HEICO Corporation

HEICO reported record Q2 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 net sales increased 25% year over year, and operating income increased 41%. Cash flow provided by operating activities rose 43% to $292 million from $204.7 million a year ago; consolidated EBITDA increased 37% to $408.3 million. Flight Support Group sales increased 21% to $929.4 million and operating income increased 31% to $243.1 million, while Electronic Technologies Group sales increased 34% to $454.5 million and operating income increased 56% to $121.8 million. Net debt-to-EBITDA was 1.74x at April 30, 2026, versus 1.6x at October 31, 2025. For the remainder of fiscal 2026, management expects increased sales in both segments, supported by underlying demand and contributions from recent acquisitions; ETG’s overall GAAP operating margin is still expected to be between 22% and 24% for fiscal 2026, though Carlos Macau suggested the segment could trend toward 24% to 26% depending on mix and timing.

Victor Mendelson framed the quarter as another record period and emphasized that HEICO is “firing on all engines,” with strength in commercial aviation, defense, and space. He was notably optimistic about future demand, saying orders are at record or near-record levels and that the company is benefiting from rising need for cost-effective parts and repairs, especially as airlines and defense customers seek lower costs and more resilience. He also highlighted HEICO’s acquisition strategy, saying the company will stay disciplined, favor high-quality businesses, and buy to own for the long term.

Carlos Macau focused on the quality of the quarter’s margins and cash generation, pointing to the 43% rise in operating cash flow to $292 million and the continued leverage of HEICO’s relatively flat cost structure. He said both segments benefited from favorable mix and high volume, with ETG’s GAAP operating margin at 26.5% and FSG’s at 26.2%, while cash margins before amortization were 30.6% for ETG and 28.6% for FSG. He also noted acquisition-related amortization consumed about 240 basis points of FSG operating margin and about 410 basis points at ETG, and he said defense remained about just under 30% of consolidated sales.

Analysts pressed management on whether FSG’s growth was sustainable, what drove the strong ETG margin rebound, and how much of the quarter reflected pulled-forward defense shipments. Eric Mendelson said FSG’s growth came from broad-based demand across parts, specialty products, and component repair, but component repair was constrained by parts availability; he also quantified the pulled-forward defense sales at roughly $15 million to $20 million. On ETG, management said the margin strength came from favorable mix, high volume, and SG&A leverage, while warning the segment remains volatile by quarter. Analysts also questioned “peak aftermarket” concerns; Eric argued those worries are misplaced for HEICO because newer aircraft are more expensive and more numerous, customers are asking for more parts, and HEICO’s proprietary parts/repairs model differs from pure parts trading.