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Jun 30, 2025
MEC Q2 2025 Earnings Report
MEC reported a decrease in net sales and a net loss in Q2 2025, primarily due to soft customer demand across most end markets, partially offset by strong free cash flow generation and strategic cost management.
Key Takeaways
Mayville Engineering Company (MEC) experienced a challenging second quarter in 2025, with net sales decreasing by 19.1% year-over-year to $132.3 million and a GAAP net loss of $1.1 million. Despite the difficult demand environment, the company delivered improved Adjusted EBITDA margins compared to the previous quarter and generated strong free cash flow of $12.5 million, driven by disciplined cost management and operational efficiency.
Net sales for Q2 2025 were $132.3 million, a 19.1% decrease year-over-year, primarily due to lower customer demand and inventory destocking.
The company reported a GAAP net loss of $1.1 million, or ($0.05) per diluted share, compared to a net income of $3.8 million in the prior-year period.
Adjusted EBITDA was $13.7 million, with an Adjusted EBITDA margin of 10.3%, demonstrating improved margins compared to the first quarter despite soft demand.
MEC generated strong free cash flow of $12.5 million in Q2 2025, reflecting effective working capital management and cost reduction activities.
Revenue by Segment
Forward Guidance
MEC updated its full-year 2025 guidance to reflect the recent acquisition of Accu-Fab and the continued soft end market demand in its legacy markets. The revised outlook incorporates steady demand from Accu-Fab's critical power infrastructure and data center markets, along with associated integration costs. The company is withdrawing its 2026 financial targets due to the uncertain macroeconomic environment.
Positive Outlook
- Accu-Fab acquisition expected to contribute to steady demand in higher-growth critical power infrastructure and data center markets.
- Company's ongoing strategic execution and improved efficiencies are expected to partly offset end market softness.
- Continued working capital efficiencies are anticipated to support free cash flow.
- Teams have identified attractive growth opportunities within Accu-Fab’s customer base.
- Focus on operational excellence, diversified commercial growth, and disciplined capital deployment through the MBX framework.
Challenges Ahead
- Continued soft end market demand in legacy markets, particularly Commercial Vehicle, Powersports, and Agriculture.
Revenue & Expenses
Visualization of income flow from segment revenue to net income
Historical Earnings Impact
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Avg. Return Before/After Earnings
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