Heico (HEI -1.32%), a diversified aerospace and electronics supplier, released its third-quarter results for fiscal 2025 on August 25, 2025. The standout news was a fresh set of company records in revenue, operating income, and net income attributable to Heico shareholders. Revenue (GAAP) reached $1,147.6 million and Diluted earnings per share (GAAP) climbed to $1.26. These results represent double-digit percentage increases over Q3 FY2024. Organic net sales growth reached 13%. Management described the period as robust, citing strong organic demand, healthy margins, and successful integration of acquisitions as key factors shaping the quarter.
| Metric | Q3 2025 | Q3 2024 | Y/Y Change |
|---|---|---|---|
| EPS (GAAP) | $1.26 | $0.97 | 30.0% |
| Revenue (GAAP) | $1,147.6 million | $992.2 million | 15.7% |
| Operating Margin | 23.1% | 21.8% | 1.3 pp |
| EBITDA | $316.4 million | $261.4 million | 21.1% |
| Operating Margin – Flight Support Group | 24.7% | 22.5% | 2.2 pp |
| Operating Margin – Electronic Technologies Group | 22.8% | 23.5% | (0.7 pp) |
Business Overview and Focus
Heico specializes in aerospace replacement parts and a range of electronic components for aviation, defense, and industrial markets. Through its two main divisions, the Flight Support Group (FSG) and Electronic Technologies Group (ETG), it serves commercial airlines, military agencies, and other original equipment manufacturers (OEMs). The company is a major provider of Federal Aviation Administration (FAA)-approved replacement parts, offering alternatives to more costly OEM products.
Recent years have seen Heico focus on organic growth, disciplined acquisitions, and ongoing research and development (R&D). Its key success factors include a robust product pipeline, market share gains in aerospace aftermarket parts, successful integration of recent acquisitions, and careful attention to regulatory requirements and customer service.
Quarter Review: Financial and Strategic Developments
The period saw Heico post record sales and income, hallmarks of solid demand and expanding operations. Revenue (GAAP) increased 16% compared to the same quarter last year. Operating income rose 22%, bolstered by margin improvement and cost management, particularly in the Flight Support Group. Net income attributable to Heico shareholders jumped 29.8% year over year (GAAP).
Flight Support Group, which offers aircraft replacement parts and repair and overhaul services, achieved 18% net sales growth in the third quarter of fiscal 2025 compared to fiscal 2024. This came from both organic factors and recent acquisitions. Operating income for this segment was up 29%, and the operating margin reached 24.7%, a notable gain from 22.5% in Q3 FY2024. According to management, demand increased across all product lines, and there were continued benefits from previous acquisitions—including improved market reach and cross-selling opportunities. Heico cited supply chain challenges but stated that it has made progress through dual sourcing and inventory management.
Electronic Technologies Group—which supplies electronic, defense, and space-related products such as sensors, high-reliability connectors, and other avionics—saw net sales rise 10%. Operating margin dipped to 22.8 % from 23.5 % a year earlier. The company attributed this to higher performance-based compensation expenses and a shift in product mix, including declining medical electronics sales. Bookings and backlog remain firm, particularly in European and U.S. defense contracts, reflecting ongoing demand for its electronic products.
Heico’s capital allocation included $629.9 million in acquisition spending in 9M FY2025, with the integration of recent additions like Wencor and Rosen Aviation advancing well. The company’s financial position improved, with net debt to EBITDA (non-GAAP) reduced to 1.90x as of July 31, 2025, compared to 2.06x as of October 31, 2024. Cash and equivalents increased to $261.9 million as of July 31, 2025.
Looking Ahead: Outlook and Things to Watch
For the remainder of FY2025, Heico’s management expressed confidence in continued revenue growth in both the Flight Support Group and Electronic Technologies Group. The company expects organic demand for most products to continue, with further gains from recently completed acquisitions. Management also stated its goal to achieve strong cash flow from operations for the full fiscal year. However, the company did not provide specific numerical earnings or revenue guidance for future quarters.
Key areas for investors to monitor include R&D requirements and supply chain availability. Segment-level margin dynamics, particularly in Electronic Technologies Group, remain an important area of focus due to recent compression.
Revenue and net income presented using U.S. generally accepted accounting principles (GAAP) unless otherwise noted.
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