Core Viewpoint - JPMorgan's Stephen Tusa has initiated coverage of SPX Technologies (SPXC) with an Overweight rating and a price target of $260, indicating a strong bullish sentiment towards the company [1] Company Summary - SPX Technologies has received a positive outlook from JPMorgan, suggesting potential for growth and investment opportunities [1]

Core Insights - SPX Technologies reported strong fourth-quarter results with a 19.4% year-over-year revenue increase, driven by both acquisitions and organic growth across segments [2] - The company anticipates continued growth in 2026, with projected revenue between $2.535 billion and $2.605 billion, and adjusted EPS expected to rise by approximately 15% [6][20] HVAC Segment Performance - In the HVAC segment, fourth-quarter revenue grew by 16.4%, with organic revenue increasing by 10.3% and segment income rising by $17 million, or 18% [1] - The segment backlog reached $585 million, reflecting a 22% organic increase year-over-year [1] Detection & Measurement Segment Performance - The Detection & Measurement segment saw a revenue increase of 26.3% year-over-year, with organic revenue growth of 1.7% primarily due to higher project volumes [6] - Segment income grew by $10 million, or 27%, and backlog finished at $350 million, up 43% organically year-over-year [6] Financial Highlights - Adjusted earnings per share for the fourth quarter rose by 25% to $1.88, while full-year adjusted EPS increased by 21% to $6.76 [3] - Adjusted EBITDA for the fourth quarter increased by approximately 22% year-over-year, with a margin expansion of 50 basis points [2] Capital Investments and Capacity Expansion - SPX is investing approximately $100 million in capital expenditures for HVAC capacity expansion in 2026, following about $60 million in 2025 [5][9] - A new 459,000 square-foot facility in Alabama is expected to enhance manufacturing capabilities for custom air handling and data center solutions [7] Acquisitions and Strategic Growth - Recent acquisitions, including Thermelec and Air Enterprises, are expected to contribute approximately $35 million and low $80 million in annual revenue, respectively [11][12] - Data center revenue is projected to grow significantly, moving from about 9% of total revenue in 2025 to approximately 12% in 2026, with anticipated growth of around 50% [13] 2026 Guidance - Management provided guidance for 2026, forecasting HVAC revenue between $1.8 billion and $1.84 billion, and Detection & Measurement revenue between $735 million and $765 million [17] - The company expects adjusted EBITDA of $590 million to $620 million and adjusted EPS of $7.60 to $8.00 for 2026 [20]

Financial Performance - HVAC reportable segment revenues were $1,518.2 million in 2025, up from $1,364.7 million in 2024 and $1,122.3 million in 2023, representing a year-over-year growth of approximately 11.3% from 2024 to 2025 and 21.6% from 2023 to 2024[30] - Detection and Measurement segment revenues were $746.9 million in 2025, up from $619.2 million in 2024 and $618.9 million in 2023, with a backlog of $350.3 million as of December 31, 2025[31] - International sales reached $452.5 million in 2025, compared to $343.1 million in 2024 and $287.1 million in 2023[38] Backlog and Revenue Recognition - As of December 31, 2025, the HVAC segment backlog was $584.5 million, an increase from $436.8 million as of December 31, 2024, indicating a backlog growth of approximately 33.9% year-over-year[30] - Approximately 83% of the HVAC segment's backlog as of December 31, 2025, is expected to be recognized as revenue during 2026[30] - Approximately 66% of the backlog is expected to be recognized as revenue during 2026[31] Acquisitions - The company completed the acquisition of T.A. Morrison & Co. Inc. on April 3, 2023, enhancing its HVAC reportable segment with motorized and non-motorized dampers[17] - On June 2, 2023, the company acquired ASPEQ Heating Group, a leading provider of electrical heating solutions, further strengthening its HVAC segment[18] - The company acquired Ingénia Technologies Inc. on February 7, 2024, specializing in custom air handling units for various high-precision markets, which will also be included in the HVAC segment[19] - The company completed the acquisition of Kranze Technology Solutions, Inc. on January 27, 2025, focusing on digital interoperability solutions for the defense industry, contributing to the Detection and Measurement segment[20] - The company acquired Thermolec in January 2026, Crawford in February 2026, and Sigma & Omega in April 2025, among others[34] - Cash outflows related to acquisitions totaled $8.2 million during the year ended December 31, 2025[33] Workforce and Operations - The company reported a diversified global presence with operations in 16 countries and approximately 4,700 employees, indicating a strong operational scale[25] - The company employs approximately 4,700 employees, with about 3,500 based in the United States[54] - The company has experienced satisfactory labor relations but is subject to potential union campaigns and labor disputes[54] - The company has trained 315 leaders through its "Frontline Leaders Program" and 138 leaders have completed the "Amplified Leadership" midlevel leader program[56] - Over 90% of employees participated in the updated Global Employee Survey, which informed action plans to enhance employee priorities[57] Research and Development - The company emphasizes research and development to improve existing products and develop new ones, focusing on sustainable solutions[41] Working Capital and Sales Trends - The company maintains sufficient working capital levels to support customer requirements, particularly inventory, and generally experiences stronger sales in the second half of the calendar year[60] - The company’s businesses generally experience stronger performance in the second half of the calendar year due to seasonal fluctuations[60]

Financial Data and Key Metrics Changes - The company reported a 19.4% year-over-year increase in total revenue for Q4 2025, driven by acquisitions and organic growth [11] - Adjusted EPS grew by 25% to $1.88 for Q4, and full-year adjusted EPS increased by 21% to $6.76, aligning with the upper end of guidance [11][15] - Adjusted EBITDA increased by approximately 22% year-over-year, with a margin expansion of 50 basis points [7][11] Business Line Data and Key Metrics Changes - In the HVAC segment, revenue grew by 16.4% year-over-year, with 5.5% from inorganic growth and a 10.3% organic growth [11][12] - The detection and measurement segment saw a revenue increase of 26.3% year-over-year, with KTS acquisition contributing 23.2% to growth [12] - Segment backlog for HVAC was $585 million, up 22% organically year-over-year, while detection and measurement backlog was $350 million, up 43% organically [12][13] Market Data and Key Metrics Changes - The company anticipates total revenue for 2026 to be in the range of $2.535 billion to $2.605 billion, with adjusted EBITDA expected between $590 million and $620 million [15] - The HVAC segment is projected to generate revenue between $1.8 billion and $1.84 billion in 2026, while the detection and measurement segment is expected to generate revenue between $735 million and $765 million [16] Company Strategy and Development Direction - The company is focusing on expanding capacity within its HVAC segment to meet growing demand, including the acquisition of new facilities and strategic acquisitions [5][9] - The introduction of new products like OlympusMAX is expected to drive significant growth, particularly in the data center market [47] - The company is actively pursuing additional acquisition opportunities to enhance its market position in engineered air movement and electric heat [80] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving approximately 20% adjusted EBITDA growth in 2026, supported by strong demand and a solid backlog [19] - The company is optimistic about market conditions, particularly in HVAC and detection and measurement segments, with expectations of continued growth [18] - Management noted that while there are some soft spots in certain markets, overall growth remains solid, particularly in data centers and healthcare [86] Other Important Information - The company plans to invest approximately $100 million in capacity expansion in 2026, in addition to $60 million invested in 2025 [9] - The leverage ratio at year-end was approximately 0.3 times, indicating a strong financial position [13] Q&A Session Summary Question: Data center revenue growth in 2025 and its percentage of total revenue - Management indicated that data center revenue is around $200 million, approximately 9% of total revenue, and expects growth to reach low double digits in 2026 [25] Question: Strategic state of recent acquisitions - Management highlighted that Air Enterprises and Rahn Industries will enhance HVAC positioning and provide operational synergies, with expected revenue contributions of around $110 million in 2026 [31] Question: Capacity additions and revenue potential - Management confirmed that full production from capacity expansions could equate to approximately $700 million in revenue potential, with a timeline for full production expected by 2028 [66][68] Question: Margin expansion in detection and measurement segment - Management explained that margin expansion is driven by project mix and ongoing cost optimization initiatives [70] Question: Trends in non-data center end markets - Management noted solid growth in HVAC markets such as healthcare and heavy industrial, while some sectors like automotive and commercial real estate are softer [86] Question: Supply chain concerns - Management stated that there are currently no significant supply chain concerns, and they are monitoring the situation closely [106]

Financial Data and Key Metrics Changes - For Q4 2025, adjusted EPS grew by 25% to $1.88, while full-year adjusted EPS increased by 21% to $6.76, aligning with the upper end of guidance [9][12] - Total company revenues rose by 19.4% year-over-year, driven by acquisitions and organic growth [9][10] - Adjusted EBITDA increased by approximately 22% year-over-year, with a margin expansion of 50 basis points [5][9] Business Line Data and Key Metrics Changes - In the HVAC segment, revenue grew by 16.4% year-over-year, with 5.5% from inorganic growth and a 10.3% increase on an organic basis [10] - The detection and measurement segment saw revenue increase by 26.3% year-over-year, with KTS acquisition contributing 23.2% to growth [10] - Segment backlog for HVAC was $585 million, up 22% organically year-over-year, while detection and measurement backlog was $350 million, up 43% organically [10][11] Market Data and Key Metrics Changes - The company anticipates total revenue for 2026 to be in the range of $2.535 billion to $2.605 billion, with adjusted EBITDA expected between $590 million and $620 million [12][13] - The HVAC segment is expected to generate revenue between $1.8 billion and $1.84 billion, while the detection and measurement segment is projected to bring in $735 million to $765 million [13] Company Strategy and Development Direction - The company is focusing on expanding capacity within the HVAC segment to meet growing demand, including the acquisition of new facilities and strategic acquisitions [4][5] - The introduction of new products, such as OlympusMAX, is aimed at capturing market share in data center cooling solutions [44][55] - The company is actively pursuing additional acquisition opportunities to strengthen its market position in engineered air movement and electric heat [78] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving approximately 20% adjusted EBITDA growth in 2026, supported by strong demand and a solid backlog [16] - The company noted improving global market conditions in the detection and measurement segment, which is expected to support growth [15] - Management highlighted the importance of ongoing investments in capacity expansion to meet future demand [7][16] Other Important Information - The company plans to invest approximately $100 million in capacity expansion in 2026, in addition to $60 million invested in 2025 [7] - The company ended the year with $366 million in cash and total debt of $502 million, resulting in a leverage ratio of approximately 0.3 times [11] Q&A Session Summary Question: How much did data center revenue grow in 2025? - Data center revenue is approximately $200 million, representing about 9% of total revenue, with expectations for growth to around 12% in 2026 [22] Question: Can you provide more details on the strategic acquisitions? - The acquisitions of Air Enterprises, Rahn Industries, and Thermelec are expected to enhance HVAC positioning and provide operational synergies [24][28] Question: How should we model the $20 million revenue pull forward in 2026? - The $20 million should be adjusted out of the back half of 2026, as it was originally expected in that period [34][40] Question: What are the expectations for the OlympusMAX product? - OlympusMAX has received positive feedback, with expectations of significant bookings and revenue conversion in the coming years [44] Question: What is the outlook for non-data center end markets? - Growth is expected in healthcare, power, and heavy industrial sectors, while some areas like automotive and commercial real estate are softer [86]

Q4 2025 Earnings Presentation FEBRUARY 24, 2026 Q4 2025 EARNINGS PRESENTATION | COPYRIGHT © 2025 SPX TECHNOLOGIES 1 Q4 2025 EARNINGS PRESENTATION | COPYRIGHT © 2025 SPX TECHNOLOGIES FEBRUARY 24, 2026 2 | Introductory Comments Gene Lowe, President & Chief Executive Officer FEBRUARY 24, 2026 Q4 2025 EARNINGS PRESENTATION | COPYRIGHT © 2025 SPX TECHNOLOGIES 3 | Safe Harbor Statement Certain statements contained in this presentation that are not historical facts, including any statements as to future market con ...

Revenue Growth - Revenue for Q4 2025 was $637.3 million, an increase of 19.4% compared to Q4 2024[3] - Full-year 2025 revenue reached $2,265.1 million, up 14.2% from 2024[3] - The company anticipates 2026 revenue in the range of $2.535 to $2.605 billion, representing approximately 13% growth year-over-year at the midpoint[3] - Consolidated revenues reached $637.3 million for the three months ended December 31, 2025, reflecting a 19.4% increase from $533.7 million in the same period of 2024[31] - Consolidated revenues for the twelve months ended December 31, 2025, were $2,265.1 million, a 14.2% increase from $1,983.9 million in 2024[31] Profitability Metrics - Adjusted EBITDA for Q4 2025 was $142.0 million, reflecting a growth of 22.3% year-over-year[3] - Adjusted EPS for Q4 2025 was $1.88, up 24.5% compared to Q4 2024[3] - The company expects continued double-digit growth in Adjusted EBITDA and Adjusted EPS for 2026[2] - Consolidated operating income for the three months ended December 31, 2025, was $100.1 million, an increase of 11.0% from $90.2 million in the prior year[31] - Net income for the three months ended December 31, 2025, was $77.9 million, compared to $57.1 million in the same period of 2024, representing a 36.0% increase[27] Segment Performance - The HVAC segment reported Q4 2025 revenue of $431.1 million, a 16.4% increase from Q4 2024[5] - Detection & Measurement segment revenue for Q4 2025 was $206.2 million, up 26.3% year-over-year[9] - HVAC reportable segment revenues increased by 16.4% to $431.1 million for the three months ended December 31, 2025, compared to $370.5 million for the same period in 2024[31] - Detection & Measurement reportable segment revenues rose by 26.3% to $206.2 million for the three months ended December 31, 2025, compared to $163.2 million for the same period in 2024[31] Asset and Debt Management - Total debt decreased to $501.6 million in Q4 2025 from $614.7 million in Q4 2024[12] - Long-term debt decreased to $496.7 million in 2025 from $577.0 million in 2024, a reduction of 13.9%[29] - The company’s total stockholders' equity increased to $2,237.5 million in 2025, up from $1,384.4 million in 2024, representing a 61.7% increase[29] - Total current assets increased to $1,143.7 million as of December 31, 2025, from $784.3 million in 2024, marking a 45.8% growth[29] - Total assets reached $3,604.6 million as of December 31, 2025, up from $2,714.5 million in 2024, a growth of 32.6%[29] Cash Flow and Investments - Net cash from operating activities for the twelve months ended December 31, 2025, was $333.3 million, compared to $285.9 million in 2024, representing an increase of 16.5%[33] - Operating cash flow from continuing operations for the twelve months ended December 31, 2025, was $335.6 million, an increase from $313.1 million in 2024[58] - Capital expenditures for the twelve months ended December 31, 2025, totaled $92.1 million, up from $38.0 million in 2024[36] - The company reported a net cash used in investing activities of $561.0 million for the twelve months ended December 31, 2025, compared to $284.5 million in 2024[36] - Free cash flow from continuing operations for the three months ended December 31, 2025, was $127.3 million, compared to $156.9 million in the prior year[56] Earnings Per Share - The company reported a basic income per share of $1.57 for the three months ended December 31, 2025, compared to $1.22 in 2024, a 28.7% increase[27] - Earnings per share from continuing operations for the three months ended December 31, 2025, increased to $1.88 from $1.54 on a GAAP basis[44] - For the twelve months ended December 31, 2025, earnings per share from continuing operations rose to $6.76 from $5.06 on a GAAP basis[46] Corporate Expenses and Adjustments - Corporate expenses for the twelve months ended December 31, 2025, were $59.2 million, with adjustments leading to an adjusted figure of $52.4 million[46] - Acquisition and integration-related costs for the twelve months ended December 31, 2025, totaled $28.9 million, which were fully adjusted out[46] - The company reported a long-term incentive compensation expense of $16.7 million for the twelve months ended December 31, 2025, with adjustments reducing it to $15.1 million[46] - Interest expense for the twelve months ended December 31, 2025, was $43.3 million, with no adjustments made[46] - The income tax provision for the twelve months ended December 31, 2025, was $68.6 million, adjusted to $104.9 million[46]

Core Insights - SPX Technologies, Inc. reported strong financial results for Q4 and full-year 2025, with significant growth in Adjusted EBITDA and Adjusted EPS exceeding 20% [1][3] - The company anticipates continued double-digit growth in Adjusted EBITDA and Adjusted EPS for 2026, driven by strong customer demand and operational momentum [1][3] Financial Performance - Q4 2025 revenue reached $637.3 million, a 19.4% increase from Q4 2024's $533.7 million [2][3] - Full-year 2025 revenue was $2,265.1 million, up 14.2% from $1,983.9 million in 2024 [2][3] - Q4 2025 GAAP income from continuing operations was $78.2 million, a 38.4% increase from $56.5 million in Q4 2024 [2][3] - Full-year 2025 GAAP income from continuing operations was $245.5 million, up 21.7% from $201.8 million in 2024 [2][3] - Adjusted EBITDA for Q4 2025 was $142.0 million, a 22.3% increase from $116.1 million in Q4 2024 [2][3] - Full-year 2025 Adjusted EBITDA was $507.4 million, up 20.5% from $421.0 million in 2024 [2][3] Segment Performance - HVAC segment revenue for Q4 2025 was $431.1 million, a 16.4% increase from $370.5 million in Q4 2024 [5][34] - Detection & Measurement segment revenue for Q4 2025 was $206.2 million, a 26.3% increase from $163.2 million in Q4 2024 [8][34] - HVAC segment income for Q4 2025 was $108.5 million, representing a margin of 25.2% [5][34] - Detection & Measurement segment income for Q4 2025 was $47.9 million, with a margin of 23.2% [8][34] 2026 Guidance - For 2026, SPX expects total revenue in the range of $2.535 to $2.605 billion, reflecting approximately 13% year-over-year growth at the midpoint [3][14] - Adjusted EBITDA is projected to be between $590 million and $620 million, indicating a 20% year-over-year increase at the midpoint [3][14] - Adjusted EPS is expected to range from $7.60 to $8.00, representing a 15% year-over-year increase at the midpoint [3][14]

Core Viewpoint - SPX Technologies (SPXC) is expected to report quarterly earnings of $1.86 per share, reflecting a year-over-year increase of 23.2%, with revenues projected at $627.44 million, up 17.6% from the previous year [1] Group 1: Earnings and Revenue Estimates - The consensus EPS estimate for the upcoming quarter has remained unchanged over the last 30 days, indicating analysts' stable outlook [1] - The consensus estimate for 'Revenues- Detection & Measurement' is $197.64 million, suggesting a year-over-year increase of 21.1% [4] - 'Revenues- HVAC' is expected to reach $429.80 million, indicating a year-over-year change of 16% [4] Group 2: Segment Income Estimates - Analysts project 'Segment Income- Detection & Measurement' to be $45.83 million, compared to $37.60 million from the same quarter last year [4] - The expected 'Segment Income- HVAC' is $107.68 million, up from $91.80 million reported in the same quarter last year [5] Group 3: Stock Performance and Market Outlook - SPX Technologies shares have increased by 9.4% over the past month, contrasting with a -0.8% change in the Zacks S&P 500 composite [5] - With a Zacks Rank 2 (Buy), SPXC is anticipated to outperform the overall market in the near future [5]

Core Viewpoint - SPX Technologies (SPXC) is outperforming its peers in the Construction sector with a year-to-date return of 20.8%, compared to the sector average of 15.7% [4] Group 1: Company Performance - SPX Technologies is currently ranked 2 (Buy) in the Zacks Rank, indicating a positive outlook based on earnings estimates and revisions [3] - Over the past 90 days, the Zacks Consensus Estimate for SPXC's full-year earnings has increased by 1.5%, reflecting improved analyst sentiment [4] - SPX Technologies belongs to the Building Products - Air Conditioner and Heating industry, which has an average year-to-date return of 27.9%, indicating that SPXC is slightly underperforming its industry [6] Group 2: Sector and Industry Context - The Construction sector, which includes 92 individual stocks, is ranked 16 in the Zacks Sector Rank, measuring the strength of sector groups [2] - Another stock in the Construction sector, UFP Industries (UFPI), has outperformed with a year-to-date return of 22.8% and also holds a Zacks Rank of 2 (Buy) [5] - The Building Products - Wood industry, to which UFP Industries belongs, is currently ranked 175 and has a year-to-date return of 17.3% [7]