Pool equipment and automation systems manufacturer Hayward Holdings (NYSE:HAYW) reported Q1 CY2025 results topping the market’s revenue expectations , with sales up 7.7% year on year to $228.8 million. The company expects the full year’s revenue to be around $1.08 billion, close to analysts’ estimates. Its non-GAAP profit of $0.10 per share was 17% above analysts’ consensus estimates.
Revenue: $228.8 million vs analyst estimates of $213.7 million (7.7% year-on-year growth, 7.1% beat)
Adjusted EPS: $0.10 vs analyst estimates of $0.09 (17% beat)
Adjusted EBITDA: $49.1 million vs analyst estimates of $42.7 million (21.5% margin, 15% beat)
The company reconfirmed its revenue guidance for the full year of $1.08 billion at the midpoint
EBITDA guidance for the full year is $285 million at the midpoint, in line with analyst expectations
Operating Margin: 14.6%, in line with the same quarter last year
Free Cash Flow was -$11.37 million compared to -$83.14 million in the same quarter last year
Organic Revenue rose 5.9% year on year (1.1% in the same quarter last year)
Market Capitalization: $3.13 billion
StockStory’s Take
Hayward’s first quarter results were shaped by volume and price gains across both its North America and international segments, with management highlighting resilience in the aftermarket business and effective execution on margin expansion initiatives. CEO Kevin Holleran emphasized the “robust sales growth and profitability,” attributing these results to strong demand in key product categories like pumps, lighting, and automation, as well as continued integration benefits from the ChlorKing acquisition. He also noted that inventory levels are now well aligned with channel demand, following earlier efforts to recalibrate distribution.
Looking ahead, management reiterated its full-year outlook, despite ongoing macroeconomic uncertainty and increased tariffs on China-sourced products. Holleran detailed a four-pronged mitigation plan—structural sourcing alternatives, pricing actions, supplier negotiations, and inventory management—to offset the estimated $85 million annualized impact of new tariffs. CFO Eifion Jones added that out-of-cycle price increases and accelerated cost-reduction initiatives are expected to protect margins, while new product introductions like OmniX are positioned to support future growth even as discretionary spending remains pressured.
Key Insights from Management’s Remarks
Hayward’s management attributed first quarter outperformance to a combination of operational execution, targeted product innovation, and effective tariff mitigation. The company’s ability to maintain profitability amid external pressures was a focus of the call.
Aftermarket demand resilience: Management reported that over 80% of sales serve the aftermarket, which remains stable as most pool owners see equipment maintenance as non-discretionary. Discretionary categories, such as new pool construction and remodels, showed signs of deferral rather than outright demand loss.
OmniX platform launch: The introduction of the OmniX wireless automation platform was described as a breakthrough for automating millions of existing pools. Holleran explained that OmniX “provides a far more cost-effective, simpler path to automation,” enabling homeowners to add IoT controls one product at a time during natural equipment replacement cycles.
Tariff mitigation actions: Facing new 145% tariffs on certain China-sourced products, Hayward accelerated plans to reduce direct China sourcing from 10% to 3% of cost of goods sold by year-end. The strategy includes shifting manufacturing volume to U.S. plants, renegotiating supplier contracts, and implementing broad-based price increases.
Channel inventory management: The company worked closely with distributors to limit preorders ahead of price hikes and keep inventory levels appropriate for the season. Management indicated the destocking phase is complete, and inventories are in balance with demand.
Margin and cost control focus: Hayward continued to drive margin expansion through SKU rationalization, bill of materials optimization, and automation investments at U.S. facilities. CFO Jones noted sequential margin improvement in international operations and emphasized cost discipline as a key lever for offsetting tariff-related headwinds.
Drivers of Future Performance
Management’s outlook for 2025 centers on offsetting tariff pressures through pricing, cost initiatives, and adoption of new technology, while acknowledging ongoing uncertainty in discretionary pool spending.
Pricing and cost mitigation: The company expects out-of-cycle price increases and accelerated supply chain adjustments to help absorb higher input costs from tariffs. Management believes these actions, combined with cost-cutting programs, should support stable margins.
OmniX adoption and aftermarket focus: Broader deployment of the new OmniX platform is viewed as a major opportunity to expand automation in the large installed base of existing pools, which could drive incremental aftermarket sales even if new construction remains subdued.
Macroeconomic and housing risks: Management cautioned that persistent weakness in new home sales and higher interest rates may continue to pressure discretionary pool upgrades and new builds, with the timing of a recovery remaining uncertain.
Top Analyst Questions
Andrew Carter (Stifel): Asked about the cost and margin impacts of shifting production out of China to mitigate tariffs; management outlined a four-pronged strategy and confirmed that most of the impact will be offset by year-end.
Saree Boroditsky (Jefferies): Questioned the risk of demand destruction from recent price increases; CEO Holleran stated that observed demand changes appear to be deferred rather than lost, with little evidence of customers trading down significantly.
David Tarantino (KeyBanc): Requested feedback on early-season consumer trends and the impact of new pricing actions; management noted a slow start in January but a strong March as weather improved, and reaffirmed full-year guidance.
Sean Colman (BofA Merrill Lynch): Inquired about volume assumptions in guidance and the potential for trade-down; management clarified that guidance assumes pressure on discretionary categories but resilience in critical aftermarket demand.
Nick Cash (Goldman Sachs): Asked about the impact of increased U.S. manufacturing utilization on margins; management pointed to available capacity and plans to leverage automation for further cost benefits.
Catalysts in Upcoming Quarters
In the coming quarters, the StockStory team will be monitoring (1) tangible progress in shifting production from China to U.S. facilities as a measure of tariff mitigation, (2) adoption rates and customer feedback for the OmniX automation platform as an indicator of aftermarket growth, and (3) trends in discretionary pool construction and remodel activity as the broader housing market evolves. Progress on these fronts will help clarify Hayward’s ability to sustain revenue growth and margin stability in a volatile environment.
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