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%.

• FY25 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 sales, reinforcing portfolio vitality.

• Growth was broad-based across all divisions and channels, with strong performance in both B2B and direct-to-consumer segments.

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/EBITDA margin was 21.4% (+56 bps YoY).

• Full year adjusted EBITDA was $124 million (20.2% margin), up $13.5 million and 191 bps YoY.

• FY25 net income was $19.2 million, a turnaround from a $23.2 million loss in FY24.

• Free cash flow for 2025 totaled $34.2 million, marking the third consecutive year of positive cash generation.

Outlook and guidance

• 2026 revenue guidance: $625–$655 million, implying 4–4.5% growth at midpoint.

• Adjusted EBITDA guidance: $127–$137 million, ~6.5% growth at midpoint.

• 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.

• Aiming to exit 2026 below 3.5x leverage, progressing toward 3x in 2027.