HAYW — Hayward Holdings, Inc.

Hayward Holdings Q4 2025 Earnings Call Summary

1. Key Financial Results and Metrics:

• Q4 2025 Performance:

  • Net sales increased by 7% to $349 million.
  • Gross margin expanded to 48.5%, up 160 basis points year-over-year.
  • Adjusted EBITDA rose 4% to $103 million, with an adjusted EBITDA margin of 29.4%.
  • Adjusted diluted EPS increased by 7% to $0.29.

• Full Year 2025 Performance:

  • Net sales reached $1.122 billion, a 7% increase.
  • Gross margin achieved a record 48%, with adjusted EBITDA growing 8% to $299 million.
  • Adjusted diluted EPS rose 15% to $0.77.
  • Free cash flow increased by 20%, reducing net leverage to 1.9x.

2. Strategic Updates and Business Highlights:

• Hayward celebrated its 100th anniversary in 2025, marking a significant milestone.
• The company’s aftermarket-driven model, which accounts for 85% of sales, proved resilient despite a challenging macroeconomic environment.
• Key strategic initiatives included investments in innovation, operational excellence, and customer experience, with a focus on launching new products like the OmniX automation ecosystem.
• The company successfully mitigated tariff impacts and reduced dependency on China from 10% to approximately 3% of U.S. cost of sales.
• Expansion of Hayward hubs and increased training for dealers were highlighted as part of enhancing customer experience.

3. Forward Guidance and Outlook:

• For 2026, Hayward expects:
  • Net sales growth of approximately 4%.
  • Adjusted diluted EPS guidance of $0.82 to $0.86.
  • Free cash flow projected around $200 million, exceeding 100% of net income.
  • Increased capital expenditures of approximately $40 million to upgrade operational capabilities.

4. Bad News, Challenges, or Points of Concern:

• The company acknowledged that new pool construction remains at post-Great Financial Crisis lows, with no expected recovery in 2026.
• There were increased variable compensation costs and one-time legal expenses impacting adjusted EBITDA margins in Q4.
• The macroeconomic environment poses ongoing challenges, particularly in the Northeast due to severe winter weather, which may affect equipment replacement demand.

5. Notable Q&A Insights:

• Management noted strong early buy demand and a larger order file carried into Q1 2026, indicating cautious optimism despite weather challenges.
• The company plans to continue investing in R&D and customer experience, with expectations that these investments will lead to operational leverage in 2026.
• Discussions with dealers revealed cautious optimism for 2026, but no significant changes in inventory levels were expected.
• The company is exploring growth opportunities in its industrial flow control business, which could expand its market presence beyond pools.

Overall, Hayward demonstrated solid financial performance in 2025, with strategic initiatives aimed at long-term growth, despite facing challenges in the broader economic landscape.