Helios Technologies Reports Second Quarter 2025 Financial Results

Helios Technologies, a global leader in highly engineered motion control and electronic controls technology, has released its financial results for the second quarter of 2025. The company, which serves diverse end markets including construction, agriculture, and recreational vehicles, reported a mix of financial outcomes and strategic initiatives aimed at driving future growth.

Financial Highlights

For the second quarter of 2025, Helios Technologies reported net sales of $212 million, a 3% decrease compared to the same period last year. Despite this year-over-year decline, the company saw a sequential increase of 9% from the first quarter of 2025. The gross margin expanded by 120 basis points sequentially, reaching 31.8%, despite facing tariff headwinds. Operating margin also improved by 160 basis points sequentially, driven by strong cost discipline and improved operating leverage.

The company reported a diluted EPS of $0.34 and a diluted Non-GAAP EPS of $0.59. Cash from operations reached $37 million, marking the highest level of quarterly cash generation since the fourth quarter of 2019. Helios also reduced its debt for the eighth consecutive quarter, bringing it down by $67 million, or 13%, compared to the prior year period. The net debt to adjusted EBITDA leverage ratio improved to 2.6x from 3.0x in the previous year.

Business and Operational Highlights

Helios Technologies experienced a mixed performance across its segments. The Hydraulics segment saw a 3% decline in sales, primarily due to weakness in the industrial and mobile markets. However, the segment's gross profit increased by 4%, and the gross margin expanded by 220 basis points. The Electronics segment faced a 4% decline in sales, with significant challenges in the recreational end market. Gross profit for this segment declined by 18%, and the gross margin contracted by 530 basis points.

Geographically, sales declined in the Americas by 7% and in the Asia Pacific region by 2%, while Europe, the Middle East, and Africa (EMEA) saw a 5% increase. Sequentially, sales grew in all regions, with EMEA leading at 24%, followed by APAC at 12%, and the Americas at 1%.

Strategic Initiatives and Corporate Developments

Helios Technologies has been actively managing its portfolio, announcing a definitive agreement to sell Custom Fluidpower (CFP) for approximately $83 million AUD. The company also initiated a new share repurchase program, buying 200,000 shares in the second quarter at an average price of $32 per share. Additionally, Helios has consistently paid a quarterly dividend for over 28 years.

To enhance its operating structure, Helios is refocusing its go-to-market strategy on core brands and aligning engineering assets with its product portfolio. The company is also taking steps to improve its cash conversion cycle and reduce debt, further strengthening its balance sheet.

Management's Perspective

Sean Bagan, President, CEO, and CFO of Helios, commented on the company's performance, stating, "The Helios team continued to execute on our financial priorities to drive sequential operating leverage, improve our cash conversion cycle, reduce debt, and strengthen our earnings power to be better positioned to capitalize on improving demand trends. We generated a near record level of cash which further improved our already strong free cash flow conversion."

Bagan also highlighted the company's efforts to simplify its business by focusing on core brands and enhancing the product portfolio. He noted that these changes would help direct resource allocation, leverage the cost structure more efficiently, increase productivity, drive greater innovation, and provide a higher overall value proposition for customers.

Future Outlook

Helios Technologies has raised its full-year 2025 outlook and established its third-quarter 2025 guidance. The company now expects total net sales for FY 2025 to be between $810 million and $830 million, with an adjusted EBITDA margin of 18.5% to 19.5%. For the third quarter of 2025, the company anticipates net sales of $208 million to $215 million and an adjusted EBITDA margin of 19.5% to 20.5%.

Bagan concluded, "We have exceeded our expectations for the first half of 2025 and have clear visibility through the balance of the third quarter. While there is still a degree of uncertainty associated with tariffs and persistent weakness in a number of our end markets, given our first half outperformance and the approaching convergence of orders to sales, we expect to achieve modest growth for the full year of 2025 over last year—even adjusting for the announced CFP divestiture."

SEC Filing: HELIOS TECHNOLOGIES, INC. [ HLIO ] - 8-K - Aug. 04, 2025