HEICO Corporation

HEICO reported second-quarter fiscal 2026 consolidated net income of $233.8 million, or $1.66 per diluted share, versus $156.8 million, or $1.12 per diluted share, in Q2 fiscal 2025. Consolidated operating income rose 41% year over year, consolidated net sales rose 25%, and cash flow from operating activities increased 43% to $292 million from $204.7 million. Consolidated EBITDA increased 37% to $408.3 million, and net debt-to-EBITDA was 1.74x as of April 30, 2026 versus 1.6x as of October 31, 2025. Flight Support Group net sales rose 21% to $929.4 million and operating income rose 31% to $243.1 million; Electronic Technologies Group net sales rose 34% to $455.5 million and operating income rose 56% to $121.8 million. Management said the quarter included about $15 million to $20 million of defense sales pulled forward, boosting second-quarter results. For the remainder of fiscal 2026, management expects increased sales in both operating groups, supported by underlying demand and recent acquisitions. ETG management reiterated that overall GAAP operating margins are expected to be between 22% and 24% for fiscal 2026, while later saying FSG margin potential may be closer to 24% to 26% over time.

Victor Mendelson framed the quarter as another record result and emphasized that HEICO is “firing on all engines” across commercial aviation, defense, and space. He highlighted record or near-record orders, strong backlog, and a multiyear tailwind in defense, while saying space remains a growing opportunity and the company is investing in engineering and production capacity. His tone was highly confident and long-term oriented, with repeated emphasis on HEICO’s culture, adaptability, and focus on sustainable growth and cash generation.

Carlos Macau focused on margin leverage, cash generation, and balance-sheet flexibility. He highlighted the 43% increase in operating cash flow to $292 million, the 1.74x net debt-to-EBITDA ratio, and said the higher leverage mainly reflected 4 acquisitions completed in fiscal 2026. On margins, he noted that both segments benefited from favorable mix and high volume growth; ETG’s 6-month operating margin was 23.5%, and he said if high growth continues, margins could trend toward the high end of the company’s range. He also said FSG’s margin outlook has improved somewhat, with a possible range of 24% to 26% in his current thinking.

Analysts pressed on whether FSG’s strong organic growth and margin gains were sustainable, and management attributed the strength to market share gains, strong demand, and some defense sales pulled forward by customer request. Questions also focused on ETG margin durability, with management saying quarterly results are lumpy and that the quarter reflected strong growth across all verticals rather than one unusual driver. On aftermarket concerns, management argued that HEICO is not a “parts trading” story and said demand for PMA and DER solutions remains strong, with customers actively seeking lower-cost alternatives and more new product development. A separate question on reporting frequency led management to say semiannual reporting is possible but undecided, with Eric Mendelson favoring quarterly reporting for operating discipline.