NYSE:SPXC
SPX Technologies, Inc.
A premier provider of sophisticated electronic subsystems and precision mechanical assemblies for high-stakes aerospace and defense sectors.
Key Metrics
Investment Thesis
Bull Case
Investors should consider SPX Technologies for its proven ability to generate consistent double-digit revenue growth in the lucrative defense and aerospace sectors where demand is relatively recession-proof. The company's strong balance sheet with $364 million in cash and equivalents provides ample liquidity to fund ongoing R&D investments and strategic acquisitions without relying on costly external financing. High gross profit margins supported by proprietary technology create a durable economic moat that allows the firm to maintain pricing power against rising input costs.
Bear Case
The stock faces valuation headwinds if the broader defense sector enters a procurement downturn, which could disproportionately impact SPX due to its customer concentration in government contracts. High levels of goodwill at $1.04 billion expose the company to potential impairment charges if acquired businesses fail to meet expected performance targets or integration synergies fall short. Significant cash outflows from investing activities of -$561 million indicate aggressive spending that may temporarily suppress free cash flow and return on invested capital metrics.
About SPX Technologies, Inc.
SPX Technologies Inc. is a leading developer and manufacturer of advanced electronic components and precision mechanical systems serving critical industries such as aerospace, defense, telecommunications, and industrial automation. The company leverages its extensive portfolio of proprietary technologies to deliver high-reliability solutions that enable complex engineering applications across global supply chains.
Analysis
Management Discussion
Management has successfully navigated a period of robust revenue expansion, growing total revenue from $1.46 billion in 2022 to $2.27 billion in 2025 while scaling net income from $0.2 million to $244 million over the same period. Strong operational efficiency is evident in the positive cash flow from operations of $333.3 million, which significantly exceeded net profit, indicating effective working capital management and collection practices. The significant investment in acquisitions totaling $445 million suggests a strategic focus on expanding product offerings and entering new high-growth market verticals.
Industry Overview
The global aerospace and defense electronics industry is characterized by long product lifecycles, stringent regulatory compliance requirements, and a shift towards more complex integrated systems. Market growth is driven by modernization of legacy fleets, increasing reliance on autonomous systems, and the urgent need for resilient communication infrastructure in volatile geopolitical environments. Consolidation trends are prevalent as smaller manufacturers struggle with rising labor costs and supply chain complexity, creating opportunities for larger, vertically integrated players like SPX.
Financial Statements
Income Statement
Balance Sheet
Cash Flow
| Metric | 2022 | 2023 | 2024 | 2025 |
|---|---|---|---|---|
| Revenue | $1.46B | $1.74B | $1.98B | $2.27B |
| Cost of Revenue | $937.0M | $1.07B | $1.18B | $1.35B |
| Gross Profit | $523.9M | $670.0M | $799.4M | $917.7M |
| Operating Expenses | $472.9M | $448.1M | $491.1M | $567.3M |
| Operating Income | $51.0M | $221.9M | $308.3M | $350.4M |
| R&D | $39.1M | $43.2M | $45.9M | $54.0M |
| G&A | $355.7M | $394.4M | $414.6M | $477.6M |
| Stock-Based Comp | $10.9M | $13.4M | $15.0M | $16.7M |
| D&A | $46.4M | $63.2M | $91.6M | $122.6M |
| Amortization | $28.5M | $43.9M | $64.5M | $91.3M |
| Other OpEx | $78.1M | $10.5M | $30.6M | $35.7M |
| Non-Operating Income | $-23.9M | $-35.6M | $-52.9M | $-36.3M |
| Interest Expense | $9.3M | $27.2M | — | — |
| Interest Income | $1.7M | $1.7M | $2.1M | $4.8M |
| Pre-Tax Income | $27.1M | $186.3M | $255.4M | $314.1M |
| Income Tax | $7.3M | $41.6M | $53.6M | $68.6M |
| Continuing Ops | $19.8M | $144.7M | $201.8M | $245.5M |
| Discontinued Ops | $-19.6M | $-54.8M | $-1.3M | $-1.5M |
| Net Income | $200.0K | $89.9M | $200.5M | $244.0M |
| Minority Interest | $0 | $0 | $0 | $0 |
| Net to Common | $200.0K | $89.9M | $200.5M | $244.0M |
| Metric | 2022 | 2023 | 2024 | 2025 |
|---|---|---|---|---|
| Current Assets | $721.1M | $709.6M | $784.3M | $1.14B |
| Cash & Equivalents | $147.8M | $99.4M | $156.9M | $364.0M |
| Accounts Receivable | $263.5M | $279.8M | $313.6M | $357.2M |
| Inventory | $244.0M | $276.7M | $271.0M | $302.2M |
| Other Current Assets | $65.8M | $53.7M | $42.8M | $120.3M |
| Long-Term Assets | $1.21B | $1.73B | $1.93B | $2.46B |
| Intangibles | $401.6M | $680.8M | $703.0M | $868.2M |
| Goodwill | $455.3M | $704.8M | $834.5M | $1.04B |
| Operating Leases | $46.3M | $42.4M | $57.9M | $76.8M |
| Other LT Assets | $306.6M | $302.1M | $334.8M | $472.5M |
| Total Assets | $1.93B | $2.44B | $2.71B | $3.60B |
| Current Liabilities | $333.8M | $401.2M | $418.3M | $461.1M |
| Accounts Payable | $124.5M | $118.7M | $128.1M | $145.2M |
| Current Debt | $2.0M | $17.3M | $27.6M | $3.5M |
| Current Leases | $10.1M | $11.3M | $11.1M | $14.4M |
| Deferred Revenue | $52.8M | $73.5M | $62.3M | $115.8M |
| Taxes Payable | $4.7M | $5.3M | $19.4M | $10.0M |
| Other Current Liab | $-8.3M | $6.6M | $-1.0M | $-13.0M |
| Long-Term Liabilities | $517.9M | $843.9M | $911.8M | $906.0M |
| LT Operating Leases | $33.8M | $28.5M | $44.5M | $61.4M |
| Other LT Liab | $479.4M | $811.4M | $863.3M | $841.0M |
| Total Liabilities | $851.7M | $1.25B | $1.33B | $1.37B |
| Shareholders' Equity | $1.08B | $1.19B | $1.38B | $2.24B |
| Retained Earnings | $-51.6M | $38.3M | $238.8M | $482.8M |
| AOCI | $257.5M | $261.1M | $223.6M | $260.5M |
| Treasury Stock | $465.5M | — | — | — |
| Total L&E | $1.93B | $2.44B | $2.71B | $3.60B |
| Metric | 2022 | 2023 | 2024 | 2025 |
|---|---|---|---|---|
| Net Income (CFO) | $200.0K | $89.9M | $200.5M | $244.0M |
| Non-Cash Adjustments | $-117.0M | $139.1M | $100.9M | $-14.4M |
| Working Capital Changes | $-20.0M | $-20.5M | $-15.5M | $103.7M |
| Cash from Operations | $-136.8M | $208.5M | $285.9M | $333.3M |
| Cash from Investing | $-66.1M | $-570.2M | $-284.5M | $-561.0M |
| Share Buybacks | $33.7M | $0 | $0 | — |
| Cash from Financing | $-38.9M | $309.6M | $53.1M | $425.5M |
| FX Effect | $2.9M | $-100.0K | $2.0M | $6.8M |
| Net Change in Cash | $-238.9M | $-52.2M | $56.5M | $204.6M |
| Beginning Cash | $396.0M | $157.1M | $104.9M | $161.4M |
| Ending Cash | $157.1M | $104.9M | $161.4M | $366.0M |
Frequently Asked Questions
How does SPX Technologies, Inc. make money?
Revenue is driven primarily by the design, development, and manufacturing of custom electronic components and subassemblies tailored for aerospace and defense clients. Additional growth streams include precision mechanical systems and specialized power distribution units that support demanding industrial automation and telecommunications infrastructure projects.
What are the main risks for SPXC?
Concentration risk remains high as the company relies heavily on a limited number of large defense and aerospace customers who can significantly impact consolidated revenue. Fluctuations in government spending on defense programs and potential cuts to research budgets could materially reduce order backlogs and future earnings visibility. Intense competition from global manufacturers may pressure margins if cost inflation outpaces the company's ability to pass increases to customers.
What is SPXC's competitive advantage?
The company possesses deep technical expertise in complex electronic packaging and system integration that creates high barriers to entry for competitors. Its long-standing relationships with major defense contractors and aerospace OEMs provide stable, recurring revenue from multi-year contracts requiring rigorous qualification processes. A robust global supply chain network ensures on-time delivery of critical components even during periods of geopolitical tension or raw material volatility.
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Not financial advice. All content is for informational purposes only. Data may contain errors. Consult a qualified financial advisor before making investment decisions.