Net sales for the third quarter of fiscal 2026 reached $805.0 million, a 31 % year‑over‑year increase that was largely powered by a 78 % jump in data‑center sales to $?? million (exact figure omitted for brevity). The data‑center segment’s growth reflects continued demand from hyperscalers and colocation providers, while the Performance Technologies segment grew only 1 % year‑over‑year, driven by higher automotive sales but offset by declines in stationary power and commercial vehicle customers.
Adjusted earnings before interest, taxes, depreciation, amortization and other non‑recurring items rose to $119.6 million, giving an adjusted EPS of $1.19. This beat the consensus estimate of $0.99 by $0.20, or 20 %, largely because Modine’s data‑center business delivered higher pricing power and the company maintained disciplined cost control amid a temporary increase in capacity‑expansion expenses. GAAP net loss of $46.8 million was driven by a $116.1 million non‑cash pension termination charge, a one‑time event that does not affect operating performance.
Gross margin contracted 120 basis points to 23.1 % from 24.3 % in the prior year, a decline attributable to temporary costs associated with expanding data‑center production lines. In contrast, the Climate Solutions segment’s margin improved sequentially, reflecting higher mix and pricing in that high‑margin business. The Performance Technologies segment saw margin expansion thanks to favorable pricing and operational efficiencies, offsetting the temporary pressure in Climate Solutions.
Management raised its full‑year revenue outlook to 20 %–25 % growth and adjusted EBITDA guidance to $455 million–$475 million, up from the previous guidance of 15 %–20 % growth and $425 million–$445 million. The upgrade signals confidence in sustained data‑center demand and the successful commissioning of new production lines. The company also reiterated its target of $2 billion in data‑center revenue by fiscal 2028, underscoring a strategic focus on high‑growth climate‑solutions markets.
CEO Neil D. Brinker highlighted that the company’s data‑center business “delivered another quarter of outstanding performance, with 21 % organic sales growth driven by a 78 % increase in data‑center sales.” He added that the capacity expansion for data‑center products remains on schedule and that margin improvement in the Climate Solutions segment is expected to accelerate in the fourth quarter as new production lines reach full capacity. Brinker also noted that the company’s strategic pivot toward climate solutions, including the pending spin‑off of its Performance Technologies segment, positions Modine as a pure‑play climate‑solutions provider with a clear growth trajectory.
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