TransDigm Group (TDG) Q2 2025 earnings summary

Executive summary

• Q2 FY25 net sales rose 12% year-over-year to $2,150M, driven by strong commercial aftermarket and defense demand, with organic sales growth of 6.9%.

• Net income increased 19% year-over-year to $479M, and adjusted EPS rose 14% to $9.11, reflecting operational leverage and improved strategy.

• EBITDA As Defined for Q2 was $1,162M (54.0% margin), up 14% year-over-year.

• Recent acquisitions, including Raptor Scientific, CPI Electron Device, SEI Industries, and others, 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.

Financial highlights

• Gross profit for Q2 FY25 was $1,274M (59.3% margin), up 10.6% year-over-year.

• SG&A expense decreased to 11.0% of sales from 12.9% year-over-year, mainly due to lower non-cash stock and deferred compensation expense.

• Interest expense rose 16% to $378M, reflecting higher borrowings and lower interest income.

• Cash and cash equivalents at quarter-end were $2,426M.

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

Outlook and guidance

• Fiscal 2025 revenue guidance midpoint is $8,850M, up 11% year-over-year.

• Adjusted EPS guidance midpoint is $36.47, with EBITDA As Defined guidance midpoint at $4,685M (52.9% margin).

• Net income guidance is $1,925M to $2,037M, and EPS forecasted at $32.27 to $34.19; adjusted EPS expected at $35.51 to $37.43.

• 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.