Mayville Engineering Company, Inc., together with its subsidiaries, engages in the production, design, prototyping and tooling, fabrication, aluminum extrusion, coating, and assembling ...
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Operator: Hello everyone, thank you for joining us and welcome to the 2026 second quarter Mayville Engineering Company earnings call. I will now hand the conference over to Stefan Neely with Vallum Advisors. Please go ahead. Stefan Neely Thank you, operator. On behalf of our entire team, I'd like to welcome you to our second quarter 2026 results conference call. Leading the call today is MEC's President and CEO, Jag Reddy; and Rachele Lehr, Chief Financial Officer. Today's discussion contains forward-looking statements about future business and financial expectations. Actual results may differ significantly from those projected in today's forward-looking statements due to various risks and uncertainties, including the risks described in our periodic reports filed with the Securities and Exchange Commission. Except as required by law, we undertake no obligation to update our forward-looking statements. Further, this call will include the discussion of certain non-GAAP financial measures. Reconciliation of these measures to our closest GAAP financial measure is included in our quarterly earnings press release, which is available at mecinc.com. Following our prepared remarks, we will open the line for questions. With that, I would like to turn the call over to Jag. Jagadeesh Reddy: Thank you, Stefan, and good morning, everyone. Our second quarter results reflect stronger-than-expected demand across several key end markets. This was highlighted by continued momentum in data center and critical power and the early recovery underway in our commercial vehicle market. As a result, top line performance exceeded our expectations and positions us well as we enter the second half of the year. Throughout the quarter, our execution remained strong as we ramped activity across numerous data center and critical power programs while continuing to invest in the people and equipment needed to support future demand. These investments are to expand the capacity required to support long-term profitable growth. As anticipated, higher volumes drove improved operating leverage sequentially during the quarter. As we move quickly to capture a rapidly expanding data center and critical power opportunity pipeline, we are incurring incremental operating costs ahead of the associated revenue. This reflects two deliberate timing-related investments. First, the capacity and equipment we're putting in place to ensure effective program launches. Second, the incremental cost of outsourcing certain elements of the fabrication process to third parties, as equipment constraints in our existing facilities currently limit our ability to perform this work in-house. We have ordered the equipment needed to bring this work in-house, though it carries a 4- to 6-month lead time. We expect launch costs to continue through the second half of the year as we support customers' aggressive program timelines. These investments are front-loaded by design and reflect both the natural cost of scaling …
Est. EPS $0.12 · Revenue $165.07M · 2 analysts
Est. EPS $0.19 · Revenue $163.24M · 2 analysts
| Metric | Latest | YoYYoY means Year-over-Year. It compares the latest annual value with the previous annual value to show long-term trend strength. | QoQQoQ means Quarter-over-Quarter. It compares the latest quarter with the immediately previous quarter to show short-term momentum changes. |
|---|---|---|---|
| The total money that came through the front door from selling things, before paying a single bill. Think of it as the grand total of every credit card swipe from customers. (YoY compares this year to last year's performance, while QoQ compares the current three months to the previous three). |
| Name | Title | Compensation | Gender | Year Born | Status |
|---|---|---|---|---|---|
Jagadeesh A. Reddy | President, Chief Executive Officer & Director | USD 803,288 | Male | 1972 | Active |
Craig D. Nichols | Senior Vice President Operations & Supply Chain |
| USD 599,647 |
| Male |
| 1975 |
| Active |
Ryan F. Raber | Executive Vice President of Strategy, Sales & Marketing | USD 484,300 | Male | 1983 | Active |
Rachele Lehr | Chief Financial Officer | USD 430,500 | Female | 1978 | Active |
Sean Leuba | Senior Vice President, General Counsel & Secretary | USD 412,381 | Male | 1971 | Active |
Est. EPS $0.26 · Revenue $636.08M · 3 analysts
Est. EPS $0.14 · Revenue $171.32M · 1 analysts
| $546.5M |
| -6.0% |
| +12.6% |
| Net IncomeThe absolute bottom line. If the company paid every single supplier, employee, banker, and tax collector, this is the actual money left in their pocket at the end of the day. | $-8.1M | -131.2% | +74.4% |
| Gross MarginThe basic markup. If they sell a $100 pair of sneakers, this percentage tells you how much of that price tag is profit right after paying for the rubber and shoelaces, but before paying for things like store rent or TV commercials. | +9.9% | -19.2% | +100.7% |
| Operating MarginThe 'day job' efficiency score. Out of every dollar a customer spends, this shows how many cents the company keeps after making the product AND paying for all the everyday corporate overhead (like salaries, marketing, and keeping the lights on). | -0.7% | -109.2% | +109.2% |
| Net MarginThe final take-home percentage. When you strip away every conceivable cost, tax, and interest payment, this is the exact number of cents the company truly gets to keep from every dollar in sales. | -1.5% | -133.2% | +77.2% |
| Free Cash FlowThe holy grail of corporate cash. It's the spendable, physical money left over after the business pays for its daily operations AND buys the big, expensive upgrades (like new factories or servers) it needs to survive. This is the 'free' money they can use to pay dividends or buy back stock. | $26.9M | -65.4% | +4.2% |
| FCF MarginThe ultimate cash conversion rate. It shows how good the company is at turning regular sales directly into cold, hard, spendable cash. A high percentage means the business is an absolute cash-printing machine. | +4.9% | -63.1% | +14.9% |
| Debt / EquityThe financial risk gauge. It compares how much of the company's empire was built using borrowed money (loans) versus the owners' own money (shareholders). A high number means they are heavily leveraged and playing a riskier game; a low number means they are playing it safe. | 10.6% | -75.7% | +364.1% |
| Current RatioThe 12-month survival check. It simply compares the cash they have right now (plus things they can quickly turn into cash) against the immediate bills they absolutely must pay this year. A score above 1 means they have enough in the wallet to cover the upcoming bills without panicking. | 1.72x | -1.8% | +3.5% |
| Total AssetsThe absolute size of the company's empire. It bundles together absolutely everything of value they own—from the cash in the register and the inventory in the warehouse, to the software patents in the vault and the factories on the ground. | $563.6M | +26.5% | +1.8% |
| Metric | Annual (A vs E) | Annual Surprise | Quarter (A vs E) | Quarter Surprise |
|---|---|---|---|---|
| EPS Surprise | -0.40 vs 0.12 | -443.3% | -0.09 vs -0.05 | -75.4% |
| Revenue Surprise | $546.5M vs $545.8M | +0.1% | $163.0M vs $150.6M | +8.2% |
| Date | Executive | Title | Security | Side | Shares | Price |
|---|---|---|---|---|---|---|
| Aug 6, 2026 | Leuba Sean P | officer: SVP, GC & Secretary | Common Stock | D | 12,855 | $25.44 |
| Jun 11, 2026 | Reddy Jagadeesh A | director, officer: President & CEO | Common Stock | D | 15,688 | $35.05 |
| Jun 8, 2026 | Reddy Jagadeesh A | director, officer: President & CEO | Common Stock | D | 1,300 | $35.01 |
| Jun 1, 2026 | Reddy Jagadeesh A | director, officer: President & CEO | Common Stock | D | 17,294 | $30.00 |
| Jun 1, 2026 | Reddy Jagadeesh A | director, officer: President & CEO | Common Stock | D | 17,942 | $30.00 |
