Overview
- Modine disclosed on May 26 a long-term capacity agreement that guarantees more than $4 billion of data-center cooling product supply for 2027–2029 and includes a $165 million upfront payment to fund capacity buildout.
- The company issued bullish fiscal 2027 guidance calling for total sales growth of 20%–35%, adjusted EBITDA of $650 million–$680 million, and data-center sales growth of 60%–80%.
- Modine closed fiscal 2026 with a fourth straight year of record revenue and adjusted EBITDA, and data-center sales rose about 73% to $1.1 billion for the year.
- Rapid factory ramps and startup costs have compressed margins, with Q4 gross margin down to 22.5%, and the company faces tariff-driven input costs and higher working capital needs as it scales.
- Management plans to spin off the lower-margin Performance Technologies unit by Q4 2026, investors bid the stock higher on the deal, and hyperscalers financing supplier capacity could reshape how data-center cooling is delivered and funded.