Market Overview - The U.S. stock market is experiencing a significant midday sell-off due to concerns over stretched valuations of AI stocks, the ongoing government shutdown, and weak labor market data [1][11] - All three major indexes are in negative territory, indicating a broad "risk-off" sentiment among investors [1] Major Index Performance - The Dow Jones Industrial Average (DJI) is down 0.8% or 398.70 points, closing at 46,912.30 [2] - The S&P 500 (SPX) has declined 1.1% to 6,720.32 and further to around 6,652 points, representing a 1.02% loss [2] - The Nasdaq Composite (IXIC) has tumbled 1.9% or 445.81 points to 23,053.99, with an additional loss of almost 1% in early trading [2] Investor Sentiment - The Cboe Volatility Index (VIX) rose 8.3% to 19.50, indicating increased investor anxiety [3] - The ratio of decliners to advancers on the NYSE is 1.97-to-1 and on the Nasdaq is 2.69-to-1, reflecting negative sentiment [3] Sector Performance - The Consumer Discretionary Select Sector SPDR (XLY) and Technology Select Sector SPDR (XLK) slipped 2.3% and 2% respectively, while the Energy Select Sector SPDR (XLE) advanced 1% [3] Global Market Impact - European markets are mirroring the U.S. downturn, with the FTSE 100, CAC 40, and DAX 40 all trading lower due to concerns over U.S. tech valuations [4] Economic Factors - The ongoing U.S. government shutdown, now in its 38th day, is creating a "data vacuum" and increasing investor uncertainty [5] - The absence of crucial economic reports is leading to reliance on private payroll and layoff data, indicating a cooling labor market [5] Corporate Earnings - Constellation Energy (CEG) is set to report earnings, which will be closely watched for insights on AI-driven power demand [6] - NuScale Power (SMR) reported earnings, with a focus on next-generation nuclear deployments [6] Upcoming Events - The IAB Connect H2 conference on December 4th will focus on digital advertising, potentially impacting media and advertising technology sectors [7] Major Stock News - $750 billion has been wiped off major AI stocks this week, with Nvidia (NVDA) falling 2.2% in early trading and down 4.3% since market open [8] - Salesforce Inc. (CRM) dropped 5.3%, while other tech companies like Microsoft (MSFT), Palantir Technologies (PLTR), Broadcom (AVGO), and Advanced Micro Devices (AMD) are also under pressure [8] International Developments - Rightmove's shares fell 12.5% after announcing increased investment in AI, while IAG saw an 11.5% slump due to soft U.S. travel demand [10]

Group 1 - SPX Technologies is currently outperforming its peers in the Construction sector, with a year-to-date return of approximately 49.6% compared to the sector average of 4.1% [4] - The Zacks Rank for SPX Technologies is 2 (Buy), indicating a positive outlook based on earnings estimates and revisions [3] - The Zacks Consensus Estimate for SPX Technologies' full-year earnings has increased by 3.1% over the past quarter, reflecting improved analyst sentiment [4] Group 2 - SPX Technologies is part of the Building Products - Air Conditioner and Heating industry, which has seen a year-to-date gain of about 4.7% [6] - The Construction sector, which includes SPX Technologies, ranks 15 in the Zacks Sector Rank, indicating a moderate performance relative to other sectors [2] - Another notable stock in the Construction sector is Tutor Perini, which has achieved a year-to-date return of 178.5% and also holds a Zacks Rank of 2 (Buy) [5][7]

Core Insights - Investors in the Technology Services sector may consider Acuity (AYI) and SPX Technologies (SPXC) as potential value stocks [1] - Both companies currently hold a Zacks Rank of 2 (Buy), indicating positive earnings estimate revisions and improving earnings outlooks [3] Valuation Metrics - AYI has a forward P/E ratio of 18.29, while SPXC has a forward P/E of 31.72, suggesting AYI may be more undervalued [5] - AYI's PEG ratio is 1.83, compared to SPXC's PEG ratio of 2.01, indicating AYI's expected earnings growth is more favorable relative to its valuation [5] - AYI's P/B ratio is 4.06, while SPXC's P/B ratio is 4.95, further supporting AYI's position as the superior value option [6] Value Grades - AYI has a Value grade of B, while SPXC has a Value grade of D, highlighting AYI's stronger valuation metrics [6]

Group 1 - The S&P 500 experienced a retracement following the FOMC meeting, impacting the market gap from Sunday, with bonds also trading sharply lower [1] - Institutional selling was noted at the close, particularly in key sectors such as technology (XLK), communication services (XLC), consumer discretionary (XLY), and financials (XLF) [1] - There are doubts about the persistence of negative sentiment, as the sideways movement in European markets suggests potential confidence returning to bonds, which may positively influence equities [1]

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Core Viewpoint - SPX Technologies reported quarterly earnings of $1.84 per share, exceeding the Zacks Consensus Estimate of $1.6 per share, marking a 15% earnings surprise [1][2] Financial Performance - The company achieved revenues of $592.8 million for the quarter ended September 2025, surpassing the Zacks Consensus Estimate by 3.54%, compared to $483.7 million in the same quarter last year [2] - Over the last four quarters, SPX Technologies has consistently exceeded consensus EPS estimates [2] Stock Performance - SPX Technologies shares have increased approximately 37.4% year-to-date, outperforming the S&P 500's gain of 17.2% [3] Future Outlook - The company's earnings outlook is crucial for assessing future stock performance, with current consensus EPS estimates at $1.85 for the upcoming quarter and $6.48 for the current fiscal year [7] - The Zacks Rank for SPX Technologies is currently 3 (Hold), indicating expected performance in line with the market in the near future [6] Industry Context - The Technology Services industry, to which SPX Technologies belongs, is currently ranked in the top 35% of over 250 Zacks industries, suggesting a favorable environment for stock performance [8]

Financial Data and Key Metrics Changes - In Q3 2025, adjusted EPS grew by 32% to $1.84, with total company revenue increasing by 23% year-over-year [4][8] - Adjusted EBITDA is expected to exceed $500 million, implying approximately 20% growth year-over-year [4][11] - Consolidated segment income grew by $32 million, or 28%, to $146 million, with a segment margin increase of 110 basis points [8] Business Line Data and Key Metrics Changes - HVAC segment revenue grew by 15.5% year-over-year, with 6.7% inorganic growth and a nominal FX impact [8] - Detection & Measurement segment revenue increased by 38.4% year-over-year, with strong organic growth of 26.5% [9] - Segment backlog for HVAC was $579 million, up 7% sequentially, while Detection & Measurement backlog was $366 million [8][9] Market Data and Key Metrics Changes - Strong demand in key end markets for HVAC, particularly in data centers and healthcare [12] - Detection & Measurement segment shows steady run-rate demand, with modest growth anticipated [12][22] Company Strategy and Development Direction - The company is focusing on organic growth initiatives, including expansion plans for engineered air movement businesses and the launch of the Olympus Max product [5][6] - The M&A pipeline remains robust with several attractive opportunities identified [5][29] - The company is raising full-year guidance, reflecting confidence in market conditions and operational performance [11][12] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in sustained growth across HVAC and Detection & Measurement segments, with a strong backlog supporting future performance [12][22] - There are expectations for modest headwinds in 2026 due to project sales shifting from early 2026 into 2025 [12] - Management remains optimistic about the future, citing a proven strategy and capable team [13][14] Other Important Information - The company raised additional capital through an equity offering, increasing liquidity by more than $1 billion without diluting 2025 EPS [5][10] - Adjusted free cash flow for Q3 was approximately $91 million, with expectations for Q4 to be the highest cash flow-generating quarter of the year [10] Q&A Session Summary Question: Visibility into 2026 and growth platforms - Management feels positive about HVAC businesses, particularly in data centers and healthcare, with some modest growth in industrial markets [20][21] Question: Update on KTS, Sigma, and Omega integration - KTS is performing well, with positive technology integration, while Sigma and Omega are at an earlier stage but showing promise [26][27][29] Question: Capacity expansion plans - The TAMCO facility in Tennessee is set to begin production in Q1, while Ingenia's expansion will be larger and is still being finalized [36][39] Question: Opportunities in the nuclear market - The company has a strong position in existing nuclear cooling tower markets but does not foresee new nuclear opportunities in the near term [44][46] Question: Push-outs of large projects related to data centers - Management has not observed significant push-outs, noting high demand from key customers [54][55] Question: Consumer headwinds in HVAC - The residential segment is primarily replacement demand and has not seen a slowdown; commercial segments remain strong [56][58] Question: Adoption expectations for Olympus Max product - The company is on track to achieve $50 million in bookings for Olympus Max, with potential for rapid growth thereafter [68][69] Question: M&A pipeline and appetite for larger deals - The company maintains a disciplined approach to M&A, with a robust pipeline but no change in strategy despite increased balance sheet capacity [91][92]

Financial Performance - Q3 2025 revenue increased by 23% to $593 million compared to $484 million in Q3 2024[13, 15] - Adjusted EBITDA for Q3 2025 grew by 31% to $136 million, up from $104 million in Q3 2024, with a margin expansion of 150 bps[15, 18] - Adjusted EPS for Q3 2025 was $1.84, compared to $1.39 in Q3 2024, representing a 32% growth[12, 23, 25] - Consolidated segment income increased by 22.6% year-over-year, with a 14.3% organic increase and an 8.2% impact from acquisitions[32] Segment Results - HVAC segment revenue increased by 15.5% to $387 million in Q3 2025, with a 9% organic increase and a 6.7% acquisition impact[36, 38] - Detection & Measurement segment revenue increased by 38.4% to $205 million in Q3 2025, driven by a 26.5% organic increase and an 11.6% acquisition impact[42, 44] - Detection & Measurement segment margin increased by 240 bps year-over-year[32, 44] Financial Position and Guidance - The company raised over $1 billion of additional capital through equity offering and credit facility refinancing, which is not dilutive to 2025 EPS[12] - Total debt decreased from $1.019 billion in Q2 2025 to $502 million in Q3 2025[47] - The company is raising its full-year 2025 adjusted EBITDA guidance to a midpoint of $505 million, implying 20% year-over-year growth[10] - Full-year 2025 revenue guidance is maintained at $2.225-$2.275 billion, with HVAC revenue projected at $1.500-$1.530 billion and Detection & Measurement at $725-$745 million[52]

Revenue and Income Growth - Revenue for Q3 2025 was $592.8 million, representing a 22.6% increase year-over-year[4] - GAAP income from continuing operations increased to $63.1 million, up 24.0% compared to Q3 2024[4] - Adjusted EBITDA for Q3 2025 reached $136.1 million, a 30.9% increase year-over-year[4] - The company anticipates full-year 2025 revenue in the range of $2.225 to $2.275 billion, representing a ~13% year-on-year increase at the midpoint[4] - Adjusted EPS for 2025 is projected to be in the range of $6.65 to $6.80, up ~21% year-on-year at the midpoint[4] - Operating income for the three months ended September 27, 2025, was $97.1 million, representing a 23.0% increase compared to $78.9 million in the prior year[24] - Net income for the three months ended September 27, 2025, rose to $62.7 million, a 24.9% increase from $50.2 million in the same quarter of 2024[24] - Basic income per share from continuing operations was $1.31 for the three months ended September 27, 2025, compared to $1.10 for the same period in 2024, reflecting a 19.1% increase[24] Segment Performance - HVAC segment revenue was $387.4 million, up 15.5% year-over-year, with organic growth of 9.0%[5] - Detection & Measurement segment revenue increased to $205.4 million, a 38.4% growth, driven by 26.5% organic growth[7] - HVAC reportable segment revenues increased by 15.5% to $387.4 million for the three months ended September 27, 2025, compared to $335.3 million for the same period in 2024[28] - Detection & Measurement reportable segment revenues rose by 38.4% to $205.4 million for the three months ended September 27, 2025, compared to $148.4 million for the same period in 2024[28] - The income as a percentage of revenues for the HVAC segment improved by 50 basis points to 24.4% for the three months ended September 27, 2025[28] - The Detection & Measurement segment's income as a percentage of revenues increased by 240 basis points to 25.2% for the three months ended September 27, 2025[28] Financial Position and Cash Flow - Total debt decreased to $501.6 million from $614.7 million in Q4 2024, while total cash increased to $231.4 million[9] - Total current assets increased to $1,064.4 million as of September 27, 2025, up from $784.3 million at December 31, 2024, marking a 35.7% growth[26] - Goodwill increased to $1,036.0 million as of September 27, 2025, compared to $834.5 million at December 31, 2024, indicating a 24.2% rise[26] - Total stockholders' equity reached $2,148.3 million as of September 27, 2025, up from $1,384.4 million at December 31, 2024, representing a 55.5% increase[26] - Long-term debt decreased to $499.8 million as of September 27, 2025, down from $577.0 million at December 31, 2024, a reduction of 13.4%[26] - Cash from continuing operations for the nine months ended September 27, 2025, was $139.8 million, a decrease from $146.4 million in the prior year[30] - Total cash and equivalents at the end of the period was $231.4 million, up from $129.4 million at the end of September 28, 2024[31] - Business acquisitions resulted in a net cash outflow of $445.3 million for the nine months ended September 27, 2025[33] - The company reported a net cash used in investing activities of $499.2 million for the nine months ended September 27, 2025[33] - The company experienced a net change in cash and equivalents of $70.0 million for the nine months ended September 27, 2025[33] Adjusted Metrics and Costs - Adjusted operating income for the nine months ended September 27, 2025, was $344.9 million, representing 21.2% of revenues, compared to $284.7 million or 19.6% of revenues for the same period in 2024[37] - Free cash flow from continuing operations for the three months ended September 27, 2025, was $96.4 million, compared to $69.1 million in the same period last year[47] - Adjusted free cash flow from continuing operations for the nine months ended September 27, 2025, was $164.2 million, compared to $132.3 million in the same period last year[49] - The company incurred acquisition-related costs of $7.7 million and $21.0 million during the three and nine months ended September 27, 2025, respectively[28] - The amortization of acquired intangible assets for the three months ended September 27, 2025, was $24.6 million, compared to $16.6 million in the same period of 2024[28] - Acquisition and integration-related costs for the three months ended September 27, 2025, amounted to $8.1 million, up from $2.0 million in the same period last year[43] - The company reported a long-term incentive compensation expense of $0.7 million for the three months ended September 27, 2025, compared to no such expense in the previous year[43] - The income tax provision for the nine months ended September 27, 2025, was $42.0 million, compared to $32.2 million in the previous year[45] M&A and Strategic Initiatives - The company continues to see a robust pipeline of attractive M&A opportunities and is progressing on key organic initiatives, including the launch of the Olympus Max product[1]