Triumph Group (TGI) Q2 2025 earnings summary

Executive summary

• Achieved tenth consecutive quarter of year-over-year sales growth, with Q2 FY2025 net sales rising to $287.5 million, driven by strong aftermarket demand and a turnaround in the Interiors segment.

• Aftermarket now represents 33% of sales and 61% of profit, with commercial aftermarket sales up over 26% and military aftermarket stable.

• Interiors segment returned to profitability due to cost reductions, price adjustments, and a favorable settlement with Boeing.

• Raised FY25 guidance for profitability and cash flow, reflecting multi-year targets and strong aftermarket performance.

• Backlog increased to $1.90 billion, with $1.20 billion expected to ship by September 2025.

Financial highlights

• Net sales for Q2 FY2025 were $287.5 million, up 1% year-over-year; adjusted operating income rose to $36 million (13% margin), and adjusted EBITDAP reached $43 million (15% margin).

• Net income from continuing operations was $11.9 million ($0.15 per diluted share); adjusted net income was $15.4 million ($0.20 per share).

• Free cash use in Q2 was $45 million, including a $42 million interest payment and $6 million in capex.

• Net debt reduced to $868 million, down from $1,512 million year-over-year; leverage improved to 5.5x from 8.3x.

• Gross margin for Q2 increased to 32.9% from 26.3% year-over-year.

Outlook and guidance

• FY25 net sales expected at ~$1.2 billion, with adjusted EBITDAP guidance raised to $190–$195 million (16% margin).

• Free cash flow guidance increased to $20–$30 million for FY25; positive free cash flow projected for Q3 and Q4.

• EPS guidance raised to $0.47–$0.53; adjusted EPS to $0.70–$0.76.

• Full-year capital expenditures for FY2025 expected to be $20–$25 million, focused on manufacturing efficiency.

• Supply chain and inventory challenges expected to improve in the second half of FY2025.