MOD Stock: Is Modine Manufacturing’s Data Centre Pivot Paying Off?

Modine Manufacturing [MOD] will release its Q4 and FY 2026 earnings after the market closes on 26 May. The results will be closely scrutinised, as they’ll offer investors a chance to evaluate the thermal management firm’s progress towards becoming an artificial intelligence (AI) data centre play. 

Let’s look at this venerable firm’s long trajectory, dive into the numbers and compare it to some peers in the space. 

From radiator cores to data cores

Modine was founded in 1916 in Racine, Wisconsin, as a thermal engineering specialist focused on radiators for both household and automotive use cases. Its early edge came from solving a core constraint of the internal combustion era: efficient engine cooling at scale. That positioning quickly translated into military demand during WWI and WWII, where Modine supplied heat exchangers for aircraft and armoured vehicles, embedding the company deeper into high-performance thermal systems.

Post-war, the business shifted from cyclical defence exposure into broader industrialisation, building a sizeable Heating, Ventilation, and Air Conditioning (HVAC) and commercial heating franchise. Through the late 20th century, Modine expanded internationally but remained a relatively cyclical, capital-intensive industrial supplier.

The modern investment story begins with its strategic pivot away from lower-margin legacy HVAC exposure towards higher-value thermal management. Over the past decade, it has repositioned to focus on electric vehicle (EV) battery and power electronics cooling, industrial efficiency and, most importantly, data centre thermal infrastructure – an area now benefiting from AI-driven compute demand. The result is a re-rating from traditional industrial to structural “thermal infrastructure” exposure.

Recent results: “A turning point”

As a result of this repositioning, Modine Manufacturing is increasingly being pulled into the same structural growth trade as peers such as Vertiv [VRT] and Schneider Electric [SBGSF], as the rapid expansion of AI infrastructure drives a step-change in demand for advanced liquid and air-based thermal management solutions. As GPU density rises and server racks push higher power envelopes, efficient heat dissipation has become a core bottleneck, and thus a key competitive battleground for infrastructure suppliers.

This momentum was reinforced in Modine’s latest earnings, released on 4 February. The Climate Solutions segment delivered standout performance, up 51%, while net sales increased by 31%. Data centre-related sales were the clear standout, surging 78%.

Adjusted EPS rose 29% year-on-year to $1.19, beating analysts’ expectations of $0.99 by 20.20%.

Management commentary underscored the strength of the cycle, pointing to record order intake and lifting full-year adjusted EBITDA guidance to roughly $455m-475m. CEO Neil Brinker described the moment as “a major turning point for Modine”, as the company continues to scale capacity in anticipation of sustained demand, with ambitions to exceed $1bn in annual data centre revenue this year.

Brinker also celebrated “the pending spin-off and combination of our Performance Technologies business with Gentherm [THRM]. This marks a major milestone in our strategic transformation … The combination of Performance Technologies with Gentherm will create a scaled leader in thermal management and solutions, while Modine will become a pure-play climate solutions company, focused on the high-growth data centre and commercial HVAC and refrigeration markets.”

On the upcoming earnings call, investors will be looking for signs that this pivot is bearing fruit.

Competition heating up: MOD vs VRT vs SBGSF

This is how Modine compares to two peers in the space.

Vertiv Holdings has extended its sharp AI-driven re-rating as hyperscaler spending on data centre infrastructure accelerates. Recent results showed continued explosive demand for power and liquid cooling systems, with net sales up 30% y/y and backlog levels near $15bn, providing unusually long revenue visibility for an industrial supplier. Management also lifted full-year guidance, pointing to sustained momentum in AI rack densification and multi-megawatt deployments. The market is increasingly treating Vertiv as a pure-play “AI infrastructure bottleneck” winner rather than a traditional electrical equipment company, though valuation multiples have expanded sharply alongside the growth narrative.

Schneider Electric, meanwhile, is following a more diversified but still AI-accelerating trajectory, anchored by its dominant position in global energy management and industrial automation. Recent results showed stronger-than-expected earnings driven by surging data centre demand, with particularly strong growth in its pure data centre segment and improving margins despite currency headwinds. Unlike pure plays, Schneider is benefiting from AI infrastructure across power distribution, grid optimisation and end-to-end facility electrification, including liquid cooling expansion via recent acquisitions. The result is a steadier, less volatile compounder profile, with AI acting as an incremental accelerant rather than the sole growth engine.

Source: Yahoo Finance

You could say that Vertiv Holdings, Schneider Electric and Modine Manufacturing sit at three different points on the AI data centre infrastructure spectrum. 

Vertiv is the purest AI infrastructure play, highly leveraged to hyperscaler capex cycles and thermal/power bottlenecks, with earnings volatility amplified by backlog-driven growth. Schneider Electric is the diversified incumbent, embedding AI upside into a broader energy management and industrial automation franchise, resulting in steadier compounding and lower cyclicality. Modine is the emerging specialist, smaller and more transformation-driven, with data centre cooling becoming its key re-rating driver alongside EV thermal exposure. Together, they map a continuum from legacy industrials to AI-native infrastructure beneficiaries.

Conclusion

So, is Modine Manufacturing’s [MOD] data centre pivot actually paying off? 

The evidence so far suggests that it is – witness the rapid growth in Climate Solutions, surging data centre revenues and record order intake, which together suggest meaningful early traction in AI-driven thermal demand. 

The bull case rests on continued hyperscaler spending, expanding liquid cooling adoption and Modine’s ability to scale into a $1bn-plus data centre revenue stream, potentially re-rating it closer to peers like Vertiv and Schneider Electric. 

The bear case comprises execution risk, margin pressure from scaling and the reality that it could remain a smaller, less entrenched player in a competitive, capital-intensive infrastructure market. The pivot seems to be working, but it is still early days: hence the importance of the upcoming earnings call.

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