Modine Data Center Sales Jump 95% to $439.7M, Adds $400M Deal

Modine's Data Centers segment sales rose 95% to $439.7 million in the quarter ended Sept. 30, the thermal-management maker said in its fiscal second-quarter 2027 results on Nov. 3, and BizTimes Milwaukee reports a new $400 million hyperscaler agreement.

The results, filed with the U.S. Securities and Exchange Commission as Exhibit 99.1, put group net sales at $994.4 million, up 35% from $738.9 million a year earlier. Data Centers added $214.7 million of the $255.5 million increase. The company attributed the segment's growth mainly to higher sales to hyperscale customers in North America. Chief executive Neil Brinker called orders and backlog in the segment records, though the release gives no order or backlog figure.

BizTimes reported on Nov. 4 that Modine has secured another large data center deal, worth $400 million of work slated for 2027. According to BizTimes, Brinker told analysts on the earnings call that Modine will supply an unnamed hyperscaler with custom air handling units. The BizTimes article was cut off by a paywall at that point, so the customer, the full term and any other products in the deal are not confirmed here.

What the numbers say about hall build-out

Data Centers made up about 44% of group net sales in the quarter, against about 30% a year earlier, by Voltgrid's arithmetic from the release. The $400 million award equals roughly 91% of one quarter of the segment's current sales, although it covers work slated for 2027 rather than a single quarter. The deal is for air handling units, so it points to air-side capacity in new halls rather than liquid loops, and the release does not split segment sales by product.

Growth came at a cost to margin. Segment gross margin was 19.7%, down 470 basis points, which the company blamed mainly on higher material, component and tariff costs. Segment operating income still rose 70% to $61.2 million, and adjusted EBITDA rose 66% to $67.6 million.

Capacity, cash and outlook

Building capacity is consuming cash. Free cash flow for the six months to Sept. 30 was a use of $145.6 million, which Modine tied to capital spending to raise Data Centers production capacity and to inventory built for data center cooling demand. Brinker also said the company signed long-term agreements with multiple strategic suppliers for critical components to cover its backlog.

Modine spun off its Performance Technologies business on Oct. 1, and from the third fiscal quarter that unit is reported as discontinued. For the continuing business, Modine expects fiscal 2027 net sales of $3.1 billion to $3.2 billion, up 50% to 55% with Performance Technologies excluded from both years, and adjusted EBITDA of $470 million to $500 million.

For context on the cooling supply chain, Vertiv reported third-quarter sales up 61% to $4.31 billion on Oct. 28, and LG Electronics said its AI data center cooling orders topped KRW 3 trillion.

What is not confirmed yet

Some headlines describe quarterly sales above $1 billion. The 8-K gives net sales of $994.4 million, so Voltgrid uses that figure. The customer behind the $400 million deal is unnamed, and neither Modine's release nor the visible BizTimes text gives the contract term beyond 2027 work. Modine has said it will share longer-term revenue and earnings targets at its Analyst and Investor Day on Nov. 18.