Holley (HLLY) Q4 2025 earnings summary

Executive summary

• Achieved four consecutive quarters of core net sales growth in 2025, with double-digit growth in Q4, marking the first full year of net sales growth since 2021 and adjusted EBITDA margins above 20%.

• Full-year net sales reached $613.5 million, up 1.9% year-over-year, with core net sales up 6.6% (3.8% volume, 2.8% price), and Q4 net sales up 10.9% to $155.4 million.

• Strategic initiatives delivered $20 million in cost savings and $34.2 million in free cash flow for the year, with net leverage reduced to 3.75x.

• Innovation and new product launches contributed $23 million in new product sales, supporting portfolio vitality.

• Employee engagement improved by 4 points, and revenue per employee reached $460,000.

Financial highlights

• Q4 net sales were $155.4 million, up 10.9% year-over-year; core growth was 13.5%.

• Q4 gross margin expanded to 46.8% (+120 bps YoY); adjusted EBIT margin was 21.4% (+56 bps YoY).

• Q4 net income was $6.3 million, a significant improvement year-over-year; full-year net income was $19.2 million, up from a $23.2 million loss.

• Full-year adjusted EBITDA was $124 million (20.2% margin), up $13.5 million from 2024.

• Free cash flow was $3.9 million in Q4 and $34.2 million for the year, marking the third consecutive year of positive free cash flow.

Outlook and guidance

• 2026 revenue guidance: $625–$655 million; adjusted EBITDA guidance: $127–$137 million.

• Capital expenditures expected at $15–$20 million, above historical range due to ERP and facility investments.

• Targeting $5–$7 million in operational savings and $10–$15 million in inventory reduction for 2026.

• Aims to exit 2026 below 3.5x leverage, progressing toward 3x by 2027.

• Guidance includes expected net impact of tariffs and is subject to market and operational risks.