Modine spins off Performance Tech to Gentherm; Data Centers revenue +90% but margins compress 960bp

Filed July 30, 2026 · Period ending June 30, 2026 · Compared to 10-Q Jul 31, 2025 · ~2 min read

Key Changes

• high

  Announced Reverse Morris Trust transaction to spin off Performance Technologies segment and combine it with Gentherm. Modine shareholders receive ~40% of combined entity; Modine receives $210M cash. Transaction valued at ~$1.0B, expected to close by end of calendar 2026. Modine becomes pure-play climate solutions company (Data Centers + Commercial HVAC).

  MD&A: Strategic Transactions verify on EDGAR →
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  Data Centers segment revenue grew 90% YoY to $348.6M, driven by hyperscale customer demand. However, gross margin compressed 960 basis points to 20.2% due to ~$16M in higher material costs and operating inefficiencies from rapid capacity expansion and supplier capacity constraints for key components, resulting in unfavorable absorption of overhead and labor costs.

  MD&A: Data Centers Performance verify on EDGAR →
• high

  Net income rose 44% YoY to $73.9M while operating income declined 1% to $74.8M — the bottom-line improvement came from below-the-line factors, not operations. The$$46.2M favorable swing was driven by income tax benefits (+$19.7M, primarily $26.5M in stock-based compensation tax benefits from FY2024 performance awards vesting after significant share-price appreciation), non-operating/other items (+$3.8M), and noncontrolling interest (+$100,000).

  MD&A: Tax & Non-Operating Items verify on EDGAR →