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- **Revenue Growth**: 13% YoY, driven by 21% Electronics and 9% Hydraulics growth, with double-digit regional expansion.
- **Margin Expansion**: Adjusted EBITDA margin of 20.4%, up 40 bps YoY; gross margin improved 200 bps to 33.1%.
- **Debt Reduction**: Net debt-to-EBITDA ratio at 2.4x, targeting 2.0x by year-end with CFP sale proceeds.
- **Strategic Moves**: Sold CFP for $21M gain, wrote down $25.9M i3PD goodwill, and refocused resources on core businesses.
- **2026 Outlook**: Q4 sales guidance of $192-202M (10% YoY growth), with EBITDA margin of 20-21% and EPS of $0.67-0.74.

**【CEO Summary Section】**
- **Q3 Revenue Growth**: 13% year-over-year, driven by 21% growth in Electronics and 9% in Hydraulics, with double-digit regional growth across all geographies.
- **Margin Expansion**: Adjusted EBITDA margin of 20.4%, up 40 basis points year-over-year, with gross margin improving 200 basis points to 33.1%.
- **Debt Reduction**: Net debt-to-EBITDA ratio improved to 2.4x, targeting 2.0x by year-end. CFP sale generated $21 million gain.
- **Strategic Divestitures**: Sold Custom Fluidpower (CFP) and wrote down $25.9 million of i3PD goodwill, refocusing resources on core businesses.
- **2026 Outlook**: Q4 sales guidance of $192-202 million (10% YoY growth), with adjusted EBITDA margin of 20-21% and EPS of $0.67-0.74.

**【CFO Financial Commentary】**
- **Sales Performance**: $220 million in Q3, exceeding $215 million guidance, with Electronics up 21% and Hydraulics up 9%.
- **Profitability**: Non-GAAP EPS of $0.72 (22% YoY growth), driven by higher volumes and margin expansion. Sequential EPS increased due to operating leverage.
- **Cash Flow**: Generated $18.5 million in free cash flow, with trailing 12-month conversion rate of 223%.
- **Balance Sheet**: $55 million cash and $360 million available on revolving credit, supporting strategic investments.

**【Q&A Highlights】**
- **Market Recovery**: Recreational and agricultural markets showing early signs of recovery, with dealer inventory destocking complete.
- **Portfolio Strategy**: No immediate M&A plans, but open to opportunities that fit core businesses and return profiles.
- **New Product Wins**: Wins in NEVs, marine, and construction equipment, with multi-Faster and Cygnus Reach software driving growth.
- **i3PD Restructuring**: Refocused i3PD engineers on core projects, reducing third-party revenue reliance and adjusting software adoption timelines.

Helios Technologies, Inc. (HLIO) 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

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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

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Net Income from Continuing Operations

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Other Items Before Net Income

Net Income

Net Income Attributable to Minority Interests

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Preferred Stock Dividends

Other Adjustments

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Other Comprehensive Income

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Total Comprehensive Income Attributable to Minority Interests

Total Comprehensive Income Attributable to Owners of the Company

Basic EPS

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Basic EPS from Discontinued Operations

Diluted EPS

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Diluted EPS from Discontinued Operations

HLIO

HLIO fundamentals

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