Track market-moving stories before they get noisy

Helios Technologies (NYSE:HLIO) reported second-quarter 2026 sales growth, margin expansion and record second-quarter operating cash flow, prompting the company to raise its full-year outlook.

Second-quarter sales totaled $232 million, up 9% from $212 million a year earlier. On a pro forma basis, excluding the effects of the CFP divestiture and foreign exchange, sales rose 16% year over year. President and Chief Executive Officer Sean Bagan said results marked the company’s fourth consecutive quarter of double-digit pro forma sales and adjusted earnings growth.

“The CORE Strategy is working,” Bagan said, referring to the company’s strategic plan introduced at its investor day five months earlier. He said Helios has completed its stabilization plan and has shifted its focus toward sustained growth, supported by a stronger balance sheet.

Profitability Improves as Sales Rise Gross profit increased 19% to $80 million in the quarter, while gross margin expanded 280 basis points to 34.6%. Helios said the improvement reflected higher volume, favorable mix, operational initiatives, portfolio and footprint actions, and approximately $1 million in net IEEPA tariff refunds.

Operating income rose 48% to $33 million, and operating margin increased 370 basis points to 14%. Adjusted operating margin was 17.8%, up 280 basis points. Adjusted EBITDA increased 25% to $49 million, with adjusted EBITDA margin rising 260 basis points to 21.2%.

Diluted earnings per share were $0.66, up 94% from the prior-year period. Adjusted diluted EPS was $0.88, a 49% increase that exceeded the high end of Helios’ previous outlook by $0.05 per share.

Chief Financial Officer Jeremy Evans said operating expenses increased by $2.2 million, primarily due to employee benefit costs and an isolated bad-debt expense. Excluding those items, he said expenses were essentially flat year over year while the company increased research-and-development spending.

Both Segments Report Growth Hydraulics segment sales were $146 million. Sales increased 14% on a pro forma basis after normalizing for foreign exchange and the CFP divestiture. Helios reported growth in the Americas and Europe, the Middle East and Africa, while Asia-Pacific sales increased by significant double digits on a pro forma basis.

Construction activity was a key contributor to mobile-market growth, while agriculture also increased. Industrial end-market sales were relatively flat year over year. Hydraulics gross margin expanded 160 basis points to 34.6%, and segment operating income increased 16% to $29 million. Segment operating margin rose 200 basis points to 19.7%.

Electronics sales increased 19% to $86 million, with growth across all regions and particularly strong results in Asia-Pacific. Enovation Controls recorded a second-quarter sales record, supported by recreational-market demand and continued strength from a large original equipment manufacturer customer, the company said.

Electronics also reported growth in health and wellness, mobile and industrial applications, though core markets and marine remained soft. Gross profit in the segment rose 41%, while gross margin expanded 530 basis points to 34.6%. Segment operating income nearly doubled to $11 million and operating margin increased 490 basis points to 13.1%.

Bagan said Helios expects to continue outgrowing underlying end markets through commercial wins, product launches and deeper customer relationships. He cited opportunities in health and wellness, including new Balboa products expected to enter the market over the next six to nine months, as well as growth in China and broader Asia-Pacific markets.

Cash Flow, Footprint Actions and Capital Allocation Helios generated a second-quarter record of $42 million in operating cash flow and $31 million in free cash flow. Capital expenditures totaled $11 million, or 4.9% of sales, reflecting increased strategic organic investment. The company said its cash conversion cycle improved by 11 days from the comparable period a year earlier.

During the quarter, Helios closed a Faster facility in Canada and further consolidated Faster’s North American operations. Bagan said the company is moving certain activities into a Maumee, Ohio, location while freeing capacity at its Mishawaka, Indiana, operation, where Daman manifold assemblies have experienced growth. The company expects the actions to produce efficiency and cost benefits beginning in the second half of 2026.

Capital spending is expected to support manufacturing capacity for data-center thermal-management couplings, low-cost engineering and manufacturing operations in Mexico, India and China, and automation and productivity projects. Evans said the company’s updated CapEx outlook is 4% to 4.5% of sales.

Helios ended the quarter with net debt of $264 million, its lowest level since the third quarter of 2020. Its trailing 12-month net debt-to-adjusted EBITDA ratio declined to 1.4 times from 2.6 times a year earlier, below the company’s 1.5 to 2.5 times target operating range.

The company paid a quarterly dividend of $0.12 per share and repurchased about 79,000 shares for $6 million during the quarter. Helios had $76 million remaining under its repurchase authorization and said year-to-date shareholder returns through dividends and buybacks totaled $18 million, up 40% from the first half of 2025.

Outlook Raised; Data-Center Opportunity Remains in Development Helios raised its 2026 sales outlook to a range of $880 million to $900 million, compared with $839 million reported in 2025 and $792 million on a pro forma basis excluding CFP sales. At the midpoint, the guidance implies 12% growth from 2025 and would represent the highest annual sales in company history, according to management.

Hydraulics sales are projected at $555 million to $565 million, representing approximately 13% pro forma growth at the midpoint. Electronics sales are expected at $325 million to $335 million, or 11% growth at the midpoint. Adjusted EBITDA margin is forecast at 20.2% to 21%. Adjusted diluted EPS is forecast at $3.05 to $3.25, representing 23% growth at the midpoint. For the third quarter, Helios expects sales of $215 million to $222 million, adjusted EBITDA margin of 19.8% to 20.6%, and adjusted diluted EPS of $0.70 to $0.77.

Management said it is seeing strong order trends and commercial-win activity, but remains mindful of tougher comparisons in the second half, along with energy and fuel prices, tariffs, inflation and geopolitical tensions.

Helios is also preparing to enter the data-center thermal-management market through Faster couplings. The company has completed qualifications required to meet industry standards, is building inventory and has product samples with approximately a dozen prospective customers. Management said it has not included data-center revenue in its 2026 guidance, though it would be disappointed if orders did not emerge in the second half.

Evans said Helios expects modest data-center sales in 2027 followed by a gradual ramp, subject to customer qualification processes. Bagan said the company generally expects to sell to equipment integrators building cooling racks, while its products must also be validated by hyperscale data-center operators.

About Helios Technologies (NYSE:HLIO) Helios Technologies, Inc develops and manufactures engineered motion control and electronic control products for a wide range of industrial and mobile equipment applications. The company’s Hydraulics segment designs and produces hydraulic cartridge valves, manifold systems, pumps and motors, filtration solutions and off-highway joysticks. Its Electronic Controls segment offers programmable electronic control units, wireless telematics, human-machine interfaces and software to optimize performance, efficiency and safety for equipment OEMs and end users.

Through its global network of manufacturing facilities, service centers and technology centers, Helios Technologies serves markets in agriculture, construction, material handling, mining, municipal and recreational vehicles, as well as industrial automation and infrastructure equipment.

Helios Towers LON: HTWS reported record tenancy additions in the first half of 2026 and raised its full-year outlook, citing accelerating customer investment in network coverage, capacity and new mobile technologies across its African and Middle Eastern markets.

The company added more than 2,500 tenancies in the first half, including more than 500 new sites, lifting its tenancy ratio by 0.2 times year over year to 2.3 tenants per site. Management said the order pipeline remained strong and that demand was already building for 2027.

Get Helios Towers alerts:

Revenue rose 11% year over year to $237 million, while adjusted EBITDA increased 14%. Recurring free cash flow rose 52%, and return on invested capital increased by 0.8 percentage points, according to the company. Helios Towers said tenancy additions accounted for seven percentage points of revenue growth and 12 percentage points of EBITDA growth.

Guidance Raised as Demand Builds Helios Towers raised its 2026 tenancy-addition target to 3,500 to 4,000, representing expected growth of 10% to 12% from the prior year. The company had added 2,511 tenancies in the first six months, nearly matching its record 2,538 organic tenancy additions for all of 2025.

Group CFO Manjit Dhillon said the latest upgrade included an additional 500 tenancies, split evenly between 250 new sites and 250 co-locations. The incremental sites are expected to be rolled out mainly during the latter part of the year, contributing roughly $5 million of EBITDA in 2026 and more than $10 million on an annualized basis from 2027 onward.

Adjusted EBITDA guidance was raised to $520 million to $535 million. Recurring free cash flow guidance was raised to $220 million to $235 million. Discretionary capital expenditure guidance increased to $215 million to $245 million to fund additional growth. Non-discretionary capital expenditure guidance remained unchanged at $50 million. Dhillon said the company spent $115 million in total capital expenditure during the first half, including $102 million of discretionary investment. Helios Towers said its organic investments in co-locations, operating-cost initiatives and selective new builds generate blended returns on invested capital of more than 30%.

Balance Sheet and Shareholder Returns Net leverage declined by 0.4 times year over year to 3.4 times. Helios Towers said it had reduced its blended cost of debt to 6.7% and maintained an average debt maturity of about four years. It also secured a $250 million undrawn term loan to provide flexibility around the potential maturity of its convertible bond in March 2027.

The company said it had more than $500 million of available liquidity across cash balances and undrawn debt facilities.

Helios Towers has repurchased $34 million of shares so far in 2026 and $58 million cumulatively since its buyback program began in November 2025. It also announced its inaugural interim dividend of GBP0.006 per share, totaling $8 million. The company expects to pay $25 million in dividends for the full year, subject to customary approvals.

Management said its planned shareholder distributions of $76 million for 2026 were unchanged despite the increase in growth capital spending. Under its IMPACT 2030 framework, Helios Towers intends to prioritize high-return organic investment, balance-sheet strengthening and shareholder distributions, with a target of more than $400 million in cumulative shareholder returns through 2030.

Long-Term Network Investment Opportunity The company used the call to outline its view of the long-term mobile-infrastructure opportunity in its nine markets. Management said mobile data consumption in those markets had increased sixfold over the past five years and is forecast to rise a further 12 times by 2040, compared with a projected sevenfold increase globally.

Helios Towers estimates that its addressable organic market includes about 72,000 additional tenancies through 2040, roughly twice the size of its current footprint. The company pointed to projected regional growth of about 600 million people, 800 million additional mobile subscribers and approximately 1 billion more smartphone devices between 2025 and 2040.

Chief Commercial Officer Sainesh Vallabh said social-media adoption across the company’s footprint had grown 18% year over year, compared with 4% in the rest of the world, while video traffic had increased 14%. He said mobile operators had collectively increased capital expenditure by more than 33% since 2023 as subscriber numbers and average revenue per user grew.

Management said new-build demand is primarily tied to suburban expansion, urban infill, added capacity and the deployment of technologies such as 4G and 5G. The company highlighted rapid urbanization in African cities including Dar es Salaam and Kinshasa as a driver of future network densification.

Satellite Seen as Complementary Senior Technical Advisor Marcus Weldon said terrestrial networks would continue to carry the vast majority of mobile traffic because their smaller coverage areas allow spectrum capacity to be concentrated among fewer users. Helios Towers estimates terrestrial infrastructure will carry 97% of data demand in 2040.

Weldon and Chief Technology and Digital Officer Allan Fairbairn described satellite connectivity as complementary rather than competitive with terrestrial tower networks. Satellites can provide direct-to-device coverage in sparsely populated regions and can serve as backhaul for tower sites where fiber and microwave connections are impractical, they said.

Fairbairn cited a remote tower in Madagascar where satellite backhaul links the site to an operator’s wider network while the tower provides radio coverage and capacity to surrounding communities. He said Helios Towers plans to deploy satellite backhaul at a small number of sites across the group this year.

The company ended the call by emphasizing that its $5.9 billion of contracted future revenue, with an average remaining initial contract life of 6.5 years, provides a base for continued investment and growth.

About Helios Towers (LON:HTWS)Helios Towers is a leading independent telecommunications infrastructure company, having established one of the most extensive tower portfolios across Africa and the Middle East. It builds, owns and operates telecom passive infrastructure, providing services to mobile network operators. Helios Towers owns and operates telecommunication tower sites in Tanzania, Democratic Republic of Congo, Congo Brazzaville, Ghana, South Africa, Senegal, Madagascar, Malawi and Oman. Helios Towers pioneered the model in Africa of buying towers that were held by single operators and providing services utilising the tower infrastructure to the seller and other operators.

This instant news alert was generated by narrative science technology and financial data from MarketBeat in order to provide readers with the fastest reporting and unbiased coverage. Please send any questions or comments about this story to [email protected].

Should You Invest $1,000 in Helios Towers Right Now?Before you consider Helios Towers, you'll want to hear this.

MarketBeat keeps track of Wall Street's top-rated and best performing research analysts and the stocks they recommend to their clients on a daily basis. MarketBeat has identified the five stocks that top analysts are quietly whispering to their clients to buy now before the broader market catches on... and Helios Towers wasn't on the list.

While Helios Towers currently has a Buy rating among analysts, top-rated analysts believe these five stocks are better buys.

View The Five Stocks Here

Nuclear energy is entering a new growth cycle as rising power demand, expanding data centers, and renewed policy support bring the sector back into focus. After strong gains in recent years, the most impactful phase of nuclear investment may still be ahead. This report highlights seven nuclear energy stocks positioned across the value chain—combining near-term revenue with long-term upside as next-generation technologies scale. Click the link below to unlock the full list.

Get This Free Report