Helios Technologies’ third quarter saw a positive year-over-year sales increase, yet the market reacted negatively, reflecting investor concerns about future momentum and margin sustainability. Management pointed to strong performance in its Electronics segment, particularly Enovation Controls, and improving demand across its core regions. CEO Sean Bagan described the quarter as a “turning point,” attributing the result to renewed go-to-market strategies and higher customer engagement. However, he also acknowledged the impact of a goodwill write-down related to the i3PD acquisition and ongoing portfolio adjustments as the company adapts to end-market softness.
Is now the time to buy HLIO? Find out in our full research report (it’s free for active Edge members).
Helios (HLIO) Q3 CY2025 Highlights:
- Revenue: $220.3 million vs analyst estimates of $212.5 million (13.3% year-on-year growth, 3.7% beat)
- Adjusted EPS: $0.72 vs analyst estimates of $0.66 (9.8% beat)
- Adjusted EBITDA: $45.1 million vs analyst estimates of $42.36 million (20.5% margin, 6.5% beat)
- Revenue Guidance for Q4 CY2025 is $197 million at the midpoint, below analyst estimates of $201.2 million
- Management raised its full-year Adjusted EPS guidance to $2.47 at the midpoint, a 2.7% increase
- Operating Margin: 0.6%, down from 11.4% in the same quarter last year
- Organic Revenue rose 12% year on year vs analyst estimates of 7.5% growth (454.1 basis point beat)
- Market Capitalization: $1.80 billion
While we enjoy listening to the management's commentary, our favorite part of earnings calls are the analyst questions. Those are unscripted and can often highlight topics that management teams would rather avoid or topics where the answer is complicated. Here is what has caught our attention.
Our Top 5 Analyst Questions From Helios’s Q3 Earnings Call
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Christopher Moore (CJS Securities) asked for details on recent commercial wins and visibility into 2026. CEO Sean Bagan cited new contracts in hydraulics and electronics, highlighting a significant AGCO win and momentum in recreational vehicles, while stating that sustained volume is key for margin recovery.
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Moore (CJS Securities) followed up on margin progression and what it would take to return to historical EBITDA margins. Bagan explained that achieving mid-20% margins requires both higher sales volumes and continued cost discipline, noting that a healthier mix and operational leverage will be essential.
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Jeffrey Hammond (KeyBanc Capital Markets) inquired about the recreational vehicle market and inventory destocking. Bagan clarified that while retail demand is steady, channel inventory levels have normalized, which should support stable production and gradual recovery.
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Joseph Grabowski (Baird) asked about unusual items in the Electronics segment and sales pull-forward. Bagan acknowledged that approximately $3 million of Q4 sales were pulled into Q3, but underlying demand remains strong for both Electronics and Hydraulics.
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Jon Braatz (Kansas City Capital) questioned the i3PD goodwill impairment and turnaround prospects. CFO Jeremy Evans responded that engineering resources have been redeployed to core projects, and future software will be embedded in Helios products rather than sold standalone, aligning with updated strategy.
Catalysts in Upcoming Quarters
In the coming quarters, the StockStory team will closely monitor (1) the ramp-up and adoption of new product launches in both Electronics and Hydraulics, (2) evidence of sustained volume and margin improvements across end markets as inventory destocking subsides, and (3) further progress on portfolio simplification and capital allocation. Execution on operational efficiency initiatives and the impact of new sales processes on customer wins will also be important indicators.
Helios currently trades at $54.30, down from $56.65 just before the earnings. At this price, is it a buy or sell? The answer lies in our full research report (it’s free for active Edge members).
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