HEI-A

HEICO is a best-in-class aerospace compounder, and the numbers prove it. Revenue grew from $1.87B (FY2021) to $4.49B (FY2025) — roughly a 24% CAGR — while net income climbed from $304M to $690M. FY2025 alone delivered revenue +16.3%, net income +34.3%, diluted EPS +33.5%, and operating cash flow +39.0% to $934M against just $72.9M of capex, implying ~$861M of free cash flow. That asset-light, cash-generative profile sits on a genuine moat: per the MD&A, the Flight Support Group designs and sells FAA-approved PMA jet-engine and aircraft replacement parts and aftermarket repair/overhaul, while the Electronic Technologies Group makes niche defense, space, and microwave/electro-optical components — businesses with pricing power and high switching costs. Operating margin is a healthy 22.7%.

The balance sheet is sturdy but not pristine: liabilities/equity of 0.85x and equity up 18.4% to $4.31B signal moderate leverage, yet cash is only $218M, and the MD&A explicitly states FY2025 results 'have been affected by recent acquisitions.' Growth is therefore partly inorganic — a proven M&A engine, but one that adds goodwill, integration risk, and makes pure organic momentum harder to read. ROE of 16.0% is solid rather than spectacular precisely because the acquisition-heavy model carries a large equity/goodwill base. The 80%-owned HEICO Aerospace also means minority interests skim earnings attributable to shareholders. (Note: the provided long-term-debt line is mislabeled FY2010, so the cleaner leverage read is the 0.85x liabilities/equity ratio.)