Mayville Engineering Company (MEC) Q3 2026 Earnings Report

The call was predominantly positive, driven by 18.1% sales growth, strong data center and critical power momentum, a qualified pipeline above $200 million, commercial vehicle and construction growth, and significant planned capacity expansion. The main challenges were temporary launch and outsourcing costs, customer timing shifts, labor constraints, underutilization in agriculture and power sports, negative free cash flow, and expected fourth-quarter margin pressure. Management remained confident in sequential improvement during 2027 and the longer-term multiyear growth opportunity.

For the full year of 2026, MEC currently expects net sales of between $630 million and $640 million, adjusted EBITDA of between $48 million and $50 million, and free cash flow use of between $6 million and $16 million, with planned capital expenditures of $25 million to $35 million; fourth quarter adjusted EBITDA margin is expected to be modestly below the third quarter level, while ramp related costs are expected to decline through early 27. MEC expects to reach full capacity within the next 18 months, the Thompson, Georgia facility to add approximately $50 million of annual revenue capacity by 2028, and total investment in the location through 2028 of $25 million, including approximately $10 million of capital expenditures in 2027 with the remaining to be invested in 2028, subject to an internal rate of return of at least 15%. The company continues to target an approximately 15% adjusted EBITDA margin, expects measurable margin improvement over the next 12 to 18 months, and expects 2027 to be a year of continued growth with margins improving sequentially rather than in a single step, with the benefit most visible as it exits the year and moves into 2028; it is not providing 2027 guidance today.