Motorcar Parts Of America (MPAA 15.52%), a supplier of replacement parts and electrical diagnostic equipment for vehicles, reported its earnings for the fiscal first quarter (ended June 30, 2025) on August 11, 2025. The standout news was a record for both net sales and gross profit (GAAP). Reported revenue (GAAP) reached $188.4 million, topping consensus GAAP estimates of $184.2 million. However, GAAP earnings per share (EPS) came in at $0.15, which, although a return to profit from the prior-year loss, missed GAAP expectations of $0.38 per share. Operating cash flow improved to $10.0 million and operating income (GAAP) shifted from a loss to a positive $20.1 million.
| Metric | Q1 2026(Ended June 30, 2025) | Q1 2026 Estimate | Q1 2025(Ended June 30, 2024) | Y/Y Change |
|---|---|---|---|---|
| EPS (GAAP) | $0.15 | $0.38 | ($0.92) | $1.07 |
| Revenue (GAAP) | $188.4 million | $184.2 million | $169.9 million | 10.9 % |
| Gross Profit | $33.9 million | $29.2 million | 16.3 % | |
| Operating Income (GAAP) | $20.1 million | ($6.5 million) | N/A | |
| EBITDA | $20.7 million | ($1.1 million) | N/A |
Source: Analyst estimates provided by FactSet. Management expectations based on management's guidance, as provided in Q4 2025 earnings report.
Business overview and key focus areas
Motorcar Parts Of America serves the automotive aftermarket by producing and supplying critical replacement components. Its main lines include rotating electrical parts such as alternators and starters, as well as brake-related replacement parts. The company also develops diagnostic equipment, providing tools for vehicle repair and testing -- particularly important as vehicles become more technologically complex.
Reliance on a small number of large customers has historically represented a significant business risk. The company is also expanding its product offerings in test solutions and diagnostic equipment for automotive and, increasingly, for electric vehicles and aerospace applications. Attention to technological innovation, supply chain resilience, and environmental sustainability help define its approach in a competitive market. Success hinges on cost management, diversification, effective tariff navigation, and maintaining strong operational execution.
Quarter in review: What changed and what drove results
Motorcar Parts Of America achieved record GAAP sales of $188.4 million in the fiscal first quarter, with revenue (GAAP) rising 10.9% year over year. Gross profit (GAAP) reached a new high, up 16.3% from the prior-year period. The company's gross margin (GAAP) expanded in fiscal 2025, reflecting both the impact of pricing strategies and more efficient cost absorption within manufacturing. However, this was offset in part by $3.9 million in non-cash charges and $1.4 million in cash costs, largely tied to tariffs.
Profitability (GAAP) improved in the fiscal first quarter compared to the same quarter last year. Operating income (GAAP) turned positive, moving from a loss to $20.1 million, benefiting from improved operational execution. Stripping out non-cash foreign exchange impacts, operating income was still up significantly from the prior year. Interest expenses (GAAP) fell as the company continued to reduce net bank debt, supported by strong operating cash flow of $10.0 million.
The company also purchased back nearly 198,000 shares in the fiscal first quarter, investing $2.0 million in share repurchases at an average price of $9.94 per share. In parallel, reliance on Chinese suppliers was lowered to less than 25% of sourced parts and components as of the fourth quarter of fiscal 2025, reflecting ongoing efforts to manage tariff and geopolitical risk. The benefits of these strategies are reflected in improved liquidity and strengthened supply chain flexibility.
No segment-level detail was provided for the period, particularly regarding sales from test solutions and diagnostic equipment. Management restated the importance of its electrical vehicle subsidiary, which offers testers and diagnostic tools for electric and traditional vehicle platforms. Despite the lack of specific updates, these areas remain central to the longer-term growth agenda.
Looking ahead: Guidance and areas to watch
Management updated its guidance for fiscal 2026, raising expected full-year net sales to a range of $800 million to $820 million. This would represent growth between 5.6% and 8.3% compared with the previous year. The outlook for operating income is unchanged at $86–$91 million, an increase of up to 10.4%. These projections include the effect of new tariff passthroughs and recent price increases. The company expects depreciation and amortization of about $11 million.
Investors should monitor several evolving areas in the coming quarters. These include customer concentration risk, transparency in reporting for the diagnostic equipment business, and the effects of tariffs on profitability. Non-cash impacts from foreign exchange and derivative adjustments also remain significant variables for underlying earnings trends.
Revenue and net income presented using U.S. generally accepted accounting principles (GAAP) unless otherwise noted.
