Mayville Engineering Company (MEC) Announces Q4 and Full-Year 2025 Financial Results

Key Highlights

• Q4 2025 Net Sales: \$134.3 million, up 10.7% year-over-year
• Q4 2025 Net Loss: \$4.4 million, or (\$0.22) per diluted share; Adjusted Diluted EPS of (\$0.08)
• Q4 2025 Adjusted EBITDA: \$6.3 million; margin of 4.7% of net sales
• Q4 2025 Free Cash Flow: \$10.2 million
• Full-Year 2025 Net Sales: \$546.5 million, down 6.0% year-over-year
• Full-Year 2025 Net Loss: \$8.1 million, or (\$0.40) per diluted share; Adjusted Diluted EPS of \$0.31
• Full-Year 2025 Adjusted EBITDA: \$47.1 million; margin of 8.6%
• Full-Year 2025 Free Cash Flow: \$26.9 million
• Net Debt to EBITDA Ratio: 3.7x as of December 31, 2025

Management Commentary

CEO Jag Reddy highlighted robust momentum in the Data Center & Critical Power segment, with \$15 million in new project awards secured in Q4. The qualified opportunity pipeline now stands at over \$125 million, including several large projects with major OEMs and hyperscalers. Looking forward, cross-selling synergies from the Accu-Fab acquisition are expected to generate \$40–\$50 million in revenue, making Data Center & Critical Power more than 20% of total MEC revenue in 2026.

Reddy also noted margin pressures in Q4 due to launch-phase dynamics in Data Center & Critical Power and Commercial Vehicle segments, with these pressures expected to persist short-term until program launches ramp up. Operating leverage and favorable sales mix are anticipated to drive profitability growth for full-year 2026.

The company is introducing quarterly guidance to provide better visibility given rapid developments in Data Center & Critical Power and improvements in legacy markets.

Capital allocation remains disciplined, with a focus on debt reduction through free cash flow and working capital management.

Performance Summary & Segment Analysis

• Q4 Net Sales Growth: Driven by Accu-Fab acquisition, Data Center & Critical Power growth, and increased volumes in Construction & Access and Powersports. Partially offset by lower demand in Commercial Vehicle and Military segments.
• Manufacturing Margin: \$8.9 million (6.6% of net sales) vs. \$10.8 million (8.9%) prior year. Decline due to \$1.2 million in Data Center & Critical Power launch costs, \$1.7 million in Commercial Vehicle project inefficiencies, and lower capacity utilization.
• SG&A Expenses: \$9.7 million in Q4 vs. \$7.9 million prior year, mainly due to Accu-Fab-related costs.
• Interest Expense: \$3.8 million in Q4 vs. \$2.0 million prior year, reflecting higher borrowings.
• Q4 Net Loss: \$4.4 million vs. net income of \$16.0 million in Q4 2024 (last year’s result benefited from a \$25.5 million litigation settlement gain).
• Adjusted EBITDA: \$6.3 million (4.7% margin) vs. \$9.2 million (7.6% margin) prior year.
• Adjusted Net Loss: \$1.4 million (\$0.08/share) vs. \$0.3 million (\$0.01/share) prior year.
• Free Cash Flow: \$10.2 million, flat after excluding prior year’s litigation settlement.

End Market Update

Balance Sheet Update

• Net Debt: \$205.3 million at year-end 2025
• Total Cash & Availability: \$223.0 million on senior secured revolving credit facility
• Net Debt to TTM Adjusted EBITDA: 3.7x

2026 Financial Guidance

Q1 2026 Guidance

• Net Sales: \$137–\$143 million (vs. \$135.6 million actual in Q1 2025)
• Adjusted EBITDA: \$5–\$7 million (vs. \$12.2 million actual in Q1 2025)
• Free Cash Flow: Expected to reflect normal seasonal working capital usage, plus incremental investment for Data Center & Critical Power ramp-up and \$3–\$5 million capital expenditures
• Key Risks: Continued softness in legacy end markets—Commercial Vehicle, Agriculture, Military—and ongoing launch costs in Data Center & Critical Power

Full-Year 2026 Guidance

• Net Sales: \$580–\$620 million (vs. \$546.5 million actual in 2025)
• Adjusted EBITDA: \$50–\$60 million (vs. \$47.1 million actual in 2025)
• Free Cash Flow: \$25–\$35 million (vs. \$26.9 million actual in 2025), driven by working capital efficiencies and \$15–\$20 million in planned capital expenditures
• Assumptions: Full-year Accu-Fab ownership, \$40–\$50 million incremental cross-selling revenue, improvement in legacy end market demand mainly in H2 2026, Data Center & Critical Power launch costs

Shareholder-Important & Price Sensitive Items

• Strong growth in Data Center & Critical Power: Segment now expected to be >20% of revenue in 2026, driven by Accu-Fab synergies and large project awards. This is a significant shift in business mix and could materially impact share value, especially as the opportunity pipeline exceeds \$125 million.
• Quarterly Guidance Initiated: Increased transparency and frequency in guidance, likely to be closely watched by analysts and investors for signs of volatility or improvement.
• Margin Pressures: Launch-phase costs and commercial vehicle inefficiencies are currently weighing on margins; improvement is anticipated in H2 2026 as volumes scale.
• Debt Reduction Focus: Management is prioritizing debt reduction and working capital efficiency, which could improve balance sheet strength and investor confidence.
• Net Loss vs. Prior Year: Q4 and FY2025 reported net losses, compared to strong prior year profits—last year benefited from a one-time \$25.5 million litigation settlement.
• Accu-Fab Acquisition: Has materially impacted both sales growth and SG&A expense; synergies are expected to significantly drive 2026 performance.
• Interest Expense Increase: Higher borrowings are pressuring bottom line, but are being managed via FCF and debt reduction plans.
• Segment Volatility: Commercial Vehicle and Military segments are under pressure due to macro and industry-specific factors.

Conference Call Information

MEC will host a conference call on March 4, 2026 at 10:00 a.m. Eastern. Investors can access the live webcast at www.mecinc.com or call (833) 470-1428 (US) / (833) 950-0062 (Canada) with access code 752735.

About MEC

Founded in 1945, Mayville Engineering Company is a leading U.S.-based, vertically-integrated manufacturing partner offering a full suite of solutions from design to production. MEC operates 27 facilities (26 in use) across nine states and serves diverse markets including commercial vehicles, construction & access, powersports, data center & critical power, agriculture, military, and industrial/consumer segments.

Non-GAAP Measures

The report contains several non-GAAP financial measures (EBITDA, Adjusted EBITDA, Adjusted Net Income, Adjusted Diluted EPS, Free Cash Flow), which provide additional insight into operating performance but should not be considered replacements for GAAP metrics.

Disclaimer

This article is for informational purposes only and does not constitute investment advice. All forward-looking statements are subject to risks and uncertainties, including macroeconomic conditions, industry developments, customer demand, project execution, and other factors as described in the company’s SEC filings. Actual results may differ materially from those projected. Investors should review the full financial statements and consult their financial advisors before making any investment decisions.

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