Hayward Holdings, Inc. Q3 FY2025 earnings call

• Strong third quarter results with net sales up 7% and adjusted EBITDA up 16%. Gross profit margin expanded 150 basis points to 51.2% and adjusted EBITDA margin up 170 basis points to 24.2%. - Reduced net leverage to 1.8x, lowest in nearly 4 years. - Advancing strategic initiatives: expanding customer relationships, developing innovative products (e.g., OmniX automation platform), leveraging operational excellence. - Aggressively executing tariff mitigation actions, reducing direct sourcing from China to 3% of COGS by year-end. - Ramping up sales/marketing in high-value regions, improving customer experience with Hayward Hub centers and AI tools.

North America: Net sales increased 7% to $208 million, with net price realization up 7% and volume stable. Gross profit margin increased 50 basis points to 52.8%. Europe and Rest of World: Net sales increased 11% to $36 million, with a 1% reduction in net price offset by 8% higher volume and favorable foreign currency translation. Gross profit margin increased 750 basis points to 41.9% sequentially from 38.9% in Q2.

• Raised full-year net sales guidance to 4%-5.5% increase (previously 2%-5%), adjusted EBITDA guidance to 5%-7% increase to $292M-$297M (previously $280M-$290M). - Increased free cash flow guidance to approximately $170M.

• Uncertain tariff environment. - Potential new tariffs affecting margins. - Geopolitical uncertainty impacting supply chain.

Q: Ryan Merkel on demand season progress and early buy reception A: Kevin Holleran discussed seasonal progress, strong September sales, balanced growth across markets, and early buy tracking expectations Q: Saree Boroditsky on new products and price vs volume A: Kevin Holleran talked about investments in new products like OmniX, and Eifion Jones on no major trade-offs seen yet Q: W. Andrew Carter on private label and exposure A: Kevin Holleran discussed private label risks and confidence in innovation and distribution Q: Mike Halloran on capital allocation and M&A A: Eifion Jones and Kevin Holleran talked about CapEx plans, M&A opportunities, and ChlorKing integration Q: Jeffrey Hammond on Q4 comp and aftermarket A: Kevin Holleran and Eifion Jones discussed Q4 comp headwind and aftermarket resilience Q: Brian Lee on international margins and pricing A: Eifion Jones talked about European margin improvement and pricing outlook for 2026 Q: Nigel Coe on tariff refunds and supply chain A: Eifion Jones and Kevin Holleran discussed tariff refunds and progress in reducing China sourcing