10-Q · May 6, 2026
Latham Group, Inc. reported Q1 2026 results showing a year-over-year revenue increase of 5.3%, reaching $117.3 million, though it fell short of analyst expectations. The net loss widened to $8.5 million, a 43.1%…
Earnings analysis · 10-Q
SWIM earnings analysis
Filed August 5, 2026 · Our reading of the company's report
The latest report
Latham delivered Q2 revenue of $197.5 million, up 14.4% year over year and above the prior quarter's $117.3 million, with broad-based growth led by in-ground pools. However, profitability lagged the sales growth: gross…
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Latham delivered Q2 revenue of $197.5 million, up 14.4% year over year and above the prior quarter's $117.3 million, with broad-based growth led by in-ground pools. However, profitability lagged the sales growth: gross margin fell to 35.5% from 37.1%, operating margin fell to 12.7% from 14.3%, and EPS decreased to $0.11 from $0.13. Six-month operating cash flow improved to $5.8 million, but receivables rose $56.1 million, capex was $16.1 million, and the company ended with $43.5 million of cash and $279.8 million of Term Loan debt.
Gross and operating margin
How much of each revenue dollar the business keeps.
One point per quarterly or annual filing. Both margins are shares of that report's revenue.
From revenue to operating profit
Where each $100 of revenue went in this report.
Cost of sales, operating expenses, and what remained. Figures are rounded to whole dollars.
How we read each report
Our analysis across the last few reports.
Our model's reading of each filing, not the share price or the market's reaction. Annual and quarterly reports each occupy one position.
Reported figures
- Earnings per share
- $0.11
- Segment
- One reportable segment. Product-line year-over-year sales increases: in-ground swimming pools +$17.7 million, covers +$3.7 million, and liners +$3.4 million.
What stood out
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Revenue grew 14.4% and accelerated sequentially
Q2 net sales increased $24.8 million, or 14.4%, year over year to $197.5 million, driven by $19.0 million of higher volume and $5.8 million of higher pricing. Sequentially, sales rose from $117.3 million in Q1 to $197.5 million in Q2.
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Broad product-line growth led by pools
All product lines contributed to growth: in-ground swimming-pool sales increased $17.7 million, covers increased $3.7 million, and liners increased $3.4 million year over year. Management said in-ground pool sales rose 22.5%, or 13.6% organically, while cover sales increased 10%.
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Operating profit and EBITDA increased
Operating income increased $0.4 million to $25.1 million and Adjusted EBITDA rose $4.7 million, or 11.9%, to $44.6 million. Operating margin improved sequentially from -5.6% in Q1 to 12.7% in Q2.
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Operating cash flow improved and revolver was repaid
Six-month operating cash flow turned positive at $5.8 million, compared with cash use of $10.9 million a year earlier. The company repaid $35.0 million on its revolver, leaving $75.0 million of revolver availability and no revolver borrowings at June 27, 2026.
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Australia/New Zealand acquisition is accretive
Freedom Pools was acquired for a GAAP purchase price of $15.4 million, funded entirely with cash, and management expects it to be immediately earnings-accretive. It is expected to add approximately $20.0 million of annualized net sales and approximately $4.0 million of annualized Adjusted EBITDA before synergies.
What to watch
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Ramp-up costs compressed gross and operating margins
Gross margin declined 160 basis points year over year to 35.5%, and operating margin declined 160 basis points to 12.7%. Management attributed the gross-margin pressure primarily to approximately $2.8 million of fiberglass demand ramp-up costs, or about 140 basis points.
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EPS and net income declined despite sales growth
Net income fell $3.2 million, or 20.2%, to $12.8 million, and diluted EPS declined from $0.13 to $0.11 year over year. Other expense shifted by $4.4 million to $1.4 million of expense, primarily reflecting unfavorable foreign-currency transaction gains and losses.
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Receivables build absorbed operating cash
Working-capital investment constrained cash conversion: trade receivables increased $56.1 million in the first six months, while operating asset-and-liability changes used $32.4 million of cash. Cash finished at $43.5 million after a $27.6 million six-month decrease.
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Leverage and refinancing exposure remain
Debt remains material at $279.8 million of Term Loan borrowings, and the $75.0 million revolving facility matures on February 23, 2027; management is discussing an extension. A 1% effective-rate change would alter annual net interest expense by approximately $1.2 million.
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No formal risk-factor update; geopolitical exposure noted
No material risk-factor changes were reported versus the 2025 Form 10-K or Q1 2026 Form 10-Q. The filing nonetheless notes that Middle East conflict and Strait of Hormuz disruptions could raise energy and commodity costs; Q2 cost of sales already increased $18.7 million, or 17.2%, year over year.
Management's outlook
The 10-Q contains no explicit quantitative full-year revenue or EPS outlook. Management said most of the approximately $2.8 million of second-quarter fiberglass ramp-up costs are expected to be recovered in the second half of 2026; Freedom Pools is expected to contribute approximately $20.0 million of annualized sales and approximately $4.0 million of annualized Adjusted EBITDA before synergies.
Earlier filings 4
10-K · March 4, 2026
Latham (SWIM) positions itself as the market leader in fiberglass and vinyl in-ground residential pools with a direct-to-homeowner digital strategy and a national manufacturing/distribution footprint. Q4 2025 delivered…
10-Q · November 5, 2025
Latham reported quarterly net sales of $161,903,000 (up $11,407,000 vs. the prior-year quarter) with gross profit of $57,307,000 (35.4% gross margin) and income from operations of $21,508,000 (13.3% operating margin).…
10-Q · August 6, 2025
Latham Group reported Q2 net sales of $172,639,000, up $12,517,000 (7.8%) versus Q2 2024 ($160,122,000) and materially higher than the prior quarter. Gross profit rose to $63,963,000 (gross margin ~37.1%) and operating…
This is our reading of a public filing, not the filing itself. Analysis can contain errors; check the source document for full context.