Modine Secures $180 Million in Orders for Data Center Cooling Systems

Rhea-AI Summary

Modine (NYSE: MOD) has secured $180 million in orders for Airedale by Modine™ data center cooling systems from a new customer in AI infrastructure development. The high-capacity equipment will be manufactured at facilities in Rockbridge, Virginia, and Grenada, Mississippi, with delivery scheduled throughout 2025 and first half of 2026.

The cooling systems are designed to lower total ownership costs through superior Power Usage Effectiveness (PUE), featuring free-cooling technology and advanced control systems. These solutions will support the customer's objectives of building large-scale, optimized data centers for AI applications.

The company expects this to be a long-term partnership and projects organic growth exceeding 30% in their next fiscal year, supported by current order intake and development pipeline.

Positive

• $180M new order secured from AI infrastructure customer
• Expected organic growth >30% next fiscal year
• Geographic manufacturing expansion across multiple facilities
• Entry into high-growth AI infrastructure market
• Long-term partnership potential with new customer

Negative

• None.

Insights

Financial Analyst

Modine's $180 million data center cooling system order represents a significant win in the company's strategic pivot toward higher-margin data center infrastructure markets. This contract with a "leading AI infrastructure developer" accounts for approximately 4% of Modine's current $4.57 billion market capitalization, providing meaningful revenue visibility through mid-2026.

The announcement carries several strategic implications:

• This validates Modine's technology position in the rapidly growing AI data center cooling market, where thermal management is becoming increasingly critical as AI computing workloads intensify
• Management's projection of 30%+ organic growth for the next fiscal year suggests this win is part of a broader momentum in their data center business
• The characterization as "initial orders" from a new customer indicates potential for follow-on business as the AI infrastructure buildout continues
• Manufacturing from Virginia and Mississippi facilities demonstrates Modine's ability to leverage domestic production capacity, potentially benefiting from reshoring trends and avoiding international supply chain complications

Modine's Airedale cooling systems focus on Power Usage Effectiveness (PUE), addressing a critical pain point for data center operators as energy costs and environmental considerations become increasingly important. With AI data centers consuming 10-20 times the power of traditional data centers, efficient cooling technology directly impacts operating economics.

The timing of this announcement appears strategic as major tech companies and infrastructure providers accelerate capital expenditures on AI computing capacity, with cooling systems representing approximately 15-20% of total data center infrastructure costs.

Technology Industry Expert

This $180 million order highlights the critical importance of thermal management in the AI infrastructure buildout. As AI workloads generate 3-5x more heat than traditional computing, cooling has become a major bottleneck in scaling AI infrastructure.

The technical significance lies in Modine's approach to Power Usage Effectiveness (PUE):

• "Free-cooling technology" leverages external ambient air when conditions permit, reducing mechanical cooling requirements and energy consumption
• Advanced control systems optimize cooling delivery based on real-time workload demands
• These technologies directly address the substantial cooling challenges in AI data centers, where cooling can represent 40% of total power consumption

The customer's description as building "large-scale, building-optimized data centers" is particularly noteworthy. This indicates facilities designed from the ground up around thermal and power constraints rather than retrofitting existing data centers - a growing trend as standard data center designs prove insufficient for AI compute density.

This order likely represents part of the second wave of AI infrastructure investment. The initial wave focused on securing GPU compute capacity, while this phase addresses the supporting infrastructure needed to efficiently operate that compute at scale.

Modine's emphasis on customized solutions reflects the reality that AI infrastructure cooling isn't one-size-fits-all. Different AI architectures (training vs. inference) and chip designs (NVIDIA H100 vs. custom ASICs) have varying thermal profiles requiring tailored approaches.

While this announcement doesn't specify air vs. liquid cooling, Modine's approach appears to focus on highly efficient air cooling systems. This contrasts with direct liquid cooling approaches from competitors like Vertiv and Schneider Electric, suggesting there remains a substantial market for advanced air cooling in certain AI deployment scenarios.

RACINE, Wis., Feb. 27, 2025 /PRNewswire/ -- Modine (NYSE: MOD), a diversified global leader in thermal management technology and solutions, today announced $180 million in orders for Airedale by Modine™ data center cooling systems from a new customer that is a leading AI infrastructure developer. The high capacity equipment are purpose-built to meet the customer's objectives to provide scalable, cost-effective and sustainable solutions for AI applications by building large-scale, building-optimized data centers. Airedale by Modine data center solutions are designed to lower the total cost of ownership by delivering superior Power Usage Effectiveness (PUE) through free-cooling technology and advanced control systems. The products will be manufactured at Modine's state-of-the-art facilities in Rockbridge, Virginia, and Grenada, Mississippi, with delivery expected throughout 2025 and the first half of 2026.

"These initial orders from an important new customer demonstrate the value provided by Airedale by Modine data center cooling products, underscoring our strategic advantage in this market," said Eric McGinnis, President, Climate Solutions. "We expect this to be a long-term partnership as we support their significant growth objectives to develop some of the largest, high-performance computing clusters in the world."

"Building relationships and delivering on promises are key to meeting and exceeding our aggressive growth targets for this business," added Neil D. Brinker, President and Chief Executive Officer. "Our current order intake, significant development funnel and this new business win provide us with confidence in our ability to drive organic growth, and support our expectation of delivering organic growth in excess of 30% in our next fiscal year." 

"We are excited to leverage our engineering expertise to provide a fit-for-purpose solution that helps this important customer achieve their objectives," said Art Laszlo, Group Vice President, Data Centers at Modine. "Airedale by Modine partners with our customers' to solve their most complex challenges through customized solutions that are meticulously engineered by our global Data Centers team to deliver superior operating performance, efficiency, and reliability."

These substantial orders underscore Modine's precision-engineering capabilities and commitment to providing innovative and efficient thermal management solutions that meet the rigorous demands of modern data centers.  

For more information about Airedale by Modine solutions, please visit www.airedale.com.

About Modine
At Modine, we are Engineering a Cleaner, Healthier World™. Building on more than 100 years of excellence in thermal management, we provide trusted systems and solutions that improve air quality and conserve natural resources. More than 11,000 employees are at work in every corner of the globe, delivering the solutions our customers need, where they need them. Our Climate Solutions and Performance Technologies segments support our purpose by improving air quality, reducing energy and water consumption, lowering harmful emissions and enabling cleaner running vehicles and environmentally-friendly refrigerants. Modine is a global company headquartered in Racine, Wisconsin (U.S.), with operations in North America, South America, Europe and Asia. For more information about Modine, visit www.modine.com.

Media Contacts:

UK: Nicola Ware | E: nicola.d.ware@airedale.com | Tel: +44 113 2391000
US: pr@modine.com

Investor Contact:
Kathleen Powers
(262) 636-1687
kathleen.t.powers@modine.com

Forward-Looking Statements

This press release contains statements, including information about future financial performance and market conditions, accompanied by phrases such as "believes," "estimates," "expects," "plans," "anticipates," "intends," "projects," and other similar "forward-looking" statements, as defined in the Private Securities Litigation Reform Act of 1995. Modine's actual results, performance or achievements may differ materially from those expressed or implied in these statements because of certain risks and uncertainties, including, but not limited to those described under "Risk Factors" in Item 1A of Part I of the Company's Annual Report on Form 10-K for the year ended March 31, 2024 and under Forward-Looking Statements in Item 7 of Part II of that same report and in the Company's Quarterly Report on Form 10-Q for the quarters ended June 30, 2024, September 30, 2024, and December 31, 2024.  Other risks and uncertainties include, but are not limited to, the following: the impact of potential adverse developments or disruptions in the global economy and financial markets, including impacts related to inflation, energy costs, government incentive or funding programs, supply chain challenges or supplier constraints, logistical disruptions, tariffs, sanctions and other trade issues or cross-border trade restrictions; the impact of other economic, social and political conditions, changes and challenges in the markets where we operate and compete, including foreign currency exchange rate fluctuations, changes in interest rates, tightening of the credit markets, recession or recovery therefrom, restrictions associated with importing and exporting and foreign ownership, public health crises, and the general uncertainties, including the impact on demand for our products and the markets we serve from regulatory and/or policy changes that have been or may be implemented in the U.S. or abroad, including those related to tax and trade, climate change, public health threats, and military conflicts, including the conflicts in Ukraine and in the Middle East and tensions in the Red Sea; the overall health and pricing focus of our customers; changes or threats to the market growth prospects for our customers; our ability to successfully realize anticipated benefits, including improved profit margins and cash flow, from our strategic initiatives and our application of 80/20 principles across our businesses; our ability to be at the forefront of technological advances and the impacts of any changes in the adoption rate of technologies that we expect to drive sales growth; our ability to accelerate growth organically and through acquisitions and successfully integrate acquired businesses; our ability to effectively and efficiently manage our operations in response to sales volume changes, including maintaining adequate production capacity to meet demand in our growing businesses while also completing restructuring activities and realizing benefits thereof; our ability to fund our global liquidity requirements efficiently and comply with the financial covenants in our credit agreements; operational inefficiencies as a result of product or program launches, unexpected volume increases or decreases, product transfers and warranty claims; the impact on Modine of any significant increases in commodity prices, particularly aluminum, copper, steel and stainless steel (nickel) and other purchased components and related costs, and our ability to adjust product pricing in response to any such increases; our ability to recruit and maintain talent in managerial, leadership, operational and administrative functions and to mitigate increased labor costs; our ability to protect our proprietary information and intellectual property from theft or attack; the impact of any substantial disruption or material breach of our information technology ("IT") systems; the impact of a material weakness identified in our internal controls related to IT system access in Europe on our financial reporting process; costs and other effects of environmental investigation, remediation or litigation and the increasing emphasis on environmental, social and corporate governance matters; our ability to realize the benefits of deferred tax assets; and other risks and uncertainties identified in our public filings with the U.S. Securities and Exchange Commission. Forward-looking statements are as of the date of this press release, and we do not assume any obligation to update any forward-looking statements.

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SOURCE Modine

FAQ

What is the value of Modine's (MOD) new data center cooling systems order?

Modine secured $180 million in orders for data center cooling systems from a new AI infrastructure customer.

When will Modine (MOD) deliver the new data center cooling systems orders?

Delivery is expected throughout 2025 and the first half of 2026.

What is the projected organic growth rate for Modine (MOD) in the next fiscal year?

Modine expects organic growth to exceed 30% in their next fiscal year.

Where will Modine (MOD) manufacture the new data center cooling systems?

The systems will be manufactured at Modine's facilities in Rockbridge, Virginia, and Grenada, Mississippi.

How do Airedale by Modine's cooling systems improve data center efficiency?

The systems lower total ownership costs through superior Power Usage Effectiveness (PUE), free-cooling technology, and advanced control systems.