Helios Technologies, Inc.

Second-quarter sales were $232 million, up 9% from $212 million a year ago; excluding the CFP divestiture and foreign exchange, sales were up 16% year over year. Gross profit increased 19% to $80 million, and gross margin expanded 280 basis points to 34.6%. Operating income rose 48% to $33 million, operating margin expanded to 14.0%, adjusted EBITDA increased 25% to $49 million with a 21.2% margin, diluted EPS was $0.66 (up 94%), and adjusted diluted EPS was $0.88 (up 49%). For the full year 2026, Helios raised sales guidance to $880 million-$900 million, adjusted EBITDA margin to 20.2%-21.0%, and adjusted diluted EPS to $3.05-$3.25. For Q3, it expects sales of $215 million-$222 million, adjusted EBITDA margin of 19.8%-20.6%, and adjusted diluted EPS of $0.70-$0.77.

Sean Bagan framed the quarter as evidence that the company has moved from stabilization to sustainable profitable growth, saying the CORE Strategy is working and the business is in a “new phase” backed by a fortified balance sheet. He emphasized broad-based order strength, new business wins, and expanding product momentum across Hydraulics and Electronics, while highlighting data center thermal management as a major new opportunity. His tone was confident and increasingly upbeat, though he noted the company is still navigating tougher comps and a turbulent macro backdrop.

Jeremy Evans focused on the mechanics of the margin and cash improvement. He cited $80 million of gross profit, 34.6% gross margin, $33 million of operating income, $49 million of adjusted EBITDA, and record second-quarter operating cash flow of $42 million and free cash flow of $31 million; CapEx was $11 million, or 4.9% of sales. He said net debt fell to $264 million, leverage improved to 1.4x from 2.6x a year ago, and the company repurchased about 79,000 shares for $6 million while continuing its $0.12 quarterly dividend.

Analysts pressed on the Faster footprint actions, CapEx, Electronics outgrowth, margin sustainability, data center timing, China strength, and capital allocation. Management said Faster is consolidating operations, closing the Canadian facility, and shifting production to improve efficiency and create capacity for the data center opportunity, while CapEx is now expected at 4% to 4.5% of sales because of thermal-management investments, low-cost center setup, and automation upgrades. On margins, management said volume is the biggest driver, with some support from about $1 million of IEEPA tariff refunds, and on data centers they said they have samples out, no revenue in 2026 guidance, and expect a gradual ramp starting in 2027. They also said China/APAC has become a bright spot, especially in Electronics and Hydraulics, and that M&A will be pursued selectively once the balance sheet and planning process support it.