What were the key takeaways from Mayville Engineering’s earnings call?

What were the key takeaways from Mayville Engineering's earnings call?

What is the market's earnings forecast for Mayville Engineering next quarter?

Did Mayville Engineering beat or miss consensus estimates last quarter?

What is the revenue and EPS growth rate for Mayville Engineering year over year?

What does Mayville Engineering do and what are its main business segments?

What factors drove the changes in Mayville Engineering's revenue and profit?

What is Mayville Engineering's gross profit margin?

- **Data Center Breakthrough**: $30M Q3 wins, $100M+ pipeline, targeting 20-25% of revenue by 2026 with 10+ pt margin premium.
- **Legacy Market Volatility**: CV down 24% YoY, ACT 2026 forecast 205k units vs. OEM 245k; agriculture -21.8% YoY.
- **Financial Discipline**: Q3 adj EBITDA 9.8%, free cash flow guidance $25-31M; net debt $214.9M (3.5x leverage).
- **Operational Flexibility**: 8-12 week data center project ramp vs. 12-24 months legacy; reallocating CV plant capacity.
- **2026 Outlook**: Data center margin expansion, CV recovery upside, and 20%+ EBITDA growth potential.

**【CEO Summary Section】**
- **Accu-Fab Integration Success**: $30 million in new data center and critical power awards in Q3, with a pipeline exceeding $100 million. Cross-selling wins include $25 million in legacy MEC plant utilization.
- **Data Center Growth**: Target for data center/critical power to represent 20-25% of total revenue by 2026, with gross margins 10+ percentage points above historical average (15-20%).
- **Legacy Market Challenges**: Commercial vehicle (CV) demand down 24% YoY, with ACT projecting 28% decline in 2025 Class 8 production. Agriculture sales declined 21.8% due to macroeconomic factors.
- **Operational Flexibility**: Rapid 8-12 week ramp-up for data center projects vs. 12-24 months for legacy programs; reallocating capacity from underutilized CV plants.
- **Free Cash Flow Management**: Q3 negative $1.1 million due to $3.5 million non-recurring costs; reaffirmed full-year free cash flow guidance of $25-31 million.

**【CFO Financial Commentary】**
- **Q3 Financials**: Total sales $144.3 million (+6.6% YoY), adjusted EBITDA margin 9.8% (vs. 12.6% YoY). Manufacturing margin rate 11% (12.6% YoY), impacted by $1.2 million restructuring costs.
- **Legacy Market Drag**: Organic net sales declined 9.1% YoY, driven by CV and agriculture softness. SG&A expenses up 25% YoY due to Accu-Fab-related costs.
- **Debt Position**: Net debt $214.9 million (3.5x leverage), targeting 3.0x or below by end-2026. Free cash flow expected positive in Q4, with debt reduction priority.

**【Q&A Highlights】**
- **Productivity Initiatives**: 2025 MBX programs reduced CV plant costs; anticipate margin expansion in 2026 as volumes recover.
- **Data Center Momentum**: 2026 pipeline includes $100+ million in qualified opportunities, with 1/3 new customer logos. Busway components and extrusion panels to be produced in legacy plants.
- **Legacy Market Outlook**: Conservative 2026 CV forecast (ACT 205k units vs. OEM 245-250k), but potential upside if demand exceeds expectations. Agriculture expects low single-digit decline.
- **CapEx Allocation**: 2026 CapEx $15-20 million, focused on data center program equipment. Minimal incremental capital needed beyond existing assets.
- **Margin Expectations**: Data center programs yield 30+ % gross margins; overall 2026 margin improvement contingent on CV recovery and data center ramp.

Mayville Engineering Company, Inc. (MEC) Q3 2025 Earnings Call Transcript

Revenue

Sales and Services Revenue

Financing Services Revenue

Other Revenue

Cost of Revenue

Cost of Goods and Services

Cost of Financing Services

Other Cost

Gross Profit

Other Operating Income

Operating Expenses

Selling, General and Administrative Expenses

Selling and Marketing Expenses

General and Administrative Expenses

Research and Development Expenses

Loss on Bad Debts

Loss on Impairment of Other Assets

Loss on Disposal of Assets

Other Operating Expenses

Operating Income

Non-Operating Income (Loss)

Income (Loss) from Affiliates

Income (Loss) from Associates

Income (Loss) from Joint ventures

Gain (Loss) on Other Investment

Gain (Loss) on Change in Fair Value

Gain (Loss) on Foreign Currency Exchange

Other Non-Operating Income (Loss)

Net Interest Expense

Interest Expense

Interest Income

Pretax Income From Continuing Operations

Income Tax Expense

Current Income Tax

Deferred Income Tax

Income Tax Adjustments

Net Income from Continuing Operations

Income from Discontinued Operations

Other Items Before Net Income

Net Income

Net Income Attributable to Minority Interests

Net Income Attributable to Owners of the Company

Preferred Stock Dividends

Other Adjustments

Net Income Attributable to Common Stockholders

Other Comprehensive Income

Total Comprehensive Income

Total Comprehensive Income Attributable to Minority Interests

Total Comprehensive Income Attributable to Owners of the Company

Basic EPS

Basic EPS from Continuing Operations

Basic EPS from Discontinued Operations

Diluted EPS

Diluted EPS from Continuing Operations

Diluted EPS from Discontinued Operations

MEC

MEC fundamentals

You can ask Aime