Microvast Holdings announces departure of chief financial officer
Modine Manufacturing Company (NYSE:MOD) presented its fourth quarter and full-year fiscal 2025 results on May 21, 2025, highlighting a third consecutive record year driven by explosive growth in its data center business and strong performance in its Climate Solutions segment.
Executive Summary
Modine reported net sales of $2.58 billion for fiscal 2025, a 7% increase from the previous year, while adjusted EBITDA surged 25% to $392.1 million with margins expanding to 15.2%. The company’s performance was characterized by a stark contrast between its two main segments: Climate Solutions thrived with 30% revenue growth, while Performance Technologies faced headwinds with a 12% sales decline.
"Our rate of earnings growth far outpaced our revenue growth," stated Neil Brinker, President and CEO, highlighting the company’s successful execution of its strategy to drive profitable top-line growth through both organic and inorganic investments in the Climate Solutions segment.
As shown in the following chart of Modine’s annual performance, both net sales and adjusted EBITDA reached record levels in fiscal 2025:
Segment Performance
The Climate Solutions segment was the standout performer, delivering exceptional results with a 30% increase in revenues to $1.44 billion and a 45% increase in adjusted EBITDA to $302.7 million. The segment’s EBITDA margin expanded to 21.0% from 18.8% in the previous year.
The most remarkable growth came from the data center business, which saw revenues increase by 119% to $644 million. The company also reported strong organic growth in North America and is launching a modular data center cooling solution in the region.
The following chart illustrates the impressive performance of the Climate Solutions segment:
In contrast, the Performance Technologies segment faced challenges due to an extended downturn in vehicular markets. Net sales decreased by 12% to $1.16 billion. Despite the revenue decline, the segment managed to increase adjusted EBITDA by 3% to $157.2 million, with margins improving to 13.5% from 11.5%.
The company is implementing structural changes in this segment, simplifying its organization to two product groups and taking actions to reduce costs and improve focus.
Quarterly Performance Highlights
For the fourth quarter of fiscal 2025, Modine reported net sales of $647.2 million, a 7% increase from the same period last year. Adjusted EBITDA for the quarter rose 32% to $104.1 million, with margins expanding to 16.1% from 13.1%. Adjusted earnings per share increased 45% to $1.12 from $0.77 in the prior year.
The quarterly results reflect the same divergent trends seen in the full-year performance, with Climate Solutions showing strong growth while Performance Technologies experienced sales declines but margin improvements.
The following chart provides a comprehensive view of Modine’s fourth quarter financial performance:
Detailed Financial Analysis
Modine maintained a strong financial position throughout fiscal 2025, generating $129 million in free cash flow and reducing net debt by $92 million year-over-year to $279 million. The company’s leverage ratio stood at a healthy 0.7x as of March 31, 2025.
"Our balance sheet remains strong," noted Mick Lucareli, Executive Vice President and CFO, adding that the company’s board had approved a share repurchase program, signaling confidence in Modine’s financial health and future prospects.
The company’s gross profit for Q4 FY25 increased to $166.0 million, representing 25.7% of net sales compared to 22.4% in the same period last year. Operating income rose to $74.5 million, or 11.5% of net sales, up from 7.8% in Q4 FY24.
Strategic Initiatives
Modine continues to execute on several strategic initiatives to drive future growth. The company’s expansion in India is on track to launch production in Q2 FY26, which will enhance its global manufacturing footprint.
The acquisition of AbsolutAire has been completed, adding to Modine’s capabilities in the HVAC market. The company also mentioned that its business development team is working on other growth initiatives, suggesting potential for further acquisitions.
In the Performance Technologies segment, Modine is implementing actions to heighten focus and reduce costs, aiming to improve profitability despite challenging market conditions.
Forward-Looking Statements
Looking ahead to fiscal 2026, Modine provided an optimistic outlook, projecting net sales growth of 2% to 10% to reach between $2.64 billion and $2.84 billion. Adjusted EBITDA is expected to grow by 7% to 15%, reaching $420 million to $450 million.
The company anticipates another year of strong growth in Climate Solutions, with projected sales growth of 12% to 20%, including more than 30% growth in data center sales. In contrast, Performance Technologies sales are expected to decline by 2% to 12%.
The following chart details Modine’s fiscal 2026 outlook:
"We anticipate another year of strong growth in Climate Solutions," said Brinker, "which would result in the fourth consecutive year of record results."
The company also expects another year of strong free cash flow, which will provide flexibility for continued investments in growth initiatives and potential share repurchases.
Modine’s stock was trading up 2.3% in premarket trading at $108.00 following the release of these results, reflecting investor confidence in the company’s performance and outlook.
Full presentation:
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.