TransDigm Group (TDG) Q4 2025 earnings summary

Executive summary

• Fiscal 2025 closed with strong revenue and profit growth, driven by robust commercial aftermarket and defense channels, and commercial OEM revenues rebounded after prior destocking trends.

• Value-driven operating strategy, higher production volumes, and favorable commercial aerospace trends contributed to margin expansion and exceeded guidance.

• The company remains focused on proprietary aerospace businesses, disciplined M&A, and capital allocation to drive shareholder value.

• Completed refinancing of key term loans and continued disciplined capital allocation.

Financial highlights

• Q4 2025 revenue rose 11.5% year-over-year to $2,437M; full year revenue up 11.2% to $8,831M.

• Q4 EBITDA as Defined margin reached 54.2%, with full year margin at 53.9%.

• Q4 operating cash flow exceeded $500 million; year-end cash balance was over $2.8 billion.

• Free cash flow for fiscal 2025 was about $2.4 billion, slightly above estimates.

• Net debt-to-EBITDA ratio at year-end was 5.8x.

Outlook and guidance

• Fiscal 2026 revenue guidance midpoint is $9.85 billion, up 12% year-over-year.

• Fiscal 2026 EBITDA as Defined guidance midpoint is $5.15 billion, up 8%, with an expected margin of 52.3%.

• Adjusted EPS guidance midpoint is $37.51.

• Net income guidance for 2026 is $1,966 million at midpoint, down 5.2% due to higher interest expense.

• CapEx for 2026 projected at $300 million, focused on automation and productivity.

• Commercial OEM revenue growth expected in high single-digit to mid-teens %, aftermarket in high single digits, and defense in mid- to high single digits.