FY 2025 Q2 Earnings Call May 6, 2025 1 Agenda TransDigm Overview, Highlights and Outlook Kevin Stein Market Review Mike Lisman Operating Performance and Financial Results Sarah Wynne President and CEO Co-COO CFO Q&A Forward Looking Statements & Special Notice Regarding Pro Forma and Non-GAAP Information FORWARD LOOKING STATEMENTS This presentation contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, including information regarding our guidance for f ...

CLEVELAND, May 6, 2025 /PRNewswire/ -- TransDigm Group Incorporated (NYSE: TDG) ("TransDigm" or the "Company") announced today that Kevin Stein will retire as President and Chief Executive Officer of TransDigm, following his more than ten years of service in senior leadership positions at the Company, effective as of September 30, 2025. Mike Lisman, the current Co-Chief Operating Officer of TransDigm, will succeed Mr. Stein as President and Chief Executive Officer. Mr. Stein will continue to serve as an adv ...

Financial Performance - Net sales for Q2 2025 increased by 12.0%, or $231 million, to $2,150 million from $1,919 million in the prior year[3]. - Net income for Q2 2025 rose by $75 million, or 18.6%, to $479 million compared to $404 million in the same quarter last year[4]. - Adjusted net income for Q2 2025 increased by 14.5% to $529 million, or $9.11 per share, from $462 million, or $7.99 per share, in the prior year[5]. - EBITDA for Q2 2025 increased by 18.5% to $1,089 million from $919 million in the comparable quarter a year ago[6]. - EBITDA As Defined for Q2 2025 rose by 13.8% to $1,162 million, with a margin of 54.0% compared to 53.2% in the prior year[6]. - Year-to-date net sales for the 26-week period ended March 29, 2025, increased by 12.1%, or $448 million, to $4,156 million from $3,708 million in the prior year[12]. - Net sales for the thirteen-week period ended March 29, 2025, were $2,150 million, a 12.0% increase from $1,919 million for the same period in 2024[31]. - Gross profit for the twenty-six-week period ended March 29, 2025, was $2,509 million, up 14.4% from $2,193 million in the prior year[31]. - EBITDA for the twenty-six-week period ended March 29, 2025, was $2,176 million, a 22.4% increase from $1,777 million in the prior year[36]. - The EBITDA As Defined margin for the thirteen-week period was 54.0%, compared to 53.2% for the same period in 2024[33]. - The company reported earnings per share of $8.24 for the thirteen-week period, up from $6.97 in the same period last year[34]. - Adjusted diluted earnings per share for the twenty-six-week period were $16.94, compared to $15.15 in the prior year[34]. - The company experienced a net cash provided by operating activities of $900 million for the twenty-six-week period, an increase from $865 million in the previous year[36]. Guidance and Projections - Fiscal 2025 net sales guidance is projected to be between $8,750 million and $8,950 million, reflecting an increase of 11.5% at the midpoint compared to $7,940 million in fiscal 2024[19]. - Fiscal 2025 net income guidance is anticipated to be in the range of $1,925 million to $2,037 million, an increase of 15.5% at the midpoint compared to $1,715 million in fiscal 2024[19]. - The company maintains its fiscal 2025 financial guidance, with expectations for commercial aftermarket revenue growth in the high single-digit to low double-digit percentage range[18][22]. - Fiscal Year 2025 guidance for net income is projected at $1,981 million[39]. - EBITDA as defined is expected to reach $4,685 million, with a margin of 52.9%[39]. - Adjusted earnings per share is forecasted at $36.47, reflecting significant adjustments for stock compensation and acquisition expenses[39]. - Current guidance for net sales remains unchanged at $8,750 to $8,950 million compared to prior guidance[41]. - GAAP net income guidance for Fiscal Year 2025 is consistent at $1,925 to $2,037 million[41]. - EBITDA as defined for Fiscal Year 2025 is also unchanged at $4,615 to $4,755 million[41]. - Adjusted earnings per share guidance remains stable at $35.51 to $37.43[41]. - Weighted-average shares outstanding is projected at 58.15 million, consistent with prior guidance[41]. Stock and Debt Management - The company repurchased approximately $53 million of common stock during Q2 2025 and an additional $131 million subsequent to the quarter-end[9][11]. - Cash and cash equivalents as of March 29, 2025, were $2,426 million, a decrease from $6,261 million as of September 30, 2024[37]. - Long-term debt remained stable at $24,306 million as of March 29, 2025, compared to $24,296 million as of September 30, 2024[37]. - The company anticipates gross adjustments to EBITDA of $159 million, including acquisition-related expenses[39]. - Non-cash stock and deferred compensation expenses are expected to impact earnings per share by $2.35[39].

TransDigm Group Incorporated (TDG) is slated to report second-quarter fiscal 2025 results on May 6, before market open.TransDigm delivered a trailing four-quarter average earnings surprise of 6.50%. (Find the latest EPS estimates and surprises on Zacks Earnings Calendar.)The improving growth trends in commercial air travel and strong defense sales are likely to have bolstered the quarterly performance.TDG’s Power & Control Segment to Remain RobustStrong sales from the commercial aftermarket, backed by stead ...

Wall Street analysts expect TransDigm Group (TDG) to post quarterly earnings of $8.85 per share in its upcoming report, which indicates a year-over-year increase of 10.8%. Revenues are expected to be $2.17 billion, up 12.9% from the year-ago quarter.Over the last 30 days, there has been a downward revision of 1% in the consensus EPS estimate for the quarter, leading to its current level. This signifies the covering analysts' collective reconsideration of their initial forecasts over the course of this timef ...

SOURCE TransDigm Group Inc. About TransDigm Group TransDigm Group, through its wholly-owned subsidiaries, is a leading global designer, producer and supplier of highly engineered aircraft components for use on nearly all commercial and military aircraft in service today. Major product offerings, substantially all of which are ultimately provided to end-users in the aerospace industry, include mechanical/electro-mechanical actuators and controls, ignition systems and engine technology, specialized pumps and ...

Group 1 - TransDigm Group Incorporated (NYSE: TDG) holds a dominant position in the aircraft parts industry and is well-positioned to leverage its pricing power to maintain an above-inflation target price for its products [1] - The company is expected to continue benefiting from its strong market position and pricing strategy, which could lead to sustained revenue growth [1] Group 2 - The article emphasizes the importance of data analytics in identifying investment opportunities within the equity markets, particularly in the context of construction project valuations [1] - The author highlights a value-oriented investment style focused on high-quality mid and small-cap companies, which aligns with the broader trends in retail investing [1]

Core Viewpoint - TransDigm Group has shown strong performance in its recent earnings report, surpassing estimates and demonstrating year-over-year growth, which raises questions about the sustainability of this positive trend leading up to the next earnings release [1][2]. Financial Performance - The company reported adjusted earnings of $7.83 per share for Q1 fiscal 2025, exceeding the Zacks Consensus Estimate of $7.48 by 4.7% and improving 9.4% from $7.16 per share in the prior-year quarter [2]. - Net sales reached $2.01 billion, a 12.1% increase from $1.79 billion in the same period last year, also beating the Zacks Consensus Estimate of $1.99 billion by 0.6% [4]. - Gross profit was $1.24 billion, up 18.5% from $1.04 billion in the prior-year quarter, while net income increased 29.1% year over year to $493 million [5]. Sales and Operating Results - Organic sales grew by 6.6% as a percentage of net sales, indicating strong underlying demand [4]. - The company experienced a 26% increase in interest expense year over year, totaling $378 million [5]. Financial Position - As of December 28, 2024, cash and cash equivalents were $2.46 billion, down from $6.26 billion as of September 30, 2024, while long-term debt remained stable at $24.30 billion [6]. - Cash from operating activities increased to $752 million compared to $636 million at the end of Q1 fiscal 2024 [6]. Guidance and Estimates - TransDigm revised its fiscal 2025 sales guidance to a range of $8.75-$8.95 billion, with the Zacks Consensus Estimate at $8.86 billion [7]. - The company now expects adjusted earnings for fiscal 2025 to be between $35.51-$37.43 per share, higher than the previous range of $35.36-$37.28, with the Zacks Consensus Estimate at $37.08 per share [8]. Market Sentiment - Despite the positive earnings report, estimates for the stock have trended downward over the past month, indicating a potential shift in market sentiment [9][11]. - TransDigm holds a Zacks Rank 2 (Buy), suggesting expectations for above-average returns in the coming months [11].

Core Viewpoint - TransDigm Group Inc. (TDG) presents a strong investment opportunity due to rising earnings estimates, an improving defense budget, solid solvency, and robust liquidity in the aerospace defense equipment industry [1] Growth Projections & Surprise History - The Zacks Consensus Estimate for TDG's fiscal 2025 earnings per share (EPS) has increased by 0.4% to $37.21 over the past 30 days [2] - Total revenue for fiscal 2025 is estimated at $8.87 billion, reflecting a year-over-year growth of 11.7% [2] - Long-term earnings growth for TransDigm is projected at 13.5%, with an average earnings surprise of 6.50% over the last four quarters [2] Solvency - TransDigm's times interest earned (TIE) ratio at the end of Q1 fiscal 2025 was 2.7, indicating strong capability to meet interest payment obligations in the near term [3] Liquidity - The current ratio for TransDigm at the end of Q1 fiscal 2025 was 2.70, significantly higher than the industry average of 1.42, demonstrating the company's ability to meet future short-term liabilities [4] Rising Defense Budget - The U.S. Senate Committee on Appropriations approved a Fiscal Year 2025 Defense Appropriations Act with total funding of $852.2 billion, a 3.3% increase from fiscal 2024 [5] - TransDigm's products are well-positioned in the U.S. defense aerospace market, benefiting from the expansionary budgetary policies of the U.S. administration and other developing nations [5] Stock Price Performance - Over the past month, TDG shares have increased by 3.6%, contrasting with a 1.8% decline in the industry [6]

Core Insights - Zacks Premium offers various tools to help investors make informed decisions and enhance their confidence in the stock market [1] - The Zacks Style Scores are designed to assist investors in selecting stocks with the highest potential to outperform the market within a 30-day timeframe [2] Zacks Style Scores Overview - The Style Scores categorize stocks into four types: Value Score, Growth Score, Momentum Score, and VGM Score, each focusing on different investment strategies [3][4][5][6] - Value Score identifies undervalued stocks using financial ratios [3] - Growth Score emphasizes a company's financial health and future growth potential [4] - Momentum Score helps investors capitalize on price trends and earnings outlook [5] - VGM Score combines all three styles to highlight stocks with attractive value, growth, and momentum [6] Zacks Rank and Style Scores Interaction - The Zacks Rank is a proprietary model that uses earnings estimate revisions to simplify stock selection [7] - Stocks rated 1 (Strong Buy) have historically achieved an average annual return of +25.41%, significantly outperforming the S&P 500 [8] - Investors are encouraged to select stocks with a Zacks Rank of 1 or 2 and Style Scores of A or B for optimal success [9] - Stocks with lower ranks but high Style Scores may still face downward price pressure due to negative earnings forecasts [10] Company Spotlight: TransDigm Group - TransDigm Group is a prominent designer and supplier of aerospace components for commercial and military aircraft, with a diversified product range [11] - Currently rated 3 (Hold) by Zacks, TransDigm has a VGM Score of B and a Momentum Style Score of A [11][12] - The stock has seen a 4.6% increase over the past four weeks, with upward revisions in earnings estimates for fiscal 2025 [12] - The Zacks Consensus Estimate for TransDigm's earnings has risen by $0.08 to $37.27 per share, with an average earnings surprise of 6.5% [12]