Hayward Holdings, Inc. 2026 Q2 Filing Summary
Business Context and Reporting Period
This Form 10-Q covers the quarterly period ended June 27, 2026. Hayward Holdings, Inc. is a global specialty water management company focused on pool and outdoor living technology and industrial flow control products. The company operates through two reportable segments: North America (NAM) and Europe & Rest of World (E&RW). The business is seasonal, with higher sales typically occurring in the second and fourth quarters.
Key Financial Metrics (Six Months Ended June 27, 2026)
- Net Sales: $573.6 million (up 8.5% year-over-year).
- Gross Profit: $273.8 million (margin of 47.7%, down 10 basis points).
- Operating Income: $118.5 million (up 13.0% year-over-year).
- Net Income: $69.0 million (up 16.6% year-over-year).
- Diluted EPS: $0.31 (up from $0.27 in the prior year period).
- Adjusted EBITDA: $149.1 million (margin of 26.0%).
- Cash Flow from Operations: $171.6 million.
- Liquidity: Cash and cash equivalents totaled $304.1 million; short-term investments totaled $179.3 million.
- Debt: Total long-term debt (net) is $945.6 million, primarily consisting of a $960.0 million Term Facility.
Material Changes vs. Prior Period
- Revenue Growth: Driven by positive net pricing (7.2% impact) to offset inflation and tariffs, favorable foreign currency translation (0.9%), and modest volume growth (0.4%).
- Margin Pressure: Gross profit margin decreased slightly due to higher costs of sales driven by inflation and tariffs, partially offset by price increases.
- Expense Increases: SG&A increased 7.0% due to higher incentive compensation, advertising, and wage inflation. R&D increased 19.1% due to new product development investments.
- Debt Refinancing: On June 23, 2026, the company entered a new Credit Agreement, refinancing $960.0 million in term loans and establishing a $425.0 million revolving facility. This resulted in a $2.0 million loss on debt extinguishment for the six-month period.
- Segment Performance:
- NAM: Net sales increased 10.2% driven by price and volume.
- E&RW: Net sales were flat (-0.1%) as volume declines due to geopolitical conflicts in the Middle East were offset by currency benefits and pricing.
Guidance, Outlook, and Risks
Management Commentary: Management highlighted strong aftermarket demand and the benefits of the "Early Buy" program. The company continues to invest in R&D for IoT and energy-efficient products. The effective tax rate decreased to 22.8% for the six months ended June 27, 2026, primarily due to lower state taxes.
Risks and Contingencies:
- Tariffs and Trade: Significant uncertainty remains regarding U.S. tariffs following a Supreme Court ruling striking down certain IEEPA tariffs, with new tariffs potentially announced. The company may be eligible for refunds on previously paid tariffs, but timing and amounts are uncertain.
- Geopolitical Conflicts: Ongoing conflicts in the Middle East and Ukraine/Russia continue to negatively impact demand in the E&RW segment.
- Legal Proceedings: A securities class action lawsuit was settled in principle in November 2025, with final court approval ordered on July 28, 2026. The remaining $9.9 million settlement payment was made in Q2 2026. Several shareholder derivative lawsuits remain pending, with no estimated financial loss range provided.
- Share Repurchases: The company repurchased approximately 4.4 million shares for $63.8 million during the six-month period. $382.3 million remains available under the current $450 million authorization.
Investor Verification Checklist
- Verify the impact of the new $960 million Term Facility on future interest expense and covenant compliance.
- Monitor the resolution of pending shareholder derivative lawsuits and potential insurance recoveries.
- Assess the sustainability of net pricing power in the face of ongoing inflation and potential new tariff regimes.
- Review the E&RW segment's exposure to geopolitical instability and its effect on volume trends.
- Confirm the timing and amount of potential tariff refunds and any associated obligations to return funds to customers.