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Call sheet · Q2'26

HEICO (HEI)

Q2'26 earnings call · held May 28, 2026 · compared with the Q1'26 call · management-credibility review
7/12
Disclosure score
2 high, 3 medium, 1 low flags
Financial quality
Bottom line
The sleeper story: ETG's record defense/space backlogs drove 56% operating income growth that nobody's talking about because FSG aftermarket grabs headlines. Yes, the 25% consolidated revenue growth is impressive, but it includes a $15-20M pull-forward that makes H2 comps harder. The binding constraint is parts availability limiting component repair to 10% growth despite 'massive backlogs,' capping FSG's true potential. Management calling themselves 'sandbaggers' while stopping receivables disclosure is the tell. My view changes if ETG sustains 25%+ EBITA margins for two more quarters, proving this isn't just mix luck.

The 30-second version

  • ETG's 30.6% cash margins reveal the real story: defense/space orders at record levels are pulling product mix higher while everyone obsesses over FSG aftermarket
  • Record Q2 results mask a pulled-forward $15-20M defense shipment that borrowed from H2
  • Management stopped disclosing DSO and receivables growth rates while emphasizing absolute cash flow numbers

What changed this quarter

MetricQ1'26Q2'26Change
Consolidated Revenue$1,190.7M (+14% YoY)$1,388.9M (+25% YoY)+1100bp acceleration
EPS (diluted)$1.35 (+13% YoY)$1.66 (+48% YoY)+3500bp acceleration
Net Income$190.2M (+13% YoY)$233.8M (+49% YoY)+3600bp acceleration
Operating Income$273.9M (+15% YoY)$364.9M (+41% YoY)+2600bp acceleration
FSG Revenue$820.0M (+15% YoY)$929.4M (+21% YoY)+600bp acceleration
FSG Operating Margin24.5%26.2%+170bp expansion
ETG Revenue$370.7M (+12% YoY)$459.5M (+34% YoY)+2200bp acceleration
ETG Operating Margin19.8%26.5%+670bp expansion
ETG EBITA Margin24.0%30.6%+660bp expansion
Operating Cash Flow$178.6M$292.0M (+43% YoY)+63% sequential surge

Accountability tracked

6 new promises made4 narrative shifts flagged6 prior promises scored
Inside the full report
The complete write-up covers the full promise ledger with kept/missed calls, disclosure-quality scoring, the metrics-vanished check, verification items, and the questions to ask next quarter.
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Scores, kept-promise rates, and flags on this site reflect the author's opinion, applying a stated methodology to statements management made on public earnings calls. Informational and educational purposes only - not investment advice, a recommendation, or an offer to buy or sell any security. Sources believed reliable but not guaranteed; the author may hold positions in the securities discussed.

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