Heico Corporation (HEI) Business Profile

What it does

HEICO makes aircraft replacement parts and electronic equipment through subsidiaries organized into two businesses. It was originally organized as a holding company in 1957. Eric A. Mendelson and Victor H. Mendelson are its co-chief executive officers.

The Flight Support Group designs and manufactures replacement parts for jet engines and aircraft components. These parts are approved by the Federal Aviation Administration (FAA) and are intended to perform the same function as parts made by the original equipment manufacturers, generally at lower prices. The group also repairs, overhauls and distributes components, avionics and instruments. Customers include commercial airlines, cargo carriers, aircraft repair businesses, military operators and business aircraft operators.

Flight Support also makes specialty components and composite assemblies for aerospace, defense and space applications. It supplies military aircraft parts and support services to customers including the U.S. Department of Defense, defense contractors and allied foreign military organizations.

The Electronic Technologies Group designs and sells components used in aircraft, defense equipment, satellites and other systems. Its products include power supplies, microwave equipment, electronic connectors, memory products, locator beacons and simulation and testing equipment. Customers include military agencies, defense contractors, spacecraft manufacturers and companies in industries such as medical equipment and telecommunications.

How it makes money

HEICO earns revenue by selling replacement parts, specialty manufactured components and electronics, and by providing repair, overhaul, distribution and other services. Consolidated net sales were $4,485.0 million in fiscal 2025. A latest-quarter total is not provided here.

Flight Support Group generated $3.1 billion of revenue in FY2025. Its replacement parts compete with original equipment manufacturers’ parts on price and service when they are interchangeable. HEICO sells its FAA-approved parts at lower prices than those made by the original manufacturers. The group also sells services that restore components for use again, distributes parts, and manufactures components for aircraft and other equipment makers.

Aircraft parts have different maintenance lives. Some can be repaired or overhauled repeatedly, others only a limited number of times, while expendable parts are used up and replaced. Aircraft operators must also follow prescribed inspection and maintenance programs. HEICO sells parts and repair services into this ongoing maintenance process; it does not disclose a recurring-revenue figure for those activities.

Electronic Technologies Group generated $1.4 billion of revenue in FY2025. It designs and manufactures electronics and subcomponents that go into larger systems, including aircraft, satellites, medical equipment and defense platforms. Its offerings range from standard and custom power supplies to microwave products and electronic connectors. The group also provides services such as radiation assurance.

HEICO’s consolidated gross profit margin was 39.8% in fiscal 2025, and operating income as a percentage of net sales was 22.7%. The company attributed the improvement in Flight Support’s gross profit margin partly to growth in repair and overhaul and a more favorable specialty-products mix.

Customers and how it sells

HEICO serves domestic and foreign commercial and cargo airlines, repair and overhaul facilities, aircraft and engine manufacturers, military units and defense equipment manufacturers. Its electronics customers also include satellite and spacecraft manufacturers and companies in medical, telecommunications, scientific and industrial markets.

In fiscal 2025, approximately 58% of consolidated net sales came from commercial aviation, 31% from defense and space, and 11% from other industrial markets. No single customer accounted for 10% or more of consolidated sales from continuing operations during any of the last three fiscal years. The five largest customers accounted for approximately 20% of total net sales in fiscal 2025.

Each operating segment runs its own distribution, sales and marketing activities, with some cross-marketing among HEICO businesses. Sales are conducted mainly by in-house staff and, to a lesser extent, by independent manufacturers’ representatives. Senior management is involved in marketing, particularly with established customers.

North America revenue was $2.8 billion in FY2025. Revenue outside the United States was $1.7 billion in the same year.

Suppliers and costs

HEICO buys high-temperature alloy sheet metal and castings, forgings, pre-plated metals, electrical components and advanced composite materials from various vendors. The materials its operations use are generally available from multiple sources in sufficient quantities, subject to normal lead times. Some materials are exposed to global price fluctuations and international trade rules, including tariffs. HEICO does not expect those measures to have a material impact on its business or results.

The company designs and manufactures replacement parts, specialty components and electronics, while its repair facilities use equipment and technical expertise to restore aircraft components. 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; acquisitions, selling expenses, share-based compensation and changes in estimated contingent consideration contributed to their increase from the prior year.

HEICO has generally experienced increases in labor, material and service costs consistent with inflation. It has sought to limit the effect on net income through manufacturing efficiencies, cost reductions and selective price increases.

Competitive position

HEICO competes with original equipment manufacturers in replacement parts and with manufacturers, airlines and independent service companies in repair, overhaul and distribution. The principal jet-engine manufacturers named by HEICO are General Electric, including CFM International, Pratt & Whitney and Rolls Royce. Historically, they were the sole source of substantially all replacement parts for their respective jet engines.

Price and service matter when replacement parts are interchangeable. Repair and overhaul competition also depends on quality, turnaround time and customer service. In electronics, HEICO competes with domestic and foreign companies on design, technology, quality, price, service and customer satisfaction. Some competitors have greater financial or other resources.

Non-original manufacturers must obtain an FAA Parts Manufacturer Approval before selling a replacement aircraft part. HEICO has developed approximately 20,000 parts for which it has received such approvals, and says it has been adding approximately 400 to 550 approvals per year in recent years, including through acquisitions. The company believes the approval process creates a barrier to entry.

Our reading: FAA approvals and the engineering needed to obtain them are a meaningful barrier, but they do not prevent competition from established manufacturers. Our reading: HEICO’s repair capabilities and customer relationships can help retain business, though customers also have access to airline, manufacturer and independent service centers. Our reading: Proprietary know-how provides some protection, but reliance on trade secrets rather than material patents for replacement-part techniques leaves that knowledge exposed to misappropriation or obsolescence.

Growth opportunities

HEICO pursues growth through new products, expanded customer relationships and acquisitions. Flight Support continues to develop FAA-approved replacement parts to serve existing customers and reach new ones. It also develops proprietary repairs. Electronic Technologies invests in research and development for its electronic products and subcomponents.

In fiscal 2025, Flight Support’s organic net sales growth was 14%, reflecting demand for aftermarket replacement parts, repair and overhaul products and services, and specialty products. Electronic Technologies’ organic net sales growth was 7%, mainly reflecting demand for defense, space, other electronics and aerospace products, partly offset by lower demand for medical products. Sales-price changes were not a significant contributor to either segment’s net sales change.

Acquisitions contributed $110.6 million to Flight Support’s fiscal 2025 net sales and $63.9 million to Electronic Technologies’ fiscal 2025 net sales. HEICO typically seeks businesses that broaden its products, services and technologies and extend its customer base or geographic presence. The company says it has completed approximately 107 acquisitions since 1990.

For fiscal 2026, HEICO expects net sales growth in both segments from increased demand for most products and from recent acquisitions. It also intends to pursue selective acquisitions. New-part approvals and acceptable sales and gross profits on new parts and repairs are not assured.

Structural risks

• Aviation demand: HEICO’s success depends heavily on the aviation industry. Lower demand for commercial air travel or changes in airline fleets could reduce demand for its products and services.
• Competition and technology: Original equipment manufacturers continue to develop engines and components. HEICO may be unable to make replacement parts that perform as well or sell them profitably at lower prices. Competitors’ patents or methods could also restrict its ability to design and manufacture products.
• Approvals and regulation: Failure to comply with government requirements could lead to suspended or revoked authorizations, penalties or sanctions. The company cannot be assured that the FAA will continue granting approvals for new parts or repairs.
• Acquisitions: Suitable acquisition candidates, capital and government approvals may not be available when needed. Integrating acquired operations and personnel, retaining key employees and completing purchases on satisfactory terms also present challenges.
• International operations and supply: HEICO faces potential transportation delays, supply-chain disruptions, geopolitical unrest, currency fluctuations and trade restrictions. Some products and technologies require export licenses or other government authorizations.
• Proprietary knowledge: The company may not be able to protect proprietary interests in aircraft parts, electronics and repair processes. Its replacement-part techniques and manufacturing expertise are also subject to misappropriation or obsolescence.

Leadership

Co-chief executives Eric A. Mendelson and Victor H. Mendelson are brothers. Each also leads one of HEICO’s operating groups.

Bottom line

Our reading

HEICO combines an aircraft-maintenance parts and services business with a portfolio of electronic components used across aviation, defense and other markets. Its approved parts, engineering capabilities and acquisitions support the business, while aviation demand, competition from equipment manufacturers and the need to keep winning approvals remain important exposures.