Key Points
- Q4 revenue rose 14.5% to $100.0 million, beating estimates
- EPS of -$0.06 outperformed consensus loss of -$0.09
- Full-year 2025 net income of $11.1 million vs. prior-year loss
- Adjusted EBITDA increased 24.4% in 2025
- Stock surged 19.72% in after-hours trading
- Acquired Freedom Pools for $17 million
- 2026 guidance calls for 9% sales growth and 12.7% EBITDA growth
Latham Group, Inc. (Nasdaq: SWIM) reported better-than-expected fourth-quarter and full-year 2025 financial results after the market close on Wednesday, while also announcing the acquisition of Australia-based Freedom Pools for approximately $17 million in cash.
Investors reacted strongly to the combined earnings beat and strategic acquisition news. Shares climbed 19.72% in after-hours trading to $7.71, up $1.27. The company now holds a market capitalization of approximately $751.27 million. Over the past 52 weeks, the stock has traded between $4.56 and $8.46 and carries a beta of 1.70, indicating above-average volatility.
Fourth Quarter 2025 Results
For the fourth quarter, Latham reported net sales of $100.0 million, representing a 14.5% year-over-year increase and exceeding analyst expectations of $95.85 million. The company posted a net loss of $7.0 million, or $0.06 per diluted share, outperforming consensus estimates that had projected a loss of $0.09 per share. In the prior-year quarter, Latham reported a loss of $0.25 per diluted share.
Adjusted EBITDA surged 189.6% to $10.5 million, reaching 10.5% of net sales. Gross margin expanded by 340 basis points compared to the prior year, driven by higher volumes, operational efficiencies, value engineering initiatives, and contributions from prior acquisitions.
President and CEO Sean Gadd described the fourth quarter as a strong finish to the year, with year-over-year sales growth across all three product categories. In-ground pool sales increased 15% during the quarter, supported primarily by fiberglass pool demand.
Full-Year 2025 Performance
For the full year 2025, Latham generated net sales of $545.9 million, an increase of 7.4% from 2024. The company returned to profitability, reporting net income of $11.1 million, or $0.09 per diluted share, compared to a net loss per diluted share of $0.15 in the prior year.
Adjusted EBITDA rose 24.4% to $99.8 million, representing 18.3% of net sales. Gross margin expanded by 320 basis points for the year, while adjusted EBITDA margin improved by 250 basis points.
Fiberglass pools accounted for 76.5% of total in-ground pool sales in 2025, underscoring the company’s strategic focus on higher-margin product categories. Management also highlighted strong traction in Florida, where fiberglass pool sales increased at a double-digit rate during the year, supported by new dealer sign-ups and expanded partnerships with custom homebuilders.
Balance Sheet and Cash Flow Strength
Latham ended 2025 with $71.0 million in cash. Net cash provided by operating activities totaled $11.3 million in the fourth quarter and $51.4 million for the full year. Total debt stood at $279.8 million at year-end, resulting in a net debt leverage ratio of 2.1 times.
Capital expenditures reached $25.4 million for the year, reflecting continued investment in growth initiatives and manufacturing capabilities.
$17 Million Acquisition Expands International Footprint
Alongside earnings, Latham announced the completion of its acquisition of Freedom Pools, a fiberglass pool manufacturer and installer operating across Australia and New Zealand. The transaction, fully funded with cash on hand, is expected to be immediately accretive to earnings and contribute approximately $20 million in annual net sales and $4 million in adjusted EBITDA before synergies.
The acquisition strengthens Latham’s position in key growth markets and complements its existing Australian brand, Narellan Pools, which was acquired in 2019. Both brands will operate under a dual-brand strategy moving forward.
2026 Outlook
Looking ahead, Latham provided 2026 guidance anticipating 9.0% net sales growth and 12.7% adjusted EBITDA growth at the midpoint. Management expects continued margin expansion and sustained demand in fiberglass pools as the company builds on its strengthened market presence.
With improving profitability, expanding margins, solid cash flow generation, and an accretive acquisition, Latham enters 2026 with strong operational momentum — a development investors quickly rewarded in after-hours trading.
