Executive Summary

Q2 2025 delivered double-digit growth and margin expansion: revenue $552.4M (+10.2% YoY), GAAP EPS $1.10 (+14.6% YoY), Adjusted EPS $1.65 (+16.2% YoY), Adjusted EBITDA $126.7M (+16.3% YoY); Adjusted EBITDA margin rose 120 bps to 22.9% .
Guidance raised again: FY25 revenue $2.225–$2.275B, Adjusted EBITDA $485–$510M, Adjusted EPS $6.35–$6.65; segment ranges raised and margins tightened upward (HVAC and D&M) .
Q2 beat Wall Street consensus across EPS, revenue, and EBITDA; strength driven by HVAC mix and favorable project execution, plus contributions from recent acquisitions (KTS; Sigma & Omega) .
Strategic catalysts: data center cooling (Olympus Vmax) gaining traction with targeted 2025 bookings and 2026 revenue, and engineered air movement capacity expansions slated for 1H26; backlog increased sequentially in both segments .
Tariff headwinds moderated to ~$0.05 EPS for the year, with surcharges rolling off; management signaled back-half D&M margin impact but reiterated confidence in FY25 outlook .

What Went Well and What Went Wrong

What Went Well

Strong HVAC margins and execution: “about 50% of [Q2 HVAC margin uplift] related to some favorable project execution… [and] a more accretive mix” .
Data center momentum and new product: “Olympus Vmax runs either dry…or in adiabatic mode…we expect this product to…increase our addressable market…target is to book Olympus Vmax orders this year for revenue in 2026” .
Raised FY25 guidance again: “Adjusted EBITDA* to a range of $485 to $510 million…an approximately 18% year-over-year increase at the midpoint…reflects our strong second quarter performance” .

What Went Wrong

Tariff drag and surcharge roll-off: recalibrated tariff impact to ~$0.05 EPS for 2025; surcharges harder to stick as certain tariffs stepped down, particularly China .
D&M margin headwind expected in 2H: implied step-down (~90 bps YoY in 2H) driven by tariffs and investments in new products (ticket vending machine; Comtech) .
Lower operating cash flow vs prior year Q2: net operating cash from continuing ops $43.4M vs $58.7M (timing around AR and project deliveries; tariff mitigation inventory buys) .

Financial Results

Consolidated performance vs prior periods

Metric	Q4 2024	Q1 2025	Q2 2025
Revenue ($USD Millions)	$533.7	$482.6	$552.4
GAAP Diluted EPS ($)	$1.19	$1.10	$1.10
Adjusted EPS ($)	$1.51	$1.38	$1.65
Adjusted EBITDA ($USD Millions)	$116.1	$102.6	$126.7
Adjusted EBITDA Margin (%)	21.8%	21.3%	22.9%
Operating Income ($USD Millions)	$90.2	$66.6	$86.6
Operating Margin (%)	16.9%	13.8%	15.7%

Segment breakdown

Segment	Q2 2024 Revenue ($MM)	Q1 2025 Revenue ($MM)	Q2 2025 Revenue ($MM)	Q2 2024 Segment Income ($MM)	Q1 2025 Segment Income ($MM)	Q2 2025 Segment Income ($MM)	Q2 2024 Margin	Q1 2025 Margin	Q2 2025 Margin
HVAC	$356.5	$323.0	$376.7	$83.7	$73.9	$95.8	23.5%	22.9%	25.4%
Detection & Measurement	$144.8	$159.6	$175.7	$33.9	$36.6	$40.0	23.4%	22.9%	22.8%

KPIs and balance sheet

KPI	Q4 2024	Q1 2025	Q2 2025
Net operating cash flow from continuing ops ($MM)	$166.7	$(10.4)	$43.4
Capital expenditures ($MM)	$9.8	$5.5	$7.7
Cash and equivalents ($MM)	$161.4	$182.2	$136.9
Total debt ($MM)	$614.7	$960.3	$1,019.3

Segment Backlog ($MM)	Q4 2024	Q1 2025	Q2 2025
HVAC backlog	$437	$451	$540
D&M backlog	$221	$346	$365

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Total Revenue	FY 2025	$2.20–$2.26B	$2.225–$2.275B	Raised
Adjusted EBITDA	FY 2025	$470–$495M	$485–$510M	Raised
Adjusted EPS	FY 2025	$6.10–$6.40	$6.35–$6.65	Raised
HVAC Revenue	FY 2025	$1.500–$1.540B	$1.500–$1.530B	Narrowed (top end lower)
HVAC Segment Income Margin	FY 2025	23.50%–24.00%	24.25%–24.75%	Raised
D&M Revenue	FY 2025	$700–$720M	$725–$745M	Raised
D&M Segment Income Margin	FY 2025	21.50%–22.75%	21.75%–23.00%	Raised
Consolidated Segment Income Margin	FY 2025	22.90%–23.60%	23.40%–24.20%	Raised
Adjusted EBITDA Margin	FY 2025	21.40%–21.90%	21.80%–22.40%	Raised

Earnings Call Themes & Trends

Topic	Q4 2024 (Q-2)	Q1 2025 (Q-1)	Q2 2025 (Current)	Trend
Data center initiatives	Introduced larger adiabatic cooling solution; DC ~7% of company revenue, ~10% of HVAC	Feeling incrementally more positive; launched dry/adiabatic products; target bookings 2025, revenue 2026	Olympus Vmax modular dry/adiabatic; target “tens of millions” bookings in 2025; 2025 DC revenue ~$150–$200M (~9%)	Accelerating
Capacity expansion (EAM: Tamco, Ingenia)	Springfield cooling site ramp-up; Mirabel expansion delays resolved	Ingenia capacity: targeting $140M revenue run-rate by YE; expanding into U.S.	Announce U.S. site locations before YE; incremental capacity online 1H26; long-term capacity ~$300M run-rate by end of 2027	Expanding
Tariffs/macro	In-country sourcing; prepared to act quickly	Net tariff impact $0.08–$0.12 EPS; cadence ~40/30/30 across Q2–Q4; gross ~$20M offset by ~$14M pricing/surcharges	Recalibrated to ~$0.05 EPS; surcharges rolling off; D&M back-half margin impact	Moderating headwind
Transportation (Genfare) projects	Robust pipeline and front-log	Larger multi-year projects; more activity pushing into 2026–27	Expect high-teens organic project growth in 2H25; backlog up; book-to-bill ~1.1	Building backlog; some pull-forward
M&A pipeline & capacity	KTS closed; year introduced FY25 outlook	Sigma & Omega closed (~$65M revenue), slightly below HVAC segment margin; leverage ~1.9x PF	“Very, very positive” pipeline; $1B revolver; ample dry powder	Active
FCF & leverage	Adjusted FCF conversion 108%; leverage ~1.0x	Adjusted FCF ≈$36M; leverage ~1.9x PF	Adjusted FCF $37.1M; leverage ~1.7x; anticipate decline below low-end target by YE	Steady FCF; leverage trending down

Management Commentary

“We continue to see solid demand in key end markets… and see strong contributions from our recent acquisitions.”
“We expect to announce site locations for the U.S. production expansion of our Tamco actuated dampers and Ingenia custom air handling units before year end, with incremental production capacity…in the first half of 2026.”
“Olympus Vmax runs either dry…or in adiabatic mode…designed to meet the large-scale needs of data center customers seeking to optimize the balance between energy and water usage.”
HVAC margin drivers: “about 50%…related to…favorable project execution…[and] higher volume…more accretive mix” .
Tariffs: “we’ve recalibrated our exposure and we actually think it’s only about $0.05…for the total company” .
Leverage/dry powder: “We’ve got a $1 billion credit facility…plenty of firepower…we obviously have the ability to access capital” .

Q&A Highlights

Data center outlook: Management expects DC revenue to rise into 2026, with Olympus Vmax bookings targeted in 2025 and shipments in 2026; DC revenue in 2025 guided at ~$150–$200M (~9% of company) .
HVAC margins: Q2 strength driven by favorable project execution and accretive mix; full-year HVAC margin midpoint lifted by ~80 bps; back-half margins implied sequential lift ex-Q2 project favorability .
D&M trajectory: High-teens organic project growth expected in 2H; backlog grew organically; back-half margins to step down modestly on tariffs and product investments .
Tariff mitigation: Price increases and surcharges implemented where possible; surcharges harder to maintain as certain China tariffs stepped down .
M&A/inorganic growth: Sigma & Omega integration proceeding well; channel expansion in the U.S.; robust pipeline with ample revolver capacity .

Estimates Context

Q2 2025 vs Wall Street consensus (S&P Global):

Metric	Q2 2025 Consensus*	Q2 2025 Actual
EPS ($)	1.4523*	1.65
Revenue ($USD Millions)	546.3*	552.4
EBITDA ($USD Millions)	115.6*	126.7
EPS – # of Estimates	7*	—
Revenue – # of Estimates	6*	—

All three metrics were beats: EPS +$0.20, revenue +$6.1M, EBITDA +$11.1M; beats driven by HVAC margin uplift (project execution, mix) and contributions from acquisitions (KTS; Sigma & Omega) .
*Values retrieved from S&P Global.

Other Q2 2025 Press Releases

Earnings call scheduling and webcast details (July 8, 2025) .
Industry PR noting growth in hydrogen station heat exchanger market (contextual to HVAC/thermal management end-markets) .

Key Takeaways for Investors

Q2 print was clean with broad-based beats and margin expansion; guidance raised across the board, positioning FY25 for mid-teens Adjusted EPS and ~18% Adjusted EBITDA growth at the midpoint .
HVAC strength is durable: backlog surged to $540M and margins benefited from mix and project execution; full-year HVAC margin guidance lifted to 24.25%–24.75% .
Data center is a growing catalyst for 2026: Olympus Vmax addresses a larger TAM; targeted 2025 bookings support 2026 shipments; watch for U.S. capacity announcements by YE .
D&M back-half margin watch: tariffs and product investments imply modest margin step-down vs 2024, but project pipeline/backlog supports revenue growth; monitor tariff cadence and pricing carry-through .
Cash generation steady; leverage ~1.7x and expected to fall, leaving capacity for disciplined M&A; Sigma & Omega and KTS integrations tracking well .
Trading implication: Near-term positive bias on raised guidance and DC narrative; medium-term thesis centers on execution of EAM capacity expansions, DC product adoption, and tariff mitigation sustaining consolidated margins .

Citations:

SPX Technologies, Inc. (SPXC)·Q2 2025 Earnings Summary