HEI · HEICO Corporation

Period Performance

Period Performance

In the first six months of fiscal 2025, HEICO delivered record results. Consolidated net sales increased 15% to $2.13 billion, driven by strong performance in both segments. Gross margin improved 80 bps to 39.6% due to favorable mix and higher volumes, partly offset by R&D spending ($56.3M vs $53.0M). SG&A expenses grew $39.3M but declined 50 bps as a percentage of sales to 17.3%, reflecting efficiencies. Operating income rose 22% to $475.0 million, with margin up 130 bps to 22.3%. Interest expense decreased $11.8M to $65.3M due to lower debt and rates. The effective tax rate fell to 14.4% from 16.9% due to a discrete benefit from stock option exercises ($27.2M vs $13.6M). Net income attributable to HEICO jumped 37% to $324.7 million, or $2.31 per diluted share.

For the second quarter alone, net sales increased 15% to a record $1.10 billion. Gross margin expanded 100 bps to 39.9%, while SG&A as a percentage of sales rose 30 bps to 17.3% due to contingent consideration charges. Operating income grew 19% to $248.2 million, with margin up 70 bps to 22.6%. Net income attributable to HEICO increased 27% to $156.8 million, or $1.12 per diluted share.

Segment Dynamics

• Flight Support Group (FSG): H1 net sales rose 17% to a record $1.48 billion, including 14% organic growth. Aftermarket replacement parts grew $127.1M, repair and overhaul parts added $30.7M, and specialty products increased $13.5M. Operating income increased 23% to $351.1 million, with margin up 120 bps to 23.7% due to volume leverage and improved gross margin, partially offset by $12.5M in contingent consideration. In Q2, FSG sales grew 19% to $767.1M; operating income rose 24% to $185.0M, margin reached 24.1% (up 110 bps).
• Electronic Technologies Group (ETG): H1 net sales increased 11% to $672.5 million, with 7% organic growth led by space (+$20.6M), defense (+$15.0M), and aerospace (+$9.5M), partially offset by medical (-$3.1M). Operating income grew 18% to $154.3 million, with margin up 140 bps to 23.0% driven by SG&A leverage. In Q2, sales rose 7% to $342.2M; operating income grew only 3% to $77.9M, margin declined 80 bps to 22.8% due to lower gross margin from product mix.

Forward View

Management expects continued net sales growth across both segments for the remainder of fiscal 2025, fueled by strong organic demand and contributions from recent acquisitions. Capital expenditures are projected at $65-70 million. HEICO maintains a disciplined financial strategy focused on strategic acquisitions and organic market share gains while preserving balance sheet flexibility. The company believes operating cash flow and available credit are sufficient to meet near-term cash requirements.