Moog (MOG) Q2 2025 earnings summary

Executive summary

• Achieved record Q2 FY25 sales of $935M, with strong operational performance and a steady 12-month backlog at $2.5B; year-to-date revenue up 3% over prior year.

• Diluted EPS for Q2 2025 was $1.75, adjusted EPS $1.92, both down year-over-year due to absence of prior year's Employee Retention Credit; six-month diluted EPS was $3.38, up from $3.34.

• Free cash flow for Q2 was $2M, with improved working capital; operating cash flow for the first half was negative $92.9M due to timing of receivables and tax payments.

• Commercial and Military Aircraft segments drove sales growth, while Industrial sales declined due to divestitures and simplification actions.

• Continued focus on operational improvement, innovation, and customer engagement driving organic growth.

Financial highlights

• Q2 sales reached $935M, up slightly from last year; Military Aircraft up 6%, Commercial Aircraft up 4%, Space and Defense up 1%, Industrial down 7%.

• Adjusted operating margin was 12.5% (down from 13.6% YoY), with gross margin at 27.4%; operating margin declined to 11.7% due to absence of prior year credits.

• Adjusted EPS was $1.92, down 12% YoY, but up 3% excluding last year's employee retention credit.

• Free cash flow for Q2 was $2M; capital expenditures at $38M.

• Repurchased 290,000 shares ($60M) in Q2; YTD repurchases at $100M.

Outlook and guidance

• FY25 sales guidance reiterated at $3.7B; commercial OE sales to slow, aftermarket robust; operating margin guidance at 13.0%, EPS at $8.20 ± $0.20.

• Free cash flow expected near low end of prior range due to A350 inventory timing; significant cash generation expected in H2.

• Tariffs estimated to create $10–$20M net pressure on FY25 operating profit, mainly impacting commercial and industrial segments; guidance excludes potential retaliatory tariffs.

• Q3 EPS projected at $2.00 ± $0.10.

• Capital expenditures will remain elevated to support anticipated long-term program growth.