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- **Record Q3 Growth**: Net income up 30% YoY to $177.3M, with FSG and ETG both setting new sales and margin records.
- **Acquisition Momentum**: $630M in deals over 9 months, including Gables (expected to be accretive within 12 months).
- **Margin Expansion**: FSG operating margin 24.7% (vs. 22.5% YoY), ETG at 22.8%, driven by repair growth and cost control.
- **Defense & Space Strength**: ETG defense organic sales +6% QoQ, missile defense backlog supports FSG expansion.
- **Cash Flow Dominance**: 8% YoY increase in operating cash flow to $231.2M, funding acquisitions without debt reliance.

**【CEO Opening Remarks】**
- HEICO reported record Q3 2025 results with consolidated net income up 30% YoY to $177.3M, driven by double-digit organic growth across core businesses and disciplined acquisitions.
- Flight Support Group (FSG) operating income rose 29% YoY to $198.3M, with 13% organic growth in net sales.
- Electronic Technologies Group (ETG) net sales increased 10% YoY to $355.9M, supported by strong demand in defense and space products.
- Cash flow from operations reached $231.2M, up 8% YoY, enabling $630M in acquisitions over the past 9 months.
- Gables Engineering acquisition (July 2025) is expected to be accretive within the year, marking HEICO's third-largest deal.

**【CFO Financial Commentary】**
- Consolidated EBITDA climbed 21% YoY to $316.4M, with net debt-to-EBITDA ratio improving to 1.9x from 2.06x.
- GAAP EPS was $1.26, up 30% YoY, while Non-GAAP metrics reflected strong cost control and margin expansion.
- FSG operating margin expanded to 24.7% (vs. 22.5% YoY), driven by repair and overhaul growth and SG&A efficiencies.
- ETG operating margin was 22.8%, with defense organic sales up 6% and other electronics up 16% YoY.
- Tax rate for the quarter was 18.9%, with expectations for 19-20% annually due to R&D tax credits and FDII benefits.

**【Q&A Highlights】**
- **Missile Defense Growth**: FSG and ETG are key suppliers to U.S. and allied defense programs, with significant order backlogs and pipeline expansion.
- **Supply Chain Resilience**: Decentralized purchasing and local supplier relationships mitigate risks, though some parts remain constrained.
- **Gables Integration**: Early results show alignment with expectations, with focus on leveraging HEICO's distribution network.
- **Leverage & Acquisitions**: Net debt-to-EBITDA at 1.9x leaves capacity for accretive deals, with $630M deployed in 2025.
- **Commercial Aerospace**: FSG's 75% non-engine exposure outperformed engine peers, with 13% organic growth despite mixed airline inventory trends.
- **Defense Spending**: U.S. administration priorities align with HEICO's lower-cost alternative parts strategy, driving defense segment growth.


HEICO Corporation (HEI) Q3 2025 Earnings Call Transcript

Revenue

Sales and Services Revenue

Financing Services Revenue

Other Revenue

Cost of Revenue

Cost of Goods and Services

Cost of Financing Services

Other Cost

Gross Profit

Other Operating Income

Operating Expenses

Selling, General and Administrative Expenses

Selling and Marketing Expenses

General and Administrative Expenses

Research and Development Expenses

Loss on Bad Debts

Loss on Impairment of Other Assets

Loss on Disposal of Assets

Other Operating Expenses

Operating Income

Non-Operating Income (Loss)

Income (Loss) from Affiliates

Income (Loss) from Associates

Income (Loss) from Joint ventures

Gain (Loss) on Other Investment

Gain (Loss) on Change in Fair Value

Gain (Loss) on Foreign Currency Exchange

Other Non-Operating Income (Loss)

Net Interest Expense

Interest Expense

Interest Income

Pretax Income From Continuing Operations

Income Tax Expense

Current Income Tax

Deferred Income Tax

Income Tax Adjustments

Net Income from Continuing Operations

Income from Discontinued Operations

Other Items Before Net Income

Net Income

Net Income Attributable to Minority Interests

Net Income Attributable to Owners of the Company

Preferred Stock Dividends

Other Adjustments

Net Income Attributable to Common Stockholders

Other Comprehensive Income

Total Comprehensive Income

Total Comprehensive Income Attributable to Minority Interests

Total Comprehensive Income Attributable to Owners of the Company

Basic EPS

Basic EPS from Continuing Operations

Basic EPS from Discontinued Operations

Diluted EPS

Diluted EPS from Continuing Operations

Diluted EPS from Discontinued Operations

HEI

HEI fundamentals

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