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DATE

Thursday, April 30, 2026 at 4:45 p.m. ET

CALL PARTICIPANTS

  • President and Chief Executive Officer — Eugene Joseph Lowe
  • Chief Financial Officer — Mark A. Carano
  • Head of Investor Relations — Johan Rollins

TAKEAWAYS

  • Revenue -- $539 million, up 17.4%, with growth driven by acquisitions and organic performance in both segments.
  • Adjusted EBITDA -- Increased 23% year over year, with 90 basis points of margin expansion.
  • Adjusted EPS -- $1.69, up 22% compared to the prior year.
  • HVAC Segment Revenue -- Grew 22%, comprising 11.5% inorganic growth and 9.6% organic growth, aided by a modest FX tailwind.
  • HVAC Segment Income -- Increased $15 million, or 20%, though segment margin decreased 40 basis points due to start-up costs for capacity expansions.
  • HVAC Segment Backlog -- $755 million, up 38% organically, with data center demand being the primary driver.
  • Detection & Measurement Revenue -- Grew 8.3%, including 3.9% inorganic growth from KTS and 3% organic growth; benefited from higher Transportation volumes and a favorable FX tailwind.
  • Detection & Measurement Segment Income -- Increased $10 million, or 28%, with segment margin up 410 basis points, driven by favorable revenue mix including higher-margin software.
  • Detection & Measurement Backlog -- $333 million, down modestly compared to the previous year.
  • Adjusted Free Cash Flow -- $16 million for the quarter.
  • Cash and Debt -- Ended with $158 million in cash and $674 million in total debt; leverage ratio at 0.9 times, below the 1.5-2.5 times target range.
  • Data Center Revenue Growth -- Management expects data center revenue growth rate to move from approximately 50% to 70% for 2026, increasing the revenue base from $200 million to an estimated $350 million.
  • Full-Year Adjusted EPS Guidance -- Raised by $0.15 to a midpoint of $7.95, incorporating a $0.05-$0.10 negative impact from updated Section 232 tariffs, largely affecting HVAC in the second quarter.
  • Data Center Capacity Expansion -- Facilities in Olathe, Kansas, and Tennessee are online; Madison, Alabama facility on track for assembly buildout in the latter half of the year and production in the first half of 2027, enabling up to $550 million incremental data center revenue beyond the current $200 million base.
  • Start-Up Costs Impact -- About $8 million to $9 million in HVAC start-up costs, mostly concentrated in the first half of the year, affecting segment margins in Q1 and Q2.
  • Tariff Impact -- CFO Carano said, "On the tariffs, we sized roughly $10 million of gross cost [for Section 232]. We believe we can offset about 50% of that, primarily through price, with other levers as well," estimating 75%-80% of net impact falls in Q2, mainly for Canadian businesses, with minimal back-half effect and no anticipated impact in 2027.
  • Radiodetection Performance -- Achieved low- to mid-single-digit revenue growth in the quarter, with management forecasting mid-single-digit growth for the full year.
  • Acquisition Strategy and Multiples -- Recent acquisitions, Air Enterprises and ROM Industries, were completed at approximately 10.5x-11x EBITDA pre-synergies, with expectations to realize an effective acquisition multiple closer to 9x after synergies.
  • M&A Capacity -- Leverage after transactions remains at 0.9x, well below target, providing flexibility for further acquisitions.
  • Locate Performance Management Platform -- Detection & Measurement segment launched this new software, significantly expanding real-time analysis from field devices for utility location.

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RISKS

  • CFO Carano stated, "On the tariffs, we sized roughly $10 million of gross cost," primarily affecting HVAC businesses in Canada, with about 75%-80% of net impact in Q2, due to already-priced backlogs.
  • HVAC segment margin decreased 40 basis points, attributed to start-up costs linked to ongoing capacity expansions.
  • Detection & Measurement backlog declined modestly compared to the prior year.

SUMMARY

SPX Technologies (SPXC +3.42%) reported substantial top- and bottom-line growth, driven by strong demand in both HVAC and Detection & Measurement, underpinned by expanded data center activity and accretive M&A. Management raised full-year adjusted EPS guidance, factoring in a quantifiable headwind from recent Section 232 tariff updates, while confirming that 2027 results are expected to be unaffected by these tariffs. Execution on major capacity expansions in HVAC is on track, with new facilities producing high-engineered components, positioning the company to meet additional data center demand and accelerate revenue capture in future periods.

  • CEO Lowe said, "With the change in outlook this year, we moved our data center growth from somewhere around 50% to 70%," reflecting a notable surge in end-market demand and increased facility utilization.
  • The Olathe and Tennessee expansions have already commenced production, and the new Madison, Alabama facility is proceeding on schedule for phased assembly and production milestones.
  • Recent acquisitions (Air Enterprises, ROM Industries, and Thermalec) have closed near the company's average pre-synergy multiples, and proceeds from divestitures helped maintain a low leverage profile.
  • Management identified favorable underlying order momentum in HVAC, supported by broad-based end market activity outside commercial real estate and hotels, with health care, pharma, and power cited as additional areas of strength.
  • Detection & Measurement benefited from a software scope expansion within its Transportation platform, materially enhancing segment margins beyond initial forecasts for the period.
  • Product innovation in Detection & Measurement, including the Locate Performance Management software, is contributing to competitive differentiation and healthy U.S. order rates.

INDUSTRY GLOSSARY

  • Section 232 Tariffs: U.S. import tariffs imposed for national security reasons, notably affecting steel and aluminum costs for industrial manufacturers.
  • Hyperscaler: A large-scale cloud service provider or data center operator demanding high-capacity, scalable infrastructure.
  • PUE (Power Usage Effectiveness): A metric quantifying energy efficiency in data centers by comparing total facility energy to IT equipment energy.
  • WUE (Water Usage Effectiveness): A metric evaluating water usage efficiency in data centers relative to IT energy consumption.
  • Engineered-to-Order: Manufacturing process in which products are custom-designed to client specifications rather than mass produced.
  • Organic Revenue: Sales growth excluding the impact of acquisitions, divestitures, and currency fluctuations.
  • Inorganic Growth: Revenue growth arising specifically from acquisitions or mergers, not from internal business expansion.

Full Conference Call Transcript

Mark A. Carano: Thank you, operator, and good afternoon, everyone. Thanks for joining us. With me on the call today is Eugene Joseph Lowe, our President and Chief Executive Officer. I am also excited to be joined by our new Head of Investor Relations, Johan Rollins. He has joined us from The Hertz Corporation, where he served as Head of Investor Relations for the last five years. A press release containing our first quarter results was issued today after market close. You can find the release and our earnings slide presentation as well as a link to a live webcast of this call in the Investor Relations section of our website at spx.com.

I encourage you to review our disclosure and discussion of GAAP results in the press release and to follow along with the slide presentation during our prepared remarks. A replay of the webcast will be available on our website. As a reminder, portions of our presentation and comments are forward-looking and subject to safe harbor provisions. Please also note the risk factors in our most recent SEC filings. Our comments today will largely focus on adjusted financial results, and comparisons will be to the results of continuing operations only. You can find detailed reconciliations of historical adjusted figures from their respective GAAP measures in the appendix to today's presentation.

Our adjusted earnings per share exclude intangible amortization expense, acquisition and integration-related costs, non-service pension items, among other items. Finally, we look forward to meeting with investors at various events during the upcoming months. And with that, I will turn the call over to Eugene Joseph Lowe.

Eugene Joseph Lowe: Thanks, Mark. Good afternoon, everyone, and thank you for joining us. On the call today, we will provide you with an update on our consolidated and segment results for 2026 as well as an update on our full-year outlook. We had a strong start to the year with year-over-year growth in EBITDA of 23% and adjusted EPS of 22%. We continue to execute well, driving significant profit growth in both segments and making meaningful progress on several key initiatives. We are raising our full-year guidance range to reflect our strong performance in Q1 and outlook for the remainder of the year, partially offset by the impact of the recent changes to the Section 232 tariffs.

We do not expect these tariffs to impact 2027 earnings. Looking ahead, we remain well positioned to continue executing on our organic and inorganic value creation initiatives supported by our robust M&A pipeline. Turning to our high-level results for the quarter, we grew revenue by 17.4%, driven by the benefit of recent acquisitions and organic growth in both segments. Adjusted EBITDA increased 23% year-over-year, with 90 basis points of margin expansion. As always, I would like to update you on our value creation initiatives. The capacity expansions across our HVAC facilities to meet the strong demand for our data center cooling and custom air handling solutions are progressing well.

They remain on track with the timeline and capital requirements outlined last quarter. In Q1, we began producing highly engineered aluminum dampers at TAMCO’s new Tennessee facility and expect production to steadily increase throughout the year. We also began production of the OLYMPUS MAX units in our Olathe, Kansas facility in the first quarter. Additionally, the Madison, Alabama facility buildout is well underway. We still expect to have assembly capabilities for OLYMPUS MAX and custom air handling products in the second half of this year, and initial production capabilities in the first half of 2027. Turning to Detection & Measurement, we continue to advance our new product initiatives across the segment.

Our Locate & Inspection platform recently launched a new Locate Performance Management software that meaningfully expands the real-time analysis of our customers' critical data and is seamlessly transferred from our Radiodetection precision locators in the field. We believe this solution significantly enhances how our customers locate underground utilities by increasing their efficiency, safety, accuracy, and overall data management capabilities. And now I will turn the call back to Mark to review our financial results.

Mark A. Carano: Thanks, Gene. Our first quarter results were strong. Year-over-year adjusted EPS grew by 22% to $1.69. For the quarter, total company revenue increased 17.4% year-over-year, primarily driven by the benefit of acquisitions and strong organic growth in HVAC. Consolidated segment income grew by $25 million, or 22%, to $135 million. Our consolidated segment margin increased 100 basis points. In our HVAC segment, revenue grew by 22% year-over-year, with 11.5% inorganic growth and a modest FX tailwind. On an organic basis, revenue increased 9.6% with solid growth in both cooling and heating.

Segment income grew by $15 million, or 20%, primarily driven by higher volume, while segment margin decreased 40 basis points largely due to start-up costs associated with the capacity expansions. Segment backlog at quarter end was $755 million, up 38% organically year-over-year, primarily driven by data center demand. In our Detection & Measurement segment, revenue grew by 8.3% year-over-year. The one month of inorganic revenue from KTS contributed 3.9% and FX was a modest tailwind. On an organic basis, revenue increased 3%, primarily driven by higher volumes in our Transportation platform. Segment income grew by $10 million, or 28%, and segment margin increased 410 basis points.

Increases in segment income and margin were primarily driven by higher volume and a favorable mix, including greater-than-typical high-margin software volume. Segment backlog at quarter end was $333 million, down modestly year-over-year. Turning now to our financial position at the end of the quarter, we ended Q1 with $158 million of cash on hand, and total debt of $674 million. Our leverage ratio, as calculated under our bank credit agreement, was approximately 0.9 times at quarter end, below our long-term target range of 1.5 to 2.5 times, giving us significant capacity to pursue accretive growth opportunities. Q1 adjusted free cash flow was approximately $16 million.

In addition, during the quarter, we received approximately $60 million in cash proceeds on completion of the sale of Crawford United's Industrial and Transportation Products business. As a reminder, these businesses were reported in discontinued operations, and not part of our original 2026 guidance. Net of these proceeds, the implied EBITDA multiple for the acquisitions of Air Enterprises and ROM Industries, formerly the Air Handling segment of Crawford United, is approximately in line with our average acquisition multiple.

Moving on to our full-year 2026 guidance, we are increasing our adjusted EPS guidance by $0.15 to a midpoint of $7.95 to reflect our strong Q1 results, particularly in D&M, and additional data center-related volume anticipated to be delivered in the second half of this year. Our updated guidance reflects a $0.05 to $0.10 impact from the recently announced changes to the Section 232 tariffs. This headwind is expected to predominantly affect HVAC in the second quarter. Excluding this tariff headwind in Q2, we expect first-half adjusted EPS gating to be similar to the prior year. As always, you will find our updated 2026 guidance on the guidance slide and modeling considerations in the appendix to our presentation.

And with that, I will turn the call back over to Gene for a review of our end markets and his closing comments.

Eugene Joseph Lowe: Thanks, Mark. Current market conditions support our 2026 outlook, which implies 21% adjusted EBITDA growth. Within our HVAC segment, our core end markets remain resilient, and we continue to see strong demand for our data center solutions. In Detection & Measurement, our run-rate businesses continue to see solid demand supported by new product introductions. For project-oriented businesses, the front log remains active. In summary, I am pleased with the strong start to 2026. We are executing at a high level, and our key initiatives, including the capacity expansions and the integration of recent acquisitions, are on track.

We are confident in our increased full-year guidance, which implies adjusted EBITDA growth of 21% at the midpoint, and we remain well positioned to navigate the changing tariff environment. Looking ahead, I am excited about our future. With a proven strategy and a highly capable, experienced team, I see significant opportunities for SPX Technologies, Inc. to continue growing and driving value for years to come.

Mark A. Carano: Thanks, Gene. Operator, we will now open the call for questions.

Operator: If your question has been answered or you wish to remove yourself from the queue, you may press 11 again. If you have a question or comment at this time, please press 11 on your telephone keypad. Our first question or comment comes from the line of Andrew Obin from Bank of America. Mr. Obin, your line is open.

Andrew Obin: Good afternoon. On your HVAC business, very strong growth even with data centers, but if you back data centers out, what end markets really stand out to you in terms of strength? And on Detection & Measurement, you highlighted strength in Transportation. I think military was an area of strength and there was some pull-forward. How should we think about that? Any benefit from what is happening in Iran on your business? Just generally, how did the government business do?

Eugene Joseph Lowe: Sure. Andrew, you are right that growth is strongest in data centers. With the change in outlook this year, we moved our data center growth from somewhere around 50% to 70%. If you look at the rest of HVAC, we are mid-single digits, maybe a bit above that. Outside of data centers, health care and pharma remain very strong. We are seeing power be very strong, both on new power and aftermarket, and some of this is somewhat linked to data centers. We are also seeing activity in heavy industrial, and the aftermarket has been very strong for us.

Areas of softness have not changed much quarter to quarter: commercial real estate remains at a relatively low level, same with hotels. The more institutional market—universities and government—has been very healthy over the past couple of years and is relatively flattish so far this year. We have called out softness in battery and semiconductor, which were very strong a couple of years ago and have been lower recently, though we see some nice new opportunities in bidding that could signal an upswing. Overall, we feel very good about our markets both within data centers and outside. On government exposure in D&M, our exposure tends to be more to U.S. municipal markets.

The area where the Iran impact could theoretically affect demand would be more in our Comtech business—our legacy TCI/ECS business—which does a lot of drone detection and related capabilities. We have had very strong demand there over the past couple of years and expect that to continue. With the addition of KTS, we see continued growth, but not a step change at this point; activity is high, we like our value proposition, and we still anticipate mid-single-digit growth for D&M.

Operator: Our next question or comment comes from the line of Joseph O'Dea from Wells Fargo. Mr. O'Dea, your line is open.

Joseph O'Dea: Good afternoon. On the step-up in HVAC orders in the quarter and the timing of shipments around that, as well as the front log—given the backlog step-up—was there a concentrated amount of activity, or do you see that strength persisting? And then on tariffs and cost inflation, how much is pricing versus cost mitigation? Where you are manufacturing outside of the U.S., what is the timeline to bring more into the U.S.?

Mark A. Carano: With respect to backlog, data centers are showing real strength, and we are seeing those orders come through. We also raised our guide for the year on HVAC largely driven by the data center market. We are seeing opportunities, orders, and bookings going into backlog for 2026, and as we look out into 2027, we are seeing opportunities that will be executed next year. The market is very healthy with strong momentum, setting us up well for 2026, and we will see as we look into 2027. On the tariffs, we sized roughly $10 million of gross cost, and we believe we can offset about 50% of that, primarily through price, with other levers as well.

About 75% to 80% of the net impact will fall in Q2 this year, largely related to businesses in Canada—Ingenia and the Sigma and Omega businesses—that have backlog already priced. We think the impact will be de minimis in the back half of the year, and we do not expect to see any impact from tariffs in 2027 as we have levers in place to offset. On manufacturing footprint, we are largely “in country for country.” For those Canadian businesses, the TAMCO expansion in Tennessee and the Madison facility will support Ingenia custom air handling in the U.S. We are doing that to meet U.S. demand and to move manufacturing into the U.S., reinforcing that in-country model.

Eugene Joseph Lowe: If you look at the data center market overall, demand strength is very strong and accelerating across our product lines. Key customers are looking to accelerate, and we have expanded capacity this year, which is how we have taken our data center growth rate from 50% to 70% for 2026. We see attractive runway into 2027 and 2028, with a balanced customer mix across hyperscalers and colos, a good global presence, and strong visibility into customer demand.

Operator: Our next question or comment comes from the line of Bradley Thomas Hewitt from Wolfe Research. Mr. Hewitt, your line is now open.

Bradley Thomas Hewitt: Thanks for taking my questions. You mentioned start-up cost-related inefficiencies with the HVAC capacity expansions. Can you quantify how much of the HVAC margin miss versus your expectations was due to the ramp? Any change to the timing of the ramp or the margin impact? And on D&M, revenue outlook unchanged but margins up 75 bps for the year—any color on project timing and the resulting impact on segment seasonality?

Mark A. Carano: On Q1 HVAC margins, we had previously highlighted start-up costs. If you do the math around what we said, that gets you to about $8 million to $9 million of start-up costs, predominantly landing in the first half—roughly two-thirds of that impacting Q1 and Q2. Those start-up costs were expected, and Q1 margin performance was on track with our expectations. If you peel out the start-up costs and look at operating leverage and accretion from acquisitions, you would see roughly 40 basis points of margin lift absent the start-up costs, on a year-over-year basis. On D&M, it was not a project pull-forward; it was an expanded scope on an existing multiyear Transportation project with a software component.

The customer expanded the software scope, which was not in our forecast or backlog. Software carries very high variable margins, so that expansion leveraged through and is a large driver of the 75 basis point full-year margin increase for D&M.

Operator: Our next question or comment comes from the line of Jamie Cook from Truist Securities. Mr. Cook, your line is now open.

Jamie Cook: Thanks. On margins, what is your comfort level in the ability to put up normalized incremental margins as we exit 2026, given tariffs and capacity additions? And anything unusual about the cadence of orders or sales through the quarter and into April given macro uncertainty?

Mark A. Carano: I am very confident in our ability to deliver our traditional incremental margins in HVAC through the back half of the year and into next year. If you look at where we ended 2025 and our 2026 guide, and you strip out the expansion costs and the very modest Q2 tariff impact, you would see operating leverage of roughly 60 to 70 basis points on the organic revenue, plus 10 to 20 basis points from the inorganic piece. We are seeing that now when you strip out those costs, and I am not concerned as we go into next year.

Eugene Joseph Lowe: On end markets, we are feeling very good. We have a small amount of sales into the Middle East, less than 1%, and we are seeing some impact there, as expected, but it is not material. Outside the Middle East, across our businesses, we track bookings closely by end market and are a little ahead of where we thought we would be. Overall, we are comfortable with demand trends.

Operator: Our next question or comment comes from the line of Bryan Francis Blair from Oppenheimer. Mr. Blair, your line is open.

Bryan Francis Blair: How did Radiodetection perform in Q1, and how are you thinking about Q2 and full-year revenue performance? To what extent is the outlook influenced by the new technology and product rollout? And then an update on integration of Air Enterprises, ROM, and Thermalec, any surprises, and color on the M&A pipeline and capital deployment prospects over the next few quarters?

Eugene Joseph Lowe: We feel very good about Radiodetection. They are the global leader in underground location equipment with strong presence in Asia, Europe, and the U.S. Revenue has been modestly flattish over the past couple of years due to slowness in continental Europe, the UK, and some Asian countries, but we see nice momentum in end-market demand and innovation. Our Locate Performance Management software gives us a meaningful advantage and is gaining traction. We have also led in mapping solutions and utility ERP integration. Radiodetection has often been our “canary in the coal mine,” and it is performing well today; order rates are healthy, particularly in the U.S.

Mark A. Carano: For the full year, we are forecasting mid-single-digit growth for Radiodetection, and Q1 was in the low- to mid-single-digit growth range.

Eugene Joseph Lowe: On integrations, we are very pleased with both Air Enterprises/ROM and Thermalec. Air Enterprises strengthens our custom air handling solutions with very good leakage rates and unique capabilities. Thermalec has a strong team and leading market position in Canada; we are the leader in electric duct heating in the Americas but were small in Canada, and Thermalec fills that gap. We see channel and product synergies both ways. After selling the non-core Crawford assets within the quarter, both deals came in around our normal acquisition multiple—about 10.5x to 11x before synergies—which we typically reduce by another 1.5x to 2.0x with synergies. The pipeline is robust; even after these acquisitions, leverage is about 0.9x, below our target, so we have capacity.

In HVAC, we continue to see opportunities in engineered air movement and electric heat. We are also seeing more Detection & Measurement opportunities in Transportation and Comtech. We also remain very pleased with Sigma and Omega and with KTS, which added scale and technology to Comtech and fits well with Hydronics.

Operator: Our next question or comment comes from the line of Joe Giordano from TD Cowen. Mr. Giordano, your line is now open.

Joe Giordano: On capital deployment, can a disciplined acquirer compete in this market, given valuations for attractive assets? And anything noteworthy you are seeing in terms of inflation and planning around it?

Eugene Joseph Lowe: Our M&A strategy starts with strategy—maximizing organic full potential via new products, channels, geographies, lean, digital, and AI—and then defining M&A to accelerate that. About half our targets have been proprietary deals with no banker, which we like. In competitive processes, we stay disciplined. Our average pre-synergy multiple across 18 acquisitions is about 10.5x to 11x EBITDA; with synergies, effectively closer to 9x. There are areas we will not play: some Detection & Measurement assets and some data center companies are trading in the high teens to 20x+ and even 25x to 30x EBITDA—we will not be there. We focus on strategy and discipline; we still see many opportunities to deploy capital effectively without stretching on price.

Mark A. Carano: On inflation, input costs like steel and aluminum have moved up a bit with an upward bias, but as a share of total cost of goods sold they are mid-single digits. Given our engineered-to-order and configured-to-order mix, we can price in real time and pass incremental costs, effectively mitigating inflationary pressures. We are watching it, but we feel good about our position.

Operator: Our next question or comment comes from the line of Amit Mehrotra from UBS. Your line is now open.

Amit Mehrotra: How should we think about the second quarter for organic growth and margin by segment given tariffs, new capacity, and strong data centers? And longer term, with added capacity and raising data center growth from 50% to 70%, where do you see data centers as a percentage of revenue, and how much more revenue can you unlock as Tennessee, Mirabel, and Madison ramp?

Mark A. Carano: Broadly, our markets remain healthy. As we said in prepared remarks, first-half gating should be similar to the prior year, excluding the tariff impact in Q2. We feel good heading into Q2. HVAC revenue should be up sequentially and year-over-year. D&M can be impacted by project timing quarter to quarter, though we are typically good at delivering within the year. On capacity and data centers, the Olathe facility came online earlier than anticipated, allowing us to meet more demand in 2026. Our view on capacity from the expansions is unchanged: these expansions give us the ability to serve circa $550 million of incremental data center revenue. Sites like Olathe and the new Huntsville/Madison facility are designed for flexibility.

We expect Olathe and TAMCO (Tennessee) to be at full capacity in 2027. Madison will have assembly in the back half of 2026, full production in 2027, and reach full capacity in 2028.

Eugene Joseph Lowe: To clarify, the $550 million is incremental off a $200 million base. Our expansions in existing facilities are largely in production now and have gone well. TAMCO already has multiple lines up and shipping. Madison is the longest lead-time but will produce product in the back half of this year and ramp next year. If we were at $200 million last year, we are in the $350 million neighborhood for data centers this year, and you could say we have about $400 million more capacity beyond that, with potential to pull additional levers.

Operator: Our next question or comment comes from the line of Jeff Van Sinderen from B. Riley Securities. Your line is now open.

Jeff Van Sinderen: On data centers, are you seeing any supply chain delays or other issues? And on semiconductors, what kind of work are you seeing to bid on there? Lastly, with the Middle East at less than 1% of your business, do you anticipate any impact from higher oil prices and the macro around that?

Eugene Joseph Lowe: We are not seeing supply chain delays materially impacting us. Before we take on more purchase orders, we rigorously ensure we have the supply chain to support them. Our products are truly engineered; we design and engineer proprietary components like fans, gearboxes, motors, and heat exchangers. Rapid growth has required us to expand some suppliers, but we feel very good about where we are now and are actively working to ensure comfort as we look into 2027 and 2028. On semiconductors, we see bidding activity picking up. We believe we are well positioned to be awarded on at least one opportunity.

We are typically strong in semiconductor with many of the largest OEMs, and we are specified as the choice for cooling towers in some cases. As that market bubbles up, we expect to capture opportunities, though not back to peak levels from a few years ago. Regarding oil prices and macro, our engineered-to-order model means we price with real-time cost information, so PPV is rare. We manage inflation carefully with strong systems and processes, and real-time pricing helps us mitigate impacts.

Operator: Our next question or comment comes from the line of Walter Scott Liptak from Seaport Research. Mr. Liptak, your line is now open.

Walter Scott Liptak: On data centers, last quarter you were at $200 million in 2025 going to $300 million. Why take that to $350 million now? And are you making progress with new hyperscalers versus existing customers looking for more capacity and quicker lead times?

Eugene Joseph Lowe: The demand is there, and several large customers are pushing for accelerated deliveries. We pulled additional capacity levers—primarily in Olathe and Springfield—to meet demand. On customer mix, it is broad-based: existing large customers want more, and we are also engaging with new hyperscalers and colos. It is not just the four to five hyperscalers; chip manufacturers and many colos are active. We believe we are the global leader in cooling towers for data centers and have a leading position with TAMCO in actuated dampers and air movement. Much of the growth is coming in dry and adiabatic, which is more nascent, and some customers are installing these solutions for the first time.

The requirements are very large, which is where we excel—large, complicated cooling. We see some sites approaching a gigawatt or larger, which fits our strengths. Customers want custom engineering—size, thermal capacity, speed, modularity—and efficiency on power and water to improve PUE and WUE, and we bring strong solutions for those needs. It is a very active, fast-moving, and exciting market.

Eugene Joseph Lowe: Thank you all for joining today's call. We look forward to updating you again next quarter. Operator, with that, we can end the call. Thank you.

Operator: Thank you, sir. Ladies and gentlemen, thank you for participating in today's conference. This concludes the program. You may now disconnect. Everyone, have a wonderful day. Speakers, standby.