Hayward Holdings Q1 2026 Earnings Call Summary

1Key Financial Results and Metrics

Net Sales: Increased 12% year-over-year to $255 million, driven by strong pricing, positive volume, and favorable foreign exchange.

Adjusted EBITDA: Grew 15% to $56 million, with an adjusted EBITDA margin of 22.1%, up 60 basis points.

Adjusted Diluted EPS: Increased 30% to $0.13.

Gross Margin: Expanded by 50 basis points to 46.5%.

Net Leverage: Reduced from 2.8x to 2.4x year-over-year, despite seasonal cash usage in Q1.

2Strategic Updates and Business Highlights

Celebrated the fifth anniversary of its IPO and the 100th anniversary of the company, reflecting on significant organizational improvements.

Continued focus on innovation, particularly in aftermarket products like OmniX, which enhances customer experience.

Strengthened operational efficiency through consolidation of manufacturing and distribution, and increased investment in AI for decision-making and productivity.

Positive performance in North America (up 12%) and Europe (up 9%), with notable growth in Canada (up 26%).

3Forward Guidance and Outlook

Full Year 2026 Guidance:

Net sales expected to increase approximately 5%, up from prior guidance of 4%.

Adjusted diluted EPS projected to rise 9% to 13%, now ranging from $0.84 to $0.87.

Anticipated free cash flow of around $200 million, exceeding 100% of net income.

Expecting modest working capital improvements and increased CapEx of approximately $40 million.

4Bad News, Challenges, or Points of Concern

Geopolitical Risks: Ongoing conflict in the Middle East impacted sales in the Rest of World segment, which saw a 1% decline.

Inflationary Pressures: Rising costs for specialty metals, freight, and resins are expected to exert downward pressure on gross margins in Q2, with some year-over-year compression anticipated.

Channel Inventory Management: Concerns about inventory levels and potential impacts from price increases, although management expressed confidence in current inventory balances.

5Notable Q&A Insights

Weather Impact: Favorable weather conditions contributed positively to Q1 performance, although some regions experienced adverse conditions.

Early Buy Program: Successful management of Early Buy shipments helped maintain balanced inventory levels.

Pricing Strategy: Price increases were implemented in response to inflation, with a current expectation of 4% price growth for the year, up from an initial 3%.

Market Share Gains: Management believes they are gaining market share through new product launches and targeted regional strategies, despite competitive pressures.

Demand Environment: While aftermarket demand remains resilient, management is cautious about new construction activity, expecting it to remain flat. Overall, Hayward Holdings reported a strong start to 2026, with solid financial performance and strategic initiatives in place, while remaining vigilant about external challenges and market dynamics.