--- title: "Modine starts its largest chiller plant in Texas; data-center orders topped $1 billion in a quarter" description: "The plant runs one shift today with four 2MW lines targeted by fiscal year end, and Modine's shareholders fund that ramp on debt, with first-half free cash flow of negative $145.6 million, in a state where new data center permits have been frozen since September." publisher: "The Inference" section: "Data Center" published: 2026-11-11T15:53:31.533Z modified: 2026-11-11T15:53:31.533Z canonical: https://theinference.org/article/modine-starts-its-largest-chiller-plant-in-texas-data-center-orders-topped-1-billion-in-a-quarter language: en keywords: "Data Centers, Earnings, Cooling, Manufacturing" --- # Modine starts its largest chiller plant in Texas; data-center orders topped $1 billion in a quarter > The plant runs one shift today with four 2MW lines targeted by fiscal year end, and Modine's shareholders fund that ramp on debt, with first-half free cash flow of negative $145.6 million, in a state where new data center permits have been frozen since September. [Modine](https://theinference.org/markets/companies/modine)'s biggest chiller plant began commercial production in Grand Prairie, Texas this month. The company [announced on November 11](https://www.prnewswire.com/news-releases/production-of-airedale-chillers-for-data-center-customers-begins-at-new-texas-facility-302935612.html) that the 682,000-square-foot facility, expected to be its largest Airedale chiller plant, is now making 2MW and 3MW chillers for data centers, with one shift running and a three-shift model planned [1]. It targets four operational 2MW lines by fiscal year end [1]. That capacity answers a record order book, but the ramp spends cash first, and the plant sits in the one state whose permitting politics now hangs over new orders. ## The order book is booked; the new lines are not Demand is real and already committed. [Data center orders passed $1 billion in a single quarter](https://datacenterfeed.com/article/modine-data-center-sales-rise-95-percent-record-orders-hyperscaler-air-handling-award-november-2026) for the first time, a fourth consecutive record, and one hyperscaler committed to more than $400 million of custom air handling units running through calendar 2027 [2]. *Chart: **Revenue is still compounding: $647.2M to $994.4M in seven quarters** Column chart of Modine total quarterly revenue from fiscal Q1 2025 through fiscal Q2 2027, rising from 647.2 to 994.4 million dollars* *Modine total revenue by fiscal quarter, millions of dollars, calendar quarters labelled. Source: Modine, quarterly figures from its SEC filings, retrieved November 11, 2026. [6]* Chillers get ordered when a project is far enough along to need one, so the backlog sits in halls already permitted. Lines two through four fill only if the next set of projects gets approved. [Wells Fargo](https://theinference.org/markets/companies/wells-fargo) estimates Texas holds about 27% of planned US data center capacity; [permits there have been frozen since September pending an audit](https://finance.yahoo.com/markets/stocks/articles/dell-sinks-12-week-texas-233009122.html); and the governor-elect won on November 3 after vowing "a moratorium, a ban, on all data center approvals" [3]. ## The margin has to close the cash gap [Data Centers sales rose 95%](https://theinference.org/article/modine-s-data-center-sales-rose-95-and-the-margin-bill-came-due) to $439.7 million in fiscal Q2, but segment gross margin fell 470 basis points to 19.7% on higher material, component and tariff costs [2]. Segment EBITDA margin slipped to 15.4% from 18.1% a year earlier, against management's promise of at least 20% by the fourth quarter, while first-half free cash flow was negative $145.6 million on $573.7 million of net debt [4]. New lines add fixed cost and working capital before they add margin. The shares hit a 52-week low of $99.61 after the earnings miss [5]. *Chart: **Modine's data center EBITDA margin must rise from 15.4% to its 20% target** Column chart of Modine Data Centers segment EBITDA margin: 18.1% in fiscal Q2 2026, 15.4% in fiscal Q2 2027, and management's 20% target for fiscal Q4 2027, shown dashed as a target* *Modine Data Centers segment EBITDA margin, fiscal Q2 year over year, and management's fiscal Q4 target, percent, dashed where a target. Source: ad-hoc-news, Modine's Order Boom Meets Its Margin Test as New Leadership Takes the Reins, November 7, 2026. [4]* ## What to watch on November 18 [The investor day on November 18](https://www.ad-hoc-news.de/boerse/news/unternehmensnachrichten/modine-s-order-boom-meets-its-margin-test-as-new-leadership-takes-the-reins/70472874) is where the 20% marker gets defended [4]. Two things decide whether this plant pays for itself: the fill rate on lines two through four, and whether cash flow turns positive before Texas policy reaches the order book. Modine is doing the builder's work the AI chain needs, turning demand into physical cooling capacity; its reward depends on orders it cannot yet book. ## Takeaway Modine's largest chiller plant is running, but the record order book only pays if Texas permits the projects that fill lines two through four and the 20% margin promise holds at the November 18 investor day. ## Sources 1. [PR Newswire, Production of Airedale Chillers for Data Center Customers Begins at New Texas Facility, 11 November 2026](https://www.prnewswire.com/news-releases/production-of-airedale-chillers-for-data-center-customers-begins-at-new-texas-facility-302935612.html) 2. [Data Center Feed, Modine Says Data Center Sales Rose 95% as Record Orders Top $1 Billion, 6 November 2026](https://datacenterfeed.com/article/modine-data-center-sales-rise-95-percent-record-orders-hyperscaler-air-handling-award-november-2026) 3. [Yahoo Finance, Dell Sinks 12% in a Week on Texas Data Center Fears: 'A Moratorium, a Ban', 10 November 2026](https://finance.yahoo.com/markets/stocks/articles/dell-sinks-12-week-texas-233009122.html) 4. [ad-hoc-news, Modine's Order Boom Meets Its Margin Test as New Leadership Takes the Reins, 7 November 2026](https://www.ad-hoc-news.de/boerse/news/unternehmensnachrichten/modine-s-order-boom-meets-its-margin-test-as-new-leadership-takes-the-reins/70472874) 5. [MarketBeat, Modine Manufacturing (NYSE:MOD) Sets New 12-Month Low Following Weak Earnings, 4 November 2026](https://www.marketbeat.com/instant-alerts/price-modine-manufacturing-nyse-mod-sets-new-12-month-low-following-weak-earnings-2026-11-04/) 6. [Modine, quarterly figures from its SEC filings, retrieved 11 November 2026](https://www.sec.gov/cgi-bin/browse-edgar?action=getcompany&CIK=0000067347) --- Modine starts its largest chiller plant in Texas; data-center orders topped $1 billion in a quarter — The Inference. Canonical: https://theinference.org/article/modine-starts-its-largest-chiller-plant-in-texas-data-center-orders-topped-1-billion-in-a-quarter