Hayward Holdings Co.
Hayward Holdings is a leader in pool equipment and water infrastructure based in the United States. They operate in the consumer discretionary and industrials segments. The company was initially founded in 1925 as a tool and die shop and entered the pool market in the 1960s. They have grown into one of the most recognizable names in the aquatic systems market. They recently went public in 2021 and are focused on designing, manufacturing, and marketing a wide array of advanced pool technology. Hayward has positioned itself as a high-margin, innovation-driven business with deep aftermarket revenue streams and an expanding international reach.
Hayward's mission isn’t just to sell more pool gear, but to deliver exceptional products, innovative technology, and outstanding service to transform the water experience. Hayward is focusing on building a four-pillar expansion plan. Deepening its aftermarket dominance, scaling commercial aquatics, embedding smart/connected tech into every install, and leveraging efficient product innovation processes. They are investing heavily in R&D with projects like Omni SmartPad to advance their leadership in IoT-enabled pool solutions.
The company is also making moves to create several structural catalysts to set the stage for its long-term history. 85% of the company's revenue comes from aftermarket sales, giving the company strong free cash flow, operational predictability, and the ability to reinvest in the company. Hayward is also expanding into commercial markets through acquisitions like ChlorKing, opening a new channel into schools, hotels, and municipalities. However, the company is exposed to macro-sensitive segments like new pool construction, seasonality, and tariffs around China-based sourcing. Their business also requires the continued investment in pools from owners and stalls, which also requires investment in education and support infrastructure.
Hayward’s product portfolio spans every segment of pool equipment. The company offers variable speed pumps, cartridge and DE filters, pool heaters, automated sanitized systems, LED lighting, water features, robotic cleaners, and its most differentiated offering, the Omni SmartPad. The Omni SmartPad is a fully integrated platform that controls and automates all pool functions from your phone. The remaining 15% of its portfolio revenue comes from new constructions. Hayward has begun to layer its services and features into its product lines, creating a new stage and business model for their hybrid software structure.
Almost 80% of Hayward's revenue comes from North America; however, the company is investing heavily in international growth, particularly in Europe. Growth outside the U.S. is driven by the rising demand for premium pool systems. Hayward is opening new channels across Europe, Latin America, and the Middle East as the company is not positioned to increase international contribution over the next 3-5 years. The ChlorKing acquisition market, Hayward's entrance into the commercial space, and this segment is a high-margin, highly regulated vertical with strong recurring revenue potential, along with the launch of OmniX, its next-generation automation platform, which creates a fully integrated digital ecosystem around the pool pad.
Hayward operates in the global pool and outdoor living segment industries. This market has historically been seen as seasonal and cyclical. But the industry is not undergoing a shift due to demographic shifts, climate investments, and the rise of smart home ecosystems. Hayward holds a leadership position in the market and can stand out among its peers, such as Pantair, Fluidra, and Jandy. The company’s moat is built around its installed base, dealer relationships, and brand trust, especially within the U.S. market. Hayward is uniquely positioned to lead the category as it expands into commercial verticals and integrates more into the smart home tech stack.
The TAM for pool-related products is estimated at around $15 billion globally, with around 30 million + in-ground pools worldwide. The market is growing at a rate of almost 4% annually. Most pools are still using outdated technology that consumes excessive energy, water, and chemicals, which creates a massive opportunity for Hayward to take advantage of upgrades. During the COVID-19 pandemic, the home improvement market experienced a significant boom due to the rise of hybrid work-from-home models, which drove both indoor and outdoor home upgrades. Also, millennial homeowner rates are rising, which is increasing the demand for pools and enhancement cycles.
Technology is redefining the pool market, and Hayward is at the forefront with its Omni Smartpad platform. This platform is an integrated automation tool that enables pool owners to control every function via a smartphone or smart devices like Alexa. A long-term opportunity for Hayward is enhanced automation, using data from sensors and connected devices to automatically balance chemicals, optimize energy usage, and predict failures.
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Hayward is one of the most entrenched players in the global pool equipment industry, but competes with Pentair, Fluidra, and Zodiac. While these companies have scale, they lack the market dominance in the U.S. aftermarket that Hayward owns. Globally, the market is more split, particularly in Europe and Latin America, where Fluidra and Zodiak have roots. Although Hayward is the king of North America, the brand owns several critical channels, including service professionals, pool builders, and regional distributors. This creates a powerful advantage in segments like variable speed pumps, salt chlorinators, and pool automation. Competitors are focusing on ESG shit and have over-indexed on low market new market builds and have chased global expansion at the expense of their technical consistency.
Hayward's moat is not only wide, but they are currently building an alligator-infested moat around it. At the brand level, the company benefits from its 100-year legacy, trust, and reliability. This is valuable, particularly amongst pool bros who value consistency above all. This image doesn’t just win bids, but it also locks in loyalty and referrals. Hayward's moat goes deeper than its brand perception; the Omni SmartPad is the company’s largest moat. The SmartPad is an IoT-enabled command center that turns every pool into a connected node. This is a gateway drug that grows stickier as homeowners upgrade their homes. Each new SmartPad installed creates a sort of network effect as each pad captures data and enhances diagnostics, improves servicing, and increases the value of the homeowner's pool system. The company also owns over 500 patents, which is a strategic fortress, as many of them are in automation, fluid mechanics, water chemistry optimization, and energy efficiency. These patents don’t just block direct replication, but they force competition to either play catch-up or license inferior technology.
On the surface, the pool equipment industry looks ripe for disruption from DTC and cheaper startups. But this industry is a maze of regulatory approvals, installer loyalty, technical compatibility, and channel entrainment. Product integration is another barrier, as Hayward's products have been built to work in concert. Replacing one component with a competitor's product will require reconfiguration of the entire system. Hayward also benefits from what the industry calls an ‘invisible contract enforcement,’ which includes warranties tied to certified installs, dealer training programs that strengthen loyalty, and service networks that are optimized for hardware. Dealers who have built their business around Hayward have little incentive to switch, as doing so would mean losing access to discounts, co-marketing dollars, technical support, and extended warranties that customers expect.
Hayward's income statement is solid, with the team heavily focused on controlling growth and disciplined margin expansion. In 2024, the company posted a nice 6% YoY in revenue, aka $1.07 billion. This is modest growth, but Hayward has dramatically improved the quality of its earnings with gross margins hitting 50% post IPO. This was driven by pricing power, product mix optimization, and supply chain consolidation. Adjusted EBITDA came in at $289 million, a cool 12% increase YoY, with Net Income jumping to $134 million.
Hayward’s balance sheet is another strength for the company. The firm repaid $123 million in debt while funding the ChlorKing acquisition. They did this without hurting liquidity, with over $100 million in unrestricted cash on hand, which gives the company extra firepower. Total assets have remained stable, even while inventory levels were strategically reduced through capital management strategies. Hayward is an FCF compounding hound; the company has generated $262 million in FCF in 2024. Cash flow surged from stronger margins, lower inventory drag, and efficient capital spend, while capital expenditures remained disciplined at sub 3% of revenue.
On a valuation basis, Hayward still trades like a mid-industrial, not a margin-rich platform play. Its P/E hangs out around 16x forward earnings, which is slightly below SaaS and automation peers with similar margin profiles. Its ROIC hovers near 14%, while ROE chills around 18%. This reflects efficient asset usage and a disciplined capital allocation strategy. Their price-to-book ratio is under 3x considering Hawyards' brand equity, installed base, IP, and product control.
Hayward’s capital allocation is top tier; the company isn’t chasing vanity growth but instead is sticking to the smart and boring plays that drive shareholder value. The management team is focused on debt reduction and strategic M&A that can expand TAM without exploding its SG&A or creating unneeded integration risks. Hayward is also planning a large share buyback program, with over $450 million authorized, and they have already bought $75 million. Hayward’s management team remains focused on capex, automation, and continued efficiency and not just unreasonable growth.
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Hayward’s organic growth engine is strong and far more durable than the market assumes. The company is not just riding a covid era boom, but they have positioned themselves for long-term, margin-accretive growth across its product portfolio. Its core power is its pricing power, as 85% of sales came from after-market sales. This allows Hayward to raise prices without pushback. Hayward’s Omni SpartPad is reshaping the game that opens new doors for software monetization, subscription services, and data-based diagnostics. Every Hayward product is tied into their platform, which increases the stickiness of the ecosystem. This isn’t just a platform expansion play, but it turns Hayward into an operating system for pools. There is also significant upside for global expansion as international markets currently account for 15% of revenue.
Hayward’s acquisition history has been lean and deliberate; the company is focused on expanding its TAM by locking in high-value niches. Its acquisition of ChlorKing not only brought in new products but also relationships with schools, hotels, gyms, and municipal systems. This enabled them to create a new vertical with strong demand, longer lifecycles, and multi-unit contracts. Beyond ChlorKing, the biggest inorganic opportunity is around outdoor infrastructure like water heating, energy optimization, remote diagnostics, and even water treatment outside of pool use.
The macro tailwinds are blowing in Hayward's favor with aging installed bases, rising home improvement spend, climate adoption investments, and homeowner demand for automation and energy efficiency. What used to be a seasonal luxury product has become a part of the home system budget, and as more homeowners prioritize sustainability, they will flock to Hayward's product suite. Regulation is also working in Hayward's favor with the Department of Energy regulating pool pumps, water savings, and energy compliance. The ChlorKing acquisition gives Hayward a turnkey solution that leverages its tech and brand equity, which is currently underserved by major OEMs.
Hayward has been able to continue to grow its capacity, unlike peers who overbuilt during the pandemic. Hayward invested in automation across all its facilities instead of buying new factory space. This enabled them to tighten labor costs, reduce defects, and optimize their SKUs. They have also invested heavily in their supply chain to shorten lead times, increase installs, and enhance brand perception. Hayward R&D is continuing to rise, with its team focused on smarter, cleaner, and more automated water systems. OmniX is the next-generation version of its automation platform, which turns Hayward into a service layer operator.
Even the best companies can turn into shitcos. Hayward rebuilt its entire supply chain, although fragility can still crack from global shipping constraints, component shortages, and inflationary input pressures that can impact margins. Hayward’s shift towards automation introduces a whole new form of risk, like cybersecurity, firmware updates, and installer adoption curves. The management team has earned its credibility, but any misstep in product rollouts, M&A integration, or tech stack inconsistency could damage customer trust, brand image, and pricing power.
Hayward is strongly insulated from a crash, but if new construction stalls or if homeowners delay upgrades, it could lead to a slow bleed for Hayward. While the ChlorKing acquisition opened up more doors, it introduced institutional sales cycles to Hayward, which can be long, bureaucratic, and procurement-driven. This is very different from the residential dealers. A major risk is that OmniX and its innovative features stalling out and not catching mass adoption. If the SmartPad loses its edge, Hayward’s moat could be damaged, and people will view it as a parts company.
While current regulations and policies favor Hayward’s systems, tightening rules could increase compliance costs or restrict older high-margin SKUs from being sold. While Hayward has flexed its pricing power, competitors are hungry and may start subsidizing automation or start to bundle accessories to win market share. Demand elasticity is also a sleeper. As energy costs rise, some homeowners may delay upgrades or opt for lower-end brands.
Hayward trades at a discount related to its fundamentals, but if the market begins to price it as a cyclical industrial instead of a tech-enabled infrastructure platform, multiples could take a hit. Much of Hayward's future upside is predicted from scaling smart systems, growing commercial, and monetizing data. None of which are currently mature businesses today. While FCF is ripping, its yield won’t save the stock if estimates get cut. No company is bulletproof, especially one that is tied to water, chemicals, and high-voltage systems. If Hayward is found to have runoff issues, chemical exposure incidents, or waste inefficiencies, customers and investors could turn fast. Labor issues are also lurking in the shadows, as the company automates more of its production could lead to unwanted attention.
In a bull case, Hayward benefits from its tech-first platform, continued strong margins, and aftermarket revenue expands from the SmartPad adoption, and ChlorKing scales faster than expected. In this scenario, EBITDA grows and free cash flow expands. Although in a base case, Hayward continues to grow modestly, but is slow to grow in the commercial space, and the Omni SmartPad launch is slow to get adopted by the masses. In a things are fucked case, new housing projects flatline, consumers delay upgrades, and Hayward's tech thesis fails to create strong recurring revenue.
In the short term, several triggers could drive revenue expansion. These include the successful integration and continued growth of ChlorKing. Next is the OmniX monetization, which is a move toward SaaS and diagnostic revenue. The company will also continue to accelerate its buyback program, which could provide downside support and signal capital confidence. As well as continued home improvements. All of which Hayward is perfectly positioned to capture. In the long term, Hayward becomes the king of pool equipment and successfully monetizes the OmniX SmartPad. Although if the Omni adoption stalls, if it turns out customers don’t want smart devices, their strong moat weakens.
The bad boys over at Azar Capital Group believe that Hayward is mispriced and LIKE them. The normies see a pool parts company, the lads at ACG see a high-margin, data-enabled infrastructure platform that benefits from climate and tech advances. With its aftermarket revenue booming and its new commercial verticals opening, Hayward is laying the groundwork for long-term monetization.
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