Mayville Engineering’s second quarter was marked by ongoing demand weakness across several of its core end markets, which management attributed to continued inventory destocking and production cuts by major customers. CEO Jagadeesh Reddy explained that the most notable decline came from commercial vehicles, where channel inventories remain elevated and production schedules have been scaled back more aggressively than expected. Reddy noted, “We have had numerous conversations with our customers…customers are really taking out significant number of production days.” The quarter saw muted performance, with some stabilization in construction and agriculture but no major signs of recovery in these segments.
Is now the time to buy MEC? Find out in our full research report (it’s free).
Mayville Engineering (MEC) Q2 CY2025 Highlights:
- Revenue: $132.3 million vs analyst estimates of $138 million (19.1% year-on-year decline, 4.1% miss)
- Adjusted EPS: $0.10 vs analyst estimates of $0.06 (67.4% beat)
- Adjusted EBITDA: $13.68 million vs analyst estimates of $13.38 million (10.3% margin, 2.2% beat)
- The company dropped its revenue guidance for the full year to $545 million at the midpoint from $575 million, a 5.2% decrease
- EBITDA guidance for the full year is $52 million at the midpoint, below analyst estimates of $63.81 million
- Operating Margin: 0.1%, down from 5% in the same quarter last year
- Market Capitalization: $277.9 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 Q2 Earnings Call
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Michael Shlisky (D.A. Davidson) pressed CEO Jagadeesh Reddy on the rationale for reducing the outlook, given that many OEMs had not publicly lowered their forecasts. Reddy explained that internal data, direct customer conversations, and industry reports indicated substantial production cuts, especially in commercial vehicles.
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Ross Riley Sparenblek (William Blair) inquired about SKU rationalization in powersports and whether certain declines would be permanent. Reddy stated he was unaware of any broad-based rationalization and would follow up, but noted some new product launches and realignment by customers.
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Ross Riley Sparenblek (William Blair) also questioned the pace of destocking and whether end-market demand had aligned with production. Reddy responded that agriculture and construction had largely normalized, while powersports had minimal inventory left to work through.
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Edward Randolph Jackson (Northland Securities) asked about the timeline for commercial vehicle inventory normalization. Reddy indicated that most customers should reach alignment by year-end, but did not expect a rebound in demand before 2026 without a regulatory-driven pre-buy.
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Unidentified Analyst (Citigroup) probed on reshoring trends and diversification strategy. Reddy emphasized growing interest in domestic fabrication due to tariffs and highlighted efforts to expand into aerospace, defense, and medical markets.
Catalysts in Upcoming Quarters
In the upcoming quarters, our team will be monitoring (1) progress on Accu-Fab integration and realization of cross-selling synergies in data center and critical power markets, (2) evidence of stabilization or recovery in commercial vehicle, powersports, and agriculture end markets, and (3) the effectiveness of facility consolidation in reducing fixed costs. We will also pay close attention to the impact of tariffs and regulatory changes on demand for U.S.-based manufacturing.
Mayville Engineering currently trades at $13.68, down from $16.71 just before the earnings. In the wake of this quarter, is it a buy or sell? See for yourself in our full research report (it’s free).
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