Hardware products and merchandising solutions provider Hillman (NASDAQ: HLMN) reported Q2 CY2025 results beating Wall Street’s revenue expectations, with sales up 6.2% year on year to $402.8 million. The company’s full-year revenue guidance of $1.56 billion at the midpoint came in 0.6% above analysts’ estimates. Its non-GAAP profit of $0.17 per share was 18.5% above analysts’ consensus estimates.

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"Our team has done a fantastic job successfully managing the tariff environment while continuing to provide great customer service at the shelf and delivering orders on-time and in-full," commented Jon Michael Adinolfi, President and CEO of Hillman.

Company Overview

Established when Max Hillman purchased a franchise operation, Hillman (NASDAQ: HLMN) designs, manufactures, and sells industrial equipment and systems for various sectors.

Revenue Growth

Examining a company’s long-term performance can provide clues about its quality. Any business can put up a good quarter or two, but the best consistently grow over the long haul. Over the last five years, Hillman grew its sales at a sluggish 3.9% compounded annual growth rate. This fell short of our benchmark for the industrials sector and is a tough starting point for our analysis.

Long-term growth is the most important, but within industrials, a half-decade historical view may miss new industry trends or demand cycles. Hillman’s recent performance shows its demand has slowed as its annualized revenue growth of 1.6% over the last two years was below its five-year trend.

This quarter, Hillman reported year-on-year revenue growth of 6.2%, and its $402.8 million of revenue exceeded Wall Street’s estimates by 2.6%.

Looking ahead, sell-side analysts expect revenue to grow 7.5% over the next 12 months, an improvement versus the last two years. This projection is above average for the sector and suggests its newer products and services will fuel better top-line performance.

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Operating Margin

Operating margin is a key measure of profitability. Think of it as net income - the bottom line - excluding the impact of taxes and interest on debt, which are less connected to business fundamentals.

Hillman was profitable over the last five years but held back by its large cost base. Its average operating margin of 3.9% was weak for an industrials business. This result is surprising given its high gross margin as a starting point.

On the plus side, Hillman’s operating margin rose by 1.9 percentage points over the last five years, as its sales growth gave it operating leverage.

This quarter, Hillman generated an operating margin profit margin of 9%, in line with the same quarter last year. This indicates the company’s cost structure has recently been stable.

Earnings Per Share

We track the long-term change in earnings per share (EPS) for the same reason as long-term revenue growth. Compared to revenue, however, EPS highlights whether a company’s growth is profitable.

Hillman’s full-year EPS flipped from negative to positive over the last five years. This is encouraging and shows it’s at a critical moment in its life.

Like with revenue, we analyze EPS over a shorter period to see if we are missing a change in the business.

Hillman’s EPS grew at an astounding 18.1% compounded annual growth rate over the last two years, higher than its 1.6% annualized revenue growth. This tells us the company became more profitable on a per-share basis as it expanded.

We can take a deeper look into Hillman’s earnings quality to better understand the drivers of its performance. While we mentioned earlier that Hillman’s operating margin was flat this quarter, a two-year view shows its margin has expanded by 3.5 percentage points. This was the most relevant factor (aside from the revenue impact) behind its higher earnings; interest expenses and taxes can also affect EPS but don’t tell us as much about a company’s fundamentals.

In Q2, Hillman reported adjusted EPS at $0.17, up from $0.16 in the same quarter last year. This print easily cleared analysts’ estimates, and shareholders should be content with the results. Over the next 12 months, Wall Street expects Hillman’s full-year EPS of $0.53 to grow 3.7%.

Key Takeaways from Hillman’s Q2 Results

This was a classic 'beat and raise' quarter. We were impressed by how significantly Hillman blew past analysts’ EBITDA and EPS expectations this quarter. Looking ahead, the company raised full-year revenue guidance, and its full-year EBITDA guidance trumped Wall Street’s estimates. Zooming out, we think this was a great print. The stock traded up 12.7% to $9.17 immediately after reporting.

Hillman put up rock-solid earnings, but one quarter doesn’t necessarily make the stock a buy. Let’s see if this is a good investment. We think that the latest quarter is only one piece of the longer-term business quality puzzle. Quality, when combined with valuation, can help determine if the stock is a buy. We cover that in our actionable full research report which you can read here, it’s free.