Helios Technologies (HLIO 25.86%), a global industrial technology company focused on hydraulics and electronics for diverse markets, released its second quarter 2025 earnings on August 4, 2025. The headline news was a revenue beat—GAAP sales reached $212.5 million, ahead of the $202.99 million Wall Street estimate. Non-GAAP earnings per share (EPS) reached $0.59, beating the analyst consensus of $0.51. Still, both GAAP revenue and net income declined compared to the same period last year, highlighting continued pressures in some business units and regions. Management described the quarter as a sequential rebound, but noted that structural challenges and macro risks remain, especially in the Electronics segment and with ongoing global tariff uncertainty.
| Metric | Q2 2025 | Q2 2025 Estimate | Q2 2024 | Y/Y Change |
|---|---|---|---|---|
| EPS (Non-GAAP) | $0.59 | $0.51 | $0.64 | (8%) |
| Revenue (GAAP) | $212.5 million | $202.99 million | $219.9 million | (3%) |
| Diluted EPS (GAAP) | $0.34 | $0.41 | (17%) | |
| Adjusted EBITDA Margin | 18.6% | 20.1% | (1.5) pp | |
| Non-GAAP Adjusted Operating Margin | 15.0% | 16.4% | (1.4) pp |
Source: Analyst estimates provided by FactSet. Management expectations based on management's guidance, as provided in Q1 2025 earnings report.
Business Overview and Success Factors
Helios Technologies (HLIO 25.86%) designs and manufactures hydraulic and electronic solutions for industrial, mobile, and recreational markets worldwide. Its offerings include hydraulic cartridge valves, quick release couplings, motion control solutions, and electronic controls and displays. The company operates through two primary segments: Hydraulics and Electronics.
Key to its business success are several strategic pillars. These include a disciplined acquisition strategy, continued product innovation with a focus on automation and digital solutions, strong global market presence, and diversification into new end markets such as defense and food service. Operational excellence—reflected in a focus on cash flow, margins, and balance sheet health—also stands out as a corporate priority. Over the past year, management has emphasized a more proactive go-to-market approach, organizational streamlining, and targeting growth opportunities created by shifting global trade dynamics.
Quarterly Financial and Operational Highlights
The second quarter yielded tangible results from this strategic approach, although not without ongoing headwinds. Revenue (GAAP) beat expectations, rising $9.5 million above consensus, but still fell 3% year-over-year. Sequentially, GAAP net sales showed a notable 9% increase from Q1 2025.
The Hydraulics segment, which supplies components like cartridge valves and quick couplings, saw GAAP net sales of $140.9 million. Regional performance was mixed: EMEA climbed 8% while the Americas declined 9% and APAC slipped 6%. Gross profit in Hydraulics increased 4% year over year as lower material and labor costs offset the burden from lower volume and tariffs. Operating margin (GAAP) improved by 130 basis points, boosted by these efficiency gains even as sales volume shrank. EMEA stood out as the only region in Hydraulics to show sales expansion.
The Electronics segment, composed of product families like Enovation Controls' industrial displays and Balboa's spa and pool controls, posted GAAP revenues of $71.6 million—down 4% from the prior year. Strong growth in APAC (up 27%) was not enough to counter declines in the Americas and EMEA. Margin pressure stemmed largely from a $2.4 million one-time import classification expense, alongside higher material and freight costs. Electronics gross margin (GAAP) fell from 34.6% in Q2 2024 to 29.3%. and operating margin dropped 570 basis points to 8.2%.
Company-wide, consolidated gross margin (GAAP) was 31.8%, a drop of 30 basis points from the previous year. Operating margin (GAAP) slipped by 150 basis points, and adjusted EBITDA margin decreased to 18.6%. Despite these declines, Sequential margin improvement was achieved compared to Q1 2025, reflecting stronger cost control and better sales leverage. Net income fell 16% year over year on a GAAP basis. Cash from operations was a bright spot, at $37.0 million—its highest since late 2019 and the second-best in company history. Debt declined by $67 million compared with the prior year period, illustrating steady balance sheet strengthening.
There were a few notable tactical actions this quarter. The company agreed to divest its Custom Fluidpower business for approximately $83 million AUD, a move that fits with management’s post-listening tour focus on streamlining and targeting core brands. There were also ongoing product advances and launches, such as the introduction of Sun Hydraulics’ electro-proportional valves and Enovation Controls’ S35 display.
Dividends continued to be paid, marking the 114th consecutive quarter, at a rate of $0.09 per share. Helios also repurchased 200,000 shares at an average price of $32.29.
Management Outlook and Key Watchpoints
Management upgraded full-year FY2025 guidance, raising the sales outlook to $810–830 million, adjusted EBITDA margin to 18.5–19.5%, and Non-GAAP EPS to $2.30–$2.50. Q3 2025 expectations call for net sales between $208 million and $215 million, an adjusted EBITDA margin of 19.5–20.5%, and Non-GAAP EPS between $0.60–$0.68.
Risks remain significant. Management highlighted an anticipated $15 million tariff hit during the second half of 2025, emphasizing its plan for "dollar-for-dollar" abatement through pricing, production shifts, and alternative sourcing. However, the potential for margin pressure remains if these impacts are not fully offset. Margin risks are particularly acute in Electronics, where declining volume and rising input costs have eroded profitability. If market volumes do not recover, management noted that further restructuring might be on the table beyond margin improvement efforts.
Investors should watch the company's execution on global tariff mitigation, segment margin stabilization, and progress on new product launches. The Hydraulics segment’s organic net sales growth in constant currency was -4%. Electronics margin trends, effectiveness of recent price actions, and further cash flow generation are also crucial. The recently announced Custom Fluidpower divestiture and continued operational streamlining should support further deleveraging ambitions in the near term.
HLIO pays a quarterly dividend of $0.09 per share, which has been maintained for 114 consecutive quarters.
Revenue and net income presented using U.S. generally accepted accounting principles (GAAP) unless otherwise noted.
