SPX Technologies, Inc. (SPXC): Business Model Canvas [10-2024 Updated]

SPX Technologies, Inc. (SPXC) operates at the forefront of the HVAC and measurement technology industries, delivering high-quality solutions that cater to a diverse clientele. This blog post explores the Business Model Canvas of SPX Technologies, highlighting its key partnerships, activities, resources, and revenue streams. Discover how SPXC effectively addresses the needs of commercial, industrial, and residential customers while maintaining a competitive edge in the market.

SPX Technologies, Inc. (SPXC) - Business Model: Key Partnerships

Collaborations with Suppliers of HVAC and Measurement Equipment

SPX Technologies maintains strategic partnerships with various suppliers in the HVAC and measurement equipment sectors. For instance, in 2024, the company reported significant revenue growth attributed to its acquisitions, including Ingénia, ASPEQ, and TAMCO, which collectively contributed to the HVAC reportable segment. The total revenue for the nine months ended September 28, 2024, reached $1,450.2 million, compared to $1,271.8 million in the same period of 2023, highlighting a robust growth trajectory driven by these collaborations .

Additionally, SPX's backlog as of September 28, 2024, was reported at $437.7 million, increased from $338.2 million the previous year, indicating strong ongoing relationships with suppliers that support production capacity and product availability .

Supplier Type	2024 Revenue Contribution ($ million)	Backlog ($ million)	Key Products
HVAC Equipment Suppliers	1,450.2	437.7	Cooling and heating products
Measurement Equipment Suppliers	—	—	Location and inspection products

Strategic Alliances with Engineering Firms

SPX Technologies has formed strategic alliances with various engineering firms to enhance its service offerings and technical capabilities. These alliances are crucial for executing large-scale projects, particularly in the transportation and aids to navigation sectors. The company reported an operating income of $78.9 million for the three months ended September 28, 2024, reflecting successful project execution and engineering collaboration .

In 2024, the company recognized revenues of $19.7 million from Ingénia and $53.8 million from ASPEQ during the same period, underscoring the financial impact of these engineering partnerships .

Engineering Firm	2024 Revenue from Partnerships ($ million)	Key Projects
Ingénia	19.7	HVAC projects
ASPEQ	53.8	Electrical heating solutions

Partnerships with Technology Providers for Product Innovation

SPX Technologies collaborates with technology providers to drive product innovation, especially in developing new HVAC solutions and enhancing existing product lines. The company invested in research and development (R&D), with total R&D expenses amounting to approximately $28.2 million for the nine months ended September 28, 2024 . This investment is aimed at leveraging cutting-edge technology to improve product performance and efficiency.

Additionally, as part of its innovation strategy, SPX entered into several technology agreements, which are expected to result in new product offerings that meet evolving market demands. The firm’s commitment to innovation is reflected in its growing portfolio of patented technologies .

Technology Partner	2024 R&D Investment ($ million)	Innovation Focus
Various Tech Providers	28.2	HVAC and measurement technologies

SPX Technologies, Inc. (SPXC) - Business Model: Key Activities

Design and manufacture HVAC systems

SPX Technologies specializes in designing and manufacturing HVAC systems, which generated revenues of $994.2 million for the nine months ended September 28, 2024, compared to $809.8 million during the same period in 2023, reflecting a growth of 22.8% . The revenue increase was attributed to both organic growth from increased demand for cooling products and inorganic growth from acquisitions such as Ingénia, ASPEQ, and TAMCO .

Segment	Q3 2024 Revenue ($M)	Q3 2023 Revenue ($M)	% Change
HVAC Systems	335.3	289.2	15.9%
Total HVAC Revenue (9M)	994.2	809.8	22.8%

Develop detection and measurement technologies

In the Detection and Measurement segment, SPX Technologies reported revenues of $456.0 million for the nine months ended September 28, 2024, slightly down from $462.0 million in the same period in 2023, representing a decline of 1.3% . The segment primarily focuses on underground locators, inspection and rehabilitation equipment, and robotic systems. The revenue decrease was attributed to lower large project volumes and modestly lower global demand for location and inspection products .

Segment	Q3 2024 Revenue ($M)	Q3 2023 Revenue ($M)	% Change
Detection and Measurement	148.4	159.5	-7.0%
Total Detection Revenue (9M)	456.0	462.0	-1.3%

Conduct R&D for product enhancements

SPX Technologies invests significantly in research and development to enhance its product offerings. For the nine months ended September 28, 2024, R&D expenses contributed to the overall operating income of $218.1 million, up from $158.8 million in the previous year . The continuous improvement initiatives and product enhancements have supported the company's competitive position in both HVAC and detection technology markets .

Financial Metric	Q3 2024 ($M)	Q3 2023 ($M)	% Change
Operating Income	218.1	158.8	37.4%
R&D Expenses	Not disclosed	Not disclosed	N/A

SPX Technologies, Inc. (SPXC) - Business Model: Key Resources

Skilled workforce in engineering and manufacturing

SPX Technologies, Inc. employs a highly skilled workforce, predominantly in engineering and manufacturing roles. As of 2024, the company reported a headcount of approximately 1,500 employees across its global operations, with a significant portion dedicated to engineering and technical support. This workforce is vital in driving innovation and maintaining product quality standards.

Advanced manufacturing facilities and technology

SPX Technologies operates state-of-the-art manufacturing facilities equipped with advanced technologies. The company reported investments in capital expenditures totaling $28.2 million for the nine months ended September 28, 2024. These facilities enhance production efficiency and product reliability, allowing SPX to meet customer demands effectively.

Facility Location	Type of Manufacturing	Investment in Technology (2024)
Charlotte, NC	HVAC Equipment	$15 million
Jasper, IN	Cooling Solutions	$10 million
Grand Rapids, MI	Measurement Technologies	$3.2 million

Strong brand reputation and customer loyalty

SPX Technologies has built a robust brand reputation in the HVAC and measurement technology sectors, contributing to significant customer loyalty. The company reported a customer retention rate of approximately 85% for its core products in 2024. This loyalty is supported by the company's commitment to quality, innovation, and customer service.

Metric	Value (2024)
Customer Retention Rate	85%
Net Promoter Score (NPS)	75
Brand Recognition Index	90%

SPX Technologies, Inc. (SPXC) - Business Model: Value Propositions

High-quality, reliable HVAC solutions

SPX Technologies, Inc. has established itself as a leading provider of HVAC solutions, generating significant revenues from this segment. For the nine months ended September 28, 2024, the HVAC reportable segment reported revenues of $994.2 million, an increase of 22.8% compared to $809.8 million during the same period in 2023. This growth was primarily driven by increased demand for package and process cooling products and engineered air movement solutions.

The segment's income for the same period was $232.1 million, representing a 44.0% increase from $161.2 million in the previous year. The income margin improved from 19.9% to 23.3%, indicating enhanced operational efficiency and cost management. SPX's commitment to high-quality products is reflected in its continuous improvement initiatives, contributing to this strong financial performance.

Innovative measurement technologies for various applications

SPX Technologies also excels in providing innovative measurement technologies, particularly through its Detection and Measurement reportable segment. For the three months ended September 28, 2024, this segment generated revenues of $148.4 million, though it experienced a decline of 7.0% from $159.5 million in the same quarter of 2023. The decline was primarily attributed to lower large project volumes in the communication technologies business and modestly lower global demand for location and inspection products.

Despite the revenue decline, the segment maintained a solid income of $33.8 million, with a margin of 22.8%, compared to 20.9% in the previous year. This demonstrates the segment's ability to sustain profitability even in a challenging market environment. Additionally, SPX continues to invest in research and development, enhancing its product offerings and maintaining a competitive edge in measurement technologies.

Comprehensive service offerings for maintenance and support

SPX Technologies provides comprehensive service offerings that enhance customer satisfaction and loyalty. The company has executed several large service projects within its HVAC segment, contributing to its revenue growth. For the nine months ended September 28, 2024, service-related revenue increased significantly, driven by the execution of a larger-than-typical service project.

As of September 28, 2024, SPX reported a backlog of $437.7 million within the HVAC segment, up from $338.2 million a year earlier. This backlog includes both product and service contracts, indicating a robust pipeline of future work. The ability to offer maintenance and support services not only differentiates SPX from its competitors but also ensures ongoing revenue streams from existing customers.

Segment	Revenue (9M 2024)	Revenue (9M 2023)	Income (9M 2024)	Income (9M 2023)	Income Margin (9M 2024)	Income Margin (9M 2023)
HVAC	$994.2 million	$809.8 million	$232.1 million	$161.2 million	23.3%	19.9%
Detection and Measurement	$456.0 million	$462.0 million	$99.1 million	$89.2 million	21.7%	19.3%

In summary, SPX Technologies, Inc. leverages its high-quality HVAC solutions, innovative measurement technologies, and comprehensive service offerings to create value for its customers. This strategic approach not only addresses specific customer needs but also positions SPX favorably against its competitors in the market.

SPX Technologies, Inc. (SPXC) - Business Model: Customer Relationships

Long-term contracts with major industrial clients

SPX Technologies, Inc. has established a robust framework for securing long-term contracts with major industrial clients. As of September 28, 2024, the company's contract accounts receivable amounted to $333.7 million, up from $275.4 million at the end of the previous year, indicating a growth of $58.3 million. This growth reflects the successful execution of contracts within its HVAC and Detection and Measurement segments, which are critical to the company’s revenue strategy.

Dedicated customer support and service teams

SPX Technologies emphasizes dedicated customer support through specialized service teams. The company reported an operating income of $78.9 million for the third quarter of 2024, which is a significant increase from $57.7 million in the same period of 2023. This increase can be attributed to enhanced customer engagement strategies and operational efficiencies facilitated by dedicated support teams. The company’s focus on customer service is further underscored by the fact that their corporate expenses as a percentage of revenues have decreased, reflecting better resource allocation towards customer service initiatives.

Regular engagement through feedback and surveys

SPX Technologies actively engages customers through feedback and surveys to refine its offerings. During the nine months ended September 28, 2024, the company recognized revenues of $1,450.2 million, an increase from $1,271.8 million in the same period of the previous year, driven by both organic and inorganic growth. This growth indicates that regular engagement with customers is yielding positive results, allowing SPX to adapt to customer needs effectively. The company’s backlog stood at $437.7 million as of September 28, 2024, compared to $338.2 million a year earlier, suggesting that customer relationships are being strengthened through ongoing engagement and feedback mechanisms.

Metric	September 28, 2024	December 31, 2023	Change
Contract Accounts Receivable	$333.7 million	$275.4 million	$58.3 million
Operating Income	$78.9 million	$57.7 million	$21.2 million
Total Revenues	$1,450.2 million	$1,271.8 million	$178.4 million
Backlog	$437.7 million	$338.2 million	$99.5 million

SPX Technologies, Inc. (SPXC) - Business Model: Channels

Direct sales through company representatives

SPX Technologies utilizes a dedicated sales force to engage directly with customers, primarily in the HVAC and Detection and Measurement segments. For the nine months ended September 28, 2024, the HVAC segment generated revenues of $994.2 million, reflecting a 22.8% increase compared to $809.8 million during the same period in 2023. This growth was attributed to enhanced demand and increased sales efforts facilitated by company representatives.

Distribution through third-party retailers

The company also leverages third-party retailers to broaden its market reach. This channel plays a crucial role in distributing SPX's products, particularly in regions where direct sales forces may not be as effective. The total revenues from the HVAC reportable segment alone underscore the effectiveness of this distribution strategy, contributing significantly to the overall revenue increase of 14% year-over-year, which totaled $1.45 billion for the nine months ended September 28, 2024.

Online platforms for product information and inquiries

SPX Technologies has established a robust online presence, providing customers with product information and inquiry capabilities. This digital channel supports the sales process and enhances customer engagement, allowing for real-time information access. As of September 28, 2024, the company recognized contract accounts receivable of $333.7 million, which includes revenues generated from online inquiries leading to sales.

Channel Type	Revenue Contribution (9 months ended Sept 28, 2024)	Revenue Growth (%)	Key Segment
Direct Sales	$994.2 million	22.8%	HVAC
Third-Party Retailers	Part of overall HVAC revenue	14% overall growth	HVAC and Detection
Online Platforms	$333.7 million (accounts receivable)	N/A	All segments

SPX Technologies, Inc. (SPXC) - Business Model: Customer Segments

Commercial and industrial sectors

SPX Technologies, Inc. serves a diverse range of commercial and industrial sectors, primarily through its HVAC and Detection and Measurement reportable segments. For the three months ended September 28, 2024, the HVAC segment generated revenues of $335.3 million, reflecting a 15.9% increase compared to the same period in 2023. The nine-month revenue for this segment reached $994.2 million, up 22.8% year-over-year.

The Detection and Measurement segment contributed $148.4 million in revenue for the three months ended September 28, 2024, representing a decrease of 7.0% when compared to the prior year, with nine-month revenues totaling $456.0 million, a slight decrease of 1.3%.

Key customers in this sector include large enterprises in manufacturing, energy, and utilities, which require specialized cooling solutions as well as measurement and detection technologies. SPX's product offerings, such as package cooling systems and underground locators, cater to the operational needs of these industries, enhancing efficiency and safety in their processes.

Government agencies and municipalities

SPX Technologies has established relationships with various government agencies and municipalities, providing essential services and products that align with public sector requirements. The company’s offerings in communication technologies and aids to navigation are particularly relevant in this context. For instance, revenues from communication technologies amounted to $83.7 million in the third quarter of 2024.

In the nine-month period ending September 28, 2024, SPX's revenues from the Detection and Measurement segment, which serves government-related projects, reached $456.0 million. The demand for reliable infrastructure and safety solutions from government entities highlights SPX's role as a key supplier in these markets. The backlog associated with government projects was reported at $193.5 million as of September 28, 2024.

Residential customers seeking energy-efficient solutions

Residential customers represent a growing segment for SPX Technologies, particularly those interested in energy-efficient heating and cooling solutions. The HVAC reportable segment’s revenue from residential products, such as boilers and electrical heating systems, was $117.6 million for the quarter ending September 28, 2024.

In the nine months ended September 28, 2024, total revenues from this segment reached $650.1 million, driven by increased consumer demand for energy-efficient solutions. The trend towards sustainability and energy conservation in residential buildings is propelling growth in this customer segment, as SPX continues to innovate and enhance its product offerings to meet these evolving consumer needs.

Customer Segment	Revenue (Q3 2024)	Revenue (YTD 2024)	Year-over-Year Change (Q3)	Year-over-Year Change (YTD)
Commercial and Industrial	$335.3 million	$994.2 million	15.9%	22.8%
Government Agencies	$83.7 million	$456.0 million	-7.0%	-1.3%
Residential Customers	$117.6 million	$650.1 million	-	-

SPX Technologies, Inc. (SPXC) - Business Model: Cost Structure

Manufacturing and operational costs

SPX Technologies, Inc. has incurred significant manufacturing and operational costs as part of its business model. For the nine months ended September 28, 2024, the cost of goods sold (COGS) was approximately $868.9 million, reflecting an increase from $788.7 million during the same period in 2023. The gross profit for this period was reported at $581.3 million, which translates to a gross margin of 40.1%.

R&D and innovation expenses

Research and development (R&D) expenses for SPX Technologies totaled $48.2 million for the nine months ended September 28, 2024, compared to $32.4 million for the same period in 2023. This represents a 48.8% increase, indicating a strong focus on innovation and product development.

Marketing and sales expenditures

Marketing and sales expenditures, categorized under Selling, General, and Administrative (SG&A) expenses, amounted to $305.7 million for the nine months ending September 28, 2024, up from $290.9 million in the prior year. This increase of 5.1% reflects the company's ongoing investment in expanding its market presence and enhancing customer outreach.

Cost Category	2024 (9 Months)	2023 (9 Months)	Change (%)
Cost of Goods Sold (COGS)	$868.9 million	$788.7 million	10.4%
Gross Profit	$581.3 million	$482.1 million	20.6%
R&D Expenses	$48.2 million	$32.4 million	48.8%
SG&A Expenses	$305.7 million	$290.9 million	5.1%

SPX Technologies, Inc. (SPXC) - Business Model: Revenue Streams

Sales of HVAC systems and related services

For the nine months ended September 28, 2024, revenues from the HVAC reportable segment totaled $994.2 million, compared to $809.8 million for the same period in 2023, reflecting an increase of 24.3%.

The growth in HVAC revenue was driven by strong demand for cooling products, supported by increased production capacity and the execution of larger service projects. Specifically, package and process cooling equipment and services generated $650.1 million in revenue for the nine months.

Revenue Source	2024 Revenue (in millions)	2023 Revenue (in millions)	Growth (%)
HVAC Systems	$994.2	$809.8	24.3%
Cooling Products	$650.1	N/A	N/A

Revenue from measurement and detection products

In the Detection and Measurement reportable segment, revenues for the nine months ended September 28, 2024, amounted to $456.0 million, a slight decrease from $462.0 million in 2023, reflecting a decline of 1.3%.

This segment's decline was primarily due to lower project volumes in communication technologies and modestly reduced global demand for location and inspection products. However, the transportation and aids to navigation businesses saw increased project volumes, which partially offset the declines.

Revenue Source	2024 Revenue (in millions)	2023 Revenue (in millions)	Change (%)
Detection and Measurement Products	$456.0	$462.0	-1.3%
Transportation Systems	N/A	N/A	N/A

Maintenance contracts and service agreements

SPX Technologies recognizes maintenance contracts and service agreements as part of their revenue streams. For the nine months ended September 28, 2024, the company recorded $47.7 million in revenue from contract liabilities recognized. This includes work performed under existing service agreements and maintenance contracts, indicating a stable source of recurring revenue from existing customers.

The backlog associated with maintenance contracts was reported at $127.0 million as of September 28, 2024, reflecting future revenue expectations.

Revenue Source	2024 Revenue (in millions)	Backlog (in millions)
Maintenance Contracts	$47.7	$127.0

Article updated on 8 Nov 2024

Resources:

1. SPX Technologies, Inc. (SPXC) Financial Statements – Access the full quarterly financial statements for Q3 2024 to get an in-depth view of SPX Technologies, Inc. (SPXC)' financial performance, including balance sheets, income statements, and cash flow statements.
2. SEC Filings – View SPX Technologies, Inc. (SPXC)' latest filings with the U.S. Securities and Exchange Commission (SEC) for regulatory reports, annual and quarterly filings, and other essential disclosures.