Q2 2026 Helios Technologies Inc Earnings Call Transcript
Key Points
- Helios Technologies Inc (HLIO) delivered strong Q2 2026 results with sales of $232 million, at the high end of guidance, and adjusted EPS of $0.88, exceeding expectations by $0.05.
- The company reported its fourth consecutive quarter of double-digit pro forma sales and adjusted earnings growth, with order intake growing double-digits for the fourth straight quarter.
- Gross margin expanded 280 basis points year-over-year to 34.6%, driven by higher volumes, favorable mix, and operational initiatives, marking the fourth straight quarter of margin expansion.
- Record operating cash flow of $42 million in Q2 allowed the company to reduce net debt to $264 million and lower leverage to 1.4x, below its target range, while returning $18 million to shareholders year-to-date.
- Helios Technologies Inc (HLIO) raised its full-year 2026 outlook, now expecting sales of $880-$900 million (potentially the highest in company history) and adjusted EBITDA margin of 20.2%-21%, reflecting strong momentum and new business wins.
- The company faces tougher comparisons in the second half of 2026, with Q3 guidance implying only 8% sales growth and 2% adjusted EPS growth year-over-year.
- External headwinds include rising energy and fuel prices, tariff dynamics, broader inflationary pressures, and geopolitical tensions, which could impact performance.
- The marine end market remains soft, and the industrial end market is relatively flat, limiting growth in certain segments.
- The data center thermal management market opportunity has not yet generated revenue, with only samples out to prospective customers and no orders booked in 2026 guidance.
- Operating expenses increased by $2.2 million year-over-year due to employee benefit costs and an isolated bad debt expense, partially offsetting margin gains.
Greetings and welcome to the Helios Technologies second quarter.
2026 Financial Results Conference Call. At this time, all participants are in a listen-only mode. A question-and-answer session will follow the formal presentation.
If anyone should require operator assistance, please press *0 on your telephone keypad. As a reminder, this conference is being recorded.
It is now my pleasure to introduce Tanya Allman, Vice President, Investor Relations in Corporate Communications.
Please go ahead.
Thank you, operator, and good day, everyone. Welcome to the Helios Technologies Second Quarter 2026 Financial Results Conference Call. We issued a press release announcing our results yesterday afternoon. If you do not have that release, it is available on our website at hlio.com. You will also find slides there that accompany today's discussion as well as our prepared remarks. Joining me today are Shawn Begin, President and Chief Executive Officer, and Jeremy.
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