Loar Holdings Inc. ((LOAR)) has held its Q2 earnings call. Read on for the main highlights of the call.
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In the recent earnings call, Loar Holdings Inc. showcased a robust performance, marked by record sales and EBITDA growth. The sentiment was overwhelmingly positive, driven by solid execution across various sectors, despite some challenges in commercial OE growth and regulatory delays in acquisitions. The positive aspects of the call significantly overshadowed the few hurdles mentioned.
Record Sales and Growth
Loar Holdings achieved record sales of $123 million in Q2 2025, marking a 13% increase compared to the previous year. This growth was fueled by strong performances across the commercial aftermarket, commercial OEM, and defense sectors, underscoring the company’s strategic execution and market positioning.
Strong EBITDA Performance
The company reported a notable increase in adjusted EBITDA, up $12 million from Q2 2024, with margins reaching a record 38.3%. This represents an impressive increase of 220 basis points from the previous year, highlighting the company’s operational efficiency and profitability.
High Cash Flow Conversion
Loar Holdings reported exceptional cash flow conversion percentages of 175% and 125% for the first two quarters of 2025, with a year-to-date average of 148%. These figures exceed the company’s target of 125% for the year, reflecting strong financial health and cash management.
Successful Acquisition of Beadlight
The acquisition of Beadlight, a UK-based lighting products company, was a key highlight. This strategic move is expected to drive significant growth and deliver accretive results starting in 2026, aligning with Loar Holdings’ expansion goals.
Choppy Commercial OE Growth
Despite the overall positive performance, Loar Holdings faced challenges in the commercial OE segment, with inventory management and supply chain issues leading to inconsistent growth rates. The company remains cautious in its organic growth projections for this segment.
Regulatory Delays in LMB Acquisition
The acquisition of LMB Fans & Motors is currently stalled pending regulatory approval. These potential delays could affect the closing timeline, posing a challenge to Loar Holdings’ acquisition strategy.
Forward-Looking Guidance
Loar Holdings provided optimistic forward-looking guidance, projecting net sales between $486 million and $494 million, and adjusted EBITDA between $184 million and $187 million for 2025. The company anticipates low double-digit growth in commercial aftermarket sales and 17% to 20% growth in defense sales. The guidance reflects confidence in the company’s value drivers and proprietary portfolio, with no expected impact from current tariff environments. The recent acquisition of Beadlight is also expected to contribute positively in 2026.
In summary, Loar Holdings Inc.’s earnings call highlighted a strong financial performance with record sales and EBITDA growth. Despite some challenges in the commercial OE segment and regulatory delays, the company’s strategic acquisitions and robust cash flow conversion underscore its positive outlook. Investors can look forward to continued growth and profitability as Loar Holdings navigates the evolving market landscape.