Consolidated net sales increased 25% to a record (prepared), driven by strong performance in both segments.
Flight Support Group (FSG): Net sales up 21% to a record $929.4M (Eric), with 19% organic growth across all product lines; operating income up 31% to a record $243.1M (Eric); operating margin improved to 26.2% from 24.1% (Eric); cash margin (EBITA) was ~28.6%, up 160 bps YoY (Eric).
Electronic Technologies Group (ETG): Net sales up 34% to a record $455M (Eric), with 17% organic growth driven by defense, aerospace, and space products; operating income up 56% to a record $121.8M (Eric); operating margin improved to 26.5% from 22.8% (Eric); cash margin (before intangibles amortization) was 30.6%, up 390 bps YoY (Eric).
Consolidated net income increased 49% to a record $233.8M, or $1.66 per diluted share (Victor), up from $156.8M, or $1.12 per diluted share (Victor).
Cash flow from operations increased 43% to $292M (Victor), up from $204.7M (Victor).
Consolidated EBITDA increased 37% to $408.3M (Victor), up from $297.7M (Victor).
Net debt-to-EBITDA ratio was 1.74x as of April 30, 2026, vs. 1.6x as of October 31, 2025 (Victor).
Acquisitions: FSG acquired 80% of Sherwood Avionics (April); ETG acquired 90% of Southwest Antennas (April); both expected to be accretive within one year (Victor). Four acquisitions completed in fiscal 2026 to date (Victor).
Backlog/Orders: Orders continue at record or near-record levels in nearly all markets (Victor); defense backlog is growing (Victor).
Guidance: ETG expects overall GAAP operating margins between 22% and 24% for all of fiscal 2026 (Eric). For the remainder of fiscal 2026, both segments anticipate increased sales supported by underlying demand and recent acquisitions (Victor).
Mgmt Quotes
"HEICO is, as they say, firing on all engines, business is very strong for us virtually across the board, including in our biggest markets, commercial aviation, defense and space." (Victor)
"I have never been more optimistic on the FSG's future. The incredible value we deliver to customers each day clearly is durable and in high demand." (Eric)
"On a true operating basis, these are excellent margins, and we are very pleased with this quarter's profitability." (Eric)
"Our capital allocation approach remains opportunistic with a focus on balancing organic growth and acquisitions while maintaining liquidity and financial flexibility." (Victor)
"We will remain disciplined approach, and we'll only pursue acquisitions that meet our strategic and financial criteria and that we believe will create meaningful long-term value for all of our shareholders." (Victor)
Topic: Skepticism on aftermarket peak and revenue/margin cliff
Key points:
Skeptics focus on parts trading businesses with large inventories of out-of-production parts, which face risk from increased retirements.
HEICO’s newer generation equipment is significantly more expensive and more numerous than prior generation; 757 sales are de minimis (0 truth to being important).
New product development backlog has more parts than ever, with customers begging for significantly more.
Mgmt stance: Bullish — Eric Mendelson refutes peak concerns, highlighting proprietary parts/repairs focus and strong demand for new-generation products.
Q7 — Sheila Kahyaoglu
Topic: ETG demand acceleration and aftermarket strength by geography/segment
Key points:
ETG has a very strong and growing order book, with increasing orders for historical defense programs, new programs, and R&D inquiries (customers asking how to 6x/10x production).
PMA business is roughly 3/4 non-engine, 1/4 engine; demand is tremendous across the board.
Middle East is slightly lower, but offset by rerouting to European, North American, and Asian carriers.
Mgmt stance: Bullish — Victor and Eric Mendelson see strong continued demand in all markets, with defense tailwinds and no major deceleration except minor Middle East softness.
Q8 — Mariana Perez Mora
Topic: Aeroderivative engine acquisition (Ethos/Encore) and defense M&A pipeline
Key points:
Aeroderivative and industrial gas turbine markets are very strong; Ethos (now part of Encore) has facilities in Connecticut, South Carolina, and Scotland.
AI boom increasing power generation demand positions Ethos/HEICO well.
Defense acquisition pipeline is filled; pricing for assets has increased over ~10 years, but HEICO pays reasonable/fair prices.
HEICO has ~31 minority partners (from 10-K), no resale intent, and depth from ~110 acquisitions — differentiator vs. private equity.
Mgmt stance: Bullish — Eric and Victor Mendelson highlight strong market positions, growing defense demand, and competitive advantage as a long-term buyer (no flipping).
Q9 — Unknown Analyst (Matt Martello)
Topic: Next-gen narrow-body bidding and aftermarket for acquired Honeywell product lines
Key points:
HEICO acquired 777 AMS and 737 NG product lines from Honeywell ~1 year ago, supporting Boeing new builds (777 classic, 737 NG derivatives like P-8) and aftermarket.
Eric Mendelson affirms HEICO’s capability to develop additional products (e.g., Gables Engineering for airframers/avionics suppliers).
Aftermarket for those products is a “melting ice cube” but still has massive business potential over many decades.
Mgmt stance: Bullish — Eric Mendelson notes excellent performance of acquired lines and outstanding integration by Sunshine Avionics, with no specific commitment on bidding for next-gen work packages.
Q10 — Gautam Khanna
Topic: Sales pull-forward quantification, fuel price impact on PMA demand, and current demand trends
Key points:
Pull-forward of sales is roughly between $15 million and $20 million.
Higher fuel prices have driven new customers to approach HEICO for PMA parts; one new customer call involved a potentially powerful new business.
Customers are asking HEICO to reverse-engineer parts at a quicker pace than before the conflict; demand remains very good except for Middle East softness.
Mgmt stance: Bullish — Eric Mendelson confirms no deceleration since quarter end (except Middle East), with strong customer goodwill and kinetic energy across commercial and defense segments.