Motion control and electronic systems manufacturer Helios Technologies (NYSE: HLIO) reported Q3 2026 results beating Wall Street’s revenue expectations, with revenue up 4.3% year on year to $229.7 million. On the other hand, next quarter’s revenue guidance of $208.5 million was less impressive, coming in 1.5% below analysts’ consensus estimates. Its non-GAAP profit of $0.80 per share was 5.9% above analysts’ consensus estimates.

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“We delivered a record third quarter, with sales above the high end of our outlook and adjusted earnings exceeding expectations. Both Hydraulics and Electronics contributed to the performance, demonstrating the breadth of our growth and the effectiveness of our customer-focused commercial strategy. Our order book provides solid visibility as we enter the fourth quarter, while our teams continue to execute through persistent inflationary pressures and a dynamic supply environment. This consistent performance reflects the progress we have made strengthening the business and our ability to deliver profitable growth as comparisons become more demanding,” said Sean Bagan, President & Chief Executive Officer of Helios.

Revenue growth

Reviewing a company’s long-term revenue performance reveals insights into its quality. Any business can have short-term success, but a top-tier one grows for years. Helios’s revenue grew at a sluggish 2.3% annualized rate over the last five years, falling short of our standards.

Long-term growth matters most, but within industrials, a half-decade historical view may miss cycles, industry trends or a company capitalizing on catalysts such as a new contract win or a successful product line. Helios’s annualized revenue growth of 4.8% over the last two years is above its five-year trend, a positive sign.

This quarter, Helios reported modest year-on-year revenue growth of 4.3% but beat Wall Street’s consensus estimates by 5.7%. Company management is currently guiding for a 1% year-on-year decline in revenue next quarter.

Looking further ahead, sell-side analysts expect revenue to grow 2% over the next 12 months, according to S&P, a slight deceleration versus the last two years. This projection is underwhelming and indicates its products and services will face some demand challenges.

Operating margin

Helios has managed its cost base well over the last five years. It demonstrated solid profitability for an industrials business, producing an average operating margin of 11.4%.

Looking at the trend in its profitability, Helios’s operating margin decreased by 3.5 percentage points over the last five years. This raises questions about the company’s expense base because its revenue growth should have given it leverage on its fixed costs, resulting in better economies of scale and profitability.

This quarter, Helios generated an operating margin of 12.2%, up 11.6 percentage points year on year. The increase was solid, and its operating margin rose more than its gross margin, indicating greater efficiency with expenses such as marketing, R&D and administrative overhead.

Earnings per share

We track the long-term change in earnings per share, or EPS, for the same reason as long-term revenue growth. Compared to revenue, however, EPS highlights whether a company’s growth is profitable.

Helios’s EPS declined by 3.1% annually over the last five years while its revenue grew by 2.3%. This tells us the company became less profitable on a per-share basis as it expanded.

Diving into the nuances of Helios’s earnings can give us a better understanding of its performance. As we mentioned earlier, Helios’s operating margin expanded this quarter but declined by 3.5 percentage points over the last five years. Its share count also grew by 1.4%, meaning the company not only became less efficient with its operating expenses but also diluted its shareholders.

As with revenue, we analyze EPS over a shorter period to see if we are missing a change in the business.

For Helios, its two-year annual EPS growth of 24% was higher than its five-year trend. This acceleration made it one of the faster-growing industrials companies in recent history.

In Q3, Helios reported adjusted EPS of $0.80, up from $0.72 in the same quarter last year. This result beat analysts’ consensus estimates by 5.9%. Over the next 12 months, Wall Street expects Helios’s full-year EPS to grow 4.6% from $3.29 to $3.44, according to S&P.

Key takeaways from Helios’s Q3 results

Helios delivered a mixed quarter with some key positives: Revenue beat analysts’ consensus estimates by a wide margin, and EBITDA also topped Wall Street’s consensus. The outlook was less encouraging, with both next-quarter and full-year EPS guidance falling short of consensus estimates. Investors were likely hoping for more, and shares fell 2% to $58.95 immediately after the report.

When deciding whether to buy the stock, consider the bigger picture of valuation, business quality and the latest earnings. For more on Helios, read the full research report here (it’s free).