Mayville Engineering Company, Inc. Q4 FY2025 earnings call

• Fourth quarter was a transitional period; team focused on positioning business for 2026. • Robust demand momentum in data center and critical power market, reallocated capacity/resources, but margin pressured due to early stage project inefficiencies and launch costs. • Margin pressure transitory, expect to normalize as programs ramp. • Focus on executing MBX operational excellence framework, optimizing manufacturing footprint. • Key markets: commercial vehicle legacy end markets muted, construction/access up, power sports mixed, agriculture flat, data center/critical power growing. • Secured new project awards, expect total bookings in 2026 to be ~$140M. • Strong free cash flow in 2025, expect softer first quarter, full year free cash flow conversion ~50%-60% of adjusted EBITDA, priority on debt reduction, opportunistic on M&A.

Commercial vehicle: net sales to this end market declined approximately 19% vs prior year period. Construction and access: revenues increased approximately 13% year over year during the quarter, organic net sales growth approximately 11%. Power sports: net sales grew approximately 20% year over year, driven by incremental volumes from new business wins and stabilized customer production schedules, partially offset by decrease in marine propulsion sales. Agriculture: net sales were approximately flat year over year. Data center and critical power: business saw growth of approximately 13% year-over-year, expected to represent more than 20% of revenues in 2026

• Introducing quarterly financial guidance. • First quarter 2026 net sales expected between $137M - $143M, adjusted EBITDA between $5M - $7M. • Full year 2026 net sales expected between $580M - $620M, adjusted EBITDA between $50M - $60M, free cash flow between $25M - $35M. • Free cash flow conversion expected ~50%-60% of adjusted EBITDA, capital expenditures ~$15M - $20M. • Expect net leverage ratio of three times or lower by end of 2026.

Q: Regarding commercial vehicle market, revised ACT Outlook and Class A track orders in February, does this change view on 2026 and pull from 2027 orders?

A: Not seen signals translate to demand yet, expect some demand to accelerate bill rate increases mid-late Q2, estimate may change in coming quarters.

Q: On ag market, any light at the end of the tunnel?

A: Small ag, lawn care, turf, forestry equipment showing green shoots, ag business ~5% of overall sales now.

Q: On critical power launch costs and margin tailwind, when complete and margin tailwind?

A: Most launch costs to be at full run rate end of second quarter, first half impact, little trailing into second half.

Q: On EBITDA guide, what surprised relative to outlook?

A: Won more data center business than anticipated, Q1 bookings for data centers significantly higher, had to bring on resources online, primary reason for margin profile in Q1.

Q: On data centers, visibility into $125M revenue number and large opportunities?

A: Qualified pipeline ~$125M, excluding some significantly large opportunities, possible upside to cross-selling synergies number if continue winning at existing rates.

Q: On EBITDA guidance, moving pieces?

A: Legacy business volumes muted, high fixed costs, preparing for legacy rebound, carrying talent, launch costs, first half pressured by absorption, launch costs, getting ready for rebound.

Q: On data centers, customer concentration?

A: Reasonably diversified, working with blue chip names and next tier OEMs in end market.

Q: On construction access end market recovery, early signs?

A: Already seeing build rates increasing in construction portion, access had some starts/stops but positive on market.

Q: On ramping data center business and legacy business, capacity?

A: Believe enough capacity now, will continue to evaluate opportunities for 2027, adding shifts, looking at automation, shift schedules, project management, engineering, MBX resources, capital investments.

Q: On revenue synergies definition?

A: Anything from data center customer made in legacy MEC plant