SPX Technologies Boosts Data Center Capacity to $1.1B; 2026–2028 Ramp and Back-half Margin Impact

SPX Technologies: Data center capacity ramp (from $750M to $1.1B), 2026 vs 2027 incremental impact, and back-half effects on top line growth & HVAC margins

1) Why data center capacity increased to $1.1B from $750M

Management said the capacity increase reflects a combination of (i) execution/throughput improvements at existing manufacturing sites and (ii) underlying market demand strength that justified scaling the plan. Specifically:

• Two broad capability sources were cited for lifting capacity from $750M to $1.1B:

  1. OlympusMAX throughput—management described “blocking and tackling” (more space, better flow, lean projects, and augmented staffing) and stated they are getting “more throughput than…anticipated,” and that OlympusMAX is made in Olathe and in the new Madison facility. ¹²
  2. Core cooling business (Everest)—management said they also saw very high demand for the Everest product. ²¹

• Management also linked the plan revision to demand-driven step-ups in expected data center volumes: capacity expectations were approximately $150M two years ago, $200M last year, a plan of $300M this year, later raised to $350M last quarter, and then raised again to $430M for full-year as of the call. ²
  While the question is about the total capacity figure ($1.1B vs $750M), management directly attributed the upward revisions to stronger demand plus manufacturing productivity/efficiency gains. ¹²

• A related qualitative confirmation: management said they have “very good conviction” in the revised capacity plan after raising it based on progress already achieved (i.e., teams doing work to execute from $300M to $430M this year). ¹²

2) Incremental contribution in 2026 vs 2027 (what’s implied by the ramp)

The excerpts provide timing for when the capacity is expected to reach full production, and they describe revenue/cadence effects in the back half.

2.1 Full production timing to $1.1B (capacity ramp anchor)

• Management stated their expectation remains that the $1.1B capacity will be at full production in the second half of 2028. ³
• They added a potential bias that it “could be earlier” if things continue to go well, but cautioned it was “probably a little too early” to call that. ³

Implication: If full production is in 2H28, then the meaningful incremental capacity utilization for 2026 vs 2027 is more about how quickly volumes convert into revenue before the final “full production” milestone, not about the final capacity nameplate itself.

2.2 Execution/production starting points that shape near-term incremental revenue

While the question asks specifically for “incremental contribution in 2026 versus 2027,” the excerpts don’t give a numeric bridge split between 2026 and 2027. However, they do provide execution milestones that support the direction of incremental contribution:

• Management said OlympusMAX assembly activities launched at the new Madison facility in July and that production capabilities will be added during the first half of 2027. ⁴

• They also described that learnings from Olathe/Springfield and the ramp of other businesses are expected to “ramp smoothly” and be “on track,” and pointed to the Tamco business in Nashville being at full capacity with production capacity “sometime in 2027.” ³

Implication: These milestones support that 2027 is likely the year where a larger share of the incremental capacity/throughput translates into revenue scale (because production capabilities are being added in early 2027 and production capacity is targeted for 2027 for Tamco), while 2026 benefits more from ongoing improvements and earlier throughput gains at existing lines (and demand catching up to the raised plans). ⁴³¹

2.3 Back-half 2026 cadence and margin lift signal (incremental revenue conversion)

• On quarterly cadence, management said Q3 and Q4 were expected to have similar revenue growth rates, and margins higher in Q4 than in Q3. ⁵
• They attributed the back-half margin improvement to elements including:
  • leverage from “operating volume”
  • contribution from Thermolec and “M&A contribution”
  • moderation of startup costs and tariffs that were headwinds in the first half ⁵

Implication: Although not a 2026 vs 2027 “incremental split” by capacity, this supports that in 2H26, operating leverage and mix (including Thermolec) are expected to translate into improved results even before the later “full production” milestone for $1.1B. ⁵

3) How capacity expansion and tariffs affect expected top-line growth and HVAC margins in the back half

3.1 Tariffs: headwind to margins, not treated as a changing forecast driver

Management gave a margin bridge explanation that directly addresses tariffs:

• They cited a 260-basis-point year-over-year decline in Q2 margins, primarily driven by three known items contemplated in the forecast, including net tariff impact (which “has not changed” and was where they expected it to be). ⁶
• They also cited startup costs (with a tough prior-year comp) and modest inflationary headwinds (~50 basis points). ⁶

Back-half relevance: In their back-half margin explanation, they said the startup costs and the tariffs that were headwinds in the first half will moderate, which supports higher margins in Q4 vs Q3. ⁵

3.2 HVAC margins in back half: what’s driving improvement

Management explicitly connected back-half margin outcomes to a mix of volume leverage, acquisition contribution, and easing of earlier headwinds:

• Management expected margins higher in Q4 than in Q3 due to (1) operating volume and leverage, (2) Thermolec and M&A contribution, and (3) moderation of startup costs and tariffs versus the first half. ⁵

Separately, they also quantified a HVAC margin update:

• They said the raise in HVAC for the full year was driven by Thermolec, with a 25-basis-point increase; the rest of the HVAC forecast was unchanged. ⁶

So the mechanism is:

• Tariffs/startup costs pressuring early periods, then moderating later. ⁵
• Thermolec adding both incremental margin support (25 bps HVAC raise) and an M&A contribution element that helps explain the back-half ramp in margins. ⁶⁵
• Capacity expansion (and thus higher operating volumes) supporting leverage. ⁵

3.3 Expected top-line growth: capacity-driven acceleration plus offsetting margin pressure

While the excerpts don’t provide a full numeric top-line forecast by quarter, they do provide directional guidance that capacity expansion is intended to accelerate growth and that tariffs mainly affect margin timing.

• Management said they are pleased that capacity is coming on quicker and that it underpins expansions in revenue, driven by increased throughput (OlympusMAX) and strong Everest demand, with the plan rising to $1.1B from $750M. ⁷¹²
• They also stated that the forecast revision to higher data center volume and stronger performance (including Thermolec) increases the midpoint of full-year outlook to imply 27% adjusted EBITDA growth. ⁴

For the back half specifically:

• Management stated Q3 and Q4 would have similar revenue growth rates, consistent with a steady ramp rather than a step-function. ⁵
• They did not attribute revenue growth changes in Q3/Q4 to tariffs; rather, tariffs were framed as a margin headwind in the first half that moderates later, while margins improve due to volume leverage and Thermolec contribution. ⁵⁶

Summary answers to the question (directly)

1. Why capacity increased to $1.1B from $750M: management attributed it to (a) OlympusMAX throughput improvements (lean projects, flow/space upgrades, augmented staffing, and more-than-anticipated throughput) and (b) very high demand in the Everest core cooling business; together these allowed them to lift the capacity plan and also raised annual data center volume expectations from earlier targets up to $430M full-year. ¹²

2. Incremental contribution in 2026 vs 2027: the excerpts do not give a numeric 2026-vs-2027 dollar split of the incremental $350M capacity increase, but they do indicate the ramp mechanics: OlympusMAX Madison production capabilities add in 1H27 and other production capacity targets include Tamco production capacity “sometime in 2027,” implying more capacity-to-revenue conversion weight in 2027 than in 2026. ⁴³ For 2H26, management emphasized steady revenue growth cadence (Q3/Q4 similar) and margin improvement as headwinds moderate and acquisition/volume leverage effects play out. ⁵

3. How capacity expansion and tariffs influence expected back-half top-line growth and HVAC margins: tariffs were described as a known, unchanged headwind in Q2 and as part of first-half pressures; management expects startup costs and tariffs to moderate in the back half, enabling higher Q4 than Q3 margins, supported by operating volume leverage and Thermolec/M&A contribution. ⁶⁵ They also quantified that the HVAC full-year raise was driven by Thermolec with a 25 bps increase, while the rest of the HVAC forecast was unchanged—consistent with Thermolec being a key margin tailwind as data center scaling contributes to leverage through higher operating volumes. ⁶⁵