Mayville Engineering 2025 Q2 Earnings Profits Turn to Losses as Net Income Plummets 129%

Mayville Engineering (MEC) reported its fiscal 2025 Q2 earnings on Aug 07th, 2025. The company missed expectations as it swung to a net loss in the quarter, with results reflecting the impact of soft demand and integration costs from recent acquisitions. The Company has revised its full-year guidance downward in response to ongoing market challenges and ongoing integration efforts.

Revenue
Q2 revenue declined 19.1% year-over-year to $132.33 million, driven by weakness across multiple business segments. The fabrication division accounted for the largest share of sales at $63.96 million, followed by performance structures, which brought in $39.86 million. Tube and tank segments contributed $20.56 million and $9.30 million, respectively, while outdoor sports generated a modest $2.11 million. Intercompany sales elimination, a negative $3.45 million, reduced total reported sales.

Earnings/Net Income
The earnings performance deteriorated significantly, with the company reporting a loss of $0.05 per share in Q2 2025, a 127.8% negative change from a $0.18 per share profit in Q2 2024. Net income turned negative as well, with a $1.10 million loss compared to $3.78 million in the prior year period, representing a 129.0% decline. The results reflect ongoing industry headwinds, despite the company’s long history of quarterly profitability.

Price Action
Following the earnings release, MEC shares fell 2.26% on the day. The decline continued over the following weeks, with the stock dropping 15.09% over the most recent full trading week and 12.15% month-to-date, reflecting investor concern over the company’s near-term outlook.

Post Earnings Price Action Review
A strategy of buying MEC following a positive earnings surprise and holding for 30 days historically yielded strong returns, with a 96.33% return compared to a 63.97% benchmark. The approach was characterized by a maximum drawdown of 0.00% and a Sharpe ratio of 0.63, underscoring its strong risk-adjusted performance.

CEO Commentary
Jag Reddy, President and Chief Executive Officer, highlighted the company’s resilience in navigating a difficult market environment, with improved Adjusted EBITDA margins achieved despite weak customer demand. He noted ongoing uncertainty across key end markets, particularly in Commercial Vehicle, Powersports, and Agriculture. Strategic pricing, new project wins, and working capital efficiency remain central to operational focus, with momentum in new customer programs outpacing expectations. The company is also implementing cost reduction initiatives and optimizing its manufacturing footprint. Reddy expressed cautious optimism about the long-term value of the completed acquisition of Accu-Fab, a strategic diversification milestone with growth potential in power infrastructure and data center markets.

Guidance
The company revised its full-year 2025 guidance to reflect the impact of the Accu-Fab acquisition and weak demand in legacy end markets. For 2025, the Company now expects Net Sales between $528 million and $562 million, Adjusted EBITDA between $49 million and $55 million, and Free Cash Flow between $25 million and $31 million. Capital expenditures are projected to range from $13 million to $17 million, and non-recurring costs of $5 million to $6 million are expected due to the CFO transition and acquisition integration. The guidance excludes material revenue synergies and the company has withdrawn 2026 financial targets due to ongoing uncertainty.

Additional News
Mayville Engineering completed the acquisition of Accu-Fab, a strategic move aimed at diversifying its market exposure. The integration of the newly acquired firm is progressing well, with growth opportunities identified in Accu-Fab’s customer base, particularly in the power infrastructure and data center sectors. No dividend or buyback announcements were made during the quarter. Additionally, no major executive changes were reported within the C-suite during the three weeks following the earnings release.