MEC · Mayville Engineering Company, Inc.

Mayville Engineering Company reported first quarter 2026 results with net sales of $144.8 million, a 6.8% increase year-over-year, primarily fueled by explosive growth in the Datacenter & Critical Power end market, which surged 470% to $23.6 million, including contributions from the Accu-Fab acquisition completed in Q3 2025. Organic growth in this segment was 71.3%, underscoring robust demand. However, profitability deteriorated with a GAAP net loss of $8.2 million or ($0.40) per diluted share, compared to breakeven last year, and Adjusted EBITDA fell to $6.5 million (4.5% margin) from $12.2 million (9.0%). Manufacturing margin contracted to 7.6% from 11.3%, driven by $1.2 million in Datacenter project launch costs, restructuring expenses, lower capacity utilization in Commercial Vehicle (down 23.8% to $38.8 million due to 27.2% drop in Class 8 production), and higher bonuses ($4.8M vs $3.3M), SG&A ($9.2M vs $8.7M), and interest expense ($3.7M vs $1.6M) from acquisition-related debt. CEO Jag Reddy highlighted strong momentum in Datacenter, with $50 million in new awards exceeding H2 2025 totals and a $125 million pipeline, providing visibility for improved performance despite legacy market headwinds. Balance sheet shows net debt of $219.2 million and 4.4x leverage, with $42.2 million revolver availability. Guidance was raised at the low end for FY2026: sales $590-620 million (vs prior FY2025 $546.5M), Adjusted EBITDA $52-60 million (vs $47.1M), and FCF $25-35 million, assuming Accu-Fab synergies, $50-60 million cross-selling, and H2 legacy recovery. Q2 outlook tempers growth with sales $145-155 million and EBITDA $10-13 million amid ongoing launch costs and capex of $6-8 million. Free cash flow was negative $6.9 million, reflecting working capital needs and Datacenter investments, signaling disciplined capital allocation toward debt reduction and capacity expansion for long-term shareholder value.