Latham Group (SWIM) Q2 2025 earnings summary

Executive summary

• Achieved 7.8% year-over-year revenue growth and 15.7% adjusted EBITDA growth in Q2 2025, reinforcing market leadership across a diversified product portfolio, with strong gains in fiberglass pools and autocovers, especially in the Sand States.

• Growth driven by successful marketing, acquisitions (notably Coverstar Central and two smaller autocover dealers), and expansion of the dealer base, particularly in master planned communities.

• Operational efficiencies from lean manufacturing, value engineering, and digital initiatives (including ERP rollout and "Measure by Latham" AI tool) contributed to improved margins.

• Maintains leading share in every residential pool subcategory, with a unique direct-to-homeowner model and broad branded product portfolio driving engagement.

• Continued expansion in Sand States (Florida, Texas, Arizona, California) and increased dealer network contributed to performance.

Financial highlights

• Q2 2025 net sales: $172.6M (up 7.8% YoY); net income: $16.0M (9.3% margin); adjusted EBITDA: $39.9M (23.1% margin); gross margin: 37.1% (up 400 bps YoY).

• First half 2025 net sales: $284.1M (up 4.9% YoY); net income: $10.0M (3.5% margin); adjusted EBITDA: $51.0M (18.0% margin); gross profit: $96.8M (34.1% margin).

• In-ground pool sales: $78.6M in Q2 (down 2.9% YoY); covers: $37.2M (up 46%); liners: $56.8M (up 6%).

• Net cash at Q2 end: $26.9M; total debt: $281.5M; $75.0M available under revolving credit facility.

• Capital expenditures: $6.8M in Q2; $10.3M for first half; 2025 CapEx guidance: $27M–$33M.

Outlook and guidance

• Reaffirmed 2025 guidance: 8% net sales growth and 19% adjusted EBITDA growth at midpoints; net sales guidance: $535M–$565M; adjusted EBITDA: $90M–$100M.

• Projecting approximately 60,000 new U.S. pool starts in 2025, flat versus 2024, with long-term potential to return to 100,000 annual starts.

• Management remains cautiously optimistic, focusing on acquisitions, Sand State expansion, and operational initiatives amid macroeconomic and geopolitical uncertainties.

• Capital expenditures for 2025 projected at $27M–$33M.