Methode Electronics Stock Earnings Reports

Methode reported fiscal Q1 2026 sales of $240.5M, down 7% year-over-year, driven by program transitions and weaker North American automotive/EV demand. Despite lower sales, operating performance improved: adjusted EBITDA rose to $15.7M (up $5.9M YoY), adjusted operating income improved by ~$6.7M, and adjusted pretax loss narrowed. The company generated $25.1M net cash from operations and $18M free cash flow (third consecutive quarter of positive free cash flow), reducing net debt by $41M over the last three quarters. Power Solutions and Data Center Power products showed strength (Data Center sales +12% YoY), partially offsetting automotive headwinds. Management affirmed full-year fiscal 2026 guidance: sales $900M–$1.0B and adjusted EBITDA $70M–$80M, expecting EBITDA roughly to double versus the prior year and margin expansion to ~7.9%. Management reiterated the multi-year transformation effort (cost reductions, SG&A cuts, operational improvements, plant and organizational changes) and sees Power Solutions (EV, data center, mil/aero) as the long-term growth engine. The company disclosed a previously resolved, inadvertent miscalculation of dividend equivalents that temporarily exceeded a restricted payments covenant; a bank waiver was obtained. Near-term risks include soft North American EV demand, program timing, and macro/end-market softness in commercial vehicle segments, but management expects EV volumes to rebound in fiscal 2027 and continued opportunity in data center power applications.