"Sales were $293 million, and our adjusted pretax income was $9 million. Aside from the impact of the extra week, sales benefited from higher demand from our Power Products in data centers and electric vehicles."
— Jonathan DeGaynor
03Detailed Report
MEI
Methode Electronics Inc
Period
Q2 2025
CurrencyUSD
Report TypeQuarterly Earnings
GeneratedMay 15, 2026
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Executive Summary
In the second quarter of fiscal 2025, Methode Electronics Inc (MEI) reported sales of $292.6 million, representing a 2% increase year-over-year and a significant 13% increase quarter-over-quarter. The quarter benefited from an additional week due to the fiscal calendar, contributing approximately $20 million to revenue. However, the company faced headwinds from program roll-offs in the electric vehicle (EV) sector and weakness in the commercial vehicle market. Notably, the company maintained compliance with all debt covenants despite a notable decrease in cash flow due to timing issues with accounts payable. Looking ahead, management has reaffirmed its guidance for flat sales and raised adjusted pretax income expectations to approximately breakeven for the fiscal year, bolstered by strong demand in data center applications and promising EV program launches.
Key Performance Indicators
Revenue
Increasing
292.60M
QoQ: 13.19% | YoY: 1.60%
Gross Profit
Increasing
57.90M
19.79% margin
QoQ: 29.82% | YoY: 10.71%
Operating Income
Increasing
9.40M
QoQ: 225.33% | YoY: 118.32%
Net Income
Increasing
-1.60M
QoQ: 91.26% | YoY: 97.11%
EPS
Increasing
-0.05
QoQ: 91.33% | YoY: 97.09%
Revenue Trend
Margin Analysis
Financial Highlights
Financial Performance Overview
- Revenue: $292.6 million (Q2 2025) vs. $288 million (Q2 2024), a 2% YoY increase. Sequentially, this marked a 13% increase from $258.5 million in Q1 2025.
- Gross Profit: Improved to $57.9 million with a gross margin ratio of 19.79%. This is a significant increase from the previous quarters due to effective cost management.
- Operating Income: $9.4 million in Q2 2025, indicating a notable improvement driven by operational efficiencies and reduced freight costs.
- Net Income: Reported a net loss of $1.6 million, compared to a loss of $18.3 million in Q2 2024, reflecting improved operational execution.
- EBITDA: Adjusted EBITDA reached $26.7 million, a sequential improvement of $16.9 million, driven by higher sales volumes.
- Working Capital: Current ratio at 2.75 indicates strong liquidity, while cash and cash equivalents declined to $97 million from $161.5 million, primarily due to elevated program launch activities.
- Debt Levels: Long-term debt stands at $361.9 million, with a debt-to-equity ratio of 0.501, indicating a moderate leverage level.
- Cash Flow: Negative operating cash flow of $48 million due to timing issues with accounts payable, restricting financial flexibility.
Income Statement
Metric
Value
YoY Change
QoQ Change
Revenue
292.60M
1.60%
13.19%
Gross Profit
57.90M
10.71%
29.82%
Operating Income
9.40M
118.32%
225.33%
Net Income
-1.60M
97.11%
91.26%
EPS
-0.05
97.09%
91.33%
Key Financial Ratios
Gross Profit Margin
Weak
19.80%
Gross profit margin is below industry norms, profitability concerns
Operating Profit Margin
Weak
3.21%
Operating margin is below industry norms, profitability concerns
Net Profit Margin
Weak
-0.01%
Net profit margin is below industry norms, profitability concerns
Return on Assets
Weak
0.00%
Return on assets suggests inefficient capital allocation
Return on Equity
Weak
0.00%
Return on equity suggests inefficient capital allocation
Current Ratio
Strong
2.75
Current ratio indicates excellent liquidity and financial flexibility
Debt to Equity
Moderate
0.50
Debt-to-equity indicates balanced capital structure with manageable debt
P/E Ratio
Negative
-50.08x
Negative earnings make P/E ratio not meaningful
Price to Book
Undervalued
0.43x
Trading below book value, potential value opportunity or distressed
Management Insights Available for Members
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Methode Electronics Inc (MEI) QQ2 2026 Results – Revenue Decline Mitigated by Margin Expansion and Narrow Net Loss in a Cyclical Hardware OEM Market...