Earnings Recap — Q1 FY2027
CY Q3 2026 · Reported September 2, 2026 · Beat 3 of last 7 quarters
Methode Electronics, Inc. reported Q1 FY2027 revenue of $265M, a beat of 11.4% against consensus, and EPS of $-0.32, a miss of 18.5%.
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Methode's Industrial segment, driven by data center power distribution, continues to be a key growth engine, with sales up 27% year-over-year. The company is positioning for future AI infrastructure needs by developing 800-volt DC rack architectures and leveraging USMCA-compliant capacity to serve hyperscalers seeking shorter lead times. However, the company noted some Q1 data center sales were pull-aheads, and the full-year data center revenue target of $130 million remains unchanged.
Methode reported Q1 FY2027 net sales of $265.4 million, up 10.4% year-over-year, with Industrial segment sales up 27% to $156.8 million. Adjusted EBITDA was $13.7 million, down from $15.7 million, due to $6.7 million of onetime costs including $3.8 million from portfolio refinements and $2.3 million of premium freight. The company booked $75 million of peak annual revenue in new awards, primarily for hybrid vehicle programs with new customers. Automotive segment sales were flat at $105.7 million, while Interface segment sales declined 73% to $2.9 million following the DataMate divestiture.
Management reaffirmed fiscal 2027 guidance of net sales between $1.025B and $1.075B and adjusted EBITDA between $72M and $82M. They expect continued data center growth, ongoing operational improvement in Mexico, improving commercial vehicle demand, and further cost savings. The company is transferring production from Asia to Mexico to leverage USMCA-compliant capacity and is investing in data center engineering, including 800-volt DC rack architecture development. An Investor Day is scheduled for December 17 at the NYSE.
“We delivered a strong start to fiscal 2027 with net sales up 10% year-over-year to $265 million, driven by higher volumes across our industrial portfolio, led by data center-related sales.”
on Quarterly performance
“Altogether, Mexico is becoming a platform serving 3 markets with strong incremental adjusted EBITDA improvement.”
on Mexico transformation
“So we have to demonstrate that first. And that's -- and we expect that later this fiscal year, we'll have proof of concept and demonstrate that, and then that should turn into customer awards.”
on 800-volt data center architecture
Can you put guardrails around the materiality of auto margin improvement as you transfer capacity and fixed costs to Industrial?
Mexico already improved 500 basis points year-over-year. Further improvement will come from operational performance within the plant—reducing premium freight, scrap, and direct labor—more than the production transfer itself.
Does the $75 million peak annual revenue from new awards hit within 12-18 months, and how much reflects commercial vehicle strength?
Less than one-third is commercial vehicle; the majority is new business wins with new automotive customers for hybridization. These are new awards, not tied to market volume. Most programs launch late next fiscal year or after.
Are the $5.9 million talent and capabilities costs recurring, and how much is data center-specific?
The talent and capability investments will continue through this fiscal year, but external support will decrease in future years. We are not breaking out data center-specific spend, but we are adding commercial and engineering resources for data centers.