TransDigm Group (TDG) Q2 2025 earnings summary

Executive summary

• Q2 FY2025 net sales rose 12% year-over-year to $2,150 million, driven by strong commercial aftermarket and defense demand, with organic sales growth of 6.9%.

• Net income increased 19% year-over-year to $479 million, and adjusted EPS for Q2 was $9.11, up 14% from the prior year; EBITDA As Defined margin improved to 54.0%.

• Recent acquisitions, including Raptor Scientific, CPI Electron Device, SEI Industries, FPT Industries, and Extant Aerospace product lines, contributed to pro forma results and strengthened aftermarket and defense positions.

• CEO Kevin Stein announced retirement at the end of fiscal 2025, with COO Mike Lisman named as successor effective October 1, 2025; succession planning is ongoing.

• Capital returned to shareholders included $53 million in Q2 share repurchases and $131 million post-quarter.

Financial highlights

• Q2 EBITDA As Defined was $1,162 million, up 14% year-over-year, with a margin of 54.0%.

• Gross profit for Q2 FY2025 was $1,274 million (59.3% margin), up 10.6% year-over-year.

• Interest expense for Q2 was $378 million, up 16% due to higher borrowings.

• Cash and cash equivalents stood at $2,426 million as of March 29, 2025.

• Cash flow from operations for the first half was $900 million.

Outlook and guidance

• Fiscal 2025 net sales expected between $8,750 million and $8,950 million, up 11.5% at midpoint from 2024.

• Net income guidance is $1,925 million to $2,037 million, up 15.5% at midpoint year-over-year.

• Adjusted EPS guidance midpoint is $36.47; EBITDA As Defined projected at $4,615 million to $4,755 million, with a margin of approximately 52.9%.

• Commercial OEM revenue growth expected in low to mid single digits; aftermarket and defense in high single to low double digits.

• Guidance assumes no major macroeconomic disruptions or additional M&A/divestitures.