Core Insights - Rising air passenger traffic and an expanding global fleet are driving demand for aerospace service stocks like Astronics Corporation (ATRO) and HEICO Corporation (HEI) [1][2] - Increased defense budgets due to geopolitical tensions are boosting demand for advanced avionics and electronics supplied by these companies [1] Company Overview - Astronics specializes in advanced technologies in electrical power, lighting, connectivity, and cabin electronics for both commercial and military clients [3] - HEICO is one of the largest independent aerospace parts manufacturers globally, supplying jet engines and aircraft components [3] Financial Stability & Growth Drivers - Astronics ended June 2025 with cash and cash equivalents of $13 million and long-term debt of $159 million, indicating solid liquidity to meet capital expenditure targets of $40-$50 million in 2025 [5] - HEICO's cash and cash equivalents totaled $0.26 billion as of July 31, 2025, with long-term debt of $2.44 billion, providing flexibility for its acquisition strategy [6] - Both companies are experiencing sales growth due to rising global air passenger traffic, with Astronics reporting a 3.3% year-over-year increase in sales in Q2 2025 and HEICO's Flight Support Group achieving 18% sales growth in Q3 2025 [7] - Military sales for Astronics rose 11% year-over-year in Q2 2025, while HEICO's Electronic Technologies Group saw a 7% organic sales increase in Q3 2025 [8] Stock Performance & Valuation - Astronics outperformed HEICO with a stock increase of 111.9% over the past year compared to HEICO's 20.5% [10] - ATRO trades at a lower forward P/E of 21.55X versus HEI's 61.87X, indicating a more attractive valuation [10][18] - Astronics has a lower long-term debt-to-capital ratio of 36.97 compared to HEICO's 40.62, suggesting less leverage [19] - Return on Equity (ROE) for Astronics is 22.89%, higher than HEICO's 16.29%, indicating better efficiency in generating profits [21] Conclusion - The aerospace services industry is expected to benefit from rising global air traffic, fleet expansion, and increased defense spending [22] - Astronics presents a more compelling investment option due to its attractive valuation metrics, better ROE, and lower leverage compared to HEICO [22]

Core Insights - Artificial intelligence (AI) is identified as the greatest investment opportunity of the current era, with a strong emphasis on the urgent need for energy to support its growth [1][2][3] - The demand for energy from AI technologies is expected to surge, leading to a potential crisis in power supply and rising electricity prices [2][3][7] - A specific company is highlighted as a key player in the energy sector, poised to benefit from the increasing energy demands of AI data centers [3][6][8] Energy Demand and Infrastructure - AI technologies, particularly large language models like ChatGPT, consume energy equivalent to that of a small city, raising concerns about the sustainability of current power grids [2][3] - The company in focus owns critical nuclear energy infrastructure assets, positioning it strategically within the U.S. energy landscape [7][8] - The company is capable of executing large-scale engineering, procurement, and construction projects across various energy sectors, including oil, gas, and renewables [7][8] Financial Position and Market Potential - The company is noted for being debt-free and holding a significant cash reserve, which is nearly one-third of its market capitalization [8][10] - It has an equity stake in another AI-related company, providing investors with indirect exposure to multiple growth opportunities in the AI sector [9][10] - The stock is described as undervalued, trading at less than seven times earnings, which presents a compelling investment opportunity [10][11] Market Trends and Future Outlook - The ongoing trends of onshoring and increased U.S. LNG exports are expected to drive demand for the company's services, particularly under the current political climate [5][14] - The influx of talent into the AI sector is anticipated to lead to rapid advancements and innovative ideas, further solidifying AI's role as a disruptive force in traditional industries [12][13] - The overall sentiment is that investing in AI and its supporting infrastructure is essential for capitalizing on future growth opportunities [11][15]

Core Viewpoint - Goldman Sachs held an investor meeting with HEI, highlighting that factors such as the aerospace aftermarket, market share growth, profit margins, and mergers and acquisitions will drive the company's stock price. Goldman maintains a "Buy" rating with a 12-month target price of $382, representing approximately a 19% upside from the recent closing price of $321.74 [1] Group 1: Capital Deployment - HEI is actively assessing merger and acquisition opportunities, focusing on core commercial aviation and defense businesses, with a net debt/EBITDA ratio of approximately 2.0x, providing ample capacity for acquisitions [2] Group 2: Aerospace Aftermarket - HEI has not observed a slowdown in the commercial aftermarket due to fleet aging, limited new aircraft supply, and sustained flight demand. The company anticipates that aftermarket growth will gradually normalize to about 2x GDP/ASK in the long term, rather than the current 14-15% level [3] Group 3: PMA (Parts Manufacturer Approval) - HEI sells PMA parts at a discount equivalent to 70% of OEM parts pricing, with potential discounts expanding to 50-60% as OEM prices rise. The PMA business is mature in commercial aviation but still in early stages in defense, with opportunities comparable to adding 1-2 large airline customers [4] Group 4: Wencor Integration - HEI continues to realize synergies from the acquisition of Wencor, finding that maintaining Wencor's relative independence allows for significant cross-selling and MRO synergies. This integration is driving higher FSG profit margins due to increased sales of PMA parts [5] Group 5: Profit Margins by Division - HEI reaffirms that FSG's EBIT margin is expected to be around 24% in the medium term, with potential for further upside. Recent margin improvements are attributed to higher defense business volume and PMA-friendly operations. In ETG, margins remain below pre-pandemic levels but are expected to expand in the future [6][7]

Company Overview - HEICO Corporation is a leading manufacturer of FAA-approved jet engine and aircraft component replacement parts, as well as electronic equipment for various industries including aviation, defense, and telecommunications [11] - The company targets large commercial aircraft, military aircraft, and industrial turbines, among other applications [11] Investment Ratings - HEICO is currently rated as 3 (Hold) on the Zacks Rank, with a VGM Score of B [12] - The company has a Momentum Style Score of A, indicating strong upward price trends, with shares increasing by 3.2% over the past four weeks [12] Earnings Estimates - For fiscal 2025, seven analysts have revised their earnings estimates upwards in the last 60 days, with the Zacks Consensus Estimate increasing by $0.13 to $4.70 per share [12] - HEICO has demonstrated an average earnings surprise of +13.4%, suggesting strong performance relative to expectations [12] Investment Potential - With a solid Zacks Rank and top-tier Momentum and VGM Style Scores, HEICO is recommended for investors looking for potential opportunities [13]

Industry Overview - The aerospace defense industry is experiencing growth despite supply-chain challenges, driven by increased defense budgets from the U.S. and geopolitical uncertainties in regions like the Middle East, Europe, and South and South-East Asia, which are expected to enhance prospects in Q4 2025 [1][9]. U.S. Defense Budget - A White House report indicated a proposed 13% increase in U.S. defense spending to $1.01 trillion for fiscal year 2026, which is anticipated to benefit defense-focused companies by enabling them to secure more contracts and expand production [2]. Investment Opportunities - It is advisable to invest in aerospace defense stocks with favorable Zacks Ranks for the remainder of 2025. Five recommended stocks include GE Aerospace, Howmet Aerospace Inc., HEICO Corp., Astronics Corp., and AerSale Corp. [3][4]. Stock Performance - The selected stocks have yielded over 35% returns year-to-date, with potential for further growth as indicated by their favorable Zacks Ranks [4][9]. Company Insights GE Aerospace - GE Aerospace, with a Zacks Rank of 1, is benefiting from strong demand for commercial engines and defense budgets, expecting organic revenue growth in the low-double-digit range for 2025 [7][8][10]. Howmet Aerospace Inc. - Howmet Aerospace, ranked 2, is experiencing momentum in the commercial aerospace market and defense sectors, with expected revenue and earnings growth rates of 9.4% and 32.4%, respectively, for the current year [11][12]. HEICO Corp. - HEICO, also ranked 2, is seeing increased orders for aftermarket parts and services, with expected revenue and earnings growth rates of 13.8% and 27.5%, respectively, for the current year [13][14]. Astronics Corp. - Astronics, holding a Zacks Rank of 1, focuses on specialized lighting and electronics for various aircraft, with expected revenue and earnings growth rates of 7% and 46.8%, respectively, for the current year [15][16]. AerSale Corp. - AerSale, ranked 1, provides diversified aviation aftermarket products and services, with expected revenue and earnings growth rates of 3.2% and 94.4%, respectively, for the current year [17][18].

Company Overview - HEICO Corporation is a leading manufacturer of FAA-approved jet engine and aircraft component replacement parts, as well as electronic equipment for various industries including aviation, defense, and telecommunications [11] - The company targets a wide range of applications, including large commercial aircraft, military aircraft, industrial turbines, and electro-optical devices [11] Investment Potential - HEICO is currently rated 3 (Hold) on the Zacks Rank, with a VGM Score of B, indicating a solid investment potential [12] - The company is particularly appealing to growth investors, with a Growth Style Score of B and a forecasted year-over-year earnings growth of 27.5% for the current fiscal year [12] - Recent upward revisions in earnings estimates by seven analysts over the last 60 days have increased the Zacks Consensus Estimate by $0.11 to $4.68 per share [12] - HEICO has demonstrated an average earnings surprise of +13.4%, further enhancing its attractiveness to investors [12] Summary of Zacks Style Scores - The Zacks Style Scores categorize stocks based on value, growth, and momentum characteristics, providing a comprehensive assessment for investors [2][3][4][5][6] - The VGM Score combines all three styles, helping to identify stocks with the best value, growth forecast, and momentum [6] - Stocks with a Zacks Rank of 1 or 2 and Style Scores of A or B are considered to have the highest probability of success [9]

Core Viewpoint - Growth investors seek stocks with above-average financial growth, but identifying such stocks can be challenging due to associated risks and volatility [1] Group 1: Company Overview - Heico Corporation (HEI) is highlighted as a recommended growth stock with a favorable Growth Score and a top Zacks Rank [2] - The company has a historical EPS growth rate of 19%, with projected EPS growth of 25.8% this year, surpassing the industry average of 19.4% [4] Group 2: Financial Metrics - Heico's year-over-year cash flow growth is 24.2%, exceeding the industry average of 20.3% [5] - The company's annualized cash flow growth rate over the past 3-5 years is 11.5%, compared to the industry average of 6.1% [6] Group 3: Earnings Estimates - Current-year earnings estimates for Heico have been revised upward, with the Zacks Consensus Estimate increasing by 1% over the past month [8] - The combination of earnings estimate revisions and a Growth Score of B positions Heico well for potential outperformance [10]

Core Viewpoint - HEICO Corporation (HEI) benefits from its aircraft aftermarket services and strategic acquisitions, contributing to its steady growth and making it a solid investment option in the Zacks Aerospace Defense Equipment industry [1] Growth Projection & Surprise History - The Zacks Consensus Estimate for HEI's fiscal 2025 earnings per share (EPS) has increased by 1.1% to $4.62 per share over the past 30 days [2] - The Zacks Consensus Estimate for fiscal 2025 revenues is projected at $4.38 billion, indicating a rise of 13.5% [2] - The company's long-term earnings growth rate is 17.6%, and it has consistently surpassed expectations with an average earnings surprise of 13.35% over the last four quarters [2] Return on Equity - HEICO's return on equity (ROE) stands at 16.29%, significantly higher than the industry's average of 8.56%, indicating more efficient utilization of shareholders' funds [3] Debt Profile - HEICO's total debt to capital ratio is 36.75%, better than the industry's average of 49.24% [4] - The times interest earned ratio at the end of the third quarter of fiscal 2025 was 7.3, reflecting the company's strong ability to meet future interest obligations [4] Liquidity Position - HEICO's current ratio at the end of the third quarter of fiscal 2025 was 3.35, well above the industry's average of 1.80, indicating strong short-term liquidity [5][8] Expansion Through Acquisitions - In July 2025, HEICO completed the acquisition of Gables Engineering, enhancing its presence in the aerospace OEM manufacturing and aftermarket services market [6] - In April 2025, HEICO acquired Rosen Aviation, which is expected to enhance its product offerings in in-flight entertainment products [7] - These acquisitions are projected to expand and diversify HEICO's product portfolio and enhance its customer base, supporting revenue and cash flow growth [9] Stock Performance - Over the past year, HEI shares have increased by 25.1%, outperforming the sector's growth of 19.7% [10]

[General Information](index=1&type=section&id=General%20Information) Provides an overview of HEICO Corporation's Form 10-Q filing, registration, stock information, and shares outstanding [Company and Filing Details](index=1&type=section&id=Company%20and%20Filing%20Details) HEICO Corporation's Form 10-Q filing details its registration, stock information, and shares outstanding - HEICO Corporation filed a Quarterly Report on Form 10-Q for the period ended July 31, 2025[1](index=1&type=chunk) - The company's Common Stock (HEI) and Class A Common Stock (HEI.A) are registered on the New York Stock Exchange[3](index=3&type=chunk) - HEICO Corporation is classified as a **large accelerated filer**[4](index=4&type=chunk) Shares Outstanding as of August 25, 2025 | Class of Stock | Shares Outstanding | | :--------------- | :----------------- | | Common Stock | 55,053,674 shares | | Class A Common Stock | 84,152,807 shares | [Part I. Financial Information](index=3&type=section&id=Part%20I.%20Financial%20Information) Presents HEICO's unaudited condensed consolidated financial statements, including balance sheets, statements of operations, and detailed notes [Item 1. Financial Statements](index=3&type=section&id=Item%201.%20Financial%20Statements) This section presents HEICO's unaudited condensed consolidated financial statements and detailed notes for the periods ended July 31, 2025, and October 31, 2024 [Condensed Consolidated Balance Sheets](index=3&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) Presents HEICO's condensed consolidated balance sheets as of July 31, 2025, and October 31, 2024 Condensed Consolidated Balance Sheets (in thousands) | Item | July 31, 2025 | October 31, 2024 | | :--------------------------------- | :------------ | :--------------- | | **ASSETS** | | | | Total current assets | $2,386,027 | $2,062,292 | | Property, plant and equipment, net | 437,635 | 339,034 | | Goodwill | 3,646,106 | 3,380,295 | | Intangible assets, net | 1,513,525 | 1,334,774 | | Total assets | **$8,531,623**| **$7,592,822** | | **LIABILITIES AND EQUITY** | | | | Total current liabilities | 711,316 | 663,851 | | Long-term debt, net | 2,443,898 | 2,225,267 | | Total liabilities | 3,881,583 | 3,529,260 | | Total shareholders' equity | 4,212,453 | 3,697,406 | | Total liabilities and equity | **$8,531,623**| **$7,592,822** | [Condensed Consolidated Statements of Operations](index=4&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) Presents HEICO's condensed consolidated statements of operations for the nine and three months ended July 31, 2025, and 2024 Condensed Consolidated Statements of Operations (in thousands, except per share data) | Item | Nine months ended July 31, 2025 | Nine months ended July 31, 2024 | Three months ended July 31, 2025 | Three months ended July 31, 2024 | | :----------------------------------- | :------------------------------ | :------------------------------ | :------------------------------- | :------------------------------- | | Net sales | $3,275,633 | $2,844,004 | $1,147,591 | $992,246 | | Operating income | 739,976 | 605,809 | 265,019 | 216,446 | | Net income attributable to HEICO | $502,089 | $374,421 | $177,341 | $136,577 | | Net income per share attributable to HEICO shareholders: | | | | | | Basic | $3.61 | $2.71 | $1.27 | $.99 | | Diluted | $3.57 | $2.67 | $1.26 | $.97 | [Condensed Consolidated Statements of Comprehensive Income](index=5&type=section&id=Condensed%20Consolidated%20Statements%20of%20Comprehensive%20Income) Presents HEICO's condensed consolidated statements of comprehensive income for the nine and three months ended July 31, 2025, and 2024 Condensed Consolidated Statements of Comprehensive Income (in thousands) | Item | Nine months ended July 31, 2025 | Nine months ended July 31, 2024 | Three months ended July 31, 2025 | Three months ended July 31, 2024 | | :----------------------------------- | :------------------------------ | :------------------------------ | :------------------------------- | :------------------------------- | | Net income from consolidated operations | $542,769 | $408,200 | $190,680 | $147,817 | | Total other comprehensive income | 27,167 | 11,611 | 888 | 6,967 | | Comprehensive income attributable to HEICO | $529,047 | $385,656 | $178,634 | $143,309 | [Condensed Consolidated Statements of Shareholders' Equity](index=6&type=section&id=Condensed%20Consolidated%20Statements%27%20Equity) Presents HEICO's condensed consolidated statements of shareholders' equity for the nine months ended July 31, 2025, and 2024 - Total HEICO shareholders' equity increased to **$4.14 billion** as of July 31, 2025, from $3.64 billion as of October 31, 2024[14](index=14&type=chunk) - Comprehensive income attributable to HEICO for the nine months ended July 31, 2025, was **$502.1 million**, contributing significantly to the equity increase[14](index=14&type=chunk) - Cash dividends of **$0.23 per share** were paid during the nine months ended July 31, 2025, totaling **$32.0 million**[14](index=14&type=chunk) [Condensed Consolidated Statements of Cash Flows](index=8&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) Presents HEICO's condensed consolidated statements of cash flows for the nine months ended July 31, 2025, and 2024 Condensed Consolidated Statements of Cash Flows (in thousands) | Cash Flow Activity | Nine months ended July 31, 2025 | Nine months ended July 31, 2024 | | :----------------------------------- | :------------------------------ | :------------------------------ | | Net cash provided by operating activities | $638,940 | $466,747 | | Net cash used in investing activities | (697,694) | (112,150) | | Net cash provided by (used in) financing activities | 155,249 | (324,047) | | Net increase in cash and cash equivalents | 99,785 | 31,892 | | Cash and cash equivalents at end of period | $261,888 | $202,940 | [Notes to Condensed Consolidated Financial Statements](index=9&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) Provides detailed notes to HEICO's condensed consolidated financial statements, covering accounting policies, acquisitions, and other disclosures [Note 1. Summary of Significant Accounting Policies](index=9&type=section&id=Note%201.%20Summary%20of%20Significant%20Accounting%20Policies) Outlines HEICO's significant accounting policies and the basis of financial statement preparation - The unaudited condensed consolidated financial statements are prepared in conformity with GAAP for interim financial information and Form 10-Q instructions, and should be read with the annual Form 10-K[18](index=18&type=chunk) - HEICO operates with two segments: the **Flight Support Group (FSG)** and the **Electronic Technologies Group (ETG)**[19](index=19&type=chunk) - New FASB ASUs (2023-07, 2023-09, 2024-03) on segment reporting, income taxes, and expense disaggregation are being evaluated for disclosure impact but are not expected to affect consolidated results, financial position, or cash flows[20](index=20&type=chunk)[22](index=22&type=chunk)[23](index=23&type=chunk) [Note 2. Acquisitions](index=10&type=section&id=Note%202.%20Acquisitions) Details HEICO's acquisitions completed in fiscal 2025, including consideration and asset allocation - In fiscal 2025, HEICO completed several acquisitions, including SVM Private Limited (70%), exclusive license/assets from Honeywell International for Boeing 777 AIMS and 737NG/P-8/E-7 VIA, Millennium International, LLC (90%), Rosen Aviation, LLC (100%), and Gables Engineering, Inc. (100%)[24](index=24&type=chunk)[25](index=25&type=chunk)[27](index=27&type=chunk)[28](index=28&type=chunk)[29](index=29&type=chunk) Aggregate Total Consideration for Fiscal 2025 Acquisitions (in thousands) | Item | Amount | | :-------------------------- | :------- | | Cash paid, net | $629,890 | | Issuance of common stock | 10,123 | | Contingent consideration | 11,509 | | Additional purchase consideration | (129) | | **Total consideration** | **$651,393** | Allocation of Aggregate Total Consideration for Fiscal 2025 Acquisitions (in thousands) | Assets Acquired | Amount | | :------------------------ | :------- | | Goodwill | $252,172 | | Customer relationships | 157,487 | | Property, plant and equipment | 91,530 | | Intellectual property | 90,125 | | Inventories | 81,353 | | Trade names | 29,946 | | Other assets | 31,516 | | Liabilities assumed | (54,786) | | Noncontrolling interests | (27,950) | | **Net assets acquired, excluding cash** | **$651,393** | [Note 3. Selected Financial Statement Information](index=13&type=section&id=Note%203.%20Selected%20Financial%20Statement%20Information) Provides selected financial statement information, including accounts receivable, inventories, and redeemable noncontrolling interests Selected Financial Statement Information (in thousands) | Item | July 31, 2025 | October 31, 2024 | | :----------------------------------- | :------------ | :--------------- | | Accounts receivable, net | $597,622 | $538,487 | | Inventories, net | $1,310,393 | $1,170,949 | | Property, plant and equipment, net | $437,635 | $339,034 | | Accrued customer rebates and credits | $29,400 | $24,300 | | R&D expenses (9 months) | $88,275 | $82,810 | | Redeemable noncontrolling interests | $437,587 | $366,156 | | Accumulated other comprehensive income (loss) | $882 | ($26,076) | - The company has various Put Rights with noncontrolling interest holders, which may require the company to purchase their equity interests through fiscal 2034[38](index=38&type=chunk) [Note 4. Goodwill and Other Intangible Assets](index=16&type=section&id=Note%204.%20Goodwill%20and%20Other%20Intangible%20Assets) Details changes in goodwill by segment and the net carrying amount of identifiable intangible assets Goodwill by Operating Segment (in thousands) | Segment | October 31, 2024 | Goodwill Acquired (FY25) | July 31, 2025 | | :------ | :--------------- | :----------------------- | :------------ | | FSG | $1,882,558 | $110,301 | $1,995,261 | | ETG | $1,497,737 | $141,871 | $1,650,845 | | **Consolidated Totals** | **$3,380,295** | **$252,172** | **$3,646,106**| Identifiable Intangible Assets (Net Carrying Amount, in thousands) | Asset Type | July 31, 2025 | October 31, 2024 | | :-------------------- | :------------ | :--------------- | | Customer relationships | $792,103 | $706,316 | | Intellectual property | 396,254 | 334,328 | | Trade names | 324,563 | 293,263 | | Other | 605 | 867 | | **Total Net Carrying Amount** | **$1,513,525**| **$1,334,774** | - Amortization expense for intangible assets was **$101.7 million** for the nine months ended July 31, 2025, up from $91.5 million in the prior year[50](index=50&type=chunk) [Note 5. Long-Term Debt](index=17&type=section&id=Note%205.%20Long-Term%20Debt) Provides details on HEICO's long-term debt, including revolving credit facilities and senior unsecured notes Long-Term Debt (in thousands) | Item | July 31, 2025 | October 31, 2024 | | :----------------------------------- | :------------ | :--------------- | | Borrowings under revolving credit facility | $1,235,000 | $1,015,000 | | 2028 senior unsecured notes | 600,000 | 600,000 | | 2033 senior unsecured notes | 600,000 | 600,000 | | Finance leases and notes payable | 23,034 | 26,133 | | Less: Debt discount and debt issuance costs | (10,411) | (11,759) | | Less: Current maturities of long-term debt | (3,725) | (4,107) | | **Total Long-Term Debt, net of current maturities** | **$2,443,898**| **$2,225,267** | - The weighted average interest rate on borrowings under the revolving credit facility decreased to **5.7%** as of July 31, 2025, from 6.3% as of October 31, 2024[52](index=52&type=chunk) Fair Value of Senior Unsecured Notes (in thousands) | Notes | Carrying Value (Jul 31, 2025) | Fair Value (Jul 31, 2025) | Carrying Value (Oct 31, 2024) | Fair Value (Oct 31, 2024) | | :---------- | :---------------------------- | :------------------------ | :---------------------------- | :------------------------ | | 2028 Notes | $596,137 | $612,502 | $595,267 | $609,376 | | 2033 Notes | 593,452 | 612,235 | 592,974 | 605,917 | | **Total** | **$1,189,589** | **$1,224,737** | **$1,188,241** | **$1,215,293** | [Note 6. Revenue](index=19&type=section&id=Note%206.%20Revenue) Details contract balances, remaining performance obligations, and net sales by operating segment Contract Balances (in thousands) | Item | July 31, 2025 | October 31, 2024 | Change | | :-------------------- | :------------ | :--------------- | :----- | | Contract assets, current | $132,963 | $112,235 | $20,728 | | Total contract liabilities | (173,497) | (145,746) | (27,751) | - Remaining performance obligations (backlog) totaled **$2.06 billion** as of July 31, 2025, with $625.5 million expected to be recognized in the remainder of fiscal 2025 and $1.44 billion thereafter[59](index=59&type=chunk) Net Sales by Operating Segment (in thousands) | Segment | 9 months ended July 31, 2025 | 9 months ended July 31, 2024 | 3 months ended July 31, 2025 | 3 months ended July 31, 2024 | | :-------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | | Flight Support Group | $2,282,905 | $1,947,574 | $802,661 | $681,626 | | Electronic Technologies Group | $1,028,345 | $927,393 | $355,863 | $322,129 | | **Total consolidated net sales** | **$3,275,633** | **$2,844,004** | **$1,147,591** | **$992,246** | [Note 7. Income Taxes](index=22&type=section&id=Note%207.%20Income%20Taxes) Discusses HEICO's effective tax rates and the impact of recent tax law changes - The effective tax rate for the first nine months of fiscal 2025 decreased to **16.0%** from 17.3% in the prior year, primarily due to a larger tax benefit from stock option exercises (**$27.2 million** in 2025 vs. $13.6 million in 2024)[62](index=62&type=chunk)[95](index=95&type=chunk) - The effective tax rate for the third quarter of fiscal 2025 increased to **18.9%** from 18.0% in the prior year, mainly due to the prior year's favorable impact from contingent consideration reversal and a larger R&D tax credit[63](index=63&type=chunk)[107](index=107&type=chunk) - The company is evaluating the impact of the recently enacted H.R. 1, 'One Big Beautiful Bill Act,' which introduces significant changes to U.S. tax law[64](index=64&type=chunk) [Note 8. Fair Value Measurements](index=23&type=section&id=Note%208.%20Fair%20Value%20Measurements) Details fair value measurements of liabilities, particularly contingent consideration, and valuation inputs Fair Value Measurements of Liabilities (in thousands) | Item | July 31, 2025 | October 31, 2024 | | :------------------------ | :------------ | :--------------- | | Contingent consideration (Level 3) | $42,252 | $30,207 | - The estimated fair values of contingent consideration arrangements are classified within **Level 3** and determined using a probability-based scenario analysis approach[70](index=70&type=chunk) - Unobservable inputs used for Level 3 contingent consideration liabilities include compound annual revenue growth rates (ranging from **-2% to 22%**) and discount rates (ranging from **7.2% to 7.8%**)[72](index=72&type=chunk) [Note 9. Net Income Per Share Attributable to HEICO Shareholders](index=26&type=section&id=Note%209.%20Net%20Income%20Per%20Share%20Attributable%20to%20HEICO%20Shareholders) Presents basic and diluted net income per share attributable to HEICO shareholders Net Income Per Share Attributable to HEICO Shareholders | Item | Nine months ended July 31, 2025 | Nine months ended July 31, 2024 | Three months ended July 31, 2025 | Three months ended July 31, 2024 | | :----------------------------------- | :------------------------------ | :------------------------------ | :------------------------------- | :------------------------------- | | Basic EPS | $3.61 | $2.71 | $1.27 | $.99 | | Diluted EPS | $3.57 | $2.67 | $1.26 | $.97 | [Note 10. Operating Segments](index=27&type=section&id=Note%2010.%20Operating%20Segments) Provides financial information by operating segment, including operating income and total assets Operating Income by Segment (in thousands) | Segment | 9 months ended July 31, 2025 | 9 months ended July 31, 2024 | 3 months ended July 31, 2025 | 3 months ended July 31, 2024 | | :-------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | | Flight Support Group | $549,422 | $438,561 | $198,326 | $153,594 | | Electronic Technologies Group | $235,334 | $206,379 | $80,998 | $75,788 | | **Consolidated Operating income** | **$739,976** | **$605,809** | **$265,019** | **$216,446** | Total Assets by Operating Segment (in thousands) | Segment | July 31, 2025 | October 31, 2024 | | :-------------------------- | :------------ | :--------------- | | Flight Support Group | $4,605,036 | $4,264,360 | | Electronic Technologies Group | $3,447,101 | $2,981,326 | | Other, Primarily Corporate | $479,486 | $347,136 | | **Consolidated Total assets** | **$8,531,623**| **$7,592,822** | [Note 11. Commitments and Contingencies](index=28&type=section&id=Note%2011.%20Commitments%20and%20Contingencies) Details HEICO's outstanding commitments, product warranty liabilities, and legal contingencies - As of July 31, 2025, the Company had **$6.7 million** in outstanding standby letters of credit and guarantees[77](index=77&type=chunk) - The product warranty liability increased to **$4.8 million** as of July 31, 2025, from $4.0 million at the beginning of the fiscal year[78](index=78&type=chunk) - Management believes that the outcome of current legal actions will not have a material adverse effect on the Company's financial position or results of operations[79](index=79&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=29&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management analyzes HEICO's financial performance, condition, liquidity, and outlook for the nine and three months ended July 31, 2025 [Overview](index=29&type=section&id=Overview) Provides an overview of HEICO's two operating segments and the impact of recent acquisitions on results - HEICO's business is comprised of two operating segments: the **Flight Support Group (FSG)** and the **Electronic Technologies Group (ETG)**[82](index=82&type=chunk) - Results of operations for the reported periods have been affected by fiscal 2024 and 2025 acquisitions[83](index=83&type=chunk) [Results of Operations](index=30&type=section&id=Results%20of%20Operations) Presents consolidated financial highlights for the nine and three months ended July 31, 2025, and 2024 Consolidated Financial Highlights (9 months ended July 31) | Metric | 2025 (in thousands) | 2024 (in thousands) | % of Net Sales (2025) | % of Net Sales (2024) | | :----------------------------------- | :------------------ | :------------------ | :-------------------- | :-------------------- | | Net sales | $3,275,633 | $2,844,004 | 100.0% | 100.0% | | Gross profit margin | 39.7% | 39.0% | | | | Selling, general and administrative expenses | 17.1% | 17.7% | | | | Operating income | $739,976 | $605,809 | 22.6% | 21.3% | | Net income attributable to HEICO % of net sales | 15.3% | 13.2% | | | Consolidated Financial Highlights (3 months ended July 31) | Metric | 2025 (in thousands) | 2024 (in thousands) | % of Net Sales (2025) | % of Net Sales (2024) | | :----------------------------------- | :------------------ | :------------------ | :-------------------- | :-------------------- | | Net sales | $1,147,591 | $992,246 | 100.0% | 100.0% | | Gross profit margin | 39.8% | 39.2% | | | | Selling, general and administrative expenses | 16.7% | 17.4% | | | | Operating income | $265,019 | $216,446 | 23.1% | 21.8% | | Net income attributable to HEICO % of net sales | 15.5% | 13.8% | | | [Comparison of First Nine Months of Fiscal 2025 to First Nine Months of Fiscal 2024](index=31&type=section&id=Comparison%20of%20First%20Nine%20Months%20of%20Fiscal%202025%20to%20First%20Nine%20Months%20of%20Fiscal%202024) Compares HEICO's consolidated financial performance for the first nine months of fiscal 2025 and 2024 - Consolidated net sales increased **15%** to a record **$3.28 billion**, driven by strong organic growth in both FSG (**13%**) and ETG (**7%**), supplemented by acquisitions[85](index=85&type=chunk) - Consolidated gross profit margin improved to **39.7%** from 39.0%, primarily due to a 1.4% increase in FSG's gross profit margin[86](index=86&type=chunk) - Consolidated SG&A expenses as a percentage of net sales improved to **17.1%** from 17.7%, reflecting efficiencies from net sales growth[88](index=88&type=chunk) - Consolidated operating income increased **22%** to a record **$740.0 million**, with FSG operating income up 25% and ETG operating income up 14%[90](index=90&type=chunk) - Net income attributable to HEICO increased **34%** to a record **$502.1 million**, or **$3.57 per diluted share**[97](index=97&type=chunk) [Comparison of Third Quarter of Fiscal 2025 to Third Quarter of Fiscal 2024](index=33&type=section&id=Comparison%20of%20Third%20Quarter%20of%20Fiscal%202025%20to%20Third%20Quarter%20of%20Fiscal%202024) Compares HEICO's consolidated financial performance for the third quarter of fiscal 2025 and 2024 - Consolidated net sales increased **16%** to a record **$1.15 billion**, with FSG sales up 18% and ETG sales up 10%[98](index=98&type=chunk) - Consolidated gross profit margin improved to **39.8%** from 39.2%, mainly due to a 1.4% increase in FSG's gross profit margin[99](index=99&type=chunk) - Consolidated SG&A expenses as a percentage of net sales improved to **16.7%** from 17.4%, driven by efficiencies from net sales growth[101](index=101&type=chunk) - Consolidated operating income increased **22%** to a record **$265.0 million**, with FSG operating income up 29% and ETG operating income up 7%[102](index=102&type=chunk) - Net income attributable to HEICO increased **30%** to a record **$177.3 million**, or **$1.26 per diluted share**[109](index=109&type=chunk) [Outlook](index=36&type=section&id=Outlook) Discusses HEICO's expectations for future net sales growth and long-term financial strategy - HEICO is confident in achieving net sales growth across both FSG and ETG segments, driven by continued organic demand and recently completed acquisitions[110](index=110&type=chunk) - The company's financial strategy focuses on maximizing long-term shareholder value through strategic acquisitions, organic growth, market share gains, and maintaining a strong financial position[110](index=110&type=chunk) [Liquidity and Capital Resources](index=36&type=section&id=Liquidity%20and%20Capital%20Resources) Analyzes HEICO's cash flow activities, capital expenditures, debt, and compliance with covenants - Principal uses of cash include acquisitions, interest payments, capital expenditures, cash dividends, distributions to noncontrolling interests, and working capital needs[111](index=111&type=chunk) - Anticipated fiscal 2025 capital expenditures are approximately **$65 million to $70 million**[111](index=111&type=chunk) - The total debt to shareholders' equity ratio was **58.1%** as of July 31, 2025, and the company was in compliance with all debt covenants[111](index=111&type=chunk) - Net cash provided by operating activities increased **37%** to **$638.9 million** for the first nine months of fiscal 2025, up from $466.7 million in the prior year[114](index=114&type=chunk) - Net cash used in investing activities totaled **$697.7 million**, primarily for acquisitions (**$629.9 million**) and capital expenditures (**$46.0 million**)[115](index=115&type=chunk) - Net cash provided by financing activities was **$155.2 million**, including **$495.0 million** in revolving credit facility borrowings, partially offset by payments, dividends, and distributions[116](index=116&type=chunk) [Guarantor Group Summarized Financial Information](index=37&type=section&id=Guarantor%20Group%20Summarized%20Financial%20Information) Provides summarized financial information for the Guarantor Group subsidiaries backing HEICO's senior notes - HEICO's **$600 million** 2028 Senior Notes and **$600 million** 2033 Senior Notes are fully and unconditionally guaranteed by the 'Guarantor Group' subsidiaries[119](index=119&type=chunk) Guarantor Group Summarized Financial Information (in thousands) | Item | July 31, 2025 | October 31, 2024 | | :----------------------------------- | :------------ | :--------------- | | Current assets (excluding net intercompany receivable from non-guarantor subsidiaries) | $1,881,632 | $1,642,341 | | Noncurrent assets | 4,966,866 | 4,627,711 | | Current liabilities (excluding net intercompany payable to non-guarantor subsidiaries) | 594,466 | 546,677 | | Noncurrent liabilities | 3,064,155 | 2,793,193 | | Redeemable noncontrolling interests | 314,394 | 243,277 | | Noncontrolling interests | 60,250 | 49,900 | - Guarantor Group net sales for the nine months ended July 31, 2025, were **$2.77 billion**[128](index=128&type=chunk) [Forward-Looking Statements](index=40&type=section&id=Forward-Looking%20Statements) Highlights the inherent risks and uncertainties associated with forward-looking statements in the report - Statements in the report that are not historical facts are forward-looking and involve risks, uncertainties, and contingencies[129](index=129&type=chunk) - Factors that could cause actual results to differ materially include public health threats, liquidity, airline purchasing decisions, product costs, governmental demands, competition, new product introduction, manufacturing difficulties, cybersecurity events, acquisitions, and economic conditions[129](index=129&type=chunk)[130](index=130&type=chunk) - The company undertakes no obligation to publicly update or revise any forward-looking statement, except as required by applicable law[130](index=130&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=41&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) No material changes in HEICO's market risk sensitivity assessment since the October 31, 2024, Annual Report on Form 10-K - There have been no material changes in HEICO's assessment of sensitivity to market risk since the disclosures in the Annual Report on Form 10-K for the year ended October 31, 2024[131](index=131&type=chunk) [Item 4. Controls and Procedures](index=41&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded HEICO's disclosure controls were effective as of July 31, 2025, with no material changes in internal control over financial reporting - Management, with the participation of Co-CEOs and CFO, concluded that HEICO's disclosure controls and procedures were effective as of July 31, 2025[132](index=132&type=chunk) - No material changes in internal control over financial reporting occurred during the third quarter ended July 31, 2025[133](index=133&type=chunk) [Part II. Other Information](index=42&type=section&id=Part%20II.%20Other%20Information) Presents other information, including details on trading arrangements, exhibits, and report signatures [Item 5. Other Events](index=42&type=section&id=Item%205.%20Other%20Events) No directors or officers adopted, modified, or terminated Rule 10b5-1 or non-Rule 10b5-1 trading arrangements during the third quarter - No directors or officers adopted, modified, or terminated Rule 10b5-1 or non-Rule 10b5-1 trading arrangements during the third quarter ended July 31, 2025[136](index=136&type=chunk) [Item 6. Exhibits](index=42&type=section&id=Item%206.%20Exhibits) Lists all exhibits accompanying the Form 10-Q, including subsidiary guarantors and various certifications - Exhibits include Subsidiary Guarantors, Rule 13a-14(a)/15d-14(a) Certifications, Section 1350 Certifications, and Inline XBRL documents[137](index=137&type=chunk) [Signatures](index=43&type=section&id=Signatures) The Form 10-Q report was officially signed by HEICO Corporation's CFO and Chief Accounting Officer on August 27, 2025 - The report was signed by Carlos L. Macau, Jr., Executive Vice President - Chief Financial Officer and Treasurer, and Bradley K. Rowen, Chief Accounting Officer and Assistant Treasurer[142](index=142&type=chunk) - The signing date for the report was August 27, 2025[142](index=142&type=chunk)

Financial Data and Key Metrics Changes - Consolidated net income increased by 30% to a record $177.3 million or $1.26 per diluted share in 2025, up from $136.6 million or $0.97 per diluted share in 2024 [7][8] - Consolidated operating income and net sales for Q3 2025 increased by 22% and 21% respectively compared to 2024 [8] - Cash flow from operating activities increased by 8% to $231.2 million in 2025, representing 130% of net income [9][10] - Consolidated EBITDA increased by 21% to $316.4 million in 2025, up from $261.4 million in 2024 [10] Business Line Data and Key Metrics Changes - Flight Support Group's net sales increased by 18% to a record $802.7 million in 2025, driven by 13% organic growth and acquisitions [15][17] - Flight Support Group's operating income increased by 29% to a record $198.3 million in 2025 [17][18] - Electronic Technologies Group's net sales increased by 10% to a record $355.9 million in 2025, with 7% organic growth [19][20] - Electronic Technologies Group's operating income increased by 7% to $81 million in 2025 [20][21] Market Data and Key Metrics Changes - The defense business within the Flight Support Group is experiencing significant growth due to increased demand from the U.S. and allies [16][17] - The Electronic Technologies Group's defense organic net sales increased by over 6% in 2025, with a strong order volume and record backlog [20] Company Strategy and Development Direction - The company is focused on growth within commercial aviation, defense, and space markets, supported by a favorable pro-business environment [6][7] - The acquisition strategy remains disciplined, with a focus on identifying businesses that complement existing operations and strengthen strategic positions [24] - The company aims to maximize long-term shareholder value through a balanced approach of strategic acquisitions and strong organic growth initiatives [24] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about future growth opportunities, citing strong organic demand and a robust acquisition pipeline [23][24] - The company is well-positioned to support defense initiatives, particularly in missile defense, as the U.S. government prioritizes cost efficiency [16][37] - Management noted that while there are pockets of destocking in the market, overall demand remains strong [81][84] Other Important Information - The company paid its 94th consecutive semiannual cash dividend at a rate of $0.12 per share, representing a 9% increase over the prior dividend [11] - The acquisition of Gables Engineering is expected to be accretive to earnings within a year following the acquisition [12][30] Q&A Session Summary Question: How is the Gables acquisition performing relative to expectations? - Management indicated that the acquisition is performing as expected, but it is still early days [30] Question: Is the lower tax rate sustainable? - The CFO noted that the lower rate was primarily a cash benefit and projected an effective annual rate of around 19% to 20% going forward [32] Question: Can you elaborate on missile defense opportunities? - Management highlighted ongoing orders related to missile defense and emphasized the importance of both legacy and new technology defense [36][37] Question: What are the organic growth drivers in the Flight Support Group? - The parts business grew in the low teens, with significant growth in repair and overhaul and specialty products driven by defense business [41][43] Question: What is the outlook for margins in the Flight Support Group? - Management expects margins to be in the 24% range going forward, with the potential for continued improvement [56] Question: How is the company managing supply chain challenges? - Management reported improvements in supply chain issues, with a robust inspection process in place to manage incoming parts [106][108]