TransDigm Group (TDG) Q3 2026 earnings summary

Executive summary

• Q3 FY2026 net sales rose 22.5% to $2,741 million, with organic growth at 13% and EBITDA As Defined of $1,447 million (52.8% margin), driven by strong commercial aftermarket, OEM, and defense demand.

• Net income attributable to common stockholders was $539 million, up from $492 million in Q3 FY2025; adjusted EPS increased 13.2% to $10.87.

• All major market channels delivered double-digit growth, with commercial aftermarket up 17% and transport OEM up 25% year-over-year.

• Recent acquisitions, including Jet Parts Engineering, Victor Sierra Aviation Holdings, Simmonds Precision Products, and the announced Prince & Izant deal, expanded the business and contributed to growth.

• Strategy remains focused on proprietary aerospace businesses, value-based operations, decentralized structure, and disciplined M&A.

Financial highlights

• Q3 FY2026 revenue was $2,741 million, up 22.5% year-over-year, with gross profit margin at 59.4% and operating income up 18.1% to $1,227 million.

• EBITDA As Defined for Q3 was $1,447 million (52.8% margin), and adjusted EPS was $10.87, up 13% from the prior year.

• Free cash flow for Q3 was about $870 million, totaling $2.1 billion year-to-date; cash and cash equivalents at quarter-end were $2,773 million.

• Net debt-to-EBITDA ratio was 5.8x, within the target range of 5–7x; total debt stood at $33.7 billion.

• Interest expense rose 29.5% to $514 million due to higher debt.

Outlook and guidance

• Fiscal 2026 revenue guidance midpoint raised to $10,510 million, up 19% year-over-year, with EBITDA As Defined guidance midpoint at $5,520 million (52.5% margin).

• Adjusted EPS guidance midpoint increased to $41.04.

• Net income expected at $2,102–$2,150 million.

• Market growth assumptions: commercial OEM mid-teens %, aftermarket low double-digits %, defense high single- to low double-digits %.

• Guidance excludes contribution from the pending Prince & Izant acquisition.