Mayville Engineering Company (MEC) Q1 2026 earnings summary

Executive summary

• Net sales rose 6.8% year-over-year to $144.8 million in Q1 2026, driven by Datacenter & Critical Power (DCP) momentum, the Accu-Fab acquisition, and moderate growth in Construction & Access and Powersports, while legacy markets remained soft.

• DCP organic growth reached 71% year-over-year, with $50 million in new project awards and a robust pipeline exceeding $125 million.

• Adjusted EBITDA declined to $6.5 million (4.5% margin), down from $12.2 million (9.0%) year-over-year, reflecting margin pressure from launch costs, restructuring, and legacy end market weakness.

• Net loss was $8.2 million, or $(0.40) per diluted share, compared to net income of $20,000 in the prior year, primarily due to restructuring, higher interest, and impairment charges.

• Free cash flow was negative $6.9 million, compared to positive $5.4 million a year ago, reflecting lower profitability and higher capex.

Financial highlights

• Manufacturing margin was 7.6%, down from 11.3% last year, impacted by launch and restructuring costs and lower legacy volumes.

• Interest expense rose to $3.7 million due to increased borrowings for the Accu-Fab acquisition.

• Amortization of intangible assets increased to $3.1 million, reflecting the acquisition.

• SG&A expenses increased to $9.2 million, mainly due to Accu-Fab.

• Net debt as of March 31, 2026, was $219.2 million, with a net leverage ratio of 4.4x.

Outlook and guidance

• Q2 2026 net sales expected between $145 million and $155 million; adjusted EBITDA between $10 million and $13 million.

• Full-year 2026 guidance: net sales $590 million–$620 million, adjusted EBITDA $52 million–$60 million, free cash flow $25 million–$35 million, and capex $15–$20 million.

• DCP expected to represent over 20% of 2026 revenue, with $50–$60 million in incremental cross-selling and potential to reach 25% on an exit run rate.

• Margin and cash flow improvement anticipated in the second half as new programs reach full production and legacy markets potentially recover.