MOD

It has been about a month since the last earnings report for Modine (MOD). Shares have lost about 3.9% in that time frame, underperforming the S&P 500. But investors have to be wondering, will the recent negative trend continue leading up to its next earnings release, or is Modine due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its latest earnings report in order to get a better handle on the important catalysts. Modine reported adjusted earnings of $1.53 per share for the first quarter of fiscal 2027, up 44% year over year. The figure beat the Zacks Consensus Estimate of $1.27 by 20.47%. Net sales increased 28% year over year to $874.1 million but missed the consensus estimate of $876 million by 0.17%. Data Centers sales surged 90%, while three consecutive quarters of record order intake pushed backlog to nearly twice the year-ago level. Gross profit rose 10% year over year to $182 million. However, gross margin contracted 340 basis points to 20.8%, reflecting lower margins across all three operating segments. Adjusted EBITDA increased 5% to $106.5 million, while the corresponding margin declined 270 basis points to 12.2%. Operating income slipped 1% to $74.8 million as higher gross profit was offset by increased expenses supporting growth and the planned Performance Technologies separation. Data Centers revenues jumped to $348.6 million from $183.7 million a year earlier, primarily driven by higher sales to hyperscale customers in North America. Americas sales grew 112%, while EMEA sales advanced 18%. The segment's adjusted EBITDA rose 27% to $51.7 million, though adjusted EBITDA margin fell to 14.8% from 22.1%. Supply shortages limited production and caused labor inefficiencies and weak overhead absorption. Management estimated that excess labor and under-absorbed overhead reduced the margin by 450-550 basis points. Commercial HVAC sales increased 22% to $261.6 million. Growth reflected higher coil sales to data center customers and $19.7 million of incremental revenues from acquired businesses. Organic sales increased 6%. Adjusted EBITDA advanced 7% to $41.6 million, while the margin declined to 15.9% from 18.1%. Profitability was affected by acquisition-related business mix, manufacturing consolidation inefficiencies and a greater proportion of lower-margin coil sales. Management expects the segment's margin to improve sequentially through fiscal 2027. Performance Technologies revenues declined 3% to $277.8 million. Weak automotive and commercial vehicle demand more than offset higher sales to power-generation customers. Organic sales decreased 4%. Adjusted EBITDA fell 3% to $36.2 million, while the margin edged down 10 basis points to 13%. Higher material and tariff costs pressured results, with contractual recoveries lagging cost increases. A $2 million reduction in selling, general and administrative expenses partly mitigated these headwinds. Selling, general and administrative expenses rose 22% to $103.3 million, driven by Data Centers investments, acquired Commercial HVAC operations, incentive compensation and separation-related spending. As a percentage of sales, however, SG&A expenses decreased to 11.8%. The quarter included $3.9 million of restructuring expenses and $7.1 million of costs tied to the planned Performance Technologies spin-off and merger with Gentherm. The transaction remained on schedule for completion in the fourth quarter of calendar 2026, subject to approvals and closing conditions. Net cash provided by operating activities increased to $41.4 million from $27.7 million. Free cash flow was negative $5 million compared with positive $0.2 million a year earlier, mainly because capital expenditures rose to $46.4 million as the company expanded Data Centers production capacity. MOD ended the quarter with $95.3 million in cash and cash equivalents and total debt of $528.2 million. Net debt increased to $432.9 million from $362.8 million at the end of fiscal 2026, largely due to treasury-stock purchases associated with employee equity awards. Modine maintained its fiscal 2027 guidance for net sales growth of 20-35% and adjusted EBITDA of $650-$680 million. The outlook includes Performance Technologies for the full fiscal year and implies adjusted EBITDA growth exceeding 40%. Data Centers sales are projected to increase 60-80%, while Commercial HVAC revenues are expected to grow 5-10%. Management expects companywide margins to improve sequentially, including a 200-250-basis-point increase in the second quarter, as component availability, production throughput and cost recovery improve. In the past month, investors have witnessed a downward trend in fresh estimates. The consensus estimate has shifted -17.18% due to these changes. Currently, Modine has a great Growth Score of A, though it is lagging a lot on the Momentum Score front with a D. Charting a somewhat similar path, the stock was allocated a score of C on the value side, putting it in the middle 20% for this investment strategy. Overall, the stock has an aggregate VGM Score of B. If you aren't focused on one strategy, this score is the one you should be interested in. Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. Notably, Modine has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months. Modine belongs to the Zacks Automotive - Original Equipment industry. Another stock from the same industry, Mobileye Global (MBLY), has gained 9% over the past month. More than a month has passed since the company reported results for the quarter ended June 2026. Mobileye reported revenues of $508 million in the last reported quarter, representing a year-over-year change of +0.4%. EPS of $0.19 for the same period compares with $0.13 a year ago. For the current quarter, Mobileye is expected to post earnings of $0.10 per share, indicating a change of +11.1% from the year-ago quarter. The Zacks Consensus Estimate has changed +125% over the last 30 days. The overall direction and magnitude of estimate revisions translate into a Zacks Rank #3 (Hold) for Mobileye. Also, the stock has a VGM Score of A. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Modine Manufacturing Company (MOD) : Free Stock Analysis Report Mobileye Global Inc. (MBLY) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research

Modine Manufacturing Company MOD reported adjusted earnings of $1.53 per share for the first quarter of fiscal 2027, up 44% year over year. The figure beat the Zacks Consensus Estimate of $1.27 by 20.47%. Net sales increased 28% year over year to $874.1 million but missed the consensus estimate of $876 million by 0.17%. Data Centers sales surged 90%, while three consecutive quarters of record order intake pushed backlog to nearly twice the year-ago level. MOD currently carries a Zacks Rank #4 (Sell). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here. Modine Manufacturing Company price-consensus-eps-surprise-chart | Modine Manufacturing Company Quote Gross profit rose 10% year over year to $182 million. However, gross margin contracted 340 basis points to 20.8%, reflecting lower margins across all three operating segments. Adjusted EBITDA increased 5% to $106.5 million, while the corresponding margin declined 270 basis points to 12.2%. Operating income slipped 1% to $74.8 million as higher gross profit was offset by increased expenses supporting growth and the planned Performance Technologies separation. Data Centers revenues jumped to $348.6 million from $183.7 million a year earlier, primarily driven by higher sales to hyperscale customers in North America. Americas sales grew 112%, while EMEA sales advanced 18%. The segment's adjusted EBITDA rose 27% to $51.7 million, though adjusted EBITDA margin fell to 14.8% from 22.1%. Supply shortages limited production and caused labor inefficiencies and weak overhead absorption. Management estimated that excess labor and under-absorbed overhead reduced the margin by 450-550 basis points. Commercial HVAC sales increased 22% to $261.6 million. Growth reflected higher coil sales to data center customers and $19.7 million of incremental revenues from acquired businesses. Organic sales increased 6%. Adjusted EBITDA advanced 7% to $41.6 million, while the margin declined to 15.9% from 18.1%. Profitability was affected by acquisition-related business mix, manufacturing consolidation inefficiencies and a greater proportion of lower-margin coil sales. Management expects the segment's margin to improve sequentially through fiscal 2027. Performance Technologies revenues declined 3% to $277.8 million. Weak automotive and commercial vehicle demand more than offset higher sales to power-generation customers. Organic sales decreased 4%. Adjusted EBITDA fell 3% to $36.2 million, while the margin edged down 10 basis points to 13%. Higher material and tariff costs pressured results, with contractual recoveries lagging cost increases. A $2 million reduction in selling, general and administrative expenses partly mitigated these headwinds. Selling, general and administrative expenses rose 22% to $103.3 million, driven by Data Centers investments, acquired Commercial HVAC operations, incentive compensation and separation-related spending. As a percentage of sales, however, SG&A expenses decreased to 11.8%. The quarter included $3.9 million of restructuring expenses and $7.1 million of costs tied to the planned Performance Technologies spin-off and merger with Gentherm. The transaction remained on schedule for completion in the fourth quarter of calendar 2026, subject to approvals and closing conditions. Net cash provided by operating activities increased to $41.4 million from $27.7 million. Free cash flow was negative $5 million compared with positive $0.2 million a year earlier, mainly because capital expenditures rose to $46.4 million as the company expanded Data Centers production capacity. MOD ended the quarter with $95.3 million in cash and cash equivalents and total debt of $528.2 million. Net debt increased to $432.9 million from $362.8 million at the end of fiscal 2026, largely due to treasury-stock purchases associated with employee equity awards. Modine maintained its fiscal 2027 guidance for net sales growth of 20-35% and adjusted EBITDA of $650-$680 million. The outlook includes Performance Technologies for the full fiscal year and implies adjusted EBITDA growth exceeding 40%. Data Centers sales are projected to increase 60-80%, while Commercial HVAC revenues are expected to grow 5-10%. Management expects companywide margins to improve sequentially, including a 200-250-basis-point increase in the second quarter, as component availability, production throughput and cost recovery improve. Johnson Controls International plc JCI reported third-quarter fiscal 2026 (ended June 2026) adjusted earnings of $1.42 per share, which beat the Zacks Consensus Estimate of $1.32. The bottom line increased 35.2% year over year. Total revenues (continuing operations) of $6.61 billion surpassed the consensus estimate of $6.43 billion in the quarter. The top line increased 9.3% year over year, whereas organic revenues increased 10%. Johnson Controls anticipates fiscal 2026 organic revenue growth to be about 8% from the prior-year level. Operating leverage is expected to be 45-50%. It expects adjusted earnings per share to be approximately $5.05 and adjusted free cash flow conversion of about 100%. Vertiv Holdings VRT delivered second-quarter 2026 adjusted earnings of $1.52 per share, up 60% year over year. The results beat the Zacks Consensus Estimate by 6.29%, supported by higher sales volume, operating productivity and margin expansion. Net sales increased 24.1% year over year to $3.27 billion but missed the consensus estimate by 3.41%. Organic sales rose 18%, while acquisitions and favorable foreign exchange contributed 5% and 1%, respectively. For 2026, Vertiv forecasts net sales in the range of $13.8 billion to $14.2 billion. Adjusted earnings are projected to be in the range of $6.65 to $6.75 per share, while adjusted operating profit is expected to be between $3.29 billion and $3.37 billion. Lennox International LII came out with second-quarter 2026 adjusted quarterly earnings of $7.72 per share, beating the Zacks Consensus Estimate of $7.63 per share. This compares to earnings of $7.82 per share a year ago. Revenues were $1.55 billion, up 3% over the same period last year but missing the Zacks Consensus Estimate of $1.56 billion. For 2026, the company expects its revenue growth to be approximately 8%, reflecting a 5% contribution from completed acquisitions. Earnings per share are forecast in the range of $23-$24, and free cash flow is guided in the range of $750-$850 million for the year. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Modine Manufacturing Company (MOD) : Free Stock Analysis Report Johnson Controls International plc (JCI) : Free Stock Analysis Report Lennox International, Inc. (LII) : Free Stock Analysis Report Vertiv Holdings Co. (VRT) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research

Modine Manufacturing MOD shares have shed roughly 23% over the past three months, and Wall Street's estimate revisions suggest the pullback isn't just noise. Over the past seven days, the Zacks Consensus Estimate for fiscal 2027 and 2028 EPS has slipped 9 cents and 5 cents, respectively. See how the estimates have been revised over the past 60 days. Image Source: Zacks Investment Research For a stock that had a solid start to the year, gaining 67% in the first three months of 2026— outperforming Vertiv Holdings' VRT 60% rise and Trane Technologies' TT 10% rise— the combination of falling estimates and a weakening EPS view is a signal investors shouldn't ignore. Last week, Modine reported better-than-expected fiscal first-quarter 2027 earnings and guided 20-35% sales growth for the full year. Modine’s peers Vertiv and Trane Technologies also beat EPS estimates. Modine’s data centers sales surged 90%, and three consecutive quarters of record order intake pushed backlog to nearly twice last year's level. On paper, that's a growth story firing on all cylinders. Modine Manufacturing Company price-consensus-eps-surprise-chart | Modine Manufacturing Company Quote But the details tell a more complicated story. First-quarter gross margin fell 340 basis points to 20.8%, with every segment posting weaker margins. Data Centers unit absorbed higher material costs and an unfavorable mix, while Performance Technologies segment is still lagging in recovering metals and tariff costs. Management is counting on commercial agreements, pricing adjustments, and surcharges to close the gap in later quarters— but these mechanisms work with a lag, not instantly. Further commodity inflation or delay in customer reimbursement could stall the margin recovery baked into full-year guidance. Component shortages ran longer than expected and dented first-quarter data center production, labor efficiency and overhead absorption. Excess labor and underused capacity alone dragged segment margin down an estimated 450-550 basis points, compounded by a customer program delay and late shipments. Modine is expanding supplier capacity and expects Data Centers unit margin to snap back to 19-20% in the second quarter from 14.8% generated in the first quarter. That seems like a big ask in a short window, and it makes near-term supply normalization a make-or-break variable for hitting fiscal 2027 targets. Modine’s Data Centers unit margin target calls for further improvement in the fiscal third quarter and above 20% in the back half, with no room for a down quarter along the way. That's a demanding, multi-part chain of assumptions— higher volume, better fixed-cost absorption, supplier recovery, and on-schedule cost reimbursement all have to land together. Management itself has called the coming production ramp and capacity rollout a "heavy lift," as the company juggles component shortages and new manufacturing line activation. Add in temporary leadership disruption, and the coordination risk across customers, suppliers and facilities only grows. Modine's top 10 customers accounted for 49% of fiscal 2026 sales. As data centers become a bigger share of the business, growth is increasingly riding on a small group of hyperscale programs rather than a broad customer base. Long-term capacity commitments with these partners improve revenue visibility, but they also require heavy upfront production investment well before volumes materialize. A program delay, lost account, or payment issue from any one of these strategic customers could hit revenues, cash flow, and asset utilization more than it would at a more diversified peer— and Modine's complex products and long lead times leave little room to quickly backfill lost volume. At 23.12 times forward earnings, MOD appears overvalued. That premium suggests the market has already priced in aggressive data-center growth and a full margin recovery. When expectations are this stretched, any hiccup in supply normalization, capacity activation, or earnings conversion could hit the stock hard. The stock carries a Value Score of C. Image Source: Zacks Investment Research Modine's data-center and commercial HVAC pivot is real, but so are the execution and concentration risks layered on top of a stretched valuation. With Wall Street trimming estimates and margins under pressure across every segment, the risk-reward here looks tilted to the downside. Investors currently holding MOD may want to consider trimming exposure, while those on the sidelines have little reason to chase the stock at current multiples. MOD carries a Zacks Rank #4 (Sell) at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Modine Manufacturing Company (MOD) : Free Stock Analysis Report Trane Technologies plc (TT) : Free Stock Analysis Report Vertiv Holdings Co. (VRT) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research

Interested in Modine Manufacturing Company? Here are five stocks we like better. Modine reported strong first-quarter growth, with sales up 28% and adjusted EPS up 44%, while maintaining its fiscal 2027 outlook for 20%–35% revenue growth and $650 million–$680 million in adjusted EBITDA. Data Center revenue surged 90% year over year, but component shortages reduced production and pressured margins to 14.8%. Management expects margins to recover to 19%–20% in the second quarter as supply and capacity improve. Commercial HVAC delivered 22% revenue growth but faced integration and product-mix pressure, while Performance Technologies remained weak. The planned Performance Technologies spin-off and merger with Gentherm remains on track for completion by year-end, subject to approvals. Modine’s $4B AI Coup Freezes Out the Competition Modine Manufacturing (NYSE:MOD) reported first-quarter fiscal 2027 sales growth of 28% and adjusted earnings per share growth of 44%, while reiterating its full-year revenue and adjusted EBITDA outlook. The company said supply-chain shortages in its Data Center segment constrained production and pressured margins during the quarter, but management expects conditions and profitability to improve sequentially. The quarter marked Modine’s first reporting period under a new three-segment structure consisting of Data Centers, Commercial HVAC and Performance Technologies. President and Chief Executive Officer Neil Brinker said the company continues to see exceptional underlying demand for data-center cooling products, logging its third consecutive quarter of record order intake and another significant increase in backlog. → Why SK hynix Could Be the Best AI Chip Stock to Buy Now Ride the Rally: 3 Earnings Winners With More Upside Ahead Data Center segment revenue increased 90% from the prior-year period, including 112% growth in the Americas and 18% growth in EMEA. Revenue declined sequentially from the preceding quarter, as management had expected, but supply shortages of certain key components lasted longer than initially anticipated and further limited production volumes. Brinker said the shortages prompted Modine to resequence capacity rollouts, shift available components toward its highest-producing lines and temporarily carry labor and overhead costs while some expansion sites operated below planned utilization. The company is negotiating supply commitments for fiscal 2027 and beyond, while existing suppliers expand capacity. → Microsoft Just Flipped the AI Spending Narrative Overnight 3 Summer Stocks With Insider Buying and Analyst Support Data Center adjusted EBITDA rose 27%, but the adjusted EBITDA margin declined to 14.8%. Chief Financial Officer Mick Lucareli said the margin was affected by a 150-basis-point year-over-year warranty variance related to a large prior-year settlement, as well as a 450- to 550-basis-point impact from excess labor and unfavorable overhead absorption tied to lower production volumes. Modine expects Data Center margins to recover to a range between 19% and 20% in the second quarter, supported by an expected roughly $100 million sequential increase in revenue. Lucareli said the company expects further margin improvement in the second half as capacity comes online and throughput rises. For the full fiscal year, Modine expects Data Center earnings growth in excess of 85%. → Carrier Earnings Could Send the Stock to a New All-Time High The company said it has secured supply for the remainder of the fiscal year, assuming suppliers meet agreed commitments. Brinker added that Modine is pursuing longer-term supply arrangements with critical vendors and is considering vertical integration in one instance as part of its supply-risk mitigation efforts. Commercial HVAC revenue increased 22% during the first quarter. HVAC Technologies revenue rose $24 million, or 45%, with acquisitions contributing $20 million. Heat Transfer Solutions revenue increased $11 million, or 7%, led by North American coil sales supporting data-center customers. Adjusted EBITDA in Commercial HVAC increased 7%, while margin declined 220 basis points year over year. Lucareli cited the mix effect from recently acquired businesses, manufacturing inefficiencies during integration work, and a greater proportion of lower-margin coil revenue relative to higher-margin heating and cooler products. Modine recently named Michael Mahan president of Commercial HVAC. Brinker said Mahan will lead the segment’s next phase of 80/20 initiatives, including vertical segmentation, acquisition integration and operating improvements. The company is consolidating certain product lines into its Owatonna, Minnesota, facility and consolidating coils production in Grenada and Juarez. Management also said it is taking pricing actions to offset material inflation and tariffs. Lucareli said Commercial HVAC is expected to deliver double-digit earnings growth for the year, with adjusted EBITDA margin improving each quarter. He said the business could finish fiscal 2027 with an EBITDA margin between 18% and 20%, compared with approximately 16.7% in the prior year. Performance Technologies revenue remained affected by weaker end-market demand. Heavy-duty equipment sales rose 1%, helped by genset product sales, while on-highway application sales fell 5% because of lower automotive and commercial-vehicle demand. Segment adjusted EBITDA declined 3%, and margin slipped 10 basis points to 13%. Management said cost-savings initiatives reduced segment SG&A by $2 million during the quarter. The company expects commodity metals trends to become more favorable in future quarters and remains focused on improving Performance Technologies margins and earnings for the year. Modine continues to prepare for the planned spin-off and merger of Performance Technologies with Gentherm. Brinker said Gentherm has submitted its S-4 filing to the Securities and Exchange Commission, while Modine has completed the filing required for an IRS determination letter regarding the Reverse Morris Trust transaction. The company expects a favorable ruling before closing and continues to target completion before the end of the calendar year, subject to shareholder approval and other closing conditions. At the consolidated level, first-quarter adjusted EBITDA rose 5% to produce a 12.2% margin, down 270 basis points from the prior year. Gross margin declined 340 basis points to 20.8%. Lucareli said the lower margin reflected the Data Center supply-chain disruption, unfavorable Commercial HVAC mix, and lower market volumes and higher costs in Performance Technologies. Adjusted EPS was $1.53, including a favorable tax benefit related to stock-based incentive compensation awards. The company said the benefit is expected to be largely offset by other items during the rest of the year, with its full-year effective tax rate generally in line with prior expectations. Free cash flow was slightly negative in the first quarter, reflecting higher capital expenditures and more than $60 million of other cash-flow items, including contract assets, cash taxes and incentive compensation. Net debt was $433 million, and the company reported a leverage ratio of 0.9. Total fiscal 2027 sales growth outlook: 20% to 35%. Data Center sales growth outlook: 60% to 80%. Commercial HVAC sales growth outlook: 5% to 10%. Performance Technologies sales outlook: flat to up 5%. Adjusted EBITDA outlook: $650 million to $680 million, representing growth exceeding 40%. Expected full-year free cash flow as a percentage of sales: 4% to 6%. Management said the outlook includes Performance Technologies for the full fiscal year and will be updated once the timing of the proposed transaction is known. Modine expects margins and earnings to increase sequentially through fiscal 2027 and said achieving its targets would represent a fifth consecutive year of record results. Modine Manufacturing Company (NYSE:MOD) is a global provider of thermal management solutions serving automotive, commercial transportation, heavy-duty off-highway, industrial, HVAC and refrigeration markets. The company designs, manufactures, tests and markets a broad array of heat-transfer products that manage temperature and energy efficiency for engines, power electronics and building climate control systems. Its product portfolio includes heat exchangers, condensers, radiators, evaporators, charge air coolers, fan systems and associated controls. This instant news alert was generated by narrative science technology and financial data from MarketBeat in order to provide readers with the fastest reporting and unbiased coverage. Please send any questions or comments about this story to [email protected]. The article "Modine Manufacturing Q1 Earnings Call Highlights" was originally published by MarketBeat. View MarketBeat's top stocks for July 2026.

Track your investments for FREE with Simply Wall St, the portfolio command center trusted by over 7 million individual investors worldwide. Modine Manufacturing (MOD) is in focus after reporting first quarter results on July 29, with earnings per share and net income above the prior year, as well as new guidance for higher net sales in fiscal 2027. See our latest analysis for Modine Manufacturing. Despite the strong first quarter report and updated guidance, Modine Manufacturing’s share price has recently given back ground, with the 30 day share price return down 30.55% and the 1 day move down 14.43%. However, the 1 year total shareholder return of 56.70% and very large 5 year total shareholder return suggest longer term momentum has been strong. If Modine’s recent volatility has you thinking about diversification, this could be a good moment to look at companies tied to grid and electrification trends using our 34 power grid technology and infrastructure stocks. After a sharp pullback following strong results and higher 2027 sales guidance, Modine Manufacturing now sits well below its recent highs. Does that set up an early entry or make patience on the valuation side more sensible? Modine Manufacturing closed at $178.04 compared with a widely followed fair value estimate of about $340.86, which frames the recent pullback in a very different light. Read the complete narrative. Want to see what sits behind that data center growth story and the higher fair value for Modine Manufacturing? The narrative leans on fast expanding revenue, rising margins, and a richer future earnings multiple. The exact mix of those assumptions is where the real insight sits. Result: Fair Value of $340.86 (UNDERVALUED) Have a read of the narrative in full and understand what's behind the forecasts. However, the Modine Manufacturing narrative could be tested if data center demand or capacity buildouts slow, or if integration of recent HVAC acquisitions proves more difficult than expected. Find out about the key risks to this Modine Manufacturing narrative. The earlier fair value of $340.86 for Modine Manufacturing leans on future growth and cash flows. On current numbers, the picture looks different. The stock trades on a P/E of 77.8x compared with a US Building industry average of 21.4x and a peer average of 20.2x, while the fair ratio sits higher at 83.9x. That gap suggests plenty of valuation risk if expectations soften, even though the current price is still below that fair ratio level. Which story do you think matters more right now: the cash flow upside or the elevated multiple? See what the numbers say about this price — find out in our valuation breakdown. With sentiment on Modine Manufacturing clearly split between opportunity and risk, it makes sense to move quickly, test the assumptions, and weigh both sides using the 3 key rewards and 4 important warning signs. If you value Modine Manufacturing’s story but want backup options, use the Simply Wall St Screener to line up a few more stocks that fit your plan. Target resilient performers that aim to balance growth with downside protection by checking companies in the 85 resilient stocks with low risk scores. Hunt for potential bargains that combine quality fundamentals with share prices that sit below intrinsic estimates by reviewing the 49 high quality undervalued stocks. Build a watchlist of companies that pair healthy balance sheets with solid operations by scanning the solid balance sheet and fundamentals stocks screener (48 results). This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned. Companies discussed in this article include MOD. Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email [email protected]

Modine Manufacturing Company has reported past first-quarter 2027 results for the period ended June 30, 2026, with sales of US$874.1 million, net income of US$73.9 million, and diluted earnings per share from continuing operations of US$1.37, alongside guidance for fiscal 2027 calling for Net Sales growth of 20% to 35%. These strong quarterly results follow Modine's 2026 Sustainability Report, where the company highlighted early achievement of its 2030 energy and water intensity targets and progress in transforming its portfolio toward higher-growth thermal solutions. With management now projecting sizable Net Sales growth for fiscal 2027, we’ll examine how this updated outlook influences Modine’s existing investment narrative. Rare earth metals are the new gold rush. Find out which 29 stocks are leading the charge. To own Modine today, you need to believe in its pivot toward higher value thermal solutions, especially in data centers and commercial HVAC, while accepting meaningful execution and concentration risks. The latest Q1 FY2027 results and guidance for 20% to 35% Net Sales growth support the near term growth catalyst in data center cooling, but also heighten the risk around capacity build and customer concentration if demand or project timing were to slow. Among recent developments, the multi year capacity agreement for Airedale data center cooling, covering more than US$4,000 million of products for 2027 to 2029 with a US$165 million upfront payment, is most relevant here. It amplifies the near term growth story behind the strong quarter and raised sales outlook, while also tying Modine more tightly to a single customer and product set at a time when the share price has been volatile. Yet behind the strong guidance, investors should also be aware of the growing risk that heavy data center capacity investment could be mismatched with actual customer demand if... Read the full narrative on Modine Manufacturing (it's free!) Modine Manufacturing's narrative projects $6.6 billion revenue and $902.7 million earnings by 2029. This requires 27.3% yearly revenue growth and about a $781 million earnings increase from $121.5 million today. Uncover how Modine Manufacturing's forecasts yield a $340.86 fair value, a 91% upside to its current price. Some of the lowest estimate analysts were already cautious, assuming around US$6.5 billion revenue and US$988.0 million earnings by 2029, so this new data center capacity deal could either ease their concerns about demand visibility or deepen worries about over concentration in one customer and technology path, which is why it is worth comparing their more pessimistic narrative with the stronger consensus view. Explore 4 other fair value estimates on Modine Manufacturing - why the stock might be worth as much as 91% more than the current price! Disagree with existing narratives? Extraordinary investment returns rarely come from following the herd, so go with your instincts. A great starting point for your Modine Manufacturing research is our analysis highlighting 3 key rewards and 4 important warning signs that could impact your investment decision. Our free Modine Manufacturing research report provides a comprehensive fundamental analysis summarized in a single visual - the Snowflake - making it easy to evaluate Modine Manufacturing's overall financial health at a glance. Markets shift fast. These stocks won't stay hidden for long. Get the list while it matters: AI is about to change healthcare. These 41 stocks are working on everything from early diagnostics to drug discovery. The best part - they are all under $10b in market cap - there's still time to get in early. Capitalize on the AI infrastructure supercycle with our selection of the 56 best 'picks and shovels' of the AI gold rush converting record-breaking demand into massive cash flow. Uncover the next big thing with 20 elite penny stocks that balance risk and reward. This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned. Companies discussed in this article include MOD. Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email [email protected]

Continued strength in core growth engines supports reaffirmed Fiscal 2027 outlook RACINE, Wis., July 29, 2026 /PRNewswire/ -- Modine (NYSE: MOD), a diversified global leader in thermal management technology and solutions, today reported financial results for the quarter ended June 30, 2026. First Quarter Highlights: Net sales of $874.1 million increased $191.3 million, or 28 percent, from the prior year Net earnings of $74.3 million increased $22.6 million, or 44 percent, from the prior year Adjusted EBITDA of $106.5 million increased $5.1 million, or 5 percent, from the prior year Earnings per share of $1.37 increased $0.42, or 44 percent, from the prior year Adjusted earnings per share of $1.53 increased $0.47, or 44 percent, from the prior year "Our targeted growth businesses continued to deliver strong, sustainable year-over-year top-line improvements, including Data Centers and Commercial HVAC revenue expansion of 90% and 22%, respectively," said Modine President and Chief Executive Officer, Neil D. Brinker. "As anticipated, our first quarter was impacted by the supply chain constraints we discussed last quarter, which limited production and temporarily reduced margins within our Data Centers segment. We are taking decisive actions to secure supply, including working closely with our partners to lock in volume requirements while simultaneously qualifying additional suppliers. These initiatives are yielding positive results, driving sequential volume and margin improvements as the quarter progressed. Our team continues to drive operational efficiency and ramp production across our manufacturing footprint, keeping us fully on track to meet future customer commitments and deliver on our full-year financial outlook." First Quarter Financial Results Net sales increased 28 percent to $874.1 million, compared with $682.8 million in the prior year. Sales growth was driven by higher sales in the Data Centers and Commercial HVAC segments, partially offset by lower sales in the Performance Technologies segment. Gross profit increased 10 percent to $182.0 million and gross margin decreased by 340 basis points to 20.8 percent. Gross profit increased in the Data Centers and Commercial HVAC segments, while Performance Technologies experienced a decline in gross profit. The decrease in gross margin resulted from lower gross margins in all three business segments, as further discussed below. Selling, general and administrative ("SG&A") expenses increased 22 percent to $103.3 million, but decreased as a percentage of sales. The increase in SG&A expenses was primarily due to higher expenses in the Data Centers segment to support growth, incremental expenses from acquisitions in the Commercial HVAC segment, costs related to the pending spin-off of the Performance Technologies segment, and higher expenses related to incentive compensation. Operating income decreased 1 percent to $74.8 million. The decrease was driven by higher SG&A expenses to support growth and to prepare for the spin-off of the Performance Technologies segment, partially offset by higher gross profit on higher sales volume, as compared to the prior year. The Company recorded $3.9 million of restructuring expenses during the quarter, primarily severance expenses related to headcount reductions and costs related to equipment transfers. In addition, the Company incurred $7.1 million of costs related to the pending spin-off of the Performance Technologies segment. Adjusted EBITDA, which excludes restructuring expenses, disposition costs, certain other charges, interest expense, the benefit or provision for income taxes, and depreciation and amortization expense, was $106.5 million, an increase of $5.1 million, or 5 percent compared to the prior year. Earnings per share was $1.37, compared with $0.95 in the prior year, an increase of $0.42 or 44 percent. Adjusted earnings per share was $1.53, compared with adjusted earnings per share of $1.06 in the prior year, an increase of $0.47 or 44 percent. This included a favorable income tax benefit related to shares issued for stock-based incentive compensation awards during the quarter, which is expected to be largely offset by the negative impact of nondeductible compensation within the fiscal year. First Quarter Segment Review Data Centers segment sales were $348.6 million, compared with $183.7 million one year ago, an increase of 90 percent. This increase was primarily driven by higher sales to hyperscale customers in North America. The segment reported gross margin of 20.2 percent, which was 960 basis points lower than the prior year. This decrease was primarily due to higher expenses related to the capacity expansion in North America combined with the temporary impact of production inefficiencies due to supply chain constraints, higher material costs, and higher warranty expense, as the prior year benefited from the favorable settlement of a warranty claim. SG&A expenses decreased as a percentage of sales due to the significant increase in revenue. The segment reported operating income of $46.3 million, a 33 percent increase from the prior year, and adjusted EBITDA of $51.7 million, an increase of 27 percent from the prior year. Commercial HVAC segment sales were $261.6 million, compared with $214.2 million one year ago, an increase of 22 percent. This increase was primarily driven by higher coil sales to data center customers and $19.7 million of incremental sales from acquired businesses. The segment reported gross margin of 24.4 percent, which was 280 basis points lower than the prior year, primarily due to unfavorable sales mix and temporary inefficiencies due to production transfers. The segment reported operating income of $31.4 million, a 2 percent decrease from the prior year, and adjusted EBITDA of $41.6 million, a 7 percent increase from the prior year. Performance Technologies segment sales were $277.8 million, compared with $285.5 million one year ago, a decrease of 3 percent. This decrease primarily resulted from lower sales to automotive and commercial vehicle customers due to market weakness, partially offset by higher sales to power generation customers. The segment reported gross margin of 17.6 percent, which was 60 basis points lower than the prior year, primarily due to higher material and tariff costs. The segment reported operating income of $27.6 million, a 4 percent increase from the prior year, and adjusted EBITDA of $36.2 million, a 3 percent decrease from the prior year. Balance Sheet & Liquidity Net cash provided by operating activities for the quarter ended June 30, 2026, was $41.4 million, an increase of $13.7 million compared to the prior year. Free cash flow for the quarter ended June 30, 2026, was a use of $5.0 million, a decrease of $5.2 million from the prior year. This decrease was primarily due to higher capital expenditures to increase production capacity in the Data Centers segment, partially offset by favorable net changes in working capital. Cash payments for restructuring activities and disposition costs totaled $14.9 million during the quarter ended June 30, 2026. Total debt was $528.2 million as of June 30, 2026. Cash and cash equivalents totaled $95.3 million as of June 30, 2026. Net debt was $432.9 million as of June 30, 2026, an increase of $70.1 million from the end of fiscal 2026. This increase resulted from purchases of stock in conjunction with our equity compensation plan. Under this plan, participants have the option to sell back shares of their vested equity awards to satisfy individual tax withholding obligations. These repurchased shares are held as treasury stock, which reduces the number of shares outstanding used to calculate earnings per share. Outlook "Our financial outlook for Fiscal 2027 remains unchanged, and we remain confident in our ability to deliver another year of record-breaking results," said Modine President and Chief Executive Officer, Neil D. Brinker. "In response to the near-term supply chain challenges in our Data Centers segment, we are taking decisive actions to resolve these bottlenecks and have already made significant progress. Demand for our products remains robust as evidenced by three consecutive quarters of record order intake leading to our backlog nearly doubling over the past year. Now we are focused on operational execution across the enterprise, which will allow us to deliver on our near- and long-term goals. Simultaneously, we are also progressing on our long-term strategic transformation. Our planned spin-off and merger of the Performance Technologies business with Gentherm remains firmly on schedule to close in the fourth calendar quarter of this year, having cleared several major milestones this past quarter." The current full-year guidance remains unchanged and continues to reflect the Performance Technologies business for the entirety of fiscal 2027. Following the close of the transaction (expected in the fourth quarter of calendar 2026), Modine will issue an updated outlook reflecting the continuing business. Conference Call and Webcast Modine will conduct a conference call and live webcast, with a slide presentation, on Thursday, July 30, 2026, at 10:00 a.m. Central Time (11:00 a.m. Eastern Time) to discuss its first quarter fiscal year 2027 financial results. The webcast and accompanying slides will be available on the Investor Relations section of the Modine website at www.modine.com. Participants are encouraged to log on to the webcast and conference call about ten minutes prior to the start of the event. A replay of the audio and slides will be available on the Investor Relations section of the Modine website at www.modine.com on or after July 30, 2026. A call-in replay will be available through midnight on August 6, 2026, at 877-660-6853, (international replay 201-612-7415); Conference ID# 13761279. The Company will post a transcript of the call on its website on or after August 3, 2026. About Modine For more than 100 years, Modine has solved the toughest thermal management challenges for mission-critical applications. Our purpose of Engineering a Cleaner, Healthier World™ means we are always evolving our portfolio of technologies to provide the latest heating, cooling, and ventilation solutions. Through the hard work of more than 13,000 employees worldwide, our businesses advance our purpose with systems that improve air quality, reduce energy and water consumption, lower harmful emissions, enable cleaner running vehicles, and use environmentally friendly refrigerants. Modine is a global company headquartered in Racine, Wisconsin (U.S.), with operations in North America, South America, Europe, and Asia. For more information about Modine, visit www.modine.com. Forward-Looking Statements This press release contains statements, including information about future financial performance and market conditions, accompanied by phrases such as "believes," "estimates," "expects," "plans," "anticipates," "intends," "projects," and other similar "forward-looking" statements, as defined in the Private Securities Litigation Reform Act of 1995. Modine's actual results, performance or achievements may differ materially from those expressed or implied in these statements because of certain risks and uncertainties, including, but not limited to those described under "Risk Factors" in Item 1A of Part I of the Company's most recent Annual Report on Form 10-K. Other risks and uncertainties include, but are not limited to, the following: the impact of potential adverse developments or disruptions in the global economy and financial markets, including impacts related to geopolitical tensions and military conflicts, including the conflict between the U.S. and Iran, inflation, energy costs, government incentive or funding programs, supply chain challenges or supplier constraints, logistical disruptions, tariffs, sanctions and other trade issues or cross-border trade restrictions; the impact of other economic, social and political conditions, changes and challenges in the markets where we operate and compete, including foreign currency exchange rate fluctuations, changes in interest rates, tightening of the credit markets, recession or recovery therefrom, restrictions associated with importing and exporting and foreign ownership, public health crises, and the general uncertainties, including the impact on demand for our products and the markets we serve from regulatory and/or policy changes that have been or may be implemented in the U.S. or abroad, including those related to tax and trade, climate change, and public health threats; the overall health and pricing focus of our customers; changes or threats to the market growth prospects for our customers; our ability to successfully exit portions of our business that do not align with our strategic plans, including the various risks related to the pending Reverse Morris Trust transaction with Gentherm; our ability to realize the sales growth and return on investments anticipated in our Data Centers segment and our ability to execute on other organic growth opportunities and acquisitions; our ability to realize anticipated benefits, including improved profit margins and cash flow, from strategic initiatives and our continued application of 80/20 principles across our businesses; our ability to be at the forefront of technological advances and the impacts of any changes in the adoption rate of technologies that we expect to drive sales growth; our ability to effectively and efficiently manage our operations in response to sales volume changes, including maintaining adequate production capacity to meet demand in our growing businesses, particularly in our Data Centers segment, while also completing restructuring activities and realizing benefits thereof; our ability to fund our global liquidity requirements efficiently and comply with the financial covenants in our credit agreements; operational inefficiencies as a result of product or program launches, unexpected volume increases or decreases, product transfers and product warranty and liability claims; the impact on Modine of any significant increases in commodity prices, particularly aluminum, copper, steel and stainless steel (nickel) and other purchased components and related costs, and our ability to adjust product pricing in response to any such increases; our ability to recruit and maintain talent in managerial, leadership, operational and administrative functions and to mitigate increased labor costs; our ability to protect our proprietary information and intellectual property from theft or attack; the impact of any substantial disruption or material breach of our information technology systems; costs and other effects of environmental investigation, remediation or litigation and the increasing emphasis on environmental, social and corporate governance matters; our ability to realize the benefits of deferred tax assets and the impact of changes in tax regulations; and other risks and uncertainties identified in our public filings with the U.S. Securities and Exchange Commission. Forward-looking statements are as of the date of this press release, and we do not assume any obligation to update any forward-looking statements. Non-GAAP Financial Disclosures Adjusted EBITDA, adjusted EBITDA margin, adjusted earnings per share, net debt, free cash flow, organic sales and organic sales growth (which are defined below) as used in this press release are not measures that are defined in generally accepted accounting principles (GAAP). These non-GAAP measures are used by management as performance measures to evaluate the Company's overall financial performance and liquidity. These measures are not, and should not be viewed as, substitutes for the applicable GAAP measures, and may be different from similarly titled measures used by other companies. Definition – Adjusted EBITDA and adjusted EBITDA margin The Company defines adjusted EBITDA as net earnings excluding interest expense, the provision or benefit for income taxes, depreciation and amortization expenses, other income and expense, restructuring expenses, impairment charges, pension termination charges, acquisition and disposition costs, and certain other gains or charges. Adjusted EBITDA margin represents adjusted EBITDA as a percentage of net sales. The Company believes that adjusted EBITDA and adjusted EBITDA margin provide relevant measures of profitability and earnings power. The Company views these financial metrics as being useful in assessing operating performance from period to period by excluding certain items that it believes are not representative of its core business. Adjusted EBITDA, when calculated for the business segments, is defined as operating income excluding depreciation and amortization expenses, restructuring expenses, impairment charges, and certain other gains or charges. Definition – Adjusted earnings per share Diluted earnings per share plus restructuring expenses, impairment charges, pension termination charges, acquisition and disposition costs, and excluding changes in income tax valuation allowances and certain other gains or charges. Adjusted earnings per share is an overall performance measure, not including costs associated with restructuring, acquisitions, and dispositions and certain other gains or charges. Definition – Net debt The sum of debt due within one year and long-term debt, less cash and cash equivalents. Net debt is an indicator of the Company's debt position after considering on-hand cash balances. Definition – Free cash flow Free cash flow represents net cash provided by operating activities less expenditures for property, plant and equipment. Free cash flow presents cash generated from operations during the period that is available for strategic capital decisions. Definition – Organic sales and organic sales growth Net sales and net sales growth can be impacted by acquisitions, dispositions, and foreign currency exchange rate fluctuations. The Company defines organic sales as external net sales excluding the impact of acquisitions and the effects of foreign currency exchange rate fluctuations. Organic sales growth represents the percentage change of organic sales compared to prior year external net sales, excluding the impact of dispositions. The effect of exchange rate changes is calculated by using the same foreign currency exchange rates as those used to translate financial data for the prior period. The Company adjusts for acquisitions and dispositions by excluding net sales in the current and prior periods, respectively, for which there are no comparable sales in the reported periods. These sales growth measures provide a more consistent indication of our performance, without the effects of foreign currency exchange rate fluctuations or acquisitions and dispositions. Forward-looking non-GAAP financial measure The Company's fiscal 2027 guidance includes adjusted EBITDA, as defined above, which is a non-GAAP financial measure. The fiscal 2027 guidance includes the Company's estimates for interest expense of approximately $24 to $27 million, a provision for income taxes of approximately $130 to $140 million, and depreciation and amortization expense of approximately $87 to $92 million. The non-GAAP financial measure also excludes certain cash and non-cash expenses or gains. These expenses and gains may be significant and include items such as restructuring expenses (including severance and equipment transfer costs), impairment charges, acquisition and disposition costs, and certain other items. These expenses for the first three months of fiscal 2027 are presented on page 8. In connection with the pending Reverse Morris Trust transaction with Gentherm, the Company expects to incur approximately $25 to $35 million of additional costs during the remainder of fiscal 2027, primarily for transaction advisory, legal, accounting, tax and other professional services. Estimates of other expenses and gains for the remainder of fiscal 2027 are not available due to the low visibility and unpredictability of these items. Kathleen Powers(262) [email protected] View original content to download multimedia:https://www.prnewswire.com/news-releases/modine-reports-first-quarter-fiscal-2027-results-302838002.html

Modine (MOD) came out with quarterly earnings of $1.53 per share, beating the Zacks Consensus Estimate of $1.27 per share. This compares to earnings of $1.06 per share a year ago. These figures are adjusted for non-recurring items. This quarterly report represents an earnings surprise of +20.47%. A quarter ago, it was expected that this heating and cooling products maker would post earnings of $1.51 per share when it actually produced earnings of $1.71, delivering a surprise of +13.25%. Over the last four quarters, the company has surpassed consensus EPS estimates four times. Modine, which belongs to the Zacks Automotive - Original Equipment industry, posted revenues of $874.1 million for the quarter ended June 2026, missing the Zacks Consensus Estimate by 0.17%. This compares to year-ago revenues of $682.8 million. The company has topped consensus revenue estimates three times over the last four quarters. The sustainability of the stock's immediate price movement based on the recently-released numbers and future earnings expectations will mostly depend on management's commentary on the earnings call. Modine shares have added about 55.8% since the beginning of the year versus the S&P 500's gain of 8.5%. While Modine has outperformed the market so far this year, the question that comes to investors' minds is: what's next for the stock? There are no easy answers to this key question, but one reliable measure that can help investors address this is the company's earnings outlook. Not only does this include current consensus earnings expectations for the coming quarter(s), but also how these expectations have changed lately. Empirical research shows a strong correlation between near-term stock movements and trends in earnings estimate revisions. Investors can track such revisions by themselves or rely on a tried-and-tested rating tool like the Zacks Rank, which has an impressive track record of harnessing the power of earnings estimate revisions. Ahead of this earnings release, the estimate revisions trend for Modine was mixed. While the magnitude and direction of estimate revisions could change following the company's just-released earnings report, the current status translates into a Zacks Rank #3 (Hold) for the stock. So, the shares are expected to perform in line with the market in the near future. You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here. It will be interesting to see how estimates for the coming quarters and the current fiscal year change in the days ahead. The current consensus EPS estimate is $1.76 on $970.84 million in revenues for the coming quarter and $7.72 on $4.04 billion in revenues for the current fiscal year. Investors should be mindful of the fact that the outlook for the industry can have a material impact on the performance of the stock as well. In terms of the Zacks Industry Rank, Automotive - Original Equipment is currently in the bottom 33% of the 250 plus Zacks industries. Our research shows that the top 50% of the Zacks-ranked industries outperform the bottom 50% by a factor of more than 2 to 1. Another stock from the same industry, Commercial Vehicle Group (CVGI), has yet to report results for the quarter ended June 2026. The results are expected to be released on August 3. This supplier of products for heavy duty trucks is expected to post quarterly loss of $0.05 per share in its upcoming report, which represents a year-over-year change of +44.4%. The consensus EPS estimate for the quarter has remained unchanged over the last 30 days. Commercial Vehicle Group's revenues are expected to be $171.61 million, down 0.2% from the year-ago quarter. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Modine Manufacturing Company (MOD) : Free Stock Analysis Report Commercial Vehicle Group, Inc. (CVGI) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research

Our analysts just identified a stock with the potential to be the next Nvidia. Tell us how you invest and we'll show you why it's our #1 pick. Tap here. Data center revenue grew 90% year-over-year, driven by strategic hyperscale and colocation customers, though sequential volume was constrained by sudden component shortages. Management attributed temporary margin pressure to 'transitional timing issues' where excess labor and overhead were maintained during supply chain downtime to preserve long-term capacity readiness. The company logged its third consecutive quarter of record order intake, resulting in a doubled backlog and providing high visibility into the next 2-3 years of growth. Commercial HVAC performance was bolstered by acquisition integration and higher coil sales to data center customers, supported by strategic footprint optimization in Minnesota and Mexico. Performance Technologies remains on track for its planned spin-off and merger with Gentherm by the end of the calendar year, with key SEC and IRS filings completed. Strategic pricing actions are being implemented across segments to offset inflationary pressures from materials and tariffs, particularly in the HVAC and Performance Technologies units. Fiscal 2027 guidance remains unchanged, projecting 20% to 35% total revenue growth and adjusted EBITDA growth in excess of 40%. Management expects a significant sequential margin step-up in Q2 as supply chain constraints normalize and production volumes recover toward Q4 levels. The Data Center segment is anticipated to generate earnings growth exceeding 85% for the full year, with margins expected to exceed 20% in the second half. Long-term capacity agreements (LTAs) with hyperscalers are structured to ramp significantly between 2027 and 2029, with 20-25% of volume expected in the first year. Supply chain risk mitigation strategies now include negotiating multi-year LTAs with critical suppliers and evaluating vertical integration for vulnerable components. Component shortages in the data center segment resulted in a 450 to 550 basis point negative impact on margins due to unfavorable overhead absorption. A 150 basis point warranty variance in the data center segment was noted due to a one-time large settlement in the prior year period. Leadership transitions include the appointment of Michael Mahan to lead Commercial HVAC and CEO Neil Brinker stepping in to lead the Data Center business following a sudden resignation. Corporate SG&A included $7.1 million in one-time professional service fees specifically related to the Performance Technologies spin-off preparation. Management expects Q2 margins to return to the 19-20% range as volume increases by approximately $100 million sequentially. The second half of the year is projected to operate above the 20% EBITDA margin threshold as new capacity reaches higher utilization levels. One stock. Nvidia-level potential. 30M+ investors trust Moby to find it first. Get the pick. Tap here. Management prioritizes '80/20' key accounts during shortages to ensure hyperscale demand is met, while maintaining smaller customer relationships through transparent visibility. The specialized, value-added nature of Modine's cooling technology acts as a barrier against customers switching to commodity competitors during delays. Higher inlet fluid temperatures in new GPU architectures actually enhance the value of Modine's free-cooling technology by driving greater data center efficiency. Chillers remain a critical 'insurance policy' for data centers even as operating temperatures rise, sustaining long-term demand for the 3-megawatt product line. A specific delay was attributed to a new product launch for a hyperscaler involving multiple design iterations and specification updates. Management clarified this was a timing shift for a unique design rather than a cancellation or broader market slowdown. Excluding the Performance Technologies segment, the core HVAC and Data Center businesses are capable of operating at a 30% gross margin level. The company anticipates a 700 to 1,000 basis point gross margin lift once it becomes a pure-play HVAC and data center company.