Latham Group (NASDAQ:SWIM) reported fourth-quarter and full-year 2025 results that management said reflected strong execution and market-share gains despite what the company estimates was a low- to mid-single-digit decline in U.S. in-ground pool starts during the year.
Fourth-quarter results: revenue growth and margin expansion
President and CEO Sean Gadd, in his first earnings call in the role, said fourth-quarter revenue rose 15% with “solid growth across all of our product lines,” including a pickup in in-ground pool sales. CFO Oliver Gloe said fourth-quarter net sales were $100 million, up from $87 million a year earlier, with organic growth of 14%.
- In-ground pool sales were $50 million, up 15%, reflecting strength in fiberglass and packaged pools and a shift in sales cadence due to favorable weather that extended the selling season.
- Cover sales were $37 million, up 19%, supported by increased adoption of auto covers and contributions from two small Coverstar acquisitions completed in February 2025.
- Liner sales were $13 million, up 2%, which management attributed to the replacement-cycle nature of the category and “industry-leading lead times.”
Gloe said gross margin expanded 340 basis points to 28% in the quarter, driven by volume leverage and benefits from lean manufacturing and value engineering initiatives. SG&A rose to $31 million from $27 million, which he said reflected investments in sales and marketing and higher performance-based compensation.
Latham posted a fourth-quarter net loss of $7 million, or $0.06 per diluted share, compared with a net loss of $29 million, or $0.25 per diluted share, a year earlier. Adjusted EBITDA was $10 million, up from $3.6 million, and adjusted EBITDA margin improved to 11% from the prior-year period, according to Gloe.
Full-year 2025: sales up 7% and adjusted EBITDA rises to $100 million
For the full year, Gloe said net sales were $546 million, up 7% from $509 million, supported by organic and acquisition-related growth and tariff-related price increases. He said organic growth was 5%, while acquisition-related contributions included Coverstar Central (completed in August 2024) and Coverstar New York and Tennessee (completed in February 2025).
All three product lines grew year over year, with Gloe reporting:
- In-ground pools: $262 million, up 1%.
- Covers: $161 million, up 22%.
- Liners: $123 million, up 4%.
Gadd highlighted the company’s performance in fiberglass pools, saying fiberglass represented 76.5% of in-ground pool sales in 2025 and that Latham’s fiberglass pool sales increased about 2.5% year over year. He said the company estimates fiberglass gained another percentage point of market share in 2025 to represent roughly 24% of U.S. pool starts, and pointed to higher fiberglass penetration levels in Australia and Europe as evidence of a longer runway for conversion.
On pool covers, Gadd said auto cover sales grew 22% in 2025, driven by consumer response to safety benefits, including marketing efforts with pool safety advocates Bode Miller and Morgan Miller. On liners, he said sales growth was supported by lead times and the rollout of the company’s AI-powered measuring tool, Measure, which he said helps installers complete measurement and coding in as little as 30 minutes and is integrated with Latham’s order entry and processing system. Gadd said about 20% of installers who purchased the tool during the year were new to Latham.
For the full year, gross margin expanded 320 basis points to 33%, which Gloe attributed to lean manufacturing and value engineering, volume leverage, and a margin benefit from the Coverstar acquisitions. SG&A increased to $123 million from $108 million, reflecting higher sales and marketing spending, digital transformation investments, and the acquisitions. Net income was $11 million, or $0.09 per diluted share, compared with a net loss of $18 million, or $0.15 per diluted share, in 2024. Adjusted EBITDA rose to $100 million from $80 million, and adjusted EBITDA margin improved to 18.3% from 15.8%.
Sand States strategy and Florida progress
Management repeatedly emphasized growth opportunities in the “Sand States,” including Florida, Arizona, and Texas. Gadd said the company gained “considerable ground” in Florida with double-digit sales growth in 2025, driven by dealer network expansion, presence in several master-planned communities, and partnerships with select custom home builders. Gloe added that Sand States volumes remained about 17% of total sales, with Florida and Arizona growth offset by a “tough Texas market,” where pool permits declined at a double-digit rate.
In Q&A, Gadd said he is focused on market development initiatives in master-planned communities, including lead generation, dealer segmentation and targeting, and helping dealers communicate the fiberglass value proposition. He also pointed to managing installation costs as part of accelerating conversion away from concrete pools. He described master-planned communities he visited as “relatively large,” citing examples of communities with 65,000 homes, and said the company could ultimately work toward partnerships with larger national homebuilders over time.
Acquisitions, balance sheet, and 2026 guidance
Latham closed the year with $71 million of cash, and Gloe said net cash provided by operating activities was $11 million in the fourth quarter and $51 million for the year. Total debt ended at $280 million, and the net debt leverage ratio was 2.1.
Gadd and Gloe discussed the acquisition of Freedom Pools, which Gadd said expands Latham’s position in Australia and New Zealand and provides entry into Western Australia. Gloe said the company expects incremental annualized net sales of about $20 million and incremental adjusted EBITDA of $4 million from the deal, which is included in 2026 guidance. He also said Latham purchased four key fiberglass production sites that had previously been leased.
For 2026, management said it expects U.S. in-ground pool starts to be approximately in line with 2025. The company guided to net sales of $580 million to $610 million and adjusted EBITDA of $105 million to $120 million, representing year-over-year growth at the midpoints of 9% and 12.7%, respectively. Gloe said guidance includes expectations for mid-single-digit organic growth, benefits from the Freedom Pools acquisition, and increased marketing expenses. Capital expenditures are expected to be $42 million to $48 million, including spending tied to facility purchases and upgrades to Freedom Pools manufacturing.
On pricing, Gloe said the company implemented a price increase in June 2025 tied to tariffs and expects pricing to add roughly 2% to 2026 top-line results, reflecting the run-rate impact of that increase and typical seasonal pricing actions.
About Latham Group (NASDAQ:SWIM)
Latham Group, Inc designs, manufactures and supplies a broad range of aquatic products and services for residential and commercial applications. Offerings include fiberglass and vinyl-liner pool shells, commercial water park structures, water slides, surf simulators, pumps, filters, heaters and sanitation systems. The company also provides parts, equipment and technical support for pool installation, maintenance and repair.
Operating across three core segments—commercial, residential and aftermarket—Latham delivers turnkey aquatic facilities and attractions for municipal, hospitality and resort clients, offers packaged pool kits and equipment packages to builders and dealers, and supplies replacement parts, service contracts and technical assistance to support ongoing pool operations.
Headquartered in the United States, Latham Group maintains manufacturing and distribution centers throughout North America and Europe.
