Helios Technologies, Inc. (HLIO): Business Model Canvas [Dec-2025 Updated]

You're digging into a complex industrial player, and frankly, Helios Technologies, Inc. is showing a smart playbook: they're chasing profitable growth while cleaning up the books. Here's the quick math: with full-year 2025 revenue guidance landing between $820 million and $830 million, they're leaning on strong segments-like Electronics, which jumped 21% year-over-year in Q3-but the real story is their balance sheet discipline, cutting total debt to just $419.1 million as of Q3 2025. To see defintely how their unique cartridge valve tech and global distribution network translate into these numbers, check out the full Business Model Canvas breakdown below; it really shows their strategic focus.

Helios Technologies, Inc. (HLIO) - Canvas Business Model: Key Partnerships

You're looking at the structure of Helios Technologies, Inc. (HLIO) partnerships as of late 2025, which is heavily influenced by recent strategic portfolio refinement. The focus is clearly shifting toward higher-margin, core manufacturing and electronic controls, which impacts how they manage distribution and supply chains.

Long-term exclusive distribution agreement with Questas Group

The most significant recent partnership change involved the divestiture of the Custom Fluidpower (CFP) business to Questas Group, finalized on September 29, 2025. This wasn't a clean break; it cemented a long-term exclusive distribution agreement for the Australian hydraulics market, securing the continuity of Sun Hydraulics' presence there through CFP's established network.

Here are the key figures surrounding this strategic move:

This deal allowed Helios Technologies, Inc. to reduce debt for the ninth consecutive quarter, bringing total debt down to $419.1 million as of September 27, 2025, a 13% reduction from the prior year period. The deal also improved the net debt to Adjusted EBITDA leverage ratio to 2.4x from 2.8x year-over-year. It's a clear move to refine the operating model for better returns on invested capital.

Global network of third-party distributors and sales agents

Before the CFP divestiture, Helios Technologies, Inc. already operated on a wide international scale. This network remains critical for reaching niche markets globally.

• Helios Technologies, Inc. sells its products in over 90 countries worldwide.
• The strategy centers on being the leading provider in niche markets, which necessitates a broad, localized distribution footprint.

The Q3 2025 results showed a return to year-over-year sales growth of 13%, indicating that the remaining core network, despite end-market volatility, is gaining traction, with the Electronics segment growing 21% in that quarter.

Key suppliers for inventory and raw materials

Managing the supply base is a constant focus, especially given the recent gross margin contraction of 30 basis points in Q2 2025 driven partly by higher material costs as a percentage of sales. However, operational discipline is showing results.

Helios Technologies, Inc. actively manages supplier relationships to optimize working capital. Specifically, the company achieved a decrease in its cash conversion cycle in Q3 2025, which reflected improved inventory management and extending supplier payment terms. This action helps fund operations; for instance, Q3 2025 generated $25.2 million in net cash provided by operations.

The company's current ratio stood at 3.03 as of late 2025, signaling a strong ability to cover short-term obligations, which includes managing raw material purchases.

Technology partners from past acquisitions like i3 Product Development

The acquisition of i3 Product Development (i3PD) in May 2023 was intended to bolster in-house engineering and consulting services, acting as a technology partnership integrated into the Electronics segment. This capability supports the push toward higher-value, IoT-enabled offerings like the Atlas Connect Gateway, launched in 2025.

You should note the financial impact of this integrated technology partner:

• i3PD generated over $13 million in revenue during the 2022 fiscal year prior to acquisition.
• The business had completed over 4,000 projects for more than 450 clients in its history.
• In Q3 2025, a $25.9 million goodwill write down related to the i3PD business impacted operating income.

This write-down suggests a re-evaluation of the carrying value of that acquired intellectual capital, even as the core strategy relies on its engineering expertise to drive the Electronics segment, which saw sales growth of 21% in Q3 2025.

Finance: draft 13-week cash view by Friday.

Helios Technologies, Inc. (HLIO) - Canvas Business Model: Key Activities

You're looking at the core actions Helios Technologies, Inc. (HLIO) takes to run its business as of late 2025. This is where the rubber meets the road, translating strategy into tangible output and financial results.

Highly engineered product development and innovation (e.g., ENERGEN™)

Helios Technologies, Inc. focuses on developing premier products and solutions for niche markets, which is supported by an aggressive segment of new product development. This innovation is recognized in the industry; for instance, the ENERGEN™ technology from Sun Hydraulics, a Helios Operating Company, earned a 2025 LEAP Gold Award in the Motion Control category. ENERGEN™ is specifically noted as a first-of-its-kind hydraulic-power-to-electrical-power conversion system designed to harvest energy from hydraulic flow. The Company owns approximately 300 active patents and trademarks relating to certain of its products and businesses. The strategy is to use this product innovation to aid organic growth, aligning with megatrends like digitalization and productivity advancements.

Global manufacturing and supply chain management

The Company operates a global manufacturing and supply chain footprint, selling its products to customers in over 90 countries around the world. This global reach is supported by manufacturing infrastructure designed to be leveraged for new tariff mandates, such as the "in the region for the region" approach. For example, the Faster S.r.l. facility in Lombardy, Italy, features an Automated Warehouse that spans 2100 square meters and can process up to 190 pallets/hour, supporting European hydraulics capabilities. The Q3 2025 results showed sales growth across all regions, with consolidated net sales reaching $220 million, a 13% increase year-over-year, with the Electronics segment growing 21% and Hydraulics growing 9%.

Here are the segment sales performance highlights for the third quarter of 2025:

Strategic portfolio management, like the Custom Fluidpower divestiture

A key activity involves actively managing the portfolio to refine the operating model and drive improved returns on invested capital. The most recent major action was the planned divestiture of the Australian-based Custom Fluidpower ("CFP") business. Helios Technologies completed the sale of CFP to Questas Group on September 29, 2025, for an all-cash transaction valued at approximately $83 million AUD (or $\sim$$54 million USD). This compares to the original acquisition price of approximately $26 million USD in August 2018. CFP's sales in 2024 were $92 million AUD ($61 million USD). The Q3 2025 financial results recorded a $21 million gain on sale related to CFP. The proceeds are being used for debt repayment, disciplined organic investment, and return of capital to shareholders.

The impact of portfolio refinement is visible in the balance sheet and margin profile:

• Total debt as of September 27, 2025, was $419.1 million, a 13% reduction from $483.4 million at September 28, 2024.
• The net debt-to-Adjusted EBITDA leverage ratio improved to 2.4x from 2.8x in the prior year period.
• The Company raised its full-year 2025 sales outlook to the range of $810 million to $830 million.

Continuous operational efficiency and cost reduction initiatives

Helios Technologies maintains a focus on continuous operational efficiency, cost discipline, and working capital improvements to enhance margin rates. This focus helped expand the gross margin by 200 bps in Q3 2025 compared with the prior year period, despite tariff headwinds. The company has been actively managing working capital, which resulted in an 11% reduction in inventory across all businesses over the prior year period as of Q1 2025. Furthermore, cash flow generation is a priority; Q2 2025 saw cash from operations of $37 million, which was the highest quarterly cash generation since the fourth quarter of 2019. This discipline contributed to a Q3 2025 diluted Non-GAAP EPS of $0.72, which was up 22% year-over-year.

Key operational metrics reflecting efficiency efforts:

• Q3 2025 Gross Margin expansion: 200 bps versus prior year.
• Q1 2025 Inventory reduction: $24.2 million, or 11% YoY.
• Q2 2025 Cash from Operations: $37.0 million.
• Net debt-to-Adjusted EBITDA leverage ratio (Q3 2025): 2.4x.

Cost management is defintely key to absorbing external pressures.

Helios Technologies, Inc. (HLIO) - Canvas Business Model: Key Resources

You're looking at the core assets Helios Technologies, Inc. (HLIO) relies on to execute its strategy as a global leader in highly engineered motion control and electronic controls technology. These resources aren't just static items; they are dynamic capabilities, from patented designs to physical infrastructure, that drive their value proposition across diverse end markets.

The financial foundation is a key resource, showing management's success in deleveraging the balance sheet while maintaining strong liquidity. Here's the quick math on their financial posture as of the third quarter of 2025:

The intellectual property, particularly in the Hydraulics segment, is a significant intangible asset. Sun Hydraulics, an operating company, earned a 2025 LEAP Gold Award in the Motion Control Category for its ENERGEN™ technology. This is a first-of-its-kind hydraulic-power-to-electrical-power conversion system, which combines their renowned cartridge-valve design with advanced generator technology to harvest energy from hydraulic flow. This innovation directly supports the company's push for smarter, more efficient fluid power systems. Also, the Electronics segment, anchored by Enovation Controls, delivered a record quarter in Q3 2025, indicating strong IP traction in electronic controls technology.

The global manufacturing footprint is built to service customers in over 90 countries and has seen significant recent investment to drive operational efficiency. These physical assets are crucial for maintaining a competitive edge in both hydraulics and electronics:

• The Faster Automated Warehouse in Italy measures 2,100 square meters and has capacity for 6,900 pallets, capable of servicing up to 190 pallets/hour.
• North American operations feature two Regional Operational Centers of Excellence (CoE) fully operational since Q4 2023.
• The Hydraulic Manifold Solutions CoE in Mishawaka, Indiana, added 50,000 square feet and supports approximately $100 million in run-rate annual revenues.
• The Hydraulic Valve and Coupling Solutions CoE in Sarasota, Florida, streamlines order fulfillment and facilitates advancements through the Robert E. Koski Center of Engineering Innovation.

These tangible and intangible assets-from the patented ENERGEN™ system to the operational capacity of the new Italian warehouse-are what Helios Technologies uses to deliver its highly engineered solutions.

Helios Technologies, Inc. (HLIO) - Canvas Business Model: Value Propositions

Helios Technologies, Inc. provides highly engineered motion control and electronic controls technology solutions. These solutions serve diverse end markets including construction, agriculture, energy, recreational vehicles, marine, and health and wellness.

The company's commitment to reliability is reflected in its operational execution; for the third quarter of 2025, Helios Technologies achieved a gross margin of 33.1%. Furthermore, the adjusted EBITDA margin for that same period stood at 20.5%.

Superior performance is a core offering, particularly from proprietary screw-in hydraulic cartridge valves, which are part of the Hydraulics segment. For instance, a specific electro-proportional flow control valve, the FPJP, delivers an industry leading flow rate of 114 gpm (431 L/min) and operates at a maximum pressure of 5000 psi (350 bar). Historical demand for a 3-position, 4-way cartridge valve saw orders exceed the internal forecast by over 200% within 48 hours of its launch.

The value proposition is strengthened by integrated system solutions combining the Hydraulics and Electronics segments. The Hydraulics segment accounted for approximately 64% of total sales in the third quarter of 2025. The Electronics segment, which includes Enovation Controls, delivered an all-time record quarter in Q3 2025.

Here's a look at the year-over-year sales growth by segment and region for the third quarter of 2025:

The company supports its global customer base with product availability in over 90 countries around the world. The raised full-year 2025 net sales guidance is now projected to be between $820 million and $830 million.

The core value elements include:

• Highly reliable motion and electronic controls technology.
• Proprietary screw-in hydraulic cartridge valves.
• Integrated solutions across Hydraulics and Electronics.
• Global product availability in over 90 countries.

The company has paid a cash dividend to its shareholders every quarter since becoming a public company in 1997. This long-term commitment is a defintely part of the value proposition for income-focused investors.

Helios Technologies, Inc. (HLIO) - Canvas Business Model: Customer Relationships

You're looking at how Helios Technologies, Inc. (HLIO) structures its interactions with the people buying its engineered motion control and electronic solutions. It's a mix of deep partnership and efficient transaction, which makes sense given their global footprint serving customers in over 90 countries.

Dedicated sales and engineering support for Original Equipment Manufacturers (OEMs)

For your largest, most complex customers-the OEMs-Helios Technologies leans into deep technical collaboration. This isn't just about selling a valve; it's about integrating a critical component into a larger machine system. This high-touch approach is essential because, based on 2024 figures, direct sales to OEMs accounted for 51% of their segment sales. That's the majority of their business relying on that dedicated engineering interface to ensure the solution works perfectly within the OEM's final product.

Long-term, trust-based relationships with channel partners

The other half of the equation involves the channel partners, who often combine HLIO's products with other hydraulic components to build complete systems for end-users. These relationships are built on trust because the channel partners are essentially extensions of the sales force in many markets. In 2024, channel partners accounted for approximately 49% of segment sales. This split shows a balanced reliance on both direct OEM integration and the broader distribution network. Here's a quick look at how the segments contributed to the recent turnaround in Q3 2025, which reflects the health of these relationships:

Customer-centric focus to deliver leading technology solutions

The stated strategy from CEO Sean Bagan centers on this customer-centric focus, which is about combining engineered products and services to deliver leading technology solutions. You see the payoff in the financials; after a tough stretch, Q3 2025 revenue was $220 million, a 13% year-over-year increase, and the gross margin expanded to 33.1%. This suggests customers are valuing the solutions enough to drive both volume and margin expansion. The company is definitely focused on making sure its offerings resonate, as evidenced by the Hydraulics segment growing 9% year-over-year and the Electronics segment growing 21% year-over-year in that same quarter.

Transactional and self-service for replacement parts via distributors

While the OEM relationship is consultative, the ongoing need for replacement parts and standard components through the distributor network is inherently more transactional. This is where the efficiency of the channel partner model comes into play, allowing for quicker fulfillment of standard items without requiring a full engineering engagement every time. The structure supporting this involves several key operating companies:

• Sun Hydraulics, LLC
• Faster S.r.l.
• Enovation Controls, LLC
• Balboa Water Group

The company's full-year 2025 net sales guidance was raised to the $820-$830 million range, showing confidence in maintaining this balanced customer engagement model moving forward.

Helios Technologies, Inc. (HLIO) - Canvas Business Model: Channels

Direct sales force to large global OEMs.

Helios Technologies sells its products to customers in over 90 countries around the world.

Extensive global network of independent distributors.

Enovation Controls supports a worldwide network of authorized distributors and system integrators.

Operating companies with established brand channels (e.g., Sun Hydraulics, Enovation Controls).

The Q3 2025 net sales totaled $220 million. The Electronics segment, which includes Enovation Controls, saw sales increase 21% year-over-year in Q3 2025, with Enovation Controls achieving an all-time record quarter. The Hydraulics segment, which includes Sun Hydraulics, grew sales by 9% year-over-year in Q3 2025.

The company is refining its go-to-market strategy by working to value all of its channel partners.

Regional manufacturing centers supporting 'in the region for the region' delivery.

Helios Technologies has electronics manufacturing capabilities in China from the acquisition of Joyonway plus other hydraulics manufacturing facilities in China and the APAC region for many years.

• Faster, a Helios Operating Company, opened an Automated Warehouse in Italy.
• The Italian facility has capacity for 6,900 pallets.
• The new warehouse can service up to 190 pallets/hour.
• This location, along with the new North American Hydraulic Centers of Excellence, enables global reach.

Helios Technologies, Inc. (HLIO) - Canvas Business Model: Customer Segments

Helios Technologies, Inc. serves a global customer base, selling its highly engineered motion control and electronic controls technology products in over 90 countries. The company's strategy centers on being the leading provider in niche markets, which inherently means targeting specific Original Equipment Manufacturers (OEMs) within those spaces. As of the third quarter of 2025, the business is clearly split between two primary reporting segments, which map directly to distinct customer groups and their needs.

The revenue split for the third quarter ended September 27, 2025, shows the relative weight of the customer bases served by each segment:

The Hydraulics segment, representing 64.14% of the $220 million total Q3 2025 net sales, is heavily reliant on customers in the mobile and agriculture sectors. For instance, in Q3 2025, Hydraulics segment sales grew 9% year-over-year, primarily reflecting growth in mobile and agriculture markets. This shows a direct, quantifiable link between these specific OEM customers and a significant portion of Helios Technologies, Inc.'s top line.

The Electronics segment, which accounted for 35.86% of Q3 2025 revenue, saw sales increase 21% year-over-year. This growth was driven by different, though overlapping, customer sets:

• Growth in recreational markets.
• Growth in mobile markets.
• Growth in industrial markets.

To provide a more granular view of the diverse end markets Helios Technologies, Inc. serves, which are the ultimate destinations for the components sold to OEMs, here are the key sectors mentioned:

• Mobile equipment manufacturers: Including construction and material handling OEMs.
• Agriculture equipment manufacturers.
• Industrial equipment manufacturers.
• Recreational vehicle manufacturers.
• Marine equipment manufacturers.
• Health and wellness market, served in part by the Balboa Water Group operating company.

It's important to note the cyclical nature of some of these customers; for example, in Q2 2025, softness was noted in the industrial and mobile markets for the Hydraulics segment, while the recreational end market faced significant challenges in the same period for the Electronics segment. Conversely, the Electronics segment saw strong growth in the recreational market in Q3 2025. The company also serves customers via distribution channels, which cater to aftermarket service providers and end-users, though specific revenue attribution for this channel is not separately itemized from the segment reporting.

Helios Technologies, Inc. (HLIO) - Canvas Business Model: Cost Structure

You're looking at the core expenses driving Helios Technologies, Inc. (HLIO) operations as of late 2025. Honestly, for a company with global manufacturing, the cost of making the product is always the first thing to check.

The Significant cost of goods sold from global manufacturing operations is substantial, as expected for a highly engineered product maker. For the third quarter ended September 27, 2025, Helios Technologies reported net sales of $220 million. With a reported Gross Profit of $73 million and a Gross Margin of 33.1% for that same quarter, the implied Cost of Revenue (COGS) was approximately $147 million ($220 million - $73 million). This figure reflects the cost of manufacturing across their global footprint, though management noted that operational efficiency improvements and higher volumes helped expand the gross margin by 200 basis points year-over-year, partially offsetting other pressures.

Regarding Research and development (R&D) investment for new product innovation, Helios Technologies, Inc. emphasizes its commitment to being a leading provider in niche markets through innovative product development. While the company continues to invest in engineering resources and production capabilities expected to drive future productivity, the specific R&D expense figure for the third quarter of 2025 isn't explicitly detailed in the immediate summaries, though it remains a necessary, ongoing investment to fuel future revenue streams.

The Selling, General, and Administrative (SG&A) expenses include costs associated with market presence and corporate overhead. SG&A expenses in Q3 2025 were up by $5 million, or 30%, over the prior year period. A significant driver for this year-over-year increase was the $3.7 million reversal of unvested stock compensation tied to the CEO termination in July 2024, alongside higher wages and benefits. The context of tariff mitigation costs is important here; management commentary indicated that while gross margin expanded, it was partially offset by net tariff impacts. This suggests active, though perhaps not fully quantified in this section, spending on supply chain adjustments or pricing strategies to counter import duties from key markets like China, Mexico, and Canada.

Finally, the cost of capital is managed through the balance sheet structure. As of September 27, 2025, Helios Technologies, Inc. reported total debt of $419.1 million. This debt was composed of approximately $280 million in term loans and $139 million in revolver/other facilities. The focus on financial discipline is clear, as the company reduced debt for the ninth consecutive quarter. This focus helped lower the associated financing cost; net interest expense for the quarter declined by $2.1 million, or 23%, compared to the year-ago period, due to carrying a lower debt balance and lower interest rates.

Here is a quick look at the key cost components and related financial context for Q3 2025:

The structure of these costs shows a clear trade-off:

• Manufacturing Efficiency: Driving down the COGS percentage through volume leverage and operational improvements remains critical for margin expansion.
• Strategic Investment: Continued spending on engineering resources, even if R&D is not explicitly itemized here, is necessary for long-term product innovation.
• Overhead Management: SG&A is being managed, but one-time items like stock compensation reversals can skew period-over-period comparisons.
• Balance Sheet Discipline: Aggressive debt reduction directly lowers the recurring interest expense, freeing up cash flow.

Finance: draft 13-week cash view by Friday.

Helios Technologies, Inc. (HLIO) - Canvas Business Model: Revenue Streams

You're looking at how Helios Technologies, Inc. (HLIO) converts its operations into cash flow as of late 2025. The revenue streams are clearly segmented across its two primary business units, reflecting a return to top-line growth following recent market challenges.

The third quarter of 2025 saw net sales reach $220 million, marking a 13% year-over-year increase. This revenue is split between the Hydraulics and Electronics segments, which form the core of the company's product sales.

Here's a breakdown of the segment contributions for the third quarter of 2025:

Product sales from the Hydraulics segment represented 64% of the total Q3 2025 sales, delivering revenue of $141.3 million, which grew 9% compared to the prior year period. The Electronics segment showed stronger acceleration, with product sales increasing 21% year-over-year, contributing $79 million to the quarter's total revenue.

Looking forward, Helios Technologies, Inc. has tightened and raised its full-year 2025 revenue guidance. This outlook reflects confidence based on the strong third-quarter performance and momentum in key focus areas.

• Full-year 2025 revenue guidance is set between $820 million and $830 million.
• The company maintains a consistent return to shareholders via its quarterly cash dividend of $0.09 per share, paid for over 28 years.

The Electronics segment's 21% growth in Q3 2025 was primarily driven by strength in the recreational, mobile, and industrial markets. Also, the Hydraulics segment saw its sales increase 9%, led by growth in the mobile and agriculture end markets.