Hillman Solutions (HLMN 0.40%), a specialty hardware and fastener provider known for its in-store service and self-service kiosks, released its second quarter 2025 results on August 5, 2025. GAAP revenue for Q2 FY2025 was $402.8 million, surpassing analyst expectations of $389.8 million. Adjusted earnings per share (non-GAAP) was $0.17 in Q2 FY2025, ahead of the $0.14 estimate. These results highlight Hillman’s continued ability to grow sales and earnings, as shown by a 6.2% increase in GAAP net sales and a rise in non-GAAP adjusted diluted EPS to $0.17 per share from $0.16 per share in the prior year quarter, despite ongoing macroeconomic and tariff-related pressures. Overall, the quarter showed operational progress, strong customer relationships, but also signs of pressure on free cash flow and customer concentration risk.
| Metric | Q2 2025 | Q2 2025 Estimate | Q2 2024 | Y/Y Change |
|---|---|---|---|---|
| Adjusted EPS (Non-GAAP) | $0.17 | $0.14 | $0.16 | 6.3% |
| Revenue | $402.8 million | $389.8 million | $379.4 million | 6.2% |
| Adjusted EBITDA (Non-GAAP) | $75.2 million | $68.4 million | 9.9% | |
| Free Cash Flow (Non-GAAP) | $31.2 million | $42.5 million | (26.6%) | |
| Net Income | $15.8 million | $12.5 million | N/A |
Source: Analyst estimates provided by FactSet. Management expectations based on management's guidance, as provided in Q1 2025 earnings report.
Business Overview and Strategy
Hillman Solutions supplies hardware, fasteners, and key cutting systems to retailers across North America. Its customers include major home improvement chains, with the largest share of sales coming from Home Depot and Lowe’s. The company focuses on value-added services and in-store support, aiming to make category management easier for its retail partners.
The company’s recent strategy has centered on deepening customer relationships, managing a broad and diverse product mix, and investing in robotics and digital solutions. Its offering includes everything from basic fasteners to software-enabled self-service kiosks (such as MinuteKey key copying machines). Key success factors include reliable supply chain management, innovative service solutions, and maintaining strong ties with top customers.
Quarterly Highlights and Performance Drivers
During Q2 FY2025, Hillman Solutions achieved higher-than-expected GAAP revenue and non-GAAP earnings. GAAP revenue rose 6.2% compared to the prior year. This product line focuses on safety gear and related hardware offered primarily to retail customers buying for home improvement projects.
Adjusted EBITDA, which is earnings before interest, taxes, depreciation, and amortization with select items excluded, climbed 10.1% year over year. This improvement suggests the company is leveraging increased sales into higher operating profitability despite extra costs linked to tariffs, as reflected in higher net sales and Adjusted EBITDA (non-GAAP). Net income, which is the company’s reported profit after all expenses (GAAP), rose to $15.8 million compared to $12.5 million in the prior year quarter.
Free cash flow—a non-GAAP measure of the cash a company generates after accounting for capital investments—fell by 26.6% to $31.2 million compared to $42.5 million in the prior year quarter. Management noted that these changes reduced net cash from operating activities in Q1 FY2025, and that guidance for free cash flow has now been withdrawn due to uncertainties in the timing and magnitude of tariff impacts.
Product innovation remains a focus. The Robotics and Digital Solutions group, which covers self-service key duplication kiosks and digital hardware, is “back to growth,” according to management in Q1 FY2025, with ongoing deployments of the MinuteKey 3.5 machine in stores.
Hillman Solutions’ supply chain team continues to address risks linked to tariffs on imported products, aiming to limit exposure by shifting sourcing away from China. As of this report, Hillman aims to reduce reliance on Chinese suppliers to about 20% by year-end. The company is also broadening its vendor pool with more purchases coming from other parts of Asia and North America. These actions are intended to maintain service levels for major retail customers and mitigate the effects of tariffs.
A notable event in the quarter was the announcement of a new $100 million share repurchase program. No segments reported material pre-buying or pull-forwards, with performance mainly driven by planned promotions and improved product mix in Protective Solutions. There were no dividend declarations or changes in payout policy during the quarter.
Looking Ahead: Guidance and Key Watch Points
Management updated its financial guidance for fiscal 2025. The low end of revenue and adjusted EBITDA targets has been raised, with net sales now projected between $1.535 billion and $1.575 billion, and adjusted EBITDA (non-GAAP) expected between $265 million and $275 million. The year-end leverage target, a measure of net debt to trailing twelve-month Adjusted EBITDA, was also lowered to 2.4 times from the previous 2.5 times forecast. These changes reflect confidence in operational execution and a better view of tariff-related impacts after the first half of the year.
Management did not provide explicit guidance for free cash flow, citing high variability from tariffs and working capital flows. Investors following Hillman Solutions may want to closely monitor further updates on major customer relationships, progress in diversifying the supply chain, and adoption of new robotics and digital solutions products. The company remains exposed to risks from high customer concentration and changing market demand, but the updated full-year outlook suggests management expects continued improvement in sales and margins if underlying conditions remain stable.
Revenue and net income presented using U.S. generally accepted accounting principles (GAAP) unless otherwise noted.
