Latham’s third quarter results showed year-on-year revenue growth despite a flat U.S. in-ground pool market, with management crediting strong demand for fiberglass pools, pool covers, and liners as the main drivers. CEO Scott Rajeski noted, “all 3 of our product lines experienced year-on-year growth,” highlighting that the company’s investments in product innovation and marketing have outpaced broader industry trends. Latham’s ability to mitigate tariff impacts and capture share in key geographies, particularly the Sand States, contributed to its margin expansion and competitive positioning.
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Latham (SWIM) Q3 CY2025 Highlights:
- Revenue: $161.9 million vs analyst estimates of $164.8 million (7.6% year-on-year growth, 1.8% miss)
- Adjusted EPS: $0.08 vs analyst expectations of $0.10 (13.6% miss)
- Adjusted EBITDA: $38.33 million vs analyst estimates of $35.69 million (23.7% margin, 7.4% beat)
- EBITDA guidance for the full year is $95 million at the midpoint, above analyst estimates of $93.51 million
- Operating Margin: 13.3%, up from 8.9% in the same quarter last year
- Market Capitalization: $785.1 million
While we enjoy listening to the management's commentary, our favorite part of earnings calls are the analyst questions. Those are unscripted and can often highlight topics that management teams would rather avoid or topics where the answer is complicated. Here is what has caught our attention.
Our Top 5 Analyst Questions From Latham’s Q3 Earnings Call
- Andrew Carter (Stifel) asked about lead generation and customer decision-making amid tariff and interest rate uncertainty. CEO Scott Rajeski explained that while lead volume is strong, actual purchase decisions are impacted by economic uncertainty, but the company continues to convert demand into sales through dealer support.
- Daniel Eggerichs (Craig-Hallum Capital Group) inquired about geographic demand patterns and progress in Florida. Rajeski detailed consistent strength across most regions, highlighting Florida as a standout due to successful entry into master-planned communities and partnerships with custom homebuilders.
- Michael Francis (William Blair) pressed for details on share gains in Florida and the impact of product mix. Rajeski responded that the company is converting concrete pool installers to fiberglass, achieving both dealer and consumer share gains in targeted communities.
- Bobby Schultz (Baird) questioned the sustainability and potential acceleration of fiberglass market share gains. Rajeski suggested the current pace of 1% annual share gain could accelerate as the company deepens its presence in the Sand States and as broader market conditions stabilize.
- Elizabeth Langan (Barclays) sought clarity on future pricing strategy and demand outlook. CFO Oliver Gloe stated the company aims to return to regular annual price increases, pending tariff normalization, and described order rates as steady through the close of the pool building season.
Catalysts in Upcoming Quarters
Looking ahead, the StockStory team will be watching (1) whether Latham’s fiberglass pool and auto cover adoption rates continue to outpace broader industry trends, (2) the company’s execution on expanding dealer and builder partnerships in the Sand States and other growth regions, and (3) progress on productivity initiatives and cost control to sustain margin gains. Regulatory developments and macroeconomic factors like tariffs and interest rates will also be monitored for their potential impact on demand.
Latham currently trades at $6.73, down from $7.20 just before the earnings. At this price, is it a buy or sell? The answer lies in our full research report (it’s free for active Edge members).
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