Methode Electronics Secures $45M Recoveries, Sees 60% Data Center Growth, Stock Jumps 40%

The Interface segment saw net sales drop 47% in Q4 due to the planned roll-off of a major appliance program and the divestiture of the dataMate business. The Industrial segment offset some weakness with an 8% increase in net sales and a 27% rise in operating income, but full-year net sales declined 3% to approximately $1 billion.

Selling and administrative expenses climbed to $55.6 million in Q4 driven by higher employee compensation and transaction-related costs. Tax expense rose due to nondeductible items, elevated foreign taxes, and the absence of a nonrecurring tax benefit that aided fiscal ’25 results.

Methode negotiated roughly $45 million in customer recoveries to counter program changes, recognizing $22 million of related sales in Q4 and $19 million of earnings impact. Management indicates most major recovery discussions are complete, with limited additional agreements expected in fiscal ’27.

The company projects data center business sales will jump 60% to $130 million in fiscal 2027, backed by busbar product ramps with hyperscaler customers. Two new program ramps and expanded customer engagements underpin the aggressive growth target.