Helios Technologies began 2025 with a stronger-than-anticipated first quarter, as the company’s sales and non-GAAP profitability both surpassed Wall Street expectations, prompting a positive reaction from the market. Management attributed the results to early traction from more aggressive go-to-market initiatives and customer-focused product development, as well as operational improvements in working capital and cost control. CEO Sean Bagan noted, “Our more targeted sales focus is resulting in growing our sales funnels, and we are starting to get some new business wins across the finish line.” While ongoing end-market weakness dampened overall sales, progress was seen in health and wellness and recreational markets, and the electronics segment stabilized after prior declines.
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Helios (HLIO) Q1 CY2025 Highlights:
- Revenue: $195.5 million vs analyst estimates of $188.4 million (7.8% year-on-year decline, 3.8% beat)
- Adjusted EPS: $0.44 vs analyst estimates of $0.36 (21.5% beat)
- Adjusted EBITDA: $33.8 million vs analyst estimates of $30.99 million (17.3% margin, 9.1% beat)
- Revenue Guidance for Q2 CY2025 is $202 million at the midpoint, roughly in line with what analysts were expecting
- Adjusted EPS guidance for Q2 CY2025 is $0.50 at the midpoint, below analyst estimates of $0.55
- Operating Margin: 8.7%, in line with the same quarter last year
- Organic Revenue fell 6.7% year on year (-2.3% in the same quarter last year)
- Market Capitalization: $1.09 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 Helios’s Q1 Earnings Call
- Chris Moore (CJS Securities) asked how CEO Sean Bagan’s listening tour shaped tangible changes, to which Bagan cited a stronger focus on customer-centric go-to-market strategies, management team adjustments, and ongoing portfolio assessment, with an emphasis on proactive sales efforts.
- Chris Moore (CJS Securities) also pushed for clarity on transferring manufacturing to mitigate tariffs. Bagan stated that the process leverages existing capacity in China and should be completed over the next quarter, with minimal incremental investment required.
- Nathan Jones (Stifel) inquired about competitive advantages from tariffs, asking if Helios could gain market share as rivals face higher import costs. Bagan confirmed the company is pursuing these opportunities aggressively, especially in hydraulics and electronics, though the major impact is expected later in the year.
- Jeff Hammond (KeyBanc) sought specifics on covering tariff costs through pricing and other actions. Bagan said price increases are in effect across flagship brands and that additional mitigation, such as alternative sourcing and volume-driven margin leverage, is underway, aiming to offset most direct tariff impacts.
- Mircea Dobre (Baird) questioned whether Helios would need to restructure capacity in hydraulics due to multi-quarter volume declines. Bagan acknowledged that if anticipated growth does not materialize, further action on capacity may be necessary, but the current focus is on growth initiatives and operational flexibility.
Catalysts in Upcoming Quarters
In the coming quarters, the StockStory team will watch (1) the effectiveness of Helios’s tariff mitigation strategies and any associated margin impacts, (2) signs of sustained order growth—particularly in hydraulics and electronics as the company pursues proactive sales tactics, and (3) the success of new product launches and cross-selling efforts in driving revenue from diversified end markets. The pace of market stabilization and potential policy changes on tariffs will also be important indicators for tracking the company’s progress.
Helios currently trades at $33.67, up from $27.12 just before the earnings. In the wake of this quarter, is it a buy or sell? The answer lies in our full research report (it’s free).
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