Heico Corp.

Record results across the board (YoY growth): - Q2 FY’26 net sales +25%, operating income +41%, net income +49% vs Q2 FY’25. - Net income: $233.8M (up from $156.8M), $1.66 diluted EPS (up from $1.12). - Cash generation strong: operating cash flow +43% to $292M (from $204.7M). - Consolidated EBITDA +37% to $408.3M. - Net debt/EBITDA: 1.74x as of Apr 30, 2026 (up from 1.6x at Oct 31, 2025)—increase attributed to completed acquisitions during FY’26.

Segment performance highlights + margin drivers (good/surprising mechanics): - Flight Support Group (FSG): net sales $929.4M (+21%), operating income $243.1M (+31%), operating margin 26.2% vs 24.1%. - Margin improvement drivers: SG&A efficiency + improved gross margin and pull-forward of some defense sales requested by a customer. - Management notes acquisition amortization is meaningful: FSG had ~240 bps of acquisition intangible amortization impacting operating margin. - Cash margin before amortization (“EBITA”) ~28.6%, +160 bps vs Q2 FY’25—framed as “consistently excellent.” - Electronic Technologies Group (ETG): net sales $445.5M (+34%) (strong), operating income $121.8M (+56%), operating margin 26.5% vs 22.8%. - Important nuance (surprising but investor-relevant): ETG operating margin is “very sensitive” to mix/shipping volume, and intangible amortization heavily affects GAAP margins. - ~410 bps of intangible amortization in the quarter; management cites “cash” operating margin ~30.6% (ETG cash margin ~26.7% in Q2 FY’25). - Guidance stance for ETG GAAP operating margin FY’26: 22%–24% overall (expect some lumpy/volatile quarters).

Forward outlook (explicit expectations, not just optimism): - For remainder of FY’26, company expects increased sales in both FSG and ETG, supported by: - underlying demand trends, and - contributions from recent acquisitions. - Management reiterated that defense and space order/backlog trends remain strong with a multiyear tail expectation tied to defense replenishment and higher allied spending. - For ETG specifically, they are cautiously optimistic: watch for lumpiness, but they emphasized a six-month view (Q1 weaker, Q2 very strong) rather than overreacting to a single quarter.