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Call sheet · Q3'26

Modine Manufacturing (MOD)

Q3'26 earnings call · held February 5, 2026 · compared with the Q2'26 call · management-credibility review
8/12
Disclosure score
2 high, 4 medium, 2 low flags
Financial quality
Bottom line
The sleeper story is PT posting 14.8% margins in a dead market while everyone's distracted by data center fireworks; this is pure operational execution that validates the Gentherm deal valuation. Yes, data center grew 78% but the real story is management's 'record order intake' setting up 50-70% growth through FY28, implying a $3B run rate that would make them a top 3 player. The binding constraint isn't demand or capacity, it's customer concentration risk with majority of revenue from just 2 of 5 hyperscalers. Most revealing quote: 'The more we can make, the more we can sell' which sounds great until those 2 customers hiccup. My view changes if they disclose actual backlog above $2B or customer concentration below 40%.

The 30-second version

  • The sleeper: PT segment hits 14.8% margins despite 'challenged' markets, up 400 bps YoY
  • Data center grew 78% but the real story is record order intake setting up massive '27
  • Gentherm spin values PT at 6.8x EBITDA but management stopped disclosing DSO and inventory turns

What changed this quarter

MetricQ2'26Q3'26Change
Total Revenue$725M (+12% YoY)$804M (+31% YoY)+1900 bps acceleration
Adjusted EPS$1.06 (+9% YoY)$1.19 (+29% YoY)+2000 bps EPS growth acceleration
Adjusted EBITDA$102M (+4% YoY)$120M (+37% YoY)+3300 bps profit acceleration
Climate Solutions Revenue$558M (+24% YoY)$665M (+51% YoY)+2700 bps growth surge
CS Adjusted EBITDA Margin16.1% (down 420 bps YoY)17.9% (sequential +180 bps)Margin recovery underway
Data Center Revenue$227M (+42% YoY)$295M (+78% YoY)+3600 bps acceleration
Performance Tech Revenue$166M (-4% YoY)$139M (+1% YoY)+500 bps improvement off bottom
PT Adjusted EBITDA Margin14.7% (+90 bps YoY)14.8% (+400 bps YoY)Defying gravity in down market
Free Cash Flow-$30M-$17MStill burning but improving
Net Debt$498M$517M+$19M sequential increase

Accountability tracked

7 new promises made5 narrative shifts flagged7 prior promises scored
Inside the full report
The complete write-up covers the full promise ledger with kept/missed calls, disclosure-quality scoring, the metrics-vanished check, verification items, and the questions to ask next quarter.
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Scores, kept-promise rates, and flags on this site reflect the author's opinion, applying a stated methodology to statements management made on public earnings calls. Informational and educational purposes only - not investment advice, a recommendation, or an offer to buy or sell any security. Sources believed reliable but not guaranteed; the author may hold positions in the securities discussed.

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