Modine Manufacturing Company reported financial results for the first quarter ended June 30, 2025, on July 30, 2025. Net sales increased 3 percent to $682.8 million compared with $661.5 million in the prior year, driven by strong performance in the Climate Solutions segment.
Adjusted EBITDA for the quarter was $101.4 million, a slight increase of $0.5 million year-over-year, and adjusted earnings per share rose 2 percent to $1.06. The Climate Solutions segment benefited from continued momentum and higher sales of data center products, along with organic and inorganic growth in the HVAC Technologies product group.
Modine significantly raised its fiscal 2026 outlook, now expecting total company sales to increase 10% to 15% (up from 2% to 10%) and adjusted EBITDA to be between $440 million and $470 million (up from $420 million to $450 million). This revision reflects the impact of recent acquisitions in Climate Solutions and increased demand from data center customers.
The company's recently announced $100 million investment to expand North American manufacturing capacity for data center products is expected to positively impact the second half of fiscal 2026 and provide greater growth opportunities in fiscal 2027 and beyond. Modine believes this capacity expansion, combined with strong demand, provides a clear path to approach $2 billion in data center revenues by fiscal 2028.
While gross margin decreased slightly by 40 basis points to 24.2 percent due to lower gross margin in the Performance Technologies segment, Modine is actively working to control and offset higher material costs in this segment. Free cash flow for the quarter was $0.2 million, impacted by an increase in working capital related to higher inventory balances in Climate Solutions, and net debt increased to $402.6 million due to borrowings for acquisitions.
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