Motorcar Parts of America Reports 6.4% Sales Increase and Operating Income Growth in Q2 FY 2026

Motorcar Parts of America, Inc. (MPA) reported its financial results for the second quarter of fiscal year 2026, ending September 30, 2025, showing a net sales increase of 6.4% to $221.5 million compared to $208.2 million in the same period last year. The company's gross profit for the quarter was $42.7 million, representing a gross margin of 19.3%, slightly down from 19.8% in the prior year. The increase in sales was attributed to strong demand for rotating electrical and brake-related products, alongside the recognition of $14.8 million in remanufactured core revenue due to inventory realignment at customer distribution centers.

In terms of profitability, MPA reported an operating income of $16.4 million for the quarter, up from $12.5 million a year earlier. However, the company recorded a net loss of $2.1 million, or $(0.11) per share, compared to a loss of $3.0 million, or $(0.15) per share, in the prior year. The loss was primarily influenced by increased interest expenses and a non-cash loss of $2.3 million related to the change in fair value of a compound net derivative liability associated with convertible notes.

Operationally, MPA's total current assets increased to $546.7 million from $511.5 million at the end of the previous fiscal year, driven by higher cash and accounts receivable. The company’s inventory also rose to $372.6 million, reflecting ongoing efforts to meet customer demand. The total liabilities increased to $731.4 million, with a notable rise in accounts payable and accrued liabilities, which reached $196.2 million, up from $172.1 million.

Strategically, MPA continues to focus on expanding its manufacturing capacity and enhancing operational efficiencies. The company has invested in a new 410,000 square foot distribution center and additional facilities for remanufacturing brake calipers. MPA's share repurchase program remains active, with $3.4 million spent on repurchasing shares during the first half of the fiscal year, leaving approximately $10.1 million available under the program.

Looking ahead, MPA anticipates continued growth in its aftermarket hard parts business and aims to strengthen its position in the test solutions and diagnostic equipment market. The company remains committed to leveraging its scalable infrastructure and investing in innovative solutions to meet evolving customer needs.