✈️ What the company does (HEICO 10-K Analysis)
HEICO Corporation is a U.S.-based aerospace and electronics company that makes specialized, mission-critical components used in aircraft, defense systems, space equipment, and demanding industrial applications. A major part of its model is the aerospace aftermarket—selling replacement parts and repair solutions after an aircraft is already in service, which can create recurring demand over long equipment lifecycles.
- Flight Support Group (FSG): aftermarket parts, repairs, and services that keep aircraft operating safely
- Electronic Technologies Group (ETG): high-reliability electronics used in defense, space, medical, and industrial systems
📊 Financial Highlights
In FY2025, HEICO delivered strong growth and improved profitability. Revenue rose to $4,485.0m (from $3,857.7m in FY2024), while operating income increased to $1,019.0m (from $824.5m). Net income attributable to HEICO increased to $690.4m (from $514.1m), and diluted EPS rose to $4.9 (from $3.7).
- Revenue: $4,485.0m (FY2025) vs. $3,857.7m (FY2024)
- Operating income: $1,019.0m vs. $824.5m
- Net income (attributable to HEICO): $690.4m vs. $514.1m
- Diluted EPS: $4.9 vs. $3.7
Plain English: The company sold more, earned more operating profit, and those gains flowed through to higher earnings per share.
⚠️ Key Risks
Based on the FY2025 Form 10-K, the most important risks are tied to HEICO’s regulated, specialized end markets and its acquisition-driven growth strategy.
- Aerospace aftermarket exposure: if aircraft utilization or maintenance patterns shift, demand for certain parts can change
- Regulatory and certification requirements: approvals (e.g., FAA-related) can take time and may delay product launches
- Customer concentration in specialized markets: some product lines rely on a limited number of customers or programs
- Acquisition and integration risk: acquired businesses may not perform as expected, and integration can affect efficiency
- Supply chain dependency: specialized components and limited suppliers can create disruption or cost pressure
Plain English: HEICO benefits from high barriers to entry, but those same barriers (rules, certifications, specialized customers) can also create delays or concentration risk.
🧭 MD&A Highlights
Management emphasized that FY2025 performance reflected strong demand across both segments, improved operating leverage, and continued execution of its acquisition strategy.
- Growth drivers: higher volume, resilient end-market demand, and contributions from acquisitions
- Margin improvement: operating margin expanded as sales grew and costs were managed
- Capital allocation: strong operating cash flow supported acquisitions and debt management
Plain English: Management’s message was consistent: grow through core demand plus acquisitions, keep costs disciplined, and fund growth with strong cash generation.
✅ Takeaway
HEICO’s FY2025 results show a business built around recurring demand in aerospace and high-reliability electronics, with profitability improving alongside growth. The company’s strategy centers on niche products, regulatory expertise, and steady acquisitions—while key risks remain concentrated in certification timelines, specialized customers, and acquisition execution.
Income Statement Summary 💵
| (in $m, EPS in $) | FY 2023 | FY 2024 | FY 2025 |
|---|---|---|---|
| Revenue (Sales) | 2,968.1 | 3,857.7 | 4,485.0 |
| Cost of Goods Sold (Cost of Sales) | 1,814.6 | 2,355.9 | 2,698.6 |
| Gross Profit | 1,153.5 | 1,501.7 | 1,786.5 |
| SG&A | 528.1 | 677.3 | 767.5 |
| Operating Income | 625.3 | 824.5 | 1,019.0 |
| Non-Operating Income/Expense | 2.9 | 2.4 | 4.4 |
| Interest Income/Expense | -73.0 | -149.3 | -129.9 |
| Income Before Tax | 555.3 | 677.6 | 893.6 |
| Income Tax | 110.9 | 118.5 | 148.0 |
| Net Income | 403.6 | 514.1 | 690.4 |
| EPS | 2.9 | 3.7 | 4.9 |
Plain English: HEICO’s sales and profits grew strongly across FY2023–FY2025. Revenue reached 4,485.0 ($m) in FY2025, and Operating Income climbed to 1,019.0 ($m). Even after interest expense, Income Before Tax increased to 893.6 ($m), and EPS rose to 4.9, showing that growth translated into higher earnings per share.
Key Financial Ratios 🧮
| Ratio | FY 2023 | FY 2024 | FY 2025 |
|---|---|---|---|
| ROE (%) | 14.0 | 15.2 | 17.4 |
| ROA (%) | 7.1 | 7.0 | 8.6 |
| ROTC (%) | 11.0 | 13.9 | 15.6 |
| ROIC (%) | 9.1 | 11.8 | 13.4 |
| Gross Margin (%) | 38.9 | 38.9 | 39.8 |
| Operating Margin (%) | 21.1 | 21.4 | 22.7 |
| Pretax Margin (%) | 18.7 | 17.6 | 19.9 |
| Net Margin (%) | 13.6 | 13.3 | 15.4 |
| Debt-to-Equity Ratio (D/E) (%) | 77.6 | 60.3 | 49.5 |
| Net Debt / EBITDA (x) | 3.1 | 2.1 | 1.6 |
| Interest Coverage Ratio (x) | 8.6 | 5.5 | 7.8 |
| Current Ratio (%) | 278.9 | 310.7 | 283.2 |
| Quick Ratio (%) | 119.0 | 122.4 | 117.1 |
| Fixed Asset to Long-term Capital Ratio (%) | 5.7 | 5.7 | 6.6 |
Plain English: Profitability improved in FY2025: Operating Margin rose to 22.7% and Net Margin to 15.4%. Returns also strengthened (ROE 17.4%, ROIC 13.4%). Leverage moved in a more conservative direction: D/E fell to 49.5% and Net Debt/EBITDA declined to 1.6x, meaning debt became more manageable relative to earnings power.
📝 Disclaimer
This article is intended for educational purposes only. It does not constitute financial, investment, or legal advice. All investment decisions involve risks, and readers should conduct their own research or consult with a licensed financial advisor.
👉 HEICO Corporation (HEI) FY 2025 10-K Analysis (Filed 2025) | Explained for Beginners