Sep 3, 2026 earnings call — Transformation progress and USMCA-linked commercial wins
Reaffirmed fiscal 2027 net sales guidance of $1.025 billion to $1.075 billion.
Revenue $0.3B (est $0.2B) · EPS $-0.32 (est $-0.27) · Next-quarter revenue outlook $1.0B–$1.1B
Key quotes
"Revenue dropped more than 50% from fiscal 2023 to fiscal 2026, mainly due to the roll-off of a major OEM user interface program, along with delays and cancellations across North American EV programs."
"On the commercial side, we booked new awards representing $75 million of peak annual revenue or approximately $400 million of lifetime revenue."
"We are also rotating engineering and commercial resources toward data centers to support that growth and bringing customers innovative solutions that address AI-driven demand for power density, helping enable a more efficient future built on safe deployment of 800-volt DC rack architectures."
Analyst Q&A 4
Margins and investments in talent and products
Q (Luke Junk · Baird): Analyst asked for guardrails on expected margin improvement and whether production transfers or plant performance drive it. He also asked about incremental investments in talent, timing of a data center sales pull-forward, and updates on lighting, Grakon, Hetronic and possible portfolio actions.
A: Management said Mexico already saw 500 basis points year-over-year improvement and expects further improvement from operational changes and production transfers to Mexico. They said the biggest drivers are plant performance improvements—lower premium freight, scrap and direct labor—and that recent talent additions are largely timing and structural to support engineering, data centers and global planning; on data centers there were pull-forwards into Q1 but the full year unchanged at $103. They also said Nordic Lights is growing, Grakon has initial wins and improving commercial vehicle volumes, Hetronic is driving growth, and the company continually reviews the portfolio but has nothing to announce.
"So as we mentioned, we did see in Mexico 500 basis points improvement already year-over-year." — Laura Kowalchik (CFO)
New $75M orders and CapEx timing
Q (John Franzreb · Sidoti & Company): Analyst asked whether the $75 million peak run rate will be reached in 12–18 months and how much reflects commercial vehicle orders versus new market penetration. He also asked about geographic production assumptions and the composition and timing of expected CapEx.
A: Management said less than one-third of the $75 million is commercial vehicle; the majority are new awards from new automotive customers for electrification/hybridization, and the commercial vehicle award is a power product, not EV. They said most launches occur late next fiscal year or after and engineering work is already underway; regionally revenues show North America tailwinds, China down and EMEA with headwinds. On CapEx, they said spending is roughly half maintenance and half growth, timing depends on program schedules, they reuse existing capital when possible, and they remain comfortable with the CapEx forecast.
"Now in answer to your second question with regard to when would we start to see the volumes, the majority of these launch late next fiscal year or after." — Jonathan DeGaynor (CEO)
Talent costs, one-time charges, data centers, automotive
Q (Ryan Sigdahl · Craig-Hallum Capital Group): Analyst asked if the $5.9 million talent and capabilities cost is recurring and whether it must increase, and whether the $6.7 million one-time costs overlap. He also asked how much premium freight was related to transfers, how much of the talent spend is data center related and for an update on automotive revenue stability and visibility.
A: Management said the talent and capabilities investment is expected to continue this fiscal year but should decline in future years as external support falls away; the one-time costs relate to a Q4 divestiture and will decrease over the fiscal year. They identified $2.3 million of premium freight tied to the Asia-to-Mexico production transfer, said they are spending more engineering and commercial resources on data centers but are not breaking that out, and reiterated they can reaffirm guidance with automotive revenues showing North America up, China down and EMEA with some headwinds while operational improvements drive margin performance.
"For the investment in the talent and capabilities, yes, we do expect that to continue this fiscal year." — Laura Kowalchik (CFO)
Hybrid awards, 800-volt timing, data center risk
Q (Gary Prestopino · Barrington): Analyst asked if the new awards are for hybrids or EVs, where they will be manufactured and sourced, whether 800-volt data center architecture is already in market or when it will arrive, and whether data center pushback and moratoria worry the company.
A: Management said all the new awards are hybrid awards, not EV, and that all those awards will be manufactured in North America, specifically Mexico, with most awards from new customers to Methode. On 800-volt, they said it is not in the market now, they are investing in development and must demonstrate viability and safety first, expect a proof of concept later this fiscal year that could lead to customer awards, and they are monitoring data center pushback but see it driving efficiency and innovation and are not seeing softness in their revenue forecast.
"Secondly, they are to be manufactured in -- for all of these awards, they are to be manufactured in North America, so manufactured in Mexico." — Jonathan DeGaynor (CEO)