TransDigm Group (TDG) Q4 2024 earnings summary

Executive summary

• Fiscal 2024 revenue grew 21% year-over-year to $7.94 billion, with EBITDA As Defined margin reaching 52.6% for both Q4 and the full year, exceeding guidance.

• Adjusted EPS increased 32% to $33.99 for FY 2024; Q4 Adjusted EPS rose 22% to $9.83.

• Growth was driven by strong commercial aftermarket and defense markets, with significant contributions from recent acquisitions.

• Commercial aftermarket normalized as global air traffic surpassed pre-pandemic levels; OEM production remains below pre-pandemic due to supply chain issues and the Boeing strike.

• Three acquisitions and a $75/share special dividend marked significant capital deployment.

Financial highlights

• Q4 EBITDA As Defined margin was 52.6%; strong operating cash flow of over $570 million in Q4.

• Free cash flow for the year was approximately $2.3 billion.

• Ended fiscal year with $6.3 billion in cash, or $2 billion pro forma for the $75/share special dividend.

• Long-term debt increased to $24.3 billion, reflecting new debt issuance.

• Net debt-to-EBITDA ratio at year-end was 4.4x, or 5.4x pro forma for the dividend.

Outlook and guidance

• Fiscal 2025 revenue guidance midpoint is $8.85 billion, up 11% year-over-year.

• Fiscal 2025 EBITDA As Defined guidance midpoint is $4.685 billion, margin expected at 52.9%.

• Adjusted EPS guidance midpoint is $36.32, up 7%.

• Growth anticipated across commercial OEM, aftermarket, and defense segments.

• Q1 2025 expected to be the lowest quarter due to fewer working days and booking softness.