Note 3: Revenue Recognition

Disaggregation of revenue

The tables below present revenue for each of the Company’s operating segments. Each segment’s revenue is disaggregated by product group and by geographic location.

​

Effective April 1, 2026, the Company reorganized its Climate Solutions segment and split it into two separate operating segments: 1) Data Centers and 2) Commercial HVAC. The segment realignment did not impact the Performance Technologies segment. See Note 20 for additional segment financial information. The fiscal 2026 disaggregated revenue information presented below has been recast to be comparable with the fiscal 2027 presentation.

​

Data Centers

The Data Centers segment is managed regionally and sells data center cooling solutions, including chillers, dry coolers, precision air handling units, computer room air conditioning and air handler units, fan walls, rear-door heat exchangers, coolant distribution units and immersion solutions. In addition, the Data Centers segment sells modular data center solutions, replacement parts, maintenance service and control solutions for building management controls and systems.

​

Commercial HVAC

The Commercial HVAC segment revenue is comprised of two product groups: i) Heat Transfer Solutions and ii) HVAC Technologies. The Heat Transfer Solutions business provides heat exchanger coils, anti-corrosion coating products, commercial and industrial coolers and power generation and transmission cooling solutions. In addition, the Heat Transfer Solutions business sells indoor air quality products for schools, including single-packaged unit ventilators and ceiling cassettes. The HVAC Technologies business provides a wide array of commercial and residential heating products, including unit heaters, roof-mounted make-up air units, duct furnaces, infrared units, and perimeter heating products. In addition, the HVAC Technologies business sells commercial chiller and ventilation products, including modular chillers, air handling units, condensing units, and desiccant dehumidifiers.

​

Performance Technologies

The Performance Technologies segment revenue is comprised of two product groups: i) Heavy-Duty Equipment and ii) On-Highway Applications. Heavy-Duty Equipment products include heat exchangers and cooling modules for off-highway markets, including agricultural and construction. In addition, the Heavy-Duty Equipment products include cooling module generator sets that provide mission critical stationary power. On-Highway Applications products include heat exchangers and cooling systems for commercial vehicle, automotive, bus and specialty vehicle customers. In addition to products for traditional powertrains, the On-Highway Applications products include solutions for zero-emission and hybrid vehicles.

​

​

​

Contract balances

Contract assets and contract liabilities from contracts with customers were as follows:

​

​

Contract assets primarily consist of assets recorded for revenue recognized over time, which represent the Company’s rights to consideration for work completed but not yet billed, and capitalized costs related to customer-owned tooling contracts, wherein the customer has guaranteed reimbursement. Contract assets are included within other current assets on the Company’s consolidated balance sheets. The $34.7 million increase in contract assets during the first three months of fiscal 2027 primarily resulted from an increase in contract assets for revenue recognized over time.

​

Contract liabilities primarily consist of customer deposits. During March 2026, the Company entered into a long-term capacity agreement with one of its strategic data center customers. In connection with this agreement, the Company received a $165.0 million up-front deposit from the customer to support the Company’s investments necessary to meet the planned sales volume. In addition, the contract liabilities include payments received in advance of satisfying performance obligations under customer contracts, including contracts for data center products and customer-owned tooling. The $4.7 million increase in contract liabilities during the first three months of fiscal 2027 primarily resulted from payments received in advance of the Company’s satisfaction of performance obligations. Contract liabilities are included within other current and noncurrent liabilities on the Company’s consolidated balance sheets. As of June 30, 2026, contract liabilities included within other current and noncurrent liabilities totaled $25.7 million and $173.5 million, respectively. As of March 31, 2026, contract liabilities included within other current and noncurrent liabilities totaled $23.9 million and $170.6 million, respectively.