Helios Technologies (HLIO) Q2 2025 earnings summary

Executive summary

• Second quarter 2025 net sales were $212–$212.5 million, down 3–3.4% year-over-year but above outlook, with adjusted EBITDA margin at 18.6% and strong cash flow generation.

• Record $37 million cash from operations was used to reduce debt for the eighth consecutive quarter and repurchase 200,000 shares, strengthening the balance sheet.

• Announced divestiture of Custom Fluidpower for ~$54 million USD/~$83 million AUD, with proceeds to reduce debt and a long-term distribution agreement in Australia.

• Organizational restructuring and board enhancements, including new CEO and board members, aim to drive accountability, innovation, and operational efficiency.

• Sales were impacted by lower demand in recreational, industrial, and mobile markets, with some improvement in agriculture and health and wellness.

Financial highlights

• Net sales were $212–$212.5 million, down 3–3.4% year-over-year but above guidance; gross margin was 31.8%, down 30 bps year-over-year but up 120 bps sequentially.

• Adjusted EBITDA margin was 18.6%, down 150 bps year-over-year but improved sequentially; diluted non-GAAP EPS was $0.59, down 8% year-over-year but up 34% sequentially.

• Net income was $11.4 million, down 16% year-over-year; operating income was $21.9 million, down 15–16% year-over-year.

• Free cash flow for Q2 was $31.6 million, with trailing 12-month FCF conversion at 291%.

• Net debt to adjusted EBITDA leverage ratio improved to 2.6x from 3.0x a year ago.

Outlook and guidance

• Full-year 2025 net sales outlook raised to $810–$830 million, with adjusted EBITDA margin expected at 18.5%–19.5%.

• Q3 2025 net sales expected at $208–$215 million, adjusted EBITDA margin 19.5%–20.5%, and diluted non-GAAP EPS $0.60–$0.68.

• Diluted non-GAAP EPS guidance for FY25 increased to $2.30–$2.50.

• Electronics segment expected to outpace Hydraulics in growth for the second half, driven by Balboa recovery and recreational stabilization.

• Macroeconomic uncertainty, inflation, and geopolitical conflicts expected to impact demand and costs; mitigation includes regional production and pricing actions.