Hayward Holdings: Riding the Wave of Outdoor Living and ESG Innovation

Hayward Holdings (NYSE: HAYW) has positioned itself at the intersection of two transformative trends: the booming demand for outdoor living spaces and the global push for environmentally sustainable products. With its Q2 2025 earnings announcement on July 30, the company reaffirmed its leadership in pool and outdoor technology, while highlighting how its ESG-driven strategies are fueling growth. For investors, this presents a compelling opportunity to capitalize on secular trends that are reshaping the leisure and sustainability markets.

Outdoor Living: A Growth Engine with Legs

The “outdoor living” market has surged in recent years, driven by sunbelt migration, rising disposable incomes, and a cultural shift toward home-based leisure. Hayward's products—energy-efficient pool pumps, smart automation systems, and IoT-connected controls—are not just accessories but essential tools for managing this lifestyle.

The company's SmartPad™ ecosystem, which integrates pool maintenance, lighting, and water quality management into a single digital platform, is a key growth driver. This technology reduces maintenance costs and energy use, appealing to both residential and commercial pool owners. In Q1 2025, North American sales rose 8% year-over-year, with the SmartPad suite contributing significantly to volume growth.

ESG: More Than a Buzzword—A Profitable Strategy

Hayward's commitment to sustainability isn't just about compliance; it's a competitive advantage. Over 89% of its products now align with ESG goals, including energy-efficient pumps and LED lights that have saved 2.4 billion kWh of energy since 2022. This focus resonates with consumers and governments increasingly prioritizing green initiatives.

The company's manufacturing footprint—spanning the U.S., Mexico, the Netherlands, and China—supports localized production, reducing carbon footprints and supply chain risks. Additionally, partnerships like the ChlorKing acquisition in 2024 expanded Hayward's reach into water treatment systems, further embedding sustainability into its product portfolio.

Financials: A Solid Foundation for Growth

While Q2 2025 results are pending, Hayward's first-quarter performance offers a strong preview. Q1 net sales rose 8% to $228.8 million, with adjusted EBITDA up 9% to $49.1 million. Full-year 2025 guidance projects net sales of $1.06–$1.10 billion, reflecting confidence in its product pipeline and global demand.

Cash flow remains robust, with $181.3 million in liquidity as of March 2025. This financial flexibility allows Hayward to invest in R&D—particularly in digital connectivity and energy efficiency—while maintaining a disciplined approach to debt.

Risks and Considerations

Hayward's success hinges on macroeconomic factors like housing market health and consumer spending on leisure. A recession or prolonged interest rate hikes could dampen demand for pool-related upgrades. Additionally, competition from lower-cost manufacturers in Asia poses a threat.

Geopolitical risks, such as tariffs on imported materials, also loom. However, Hayward's vertical integration and localized manufacturing have helped mitigate these challenges, as noted in recent earnings calls.

Investment Takeaways

Hayward Holdings is well-positioned to benefit from two unstoppable forces: the shift toward outdoor-centric lifestyles and the global push for sustainability. Its technology-driven products and ESG-aligned innovations create a durable moat against competitors.

Buy or Hold?
At current valuations, HAYW trades at approximately 15x forward EBITDA, a reasonable multiple given its growth trajectory. Investors seeking exposure to the outdoor living and sustainability sectors would do well to consider Hayward as a core holding.

Cautions: Monitor Q2 earnings for any softness in volume growth or margin pressures. Also, keep an eye on geopolitical risks that could disrupt supply chains or pricing.

Conclusion

Hayward Holdings isn't just a manufacturer of pool equipment—it's a pioneer in redefining how people interact with their outdoor spaces. With a product pipeline that blends cutting-edge tech and environmental stewardship, the company is poised to thrive in a world increasingly focused on sustainability and quality leisure. For investors willing to look beyond short-term noise, Hayward offers a compelling blend of growth, innovation, and ESG leadership.