Mayville Engineering Company (MEC) Q2 2025 earnings summary

Executive summary

• Net sales declined 19.1% year-over-year to $132.3 million in Q2 2025, driven by soft demand and inventory destocking, but sequential adjusted EBITDA margin improved to 10.3% due to cost controls and operating leverage.

• Adjusted EBITDA was $13.7 million, down from $19.6 million year-over-year, with free cash flow of $12.5 million.

• The Accu-Fab acquisition closed July 1, 2025, for $140.5 million, expanding capabilities in critical power and data center markets and increasing the addressable market by 60% to $8 billion.

• Updated 2025 guidance reflects Accu-Fab's contribution and continued softness in core end markets, with no expected second-half recovery in demand.

• Significant new business wins and cost reduction initiatives, including the first cross-selling award post-Accu-Fab acquisition and facility consolidation plans.

Financial highlights

• Q2 2025 net sales were $132.3 million, down 19.1% year-over-year; adjusted EBITDA was $13.7 million (10.3% margin), and free cash flow was $12.5 million.

• Manufacturing margin was $13.6 million (10.3%), down from $22.3 million (13.6%) in the prior year.

• Net loss for Q2 2025 was $1.1 million, compared to net income of $3.8 million in Q2 2024.

• Adjusted diluted EPS for Q2 2025 was $0.10, down from $0.26 in Q2 2024.

• Debt reduced to $72 million from $125.4 million year-over-year; net leverage at 1.4x as of June 30, 2025.

Outlook and guidance

• 2025 net sales expected between $528 million and $562 million; adjusted EBITDA between $49 million and $60 million; free cash flow between $25 million and $31 million, including $5–$6 million in non-recurring costs.

• Accu-Fab expected to contribute $28–$32 million in revenue and $6–$8 million in adjusted EBITDA in 2025.

• Capital expenditures for 2025 projected at $13–$17 million, focusing on automation and high-return projects.

• Pro forma net leverage post-Accu-Fab acquisition at 3.1x, with a target below 2x by end of 2026.

• 2026 financial targets withdrawn due to macro uncertainty, but long-term goal remains $1 billion revenue and >15% adjusted EBITDA margin.