SWIM — Latham Group, Inc.

Summary of Latham Group, Inc. Q4 2025 Earnings Call

1. Key Financial Results and Metrics

• Q4 2025 Performance:

  • Revenues: $100 million, up 15% YoY from $87 million in Q4 2024.
  • In-Ground Pool sales: $50 million, also up 15% YoY.
  • Adjusted EBITDA: $10 million, nearly tripling from $3.6 million in Q4 2024.
  • Gross Margin: Expanded by 340 basis points to 28%.
  • Net Loss: $7 million or $0.06 per diluted share, improved from a loss of $29 million or $0.25 per diluted share in Q4 2024.

• Full Year 2025 Performance:

  • Net Sales: $546 million, up 7% YoY from $509 million.
  • Adjusted EBITDA: $100 million, up $20 million from $80 million in 2024.
  • Net Income: $11 million or $0.09 per diluted share, compared to a net loss of $18 million or $0.15 per diluted share in 2024.
  • Gross Margin: Increased by 320 basis points to 33%.

2. Strategic Updates and Business Highlights

• Product Performance:

  • Fiberglass pools accounted for 76.5% of In-Ground Pool sales, with a 2.5% YoY growth.
  • Autocover sales surged by 22% due to strong consumer interest and safety advocacy campaigns.
  • The rollout of the AI-powered MeasurePRO tool contributed to a 4% increase in liner sales.

• Market Expansion:

  • Continued focus on the Sand States, achieving double-digit growth in Florida while facing challenges in Texas.
  • Recent acquisition of Freedom Pools enhances market position in Australia and New Zealand, expected to add $20 million in net sales and $4 million in adjusted EBITDA annually.

• Branding and Marketing:

  • Plans to increase investment in targeted marketing to boost consumer awareness of fiberglass pools.

3. Forward Guidance and Outlook

• 2026 Guidance:
  • Expected net sales between $580 million and $610 million, representing a 9% growth at the midpoint.
  • Adjusted EBITDA forecasted between $105 million and $120 million, indicating a 12.7% growth.
  • Anticipated organic growth in the mid-single digits across all product lines, with a focus on fiberglass pools and autocovers.

4. Bad News, Challenges, or Points of Concern

• Market Conditions:

  • The U.S. In-Ground Pool market is expected to remain flat in 2026, with ongoing headwinds from high interest rates and consumer confidence issues.
  • Competitive pressures remain, particularly in the Texas market where pool permits have declined significantly.

• Dealer Sentiment:

  • Although dealer backlogs are positive, weather conditions and economic factors may impact early demand in 2026.

5. Notable Q&A Insights

• CEO Transition:

  • Sean Gadd expressed excitement about growth opportunities in the Sand States and emphasized the need for better dealer engagement and market development strategies.

• Pricing Power:

  • Pricing has been stable with a recent price increase to address tariff impacts; expected to contribute approximately 2% to top-line growth in 2026.

• Capacity and Expansion:

  • Current capacity is deemed sufficient, with strategic acquisitions enhancing operational flexibility. Future expansions may be considered based on market demand in specific regions.

• Consumer Engagement:

  • Addressing consumer education on fiberglass pools is crucial for conversion, as many potential buyers remain unaware of the benefits and installation processes.

This summary encapsulates the key financial metrics, strategic initiatives, forward guidance, and challenges faced by Latham Group as discussed in the Q4 2025 earnings call.