Modine’s Q2 2026 results reflect a company in the midst of a strategic transformation toward data center leadership, supported by a rapid capacity expansion and three acquisitions. Revenue for the quarter was $738.9 million, up 11.7% year over year and 8.2% quarter over quarter, led by a 24% increase in Climate Solutions driven largely by data-center deployments and the contributions from AbsolutAire, L.B. White and Climate by Design International. However, the gross margin compressed to 22.3% (down ~290 bps QoQ as management highlighted temporary unabsorbed costs from high-speed capacity ramp and labor investments) and adjusted EBITDA margin stood at 14.0%, reflecting the cost of a multiyear data center capacity expansion that management expects to normalize by Q4 and into FY27. Management reaffirmed an ambitious longer-term growth trajectory, including more than 60% data center revenue growth in the current year and a path to over $2 billion in data center revenues by fiscal 2028, supported by multiple new production lines and regional launches (Grenada, Franklin, Jefferson City, Grand Prairie, and Chennai). Free cash flow was negative $30 million in the quarter, predicated on higher working capital and capex to fund the data center ramp, with leverage at about 1.2x and a solid balance sheet to fund the transformation. The company projects continued revenue acceleration in the second half, driven by incremental capacity online in Q3 and Q4, and expects margin expansion as fixed costs are absorbed and volumes scale.