Latham Group, Inc. Reports Fourth Quarter and Full Year 2025 Financial Results and Provides 2026 Guidance

Core Insights - Latham Group, Inc. reported strong financial results for Q4 and full year 2025, with significant sales growth and margin expansion, indicating robust execution and market positioning [2][3][5] Financial Performance - Q4 2025 net sales reached $100.0 million, a 14.5% increase from the previous year, driven by a 15% rise in in-ground pool sales, particularly in fiberglass pools, which constituted 76.5% of total sales [6][3][8] - Full year 2025 net sales totaled $545.9 million, up 7.4% from $508.5 million in 2024, attributed to higher sales volumes and price increases [12][16] - Q4 gross profit was $27.9 million, a 30.3% increase year-over-year, with gross margin expanding by 340 basis points to 28.0% [8][11] - Full year gross profit was $182.1 million, an 18.4% increase, with gross margin expanding by 320 basis points to 33.4% [14][16] Margin Expansion - Q4 2025 adjusted EBITDA was $10.5 million, up 189.6% from the prior year, with an adjusted EBITDA margin of 10.5%, a 630 basis point increase [11][16] - Full year adjusted EBITDA reached $99.8 million, a 24.4% increase, with an adjusted EBITDA margin of 18.3%, reflecting operational leverage and cost discipline [16][22] Strategic Initiatives - The company acquired Freedom Pools in February 2026, expected to add approximately $20 million in net sales and $4 million in adjusted EBITDA annually, enhancing its market position in Australia and New Zealand [19][22] - Latham's strategic focus on the Sand States has led to significant growth opportunities, particularly in Florida, where fiberglass pool sales increased at a double-digit rate in 2025 [4][20] Future Outlook - For 2026, Latham anticipates net sales growth of 9.0% and adjusted EBITDA growth of 12.7%, supported by mid-single-digit organic growth and the benefits from the Freedom Pools acquisition [22][24] - The company plans to enhance branding and marketing efforts, particularly in the Sand States, to drive dealer conversion and market presence [21][22]