Moog (MOG) Q2 2025 earnings summary

Executive summary

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

• Diluted EPS was $1.75, adjusted EPS $1.92, both down year-over-year due to the absence of the prior year's Employee Retention Credit.

• Free cash flow was $2M in Q2, with significant improvement expected in the second half.

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

• Operating cash flow was negative $92.9M for the first half, mainly due to timing of receivables and tax payments.

Financial highlights

• Q2 sales reached $935M, with Military Aircraft up 6%, Commercial Aircraft up 4%, Space and Defense up 1%, and Industrial down 7%.

• Adjusted operating margin at 12.5% (down from 13.6% prior year), with gross margin at 27.4%.

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

• Free cash flow conversion was 3% for the quarter; capital expenditures at $38M.

• Repurchased $100M in shares YTD; $18M in dividends paid in first half.

Outlook and guidance

• FY25 sales guidance reiterated at $3.7B, with operating margin of 13.0% and EPS guidance at $8.20 ± $0.20.

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

• Q3 EPS projected at $2.00 ± $0.10.

• Guidance excludes potential net tariff risk of $10M–$20M to operating profit.

• Management expects continued growth in defense and commercial aircraft markets, with ongoing simplification in Industrial.