HEICO Corporation

HEICO reported record third-quarter fiscal 2026 net sales of $1,413.1 million, up 23% from $1,147.6 million a year ago. Consolidated net income rose 33% to a record $235.4 million, or $1.67 per diluted share, versus $177.3 million, or $1.26 per share, last year. Consolidated operating income increased 34% to $355.2 million, and EBITDA rose 31% to $415.2 million. Cash flow from operations was $345.3 million, up 49% from $231.2 million. Flight Support Group sales rose 18% to $947.8 million and operating income rose 24% to $245.3 million, while Electronic Technologies Group sales rose 36% to $483.5 million and operating income rose 55% to $125.6 million. Management said full-year FSG margins should remain in a 22% to 24% GAAP range, translating to about 26% to 28% EBITDA margins, and described ETG margins as mix-sensitive but still strong. For the remainder of fiscal 2026, management expects increased net sales in both groups, supported by underlying demand and recent acquisitions.

Eric Mendelson framed the quarter as another example of HEICO’s long-term playbook: strong people, solid markets, and a focus on cash flow. He emphasized broad-based demand rather than reliance on any single end market, saying customers want to buy more from HEICO and that the company continues to see opportunities across defense, aerospace, industrial tech, and adjacent areas like right-to-repair, missiles, space, drones, and IGT. His tone was highly confident and upbeat, but he repeatedly tied optimism to disciplined execution and selective acquisitions.

Carlos Macau highlighted record EBITDA of $415.2 million, operating cash flow of $345.3 million, and net debt-to-EBITDA improving to 1.57x from 1.60x. He said the company issued $1.2 billion of senior unsecured notes, repaid revolver borrowings, and amended its credit facility to June 2031 with $2.2 billion committed capital and an accordion to $3 billion. He also noted working capital will likely continue to grow with organic sales and backlog, and flagged a $70 million to $75 million operating cash flow drag in Q4 from a payment to the estate of a former chairman and CEO. On acquisitions, he said HEICO generally targets deals with at least 20% EBITDA margins and expects cash generation to remain high, with no structural change in free cash conversion.

Analysts pressed on whether 18% organic growth is sustainable, and management said it is broad-based, with standout strength in industrial tech, defense, and commercial aerospace. Questions on margins centered on whether recent ETG margin strength is mostly mix or more durable; Carlos said ETG is highly mix-sensitive but SG&A efficiencies and scale also help, while he avoided raising long-term margin expectations too much. Analysts also asked about backlog, supply chain bottlenecks, right-to-repair, Europe, defense spending, and M&A size; management said backlog and orders are very strong, supply constraints still affect repairs, Europe is strong, and the acquisition pipeline is full with room for both small and larger deals.