Holley at Canaccord Conference: Strategic Growth Amid Flat Market

On Tuesday, 12 August 2025, Holley Inc. (NYSE:HLLY) presented at Canaccord Genuity’s 45th Annual Growth Conference, highlighting its strategic shift toward growth and operational efficiency. While Holley has shown positive momentum with consecutive quarterly growth, it faces challenges such as flat July sales and economic uncertainties. The company remains focused on leveraging its established brands and improving distributor relationships.

Key Takeaways

• Holley has achieved growth for two consecutive quarters following an 18-24 month turnaround.
• The company aims to reduce net leverage to approximately 3x EBITDA by 2025.
• Holley targets $40-50 million in free cash flow generation annually.
• The company is organized into four verticals: Domestic Muscle, Trucking/Off-Road, Euro/Import, and Safety/Racing.
• Holley emphasizes strong distributor relationships and operational efficiency.

Financial Results

• Q1 and Q2 of this year saw growth, despite a generally flat market.
• July sales were flat, but the company maintains a positive outlook.
• Holley is aiming for a net leverage ratio of approximately 3x EBITDA by the end of 2025.
• Shares have risen by 60% over the past five days.
• Capital expenditures are roughly 2% of sales, reflecting a capital-light business model.

Operational Updates

• Holley mitigated tariffs through strategic planning and an 8.75% price increase.
• The company has added processes such as stage gate processes for new products.
• Holley focuses on a growth engine built around direct-to-consumer (D2C) and business-to-business (B2B) strategies.
• The company has added 25 new resources to work with distributors.

Future Outlook

• Management remains conservative about the second half of the year.
• Holley is open to mergers and acquisitions that align with its financial goals.
• The company plans to maintain momentum and evaluate pricing effects and tariffs.
• Holley aims to continue delivering on promises to build credibility with investors.

Q&A Highlights

• Holley can take market share in a flat market due to its growth engine.
• The consumer base remains stable and enthusiastic about Holley’s offerings.
• The company sees growth potential across all four verticals.
• Holley emphasizes the importance of distributor relationships for reaching consumers.

Holley’s strategic focus on growth and operational efficiency positions it well for future success. For a deeper understanding, refer to the full transcript below.

Full transcript - Canaccord Genuity’s 45th Annual Growth Conference:

Brian McMaher, Analyst, Canaccord: Thanks everyone for attending our forty fifth Annual Growth Conference. I’m Brian McMaher, one of the analysts at Canaccord in the consumerindustrial space. We are delighted to have Hollie here and the host CEO, Matt Stephenson and CFO, Jesse Weaver. And Matt, why don’t you take it away?

Matt Stephenson, CEO, Holley Performance Brands: Okay. All right. Thanks, Brian, and good afternoon, everyone. So I’ll just do a brief overview of Holli for those that aren’t as familiar with us and then we can jump into some questions, Brian, if that works. Sure.

So, of course, standard disclaimer here and then we’re going to jump into a little bit about Holli. So, one thing that’s fantastic about Holly is we serve enthusiasts. So a lot of the world of consumer discretionary and the unknowns right now are folks. This is their passion. This is their hobby.

And we liken it to folks that are fitness enthusiasts, golf enthusiasts, skiing or surfing. And you can see our consumer base of enthused around 70,000,000 actually dwarfs a lot of those other segments that people think are much larger. And sometimes when you come to the East Coast and people in New York City aren’t really understanding the the amount of car enthusiasts that exist across the country, they’re immense. I myself am one of them and, it’s just a great passionate marketplace of customers. So, Holly, we’re actually over a 120 years old.

A lot of people know us as a carburetor company. That was the original Model T, but we’ve changed a lot over the years. We actually have 70 brands in our portfolio. We went public in 2021. And Jesse and myself, Jesse, has a little over two and a half years.

I have about just over two years. We’re a team that was brought in after the company went public in 2023 to really take this organization to the next level that turned this into the $1,000,000,000 plus platform in this consumer auto, performance enthusiast space. Some of the amazing brands in our portfolio, we’ll jump into that into a second, but a long story to history of successfully integrating a ton of fantastic automotive enthusiast brands. One of the big things we did is when we came in is organized the company into four distinct verticals. And you can see the total addressable markets up there.

So traditionally, Holly was focused on the domestic muscle segment. The domestic muscle, you can think about as older vehicles. It tends to be the cars people lusted after in high school or their collegiate years and walked that back from the peak spending years of ’45 and ’55. So a lot of the cars that are coming into favor right now are cars in the nineties and early two thousands because people in the peak spending years, it’s when they went to high school. So it’s not that old cars go out of style, it’s just that window tends to shift.

Right? And so we stay on top of those trends in domestic muscle. That’s a $5,000,000,000 space. But Holli had all these fantastic brands and products that, we’ve been investing and positioning in the marketplace to drive this, growth. And so trucking off road, again, not a surprise for many folks that 80% of the vehicles Americans buy are trucks, CUVs or SUVs.

So largest part of the total addressable market, 26,000,000,000 there, and we love a lot of great brands that are positioned in that market. Eurone import, we have two of the leading brands for, APR focuses on Volkswagen Audi and Porsche. Dyna focuses on BMW. And the domestics aren’t making many cars anymore, making the Corvette, some Cadillacs, Mustang, but the Euro and import, companies are having a resurgence around, performance cars. So our brands are doing quite well in that space, $14,000,000,000 segment there, our total addressable market.

And then safety and racing, most people don’t know we have this in our portfolio. With enthusiasts, it’s not only for the street, but the track. A lot of our enthusiasts take their cars or their second or third or tenth or twentieth car on the track on the weekends. And so we have some of the leading brands of safety across the world. We have Simpson, both on auto helmets as well as motorcycle helmets.

We have Stilo, a very high end carbon fiber helmet manufacturer. Our team in Italy sits. We do F1, WRC, IndyCar, NASCAR drivers. We also have Good, Better, Best. We have a RaceQuip, which is our entry level safety brand, which a lot of people use.

If they’re not racing every weekend, they do once a month or once a quarter. So And we just have a great portfolio of products, including the Hans device, which is the device invented after the unfortunate death of Dale Earnhardt. It has a head and neck restraint. We have the patent and the brand on that. So a lot of great things to serve enthusiasts, whether on the street or on the track, is, how we cover them.

And then, that’s kind of the main thing. Just maybe quickly, what we like to do is we’re not a replacement part company. This is very important to us. Our mission every day, bring performance, safety and fun to excitement in automotive enthusiasts. And I think you can see that across our portfolio.

The vision, of course, to be the undisputed leader and drive this to a billion dollar plus, platform and the values that we have internally for our teams. And then, you can see some of the key themes, across our domestic muscle truck and our off road, your own import. But I think that gives you a little bit of flavor of what we do every day. It’s an exciting place to work. Like I said, I myself am an enthusiast.

Over the last two years, we’ve been really focused on this transformation. And for two quarters in a row, we’ve posted back to back growth in our core business, which in a market that is pretty flat or in some segments down, we’re taking a lot of share. Our unit volume is up and it’s because we’ve built a growth engine over the last two years to outperform the competition. So time for some Q and A.

Brian McMaher, Analyst, Canaccord: Absolutely. So Matt, the company has undertaken a huge turnaround over the last two plus years. Can you frame up the opportunities you saw when you arrived, the initiation, the initiatives you’ve since put in place and the progress you’ve made?

Matt Stephenson, CEO, Holley Performance Brands: Yeah. I think one of the things was really interesting coming to Holly, again, I’m an auto enthusiast, but I saw a company that had been a culmination of a lot of great small brands in businesses, but really hadn’t had that professionalization on the operations and as well as building that growth engine. When you take roles like this, you’re always like, well, if I could invest in growth, how am I going to fund it? And I saw a lot of opportunity on the operational side. I think we’re just still scratching the surface on.

And so we’ve been able to bootstrap just about all the investments in growth over the last two years by creating taking out the non value added cost. So you even see in a down market, we’ve been able to relatively maintain margin and EBITDA through that. And now that we’re starting to generate growth, even all the better. But really, it’s been about putting processes in the company, putting a division structure to manage the complex business, right? Holly Performance Brands is effectively a holding company.

We run about 20 different businesses, division leaders, category leaders under that and putting just processes a company of our size should have, stage gate processes to make sure the right new products are coming to market. We talked about a lot, Brian, on the calls about the growth engine we build around D2C and B2B we can get into. But really, it was a company that amazing brands, amazing products, just really needed that professionalization, which includes a host of things around process, people, systems, etcetera.

Brian McMaher, Analyst, Canaccord: Great. And Matt, you’re no stranger to successful turnarounds, but timing that inflection is obviously very difficult. At this very conference last year, I asked you kind of how long a turnaround would take to bear fruit. You said eighteen to twenty four months. It looks like you kind of nailed that, the company returning to growth in Q1 this year, sustaining that in Q2.

Understanding July is a seasonally slow month, I think you mentioned July sales were flat. Why would that momentum kind of slow to kind of like the sub-one percent growth range that’s implied in the back half guide?

Matt Stephenson, CEO, Holley Performance Brands: Yes. I think Brian, we’re just being conservative on this back half of the year. And like you said, these turnarounds, I’m always impatient, Jesse is impatient, but haven’t done this a couple of times. There’s always that eighteen to twenty four months you’re walking out to the parking lot lot one night and you’re like, finally, all the momentum has built up and the thing’s turning, right? It’s just the nature of moving 1,500 people and all the brands and everything else, right?

And so we’ve we’re seeing that momentum. But I think we all, spend a lot of time watching CNBC and the tariffs rolling through the economy, how does that impact discretionary spending. We put some pricing through along with our tariff mitigation actions that we just want to see how the price elasticity volume trade off happens. July is a slow month for us. So for us to comment on trends, generally our customers hanging in there, right?

They’re stable. They’re enthusiasts. Again, what we talked about, these aren’t onetime purchases for these folks. But I think until we get another quarter under our belt, then we’ll better know how that core growth plays out versus the growth we’ve had in the first half.

Brian McMaher, Analyst, Canaccord: This has been a pretty resilient category for decades. I think you’ve averaged the industry has kind of averaged kind of like that mid single digit kind of six percent top line growth since 02/2001, at least up until the pandemic. So when is it a reasonable expectation for the industry to kind of get back to that level and kind of what’s required to get there?

Matt Stephenson, CEO, Holley Performance Brands: Yes. I think ultimately there’s a lot that does comes in with vehicle sales, right? And although on the domestic muscle side, we’re serving a lot of customers that may have a five, ten, twenty year old car they they bought a few years ago, what have you. But but ultimately when cars change hands, people wanna make them their own. Whether it’s a new car or new to them car, they just bought a used car, they wanna personalize it.

They wanna make it different than the other person. Right? And so we’ve seen a SAAR at 15,000,000 to be quite depressed for a number of years. So I think the industry, just the macro hasn’t been a friend to the industry. If we can get back to a SAAR at $17,000,000 probably interest rates have to lower, manufacturers have to get more aggressive on the rebates, like that’s a good one.

Fuel prices have stayed low, which is good. That’s always a good sign for us and I think it just gets back to some of the more macro factors of the economy. But we’ve seen the trend, you know we know we’re taking share. The industry’s kind of flattened out after, you know, a heavy impact from COVID positively when people were at home more. They worked on the cars more, when they weren’t traveling with their family.

It’s like someone, who’s passionate golf gets stuck at the country club. They’re gonna golf more. Right? When people were at homes, you know, their garage was 10 feet from them. They just spent more on auto parts.

So now that, you know, then travel freed up and everything, they’re spending in other places, but we’re seeing that market all normalize out now.

Brian McMaher, Analyst, Canaccord: So to your point, the company realigned its market segmentation a couple of years ago, but you still have a pretty sizable exposure to kind of classic muscle given the company’s heritage. So where do we stand on kind of each segment today in terms of its growth ambitions?

Matt Stephenson, CEO, Holley Performance Brands: Brian, for us there’s growth in all of them. I mean, of course, you should start to see disparate amount of growth percentage wise in Trucking Off Road because some of those brands just aren’t as pronounced, Right? So the ability to grow those double digits is effectively easier than some of these that are more established. Right. But like I said, that window just just walks.

It it goes from cars in the sixties and seventies. Now we’re seeing cars in the late eighties and nineties. Like, there is a huge runway in front of domestic muscle. And I think that’s one of the misconceptions about this business is, oh, EVs is gonna take over the world. And, Holly, what’s your market?

Well, let’s walk through it. Domestic muscle, we’re sitting about the 2 thousands right now, late nineties, early two thousands. And so we’ve got a we got at least probably thirty to forty or not more years there. Right. And so we haven’t seen EV penetration there.

Trucking off road EVs really aren’t applicable for towing the weight, the off road. So trucks really don’t have adoption there. Euro and import, the resurgence we’ve seen in performance cars is being led by the Euro and import manufacturers. And then safety and racing, of course, that’s not applicable. That’s helmets, belts, seats and all that.

So it’s one of those things where there’s just a ton of runway in all these verticals. Now carburetors, you know, they haven’t made a carbureted car since 1988, but every day, every month, we’re selling a ton of carburetors. Right? So that just shows you the life cycle and how sticky these products are for a long time.

Brian McMaher, Analyst, Canaccord: So tariffs, I’m sure we’ve discussed this quite a bit. They’ve taken up a lot of investor focus. We have not seen kind of broad based price increases, at least on the shelf across kind of consumer yet. Some of those are expected in H2. On the whole, do you expect tariffs to be a net positive or a net negative to your company?

Matt Stephenson, CEO, Holley Performance Brands: Boy, that’s a great question. If I had a crystal ball now. Look, we’ve done a lot of hard work to mitigate the tariffs. We kind of gave visibility to that in the last earnings call. And I was assembling a really about 90 people in the organization, 11 Tiger teams focused on the major categories, daily report outs.

And then we went through a whole host of mitigation actions in a very short amount of time. We had also been working on it for over a year plus, just trying to get that non value added cost out of the business. But for us, you know, we put in some pricing of eight three quarters in the market. Competitors were generally anywhere from mid to high single digits to 30%. We feel like we’re the best run platform in the industry.

We’re the largest, but we’re also feel that we’re the best run. And our ability to continue to take share, navigate any supply chain, whether it’s tariffs or what comes up, and the ability to pass through pricing with our relationships with our distributors. So I think we’ve shown that being able to do that over the last two years. So it’s a net I don’t know if I’d go far to say it’s a net positive, but we think we are well positioned better than anyone else just given everything we’re bringing.

Brian McMaher, Analyst, Canaccord: So a lot of investors ask companies, why aren’t you moving out of China kind of faster? I guess why is it not so easy to move supply chains quickly? And why is China still important in terms of craft smanship and maybe cost advantage?

Matt Stephenson, CEO, Holley Performance Brands: Yes. Think ten, twenty years ago people chased China or some of these other countries because of cost. Then they became the only source of certain products or they became a competency for products, right? So it’s not about just cost, it’s carbon fiber is a great example. Carbon fiber is very hard to get the quality of carbon fiber anywhere else in the world except in China.

We do it really well in Italy and so we’re bringing and that’s part of our steel business. We’re bringing some of those parts back to Italy in doing those. But it’s just there’s a lot that goes into moving suppliers, right? You got to make sure the cost structure is there, the quality is there, and you’re validating these parts along the way to ensure consumers are getting a high quality product. So there’s just finding that competency, but then there’s everything that goes into it.

You just can’t buy from Brian yesterday and Jesse tomorrow. It just doesn’t happen that fast.

Brian McMaher, Analyst, Canaccord: Fair enough. Jesse, maybe one for you. You and your corporate finance team have done a tremendous job deleveraging over the last few years since you arrived. You still remain a little north of four times. What would be a comfortable net leverage range for you?

Jesse Weaver, CFO, Holley Performance Brands: I We’ve realized long term we need to get much lower. Our target internally is to get down to closer to three. I mean I think with the free cash flow generation alone, I mean we should be south of four by the end of the year. And then just doing 40,000,000 to $50,000,000 in free cash flow a year, just not adding any additional assumptions on growth or anything. I think by the end of next year, we’ll be probably 3.25%.

And then by the end of the following year, definitely south of three So we’re on a path to do that. Certainly, continued operational efficiency, growth on the top line and just continued optimization of the working capital could accelerate that path. But getting to three is the goal.

Brian McMaher, Analyst, Canaccord: So probably one of the more underappreciated features of your business is your cash generation. Can you touch on how or why the company can generate the cash it does on an annual basis even in the last few years when obviously the top line has been challenged?

Jesse Weaver, CFO, Holley Performance Brands: Sure. I would say, one, I mean the gross margin profile is pretty phenomenal given it is a consumer business that these enthusiasts, the brands matters, we’re able to command a pretty decent margin there. I think the other big thing is it’s a capital light business. I mean the CapEx in this organization is roughly 2% of sales. So certainly, one of the biggest features are those two things.

And when we talk about the free cash flow, I mean certainly it’s in today’s interest rates. I mean if interest rates continue to fall, I mean that could accelerate that pretty meaningfully.

Brian McMaher, Analyst, Canaccord: So Holley has grown organically and through M and A Where do you have holes in your current product portfolio? And do you have to wait to kind of get your leverage in an appropriate spot to actively pursue deals in the market?

Jesse Weaver, CFO, Holley Performance Brands: So maybe Matt can speak to the specific holes. I think we’ve maintained a pretty robust pipeline on M and A, just continually looking at deals. As you can imagine in this environment, there’s more that can actually shows up on the list. But the thing that we’re really focused on is just making sure any transaction that we do, the multiple, the synergies are there so that we’re not putting our path to 3x at risk. We may, depending upon the transaction, take like a slight pause on that continued progression.

But generally, what we’re talking about are smaller deals that it would take a pretty meaningful transaction to really move the needle on the leverage.

Brian McMaher, Analyst, Canaccord: The stock currently sits around $3 to $4 right now. Would a capital raise ever make sense to kind of clear decks on debt and so you could be more active in M and A?

Jesse Weaver, CFO, Holley Performance Brands: Yes. I mean, I think this is a question we get sometimes. I think there’s certainly a stock price where it makes complete sense, right, relative to from an EPS perspective. I mean we’re well south of that right now. You kind of have to look at all different interest rate environments to kind of triangulate on where that would make sense.

But the stock price well north of where we are today, I think the math looks really good on something like that.

Brian McMaher, Analyst, Canaccord: So Jesse, you’ve been in your seat almost three years, Matt a little over two. Where are the biggest areas of improvement you’ve seen during your tenure at the firm? Let’s maybe start with you Jesse since you’ve been there a bit longer.

Jesse Weaver, CFO, Holley Performance Brands: Yes. I mean I would say the work that Matt’s really done with his experience to bring in sort of the commercialization aspect, all of the things in the go to market. One of the things that we kind of speak to internally that was a prevailing thought from the organization before Previously was the demand will be what it will be, but we’ve obviously not taken that for what it is and put in a sales team, develop the competencies around solution based selling, making sure that we’re filling all the gaps where necessary partnering more closely with our distribution partners. And I think that, that’s really yielded a lot of fruit for us and been a big part of seeing B2B grow Q1 and Q2. I mean I think that mindset of going from really leaning into D2C, but leaning into both because we really want all channels to grow is a big part of this.

Brian McMaher, Analyst, Canaccord: Matt?

Matt Stephenson, CEO, Holley Performance Brands: It’s got to be the team. I mean the team is a night and day difference. I mean the professionalism they operate with and there is an approach prior to coming in. The company was brought more like an entrepreneur of a whack a mole, problems come up, try to knock them down, same problems come up ninety days later and that kind of thing. We’ve professionalized the company where, you know, I’ve put us against a lot of Fortune one thousand’s of how they operate, right?

We have pricing committees every Friday. We have product phase gate meetings every two weeks. Then we have the business unit reviews. We have daily huddles Monday and Wednesday. Like there is a system now that the business operates on it.

It’s because we’re getting the right people and we probably have upgraded talent in the top two levels well north of 50 teammates have joined us or replaced those that have left. The processes that we now have and the systems we have, use data to run

Brian McMaher, Analyst, Canaccord: the

Matt Stephenson, CEO, Holley Performance Brands: business. And the other big thing is just the partnerships with distributors. They’re a huge part of how you meet a consumer and where they want to be met and that was something I just don’t feel was nearly as appreciated as much as we appreciate. But the team has done a great job and we brought on a ton of great people and you feel like you can actually take a day off and the business is in a good spot. So, yeah, they’ve done a good job.

Brian McMaher, Analyst, Canaccord: Talk about where those distributor relationships are today versus maybe the day you arrived.

Matt Stephenson, CEO, Holley Performance Brands: You know, I think there was a we’re a consumer auto automotive enthusiast platform, right? There’s no doubt. Like our job is to know the consumer better than anyone and engage with them, which we do. But ultimately there’s a reason why distribution models exist for, you know, why they why they are. Consumers have everything from a spur of the moment purchase, I wanna work on my car on Saturday because my spouses took the kids.

Where do you go get that part? We’re not gonna get it there that day. Amazon’s not gonna get it their day, but you know what? The national retailers down the street, can pick it up. Right.

Right? You have wholesale distributors that serve all these little mom and pop hot hot rod shops across the country. We can’t have a direct relationship with 20,000 shops or more. They serve their purpose. The e tailers, like great customers of ours, like Summit and Jags, they have their purpose where people go just for everything performance out of all the brands, right?

And then of course, own direct to consumer platform. So for us, it was really appreciating that 75% to 80% of our business, the value they bring in ensuring we’re helping them grow not only their top line but their bottom line because if they grow, we grow. And we’ve invested a lot in the Salesforce. We’ve probably brought on 25 new resources that work with our distributors every day. Data quality, we dramatically enhanced to make it easier for for our B2B partners to merchandise.

And we’ve also made sure we’ve given a lot of margin back to our key distributors to ensure they’re profitable in selling their products. So I’d that it’s just been a massive change of mindset internally.

Brian McMaher, Analyst, Canaccord: So, Matt, the day you started the share price that day is similar to the share price today despite some

Matt Stephenson, CEO, Holley Performance Brands: So what are saying? Like what do? Did What Pretty did I do for two

Brian McMaher, Analyst, Canaccord: Herculean efforts, right? So like in our view obviously the business is in much better footing. There’s a bunch of improvements out there. Are the shares undervalued today? And if so, kind of what do you think it takes for the kind of the market to I guess agree with that view?

Matt Stephenson, CEO, Holley Performance Brands: I think, you know, all of this, are we doing what we say we’re gonna do? And I think that’s the big thing is over the last two years we’ve done exactly what we said we were gonna do in the timeframe we said we were gonna do it in. And that’s building that credibility with investors and we just gotta continue to do that. And I think, you know, we’ve seen that share performance up, what, 60% in the last five days.

Brian McMaher, Analyst, Canaccord: It’s not bad.

Matt Stephenson, CEO, Holley Performance Brands: And because people I think it just takes repetition. Yep. Right? And and people start to see it. But we’re executing a market that is doing us no favors, right.

We’re earning the growth, we’re earning the SKU velocity and we’re creating a sustainable platform to drive growth in the future and then eventually do the M and A and everything, right. So I think people will

Brian McMaher, Analyst, Canaccord: catch on. So a question we’re asking all of our consumer companies at this conference, you know, healthy in your view is the consumer today versus this time a year ago when you were sitting next to me at this very conference and how do you see consumer spending shaping up in the back half of the year and as we enter 2026?

Matt Stephenson, CEO, Holley Performance Brands: Obviously, that’s a tough question to answer, right? But I think the nature of our industry kind of who’s leading the administration today, how our customer base leans, I think their confidence in the administration for our customer base is much higher. So even though we continue to see inflation and pricing and things, I think the nature of our consumer base feels a little more confident in where the country is headed, even though they may be still dealing with a lot of the same macro factors. So I wouldn’t wouldn’t say they’re worse. I I wouldn’t say it’s dramatically better, but I feel like our customer base is quite stable and, you know, and generally excited about what we’re doing and is passionate about the industry.

Brian McMaher, Analyst, Canaccord: Great. I think we’re out of time but thank you so much guys. Appreciate it.

Jesse Weaver, CFO, Holley Performance Brands: Yeah. Brian.

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