- Record Net Income Growth: Consolidated net income surged 35% to $188.3 million ($1.33/share) in Q4 2025, up from $139.7 million ($0.99/share) in Q4 2024.
- Operating Group Sales Milestones: Flight Support Group (FSG) net sales hit $834.4 million (+21%), driven by 16% organic growth and acquisitions; Electronic Technologies Group (ETG) reached $384.8 million (+14%) with 7% organic growth.
- EBITDA & Cash Flow Expansion: Consolidated EBITDA rose 26% to $331.4 million, while operating cash flow jumped 44% to $295.3 million, reflecting strong operational efficiency.
- Acquisition Momentum: Completed five acquisitions in 2025 and added two pending deals, expanding its portfolio to ~110 companies since the program began 27 years ago.
- Balance Sheet Strength: Net debt-to-EBITDA ratio improved to 1.60, with $934 million in annual operating cash flow providing flexibility for strategic M&A and long-term net income growth targets of 15-20%.
Segment Performance
The Flight Support Group saw improved margins in 2025 due to a favorable mix of repairs and overhauls, including heavier PMA and DER repairs, as well as growth in defense-related business. The Electronic Technologies Group is expected to see mid- to low-single-digit organic growth in the next year, driven by demand in space and defense tech. As management noted, "the market will continue to evolve, with opportunities in both established and new segments."
Valuation and Growth Prospects
With a P/E Ratio of 67.47 and an EV/EBITDA ratio of 39.75, HEICO's valuation suggests that the market has already priced in significant growth prospects. However, the company's history of compounding its bottom line at 18% over 35 years and its target of 15-20% net income growth over the long term indicate that there is still room for growth. The company's strong balance sheet, with a net debt-to-EBITDA ratio of 1.6, provides flexibility for acquisitions, which is a key growth driver.
Acquisitions and Integration
HEICO completed five acquisitions in fiscal 2025 and announced two new agreements expected to close in the first quarter of calendar 2026. The company's acquisition program, started 27 years ago, has led to the purchase of around 110 companies, giving them a strong track record and reputation as a great home for sellers. The integration of HEICO and Wencor part and repair catalogs offers opportunities for cross-selling, and management believes this can be a growth tailwind.
Outlook and Challenges
HEICO expects net sales growth across both operating groups in fiscal 2026, driven by organic growth and acquisitions. The company remains optimistic about its prospects, citing its strong financial position, experienced acquisition team, and ability to integrate new businesses. However, the company also faces challenges, such as qualifying PMA parts for military aircraft, which can be more complicated than for commercial aircraft. Analysts estimate next year's revenue growth at 9.9%, indicating a continued positive trend.