stockrowWhat it does
HEICO Corporation makes replacement parts for aircraft and jet engines, repairs and distributes aircraft components, and manufactures electronic equipment used in aviation, defense, space and other industries. It was originally organized in 1957 as a holding company. Eric A. Mendelson and Victor H. Mendelson, who are brothers, are co-chief executive officers.
The Flight Support Group designs and manufactures replacement parts approved by the Federal Aviation Administration (FAA). These parts perform the same function as parts sold by the original equipment manufacturers, or OEMs, and are sold at lower prices. The group also repairs and overhauls components, distributes parts and makes specialty products such as insulation, composite assemblies and parachutes.
Its customers include commercial and cargo airlines, aircraft repair facilities, military operators, manufacturers and the U.S. government. Some parts are used up and replaced; others can be repaired and returned to service. HEICO provides products and services across those categories.
The Electronic Technologies Group makes components used within larger systems on aircraft, satellites, spacecraft, ships and other platforms. Its products include power supplies, electronic connectors, antennas, memory products, locator beacons and equipment used to test missile systems. Customers include military agencies, defense contractors and satellite manufacturers, as well as companies in medical, telecommunications and industrial markets.
How it makes money
HEICO generates revenue by selling manufactured parts and electronics, distributing products, and performing repair and overhaul services. Its two operating groups serve different markets, although both sell products used in aviation and defense.
Flight Support Group revenue was $3.1 billion in fiscal 2025. The group develops FAA-approved replacement parts that compete with those sold by original manufacturers, then sells them to airlines and repair companies. It also repairs aircraft components and instruments, supplies military aircraft parts, and manufactures specialty components for manufacturers and government customers. Pricing and service are important competitive factors where replacement parts are interchangeable.
Maintenance creates opportunities for repeat sales and service: aircraft must undergo periodic inspection and maintenance, some parts are consumed and replaced, and others are repaired for reuse. HEICO also says customers often rely on it for components and services at different stages of a component’s useful life. These activities do not necessarily represent contracted recurring revenue.
Electronic Technologies Group revenue was $1.4 billion in fiscal 2025. It designs and sells electronic, microwave and electro-optical products that become components of larger systems. Examples include power supplies for aircraft, microwave products for satellites, and simulation equipment for missile testing. Approximately 51% of the group’s fiscal 2025 sales came from products and services for military agencies, prime defense contractors and commercial and defense satellite and spacecraft manufacturers.
Consolidated net sales were $4,485.0 million in fiscal 2025. The available figures do not include a latest-quarter total.
| Segment | Revenue, FY2025 | Share | Change on the year |
|---|---|---|---|
| Flight Support Group | $3.1 billion | 69.5% | 18.1% |
| Electronic Technologies Group | $1.4 billion | 31.5% | 11.8% |
| Corporate Segment | $0.00 | 0.00% | — |
| Corporate And Eliminations | −$45.4 million | −1.01% | — |
Customers and how it sells
HEICO sells to domestic and foreign commercial airlines and cargo carriers, repair and overhaul facilities, aircraft manufacturers, military units and defense contractors. Its electronics customers also include satellite and spacecraft manufacturers, electronic manufacturing services companies, and medical, telecommunications, scientific and industrial businesses.
In fiscal 2025, approximately 58% of net sales came from commercial aviation, 31% from defense and space, and 11% from other industrial markets, including electronics, medical and telecommunications. No single customer accounted for 10% or more of consolidated sales from continuing operations in any of the last three fiscal years. The five largest customers accounted for approximately 20% of total net sales in fiscal 2025.
North America revenue was $2.8 billion in fiscal 2025, or 61.9% of revenue. Non-US revenue was $1.7 billion, or 38.1% of revenue.
Each operating group conducts its own sales, marketing and distribution, with some cross-marketing among divisions and subsidiaries. Sales and marketing are primarily handled by in-house staff, with independent manufacturers’ representatives used to a lesser extent. The Flight Support Group serves customers directly through parts sales and repair services and also distributes products.
| Region | Revenue, FY2025 | Share | Change on the year |
|---|---|---|---|
| North America | $2.8 billion | 61.9% | 14.7% |
| Non-US | $1.7 billion | 38.1% | 18.9% |
Suppliers and costs
HEICO purchases high-temperature alloy sheet metal and castings, forgings, pre-plated metals, electrical components and advanced composite materials from various vendors. Its materials are generally available from multiple sources in sufficient quantities, subject to normal lead times. Some material prices fluctuate in global markets and are affected by international trade regulations, including tariffs.
The company designs and manufactures parts and electronic products, and its repair operations use specialized equipment and technical expertise. It also spends on research and development to create new products and repairs. Total new-product research and development expenses included in consolidated cost of sales were $120.9 million in fiscal 2025.
Selling, general and administrative expenses were $767.5 million in fiscal 2025. The increase from the prior year included expenses associated with acquisitions, changes in estimated contingent consideration, higher selling expenses and share-based compensation. HEICO has also experienced increases in labor, material and service costs; it says manufacturing efficiencies, cost reductions and selective price increases have generally minimized their impact on net income.
- Revenue$4.5B
- Cost of revenue−$2.7B
- Selling, general and administrative−$767.5M
- Operating income$1.0B
Competitive position
HEICO’s replacement-parts business competes primarily with aircraft engine and component manufacturers. The principal jet engine manufacturers named by the company are General Electric, including CFM International, Pratt & Whitney and Rolls Royce. Historically, they have been the sole source of substantially all replacement parts for their respective jet engines. HEICO also competes with independent distributors, repair companies and airlines that operate service centers.
For interchangeable replacement parts, competition is principally based on price and service. Repair and overhaul providers also compete on quality and turnaround time. Electronics competitors range from large to small companies, with competition based on design, technology, quality, price, service and customer satisfaction. Some competitors have greater financial and other resources than HEICO.
Non-OEM manufacturers must obtain an FAA Parts Manufacturer Approval for each replacement part. HEICO has developed approximately 20,000 parts for which it has received those approvals, and its proprietary manufacturing and repair techniques rely primarily on trade-secret protection.
Our reading: The approval process and HEICO’s existing catalog provide a meaningful competitive advantage because new entrants must demonstrate that their parts qualify for sale. Our reading: Proprietary repair and manufacturing capabilities can support customer relationships, although trade-secret protection and competition on price and service limit their protection.
| Competitor | Where they compete | Threat (our reading) |
|---|---|---|
| General Electric | Jet engine replacement parts, including through CFM International | High |
| Pratt & Whitney | Jet engine replacement parts | High |
| Rolls Royce | Jet engine replacement parts | High |
Growth opportunities
HEICO seeks growth through new products and services, expansion of its customer base and acquisitions. It typically targets businesses that can broaden its product offerings, technologies and services while extending its customer base and geographic presence. Since 1990, it has completed approximately 107 acquisitions.
In Flight Support, the company aims to develop more FAA-approved replacement parts to sell to existing customers and to reach new ones. In recent years, including acquisitions, it has added approximately 400 to 550 Parts Manufacturer Approvals per year. The group also develops proprietary repairs and invests in research and development.
Fiscal 2025 consolidated net sales increased by 16% to $4,485.0 million. Flight Support’s increase included organic growth of 14% and sales contributed by fiscal 2025 and 2024 acquisitions. Electronic Technologies’ increase included organic growth of 7% and sales contributed by those acquisitions. Increased demand for aftermarket replacement parts, repair and overhaul services, and specialty products supported Flight Support’s organic growth. Electronics growth included demand for defense, space, other electronics and aerospace products, partly offset by lower medical-product demand.
For fiscal 2026, HEICO expects sales growth in both groups from increased demand for most products and recent acquisitions. It also plans to continue pursuing selective acquisitions.
- $1.9BFY2021
- $2.2BFY2022
- $3.0BFY2023
- $3.9BFY2024
- $4.5BFY2025
Structural risks
- Aviation demand: Lower demand for commercial air travel or changes in airline fleets could reduce demand for HEICO’s goods and services. Commercial aviation accounted for approximately 58% of fiscal 2025 net sales.
- Acquisitions: Suitable targets, financing and government approvals may be difficult to obtain. Acquisitions also bring integration challenges, possible loss of key employees and potential write-downs of acquired intangible assets.
- Competition and technology: Original manufacturers continue to improve engines and components. HEICO may be unable to redesign parts that perform as well or to sell replacements profitably at lower prices. Competitors’ patents or methods could also restrict its product development.
- Approvals and compliance: Failure to meet government regulations could lead to the withdrawal, suspension or revocation of authorizations and approvals, as well as penalties. Products and technologies are also subject to trade controls and export-license requirements.
- Supply and international operations: Transportation delays and supply-chain disruptions, currency movements, geopolitical unrest, tariffs and other trade restrictions can affect operations and foreign sales. Certain materials are also subject to global price fluctuations.
Bottom line
Our reading
Our reading: HEICO combines an aircraft-maintenance business built around approved replacement parts and repairs with a portfolio of electronic components for defense, space and other applications. Its approvals and product development support its position, while aviation demand, competition from original manufacturers and the execution of acquisitions remain important exposures.