Mayville Engineering’s first quarter was marked by strong growth in its data center and critical power business, with management crediting a 71% year-over-year increase in this segment for driving overall revenue gains. CEO Jag Reddy emphasized that new program launches and cross-selling opportunities, particularly following the AccuFab acquisition, helped offset softness in legacy end markets such as commercial vehicles and powersports. Reddy noted, “Performance improved late in the quarter as several data center and critical power programs transitioned from the launch phase into full production.” However, ongoing launch costs and weak demand in older segments continued to pressure margins.
Is now the time to buy MEC? Find out in our full research report (it’s free for active Edge members).
Mayville Engineering (MEC) Q1 CY2026 Highlights:
- Revenue: $144.8 million vs analyst estimates of $139.6 million (6.8% year-on-year growth, 3.7% beat)
- Adjusted EPS: -$0.15 vs analyst estimates of -$0.22 (30.8% beat)
- Adjusted EBITDA: $6.47 million vs analyst estimates of $6.01 million (4.5% margin, 7.8% beat)
- The company slightly lifted its revenue guidance for the full year to $605 million at the midpoint from $600 million
- EBITDA guidance for the full year is $56 million at the midpoint, above analyst estimates of $53.6 million
- Operating Margin: -5.3%, down from 1.2% in the same quarter last year
- Market Capitalization: $558.7 million
While we enjoy listening to the management's commentary, our favorite part of earnings calls are the analyst questions. Those are unscripted and can often highlight topics that management teams would rather avoid or topics where the answer is complicated. Here is what has caught our attention.
Our Top 5 Analyst Questions From Mayville Engineering’s Q1 Earnings Call
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Michael Shlisky (D.A. Davidson) asked about changes in the agricultural and construction market outlook. CEO Jag Reddy explained that strength in small ag and turf care offset large ag weakness and access equipment demand remained flat, contrary to broader industry optimism.
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Michael Shlisky (D.A. Davidson) questioned capacity plans for data center growth. Reddy detailed that six to seven plants are being retooled for data center manufacturing, with ongoing capital investments and no manufacturing site closures.
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Ross Riley Sparenblek (William Blair) probed whether recent data center customer wins were one-time or part of a broader trend. Reddy said wins included two new customers and reflected a secular shift toward outsourcing by OEMs.
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Edward Randolph Jackson (Northland Securities) inquired about the ability to handle simultaneous data center and legacy market surges. Reddy estimated current capacity can support up to $850 million in revenue, with further organic investment needed for future growth.
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Greg Palm (Craig-Hallum) asked about the margin improvement implied in the second half guidance. CFO Rachele Lehr said higher data center volumes at better margins and some recovery in commercial vehicles should drive margin expansion and deleveraging.
Catalysts in Upcoming Quarters
Looking ahead, our analyst team will monitor (1) the pace at which data center and critical power programs reach full production and drive margin improvement, (2) progress on facility optimization and capital investment to meet rising demand, and (3) stabilization and potential recovery in legacy markets such as commercial vehicles and construction. The ability to balance growth investments with cash flow discipline will be a key indicator of successful execution.
Mayville Engineering currently trades at $27.21, up from $22.75 just before the earnings. Is there an opportunity in the stock?See for yourself in our full research report (it’s free).
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