Holley reported full-year net sales of $613.5 million, up 1.9% from 2024, and core net sales growth of 6.6% when excluding divested product lines. Gross margin expanded by 378 basis points to 43.4%, and adjusted EBITDA rose $13.5 million to $124 million, marking the first time margins exceeded 20% since 2021. The company generated $34.2 million in free cash flow and prepaid $25 million of debt during the year.

In Q4, net sales reached $155.4 million, a 10.9% increase, with core sales up 13.5%. Gross margin improved 120 basis points to 46.8%, adjusted EBITDA increased to $33.2 million from $29.1 million, and net income was $6.3 million versus a prior-year impairment-driven loss. All four divisions delivered growth led by Euro & Import (+21.5%) and Safety & Racing (+13.3%).

Holley generated $3.9 million of free cash flow in Q4 and ended the year with $37 million in cash and no revolver borrowings. Total debt prepayments reached $25 million in 2025, reducing covenant net leverage to 3.75x from 4.17x a year ago. Working capital improvements of $9 million were achieved, partly offset by intentional inventory adjustments for supply chain efficiency.

For 2026, Holley forecasts revenue of $625 million to $655 million and adjusted EBITDA of $127 million to $137 million, reflecting an uneven consumer environment and early-year weather disruptions. Capital expenditures are projected at $15 million to $20 million to fund ERP implementation, facility consolidations, and new product development. Management aims to reduce leverage below 3.5x by year-end.