Executive Summary

Record quarter: revenue $1.03B (+15% y/y), operating income $226.8M (+26% y/y), and diluted EPS $1.20 (+46% y/y) with consolidated operating margin expanding to 22.0% . Excluding a $0.19 discrete tax benefit from stock option exercises, EPS growth was ~40% per management .
Broad-based strength: FSG organic sales +13% and ETG organic sales +11%; both segments posted ~23% operating margins (FSG 23.3%, ETG 23.1%) with improved mix and SG&A efficiencies .
Cash flow and balance sheet: CFO $203.0M (+82% y/y); net debt/EBITDA 2.08x TTM; ~$255M deployed on acquisitions in the quarter, with management reiterating robust M&A pipeline and disciplined leverage framework .
Outlook intact: Management “remains confident” in net sales growth for both segments in FY25 and “continues to forecast strong cash flow,” with ETG backlog at a record quarter-end level; CFO framed FY25 effective tax rate ~18–19% and NCI ~7–7.5% of pretax income .

What Went Well and What Went Wrong

What Went Well
- Record net sales, operating income, and EPS with margin expansion to 22.0% consolidated; “we’re very bullish” on FY25 and beyond (prepared remarks) .
- FSG: 15% sales growth (13% organic) and margin up to 23.3% on higher aftermarket parts mix and SG&A efficiencies; “eighteenth consecutive quarter” of FSG sales growth .
- ETG: 16% sales growth (11% organic) and margin up to 23.1%, aided by strong defense/space/aerospace mix; backlog at “highest ever quarter-end” .
What Went Wrong
- EPS quality: $0.19 of diluted EPS (net) from discrete tax benefit; management highlighted ex-benefit EPS still strong (+$0.29 per share, ~40% growth), but investors should adjust for non-recurring tax items .
- Supply chain still mixed: management said results “could have been nicely higher” absent supplier constraints and flagged potential disruption from the SPS fastener facility fire .
- ETG lumpiness persists: management reiterated ETG’s quarterly volatility; non‑A&D markets were “pretty flattish” in Q1 with expected gradual improvement as destocking fades .

Financial Results

Metric	Q3 2024	Q4 2024	Q1 2025
Revenue ($USD Billions)	$0.992	$1.014	$1.030
Operating Income ($USD Millions)	$216.4	$218.6	$226.8
Operating Margin (%)	21.8%	21.6%	22.0%
Net Income Attributable to HEICO ($USD Millions)	$136.6	$139.7	$168.0
Diluted EPS ($)	$0.97	$0.99	$1.20
EBITDA ($USD Millions)	$261.4	$264.0	$273.9
Cash from Operations ($USD Millions)	$214.0	$205.6	$203.0

Segment detail

Segment	Metric	Q3 2024	Q4 2024	Q1 2025
Flight Support Group (FSG)	Net Sales ($USD Millions)	$681.6	$691.8	$713.2
	Operating Income ($USD Millions)	$153.6	$154.5	$166.1
	Operating Margin (%)	22.5%	22.3%	23.3%
Electronic Technologies Group (ETG)	Net Sales ($USD Millions)	$322.1	$336.2	$330.3
	Operating Income ($USD Millions)	$75.8	$81.8	$76.5
	Operating Margin (%)	23.5%	24.3%	23.1%

KPIs and balance sheet/leverage

KPI	Q3 2024	Q4 2024	Q1 2025
Net Debt / EBITDA (x, TTM)	2.11x	2.06x	2.08x
Total Debt ($USD Millions)	$2,259.1	$2,229.4	$2,353.6
Cash & Equivalents ($USD Millions)	$202.9	$162.1	$165.5
Dividend	—	Declared $0.11 (Jan 2025)	Paid $0.11 (Jan 2025)
Acquisition Spend (Quarter)	—	—	~$255M
Discrete Tax Benefit EPS Impact ($)	—	—	$0.19

Notes: EPS in Q1 2025 includes a discrete tax benefit; EBITDA is non‑GAAP as defined by HEICO .

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Net Sales (both segments)	FY 2025	“Anticipate net sales growth in both FSG and ETG” (Dec)	“Remain confident in achieving net sales growth across both segments”	Maintained
Cash from Operations	FY 2025	“Strong cash flow from operations” (Dec)	“Continue to forecast strong cash flow from operations”	Maintained
FSG margin framework	FY 2025	~22–23% GAAP, incremental improvement with scale	Q1 delivered 23.3%; progress via mix/SG&A efficiencies	Positive execution vs framework
ETG margin framework	FY 2025	~24% GAAP with quarterly lumpiness	Q1 at 23.1%; strong cash margins pre‑amortization (~27%+)	In line/lumpy
Effective Tax Rate	FY 2025	—	~18–19% effective tax rate; statutory ~21% context	New disclosure
Noncontrolling Interests	FY 2025	—	~7–7.5% of pretax income	New disclosure
Dividend	Jan 2025	Declared $0.11	Paid $0.11	Executed

HEICO does not provide quantitative revenue/EPS guidance; management gives qualitative outlook and operating frameworks .

Earnings Call Themes & Trends

Topic	Previous Mentions (Q3’24 and Q4’24)	Current Period (Q1’25)	Trend
Defense/DoD parts opportunity (cost-saving alternatives)	Q4: Emphasis on administration focus; medium‑term upside for DoD cost-saving parts; missile defense content/backlog strong	Continued optimism; DoD PMA/process evolution seen as “low-hanging fruit,” but not a FY25 story; missile defense demand strong	Building, medium‑term catalyst
Supply chain health	Q3: Improvements vs prior year, still tight in places	“Getting better, but not great”; supplier labor constraints; SPS fastener fire could constrain industry	Gradual improvement; new disruption risk
Pricing vs share strategy	Q4: Focus on value, not squeezing price; growth from product breadth	Still low‑single‑digit pricing; margin gains mainly from cost/efficiency, not price taking	Stable discipline
Wencor integration	Q3/Q4: “Gift that keeps on giving,” cross‑sell, PMA/DER leverage	Outperformance continues; cooperation without consolidation; broadening avionics capabilities	Positive synergies sustained
ETG non‑A&D destocking	Q4: Destocking impact narrowing; expected H1 FY25 improvement	Non‑A&D sequential order improvement; recovery later this year; ETG backlog record	Early signs of recovery
M&A & leverage	Q4: Robust pipeline, ND/EBITDA ~2.06x	~$255M deployed; ND/EBITDA 2.08x; comfortable up to ~3x for the right deals	Active, disciplined
Tariffs/macro	—	Localized supply chains mitigate tariff risk; cost pass‑through manageable (3–5% scenario)	Managed exposure

Management Commentary

“We are thrilled to announce all-time record quarterly net income, operating income and net sales… driven by double-digit organic growth within both the Flight Support Group and Electronic Technologies Group…” (CEO) .
“We delivered all-time quarterly record results in net sales and operating income… organic net sales growth of 13%… 18th consecutive quarter of net sales growth for the Flight Support Group.” (Co‑President, FSG) .
“ETG operating income and net sales increases of 38% and 16%… strong 11% organic… backlog reaching the highest ever quarter end amount on order.” (Co‑President, ETG) .
“Consolidated EBITDA increased 22% to $273.9 million… We continue to forecast strong cash flow from operations for the entire fiscal ’25.” (CEO) .
“FSG cash margin (EBITA) was ~26%… 120 bps higher y/y.” (FSG) . “ETG operating margin before amortization was above 27.2%.” (ETG) .

Q&A Highlights

Margins: Both segments around 23% GAAP; cash margins higher pre‑amortization. Management avoids forecasting higher, but cites long‑term upward trend from efficiency and scale .
Pricing discipline: Price increases low single digits; margin expansion driven by mix/efficiency; management believes they “left a lot of money on the table” deliberately to sustain value proposition .
Defense opportunity: Significant medium‑term potential to sell cost‑saving parts to DoD; not embedded in FY25, but supports multi‑year growth thesis; missile defense demand robust .
Supply chain: Generally improved but uneven; supplier constraints limited upside; SPS fastener fire could be disruptive near term .
Leverage/M&A: Comfortable up to ~3x ND/EBITDA for attractive opportunities; strong cash generation enables rapid de‑leveraging .

Estimates Context

We attempted to retrieve S&P Global consensus for revenue/EPS/EBITDA for Q1 2025 and prior quarters but could not access due to a data provider rate limit. Therefore, we do not present estimate comparisons for this quarter. Values retrieved from S&P Global were unavailable at this time.
Important modeling note: Q1 2025 diluted EPS includes a $0.19 discrete tax benefit; management cited EPS excluding the discrete tax increased ~$0.29 per share (~40%), which may shape how analysts adjust FY25 EPS run-rate .

Key Takeaways for Investors

Margin expansion story intact: consolidated margin at 22.0% with both FSG and ETG ~23%, and higher pre‑amortization cash margins—evidence of durable efficiency gains rather than price taking .
Aftermarket cycle remains strong: FSG organic +13% with 18 straight quarters of sales growth; management not seeing demand slowdown despite OEM build discussions and expects continued growth .
Defense as a multi‑year catalyst: increasing missile defense content/backlog and potential DoD adoption of cost‑saving alternatives provide upside beyond FY25 .
Cash generation and M&A capacity: ~$203M CFO, ND/EBITDA ~2.08x, and $255M deployed in Q1 support ongoing bolt-ons/larger deals without stressing the balance sheet .
Quality of EPS: adjust for the $0.19 discrete tax benefit when assessing run-rate earnings; ex‑benefit EPS growth still robust (~40%) .
Supply chain/watch items: supplier constraints still a headwind; monitor implications from SPS fastener facility fire on both OE and aftermarket channels .
Operational excellence/AI adoption: separate industry release cited HEICO’s use of AI‑enabled EHS tools to materially reduce incident costs—supportive of sustained margin discipline across facilities .

All data and quotes are sourced from HEICO’s Q1 FY2025 8‑K press release and exhibits, the Q1 FY2025 earnings call transcript, prior quarter press releases and transcripts, and related materials as cited.

HEICO CORP (HEI)·Q1 2025 Earnings Summary