HEICO delivered a notable Q2, with the market responding positively to its strong performance. Management attributed the results to robust organic growth across both the Flight Support and Electronic Technologies Groups, supported by sustained demand in commercial aviation, defense, and space markets. The team highlighted the impact of recent acquisitions, particularly Gables Engineering, and pointed to improved operating margins driven by product mix and effective SG&A expense management. As CEO Eric Mendelson observed, “Our record third quarter results reflect robust double-digit organic growth in our core businesses, further enhanced by the momentum from our disciplined acquisition strategy.”
Is now the time to buy HEI? Find out in our full research report (it’s free).
HEICO (HEI) Q2 CY2025 Highlights:
- Revenue: $1.15 billion vs analyst estimates of $1.11 billion (15.7% year-on-year growth, 3% beat)
- Adjusted EPS: $1.26 vs analyst estimates of $1.14 (10.8% beat)
- Adjusted EBITDA: $314.8 million vs analyst estimates of $300.8 million (27.4% margin, 4.7% beat)
- Operating Margin: 23.1%, up from 21.8% in the same quarter last year
- Organic Revenue rose 11.2% year on year vs analyst estimates of 9.1% growth (208.3 basis point beat)
- Market Capitalization: $37.8 billion
While we enjoy listening to the management's commentary, our favorite part of earnings calls are the analyst questions. Those are unscripted and can often highlight topics that management teams would rather avoid or topics where the answer is complicated. Here is what has caught our attention.
Our Top 5 Analyst Questions From HEICO’s Q2 Earnings Call
- Pete Lukas (CJS Securities) asked about the integration of the Gables Engineering acquisition and HEICO’s M&A capacity. Victor Mendelson responded that Gables was performing to expectations, and the company has ample financial flexibility for further acquisitions.
- George Anthony Bancroft (Gabelli Funds) inquired about missile defense growth and potential acquisitions in that segment. Victor Mendelson confirmed ongoing organic and inorganic opportunities, with increased demand in both U.S. and allied markets.
- Sheila Kahyaoglu (Jefferies) requested detail on Flight Support Group’s organic growth by product line and market. Carlos Macau explained that parts, repair, and specialty products all contributed, with defense driving specialty product growth and commercial aerospace expected to stabilize.
- Kenneth George Herbert (RBC Capital) questioned pricing dynamics and inventory levels with airline customers. Eric Mendelson stated that pricing increases matched cost inflation, and overall, inventory destocking and shortages largely balanced each other out.
- Noah Poponak (Goldman Sachs) asked about margin sustainability in both operating groups. Carlos Macau explained that while the latest margins exceeded expectations due to mix, a 24% range for Flight Support and 22–24% for Electronic Technologies is a reasonable expectation.
Catalysts in Upcoming Quarters
In the coming quarters, the StockStory team will focus on (1) the performance and integration of recent acquisitions like Gables Engineering, (2) the ability to sustain organic growth in core aerospace and defense markets amid shifting demand, and (3) margin trends as a function of product mix and SG&A leverage. Progress in expanding the defense backlog and order flow will also serve as key indicators of future performance.
HEICO currently trades at $312, up from $305.40 just before the earnings. At this price, is it a buy or sell? See for yourself in our full research report (it’s free).
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