnings. In the wake of this quarter, is it a buy or sell? See for yourself in our full research report (it’s free).

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