Teledyne Technologies (TDY) TD Cowen 47th Annual Aerospace & Defense Conference summary

Business mix and growth drivers

• Defense accounts for 30% of business, commercial aviation 5%, and space 6-7%.

• Unmanned systems generate $500M annually, with 10% growth expected in 2026, driven by aerial, subsea, and ground platforms.

• Key unmanned programs include OPF-L (USMC) and LASSO (Army), with production ramping in 2026.

• Space business is $400M, focused on imaging for missile tracking and earth observation, with Tranche 3 contracts exceeding $100M.

• Energy segment remains strong, with $250M-$280M in subsea connectors and stable outlook.

Competitive positioning and strategy

• Focus on high-performance, higher-priced unmanned platforms ($10K-$100K+), avoiding crowded low-cost drone markets.

• Provides components (e.g., camera cores) to other drone makers and counter-UAV solutions, but avoids full system integration in crowded markets.

• Not exclusive with partners, enabling broad market access for sensors and radars.

• Growth in Europe and APAC for defense and unmanned, with manufacturing in Canada, Norway, Iceland, and the UK.

Operational and financial outlook

• Capacity to ramp production via CapEx and additional shifts, especially in space imaging and camera cores.

• Short-cycle businesses (industrial, machine vision, environmental, test & measurement) show modest recovery and low single-digit growth for 2026.

• Healthcare (X-ray, radiotherapy) expected to be flat in 2026, with steady growth beyond.

• Marine energy business stable, with no expected decline in the near term.