Company Overview - TransDigm Group is a leading global designer, producer, and supplier of highly engineered aerospace components used in commercial and military aircraft [11] - The company operates through three reportable segments, showcasing a well-diversified business model [11] Investment Potential - TransDigm is currently rated 3 (Hold) on the Zacks Rank, with a VGM Score of B, indicating a solid investment potential [11] - The company is considered a top pick for growth investors, with a Growth Style Score of B, forecasting year-over-year earnings growth of 9.7% for the current fiscal year [12] - Recent upward revisions in earnings estimates by three analysts over the last 60 days have led to an increase in the Zacks Consensus Estimate by $0.08 to $37.27 per share [12] - TransDigm has an average earnings surprise of 6.5%, further enhancing its attractiveness to investors [12]

Core Insights - TransDigm Group (TDG) reported revenue of $2.01 billion for the quarter ended December 2024, marking a year-over-year increase of 12.1% and exceeding the Zacks Consensus Estimate by 0.60% [1] - The company's EPS for the same period was $7.83, up from $7.16 a year ago, representing a surprise of 4.68% over the consensus estimate of $7.48 [1] Financial Performance - Net sales to external customers in various segments showed mixed results: - Non-aviation: $33 million, a decrease of 21.4% year-over-year, below the estimated $48.40 million [4] - Airframe: $946 million, an increase of 9.7% year-over-year, slightly above the estimated $935.12 million [4] - Power & Control: $1.03 billion, a year-over-year increase of 16.1%, exceeding the estimate of $977.02 million [4] - Airframe - Commercial and non-aerospace OEM: $278 million, a 2.2% increase year-over-year, above the estimate of $276.49 million [4] - Airframe - Defense: $335 million, a significant increase of 25.9% year-over-year, surpassing the estimate of $304.38 million [4] - Power & Control - Defense: $491 million, a 19.2% increase year-over-year, exceeding the estimate of $443.58 million [4] - Power & Control - Commercial and non-aerospace aftermarket: $341 million, a 15.2% increase year-over-year, above the estimate of $333.97 million [4] - Power & Control - Commercial and non-aerospace OEM: $195 million, a 10.2% increase year-over-year, exceeding the estimate of $182.49 million [4] - Airframe - Commercial and non-aerospace aftermarket: $333 million, a 2.8% increase year-over-year, below the estimate of $352.32 million [4] EBITDA Performance - EBITDA for Power & Control was reported at $585 million, exceeding the average estimate of $535.76 million [4] - EBITDA for Non-aviation was $12 million, below the average estimate of $18.34 million [4] - EBITDA for Airframe was $516 million, surpassing the average estimate of $461.50 million [4] Stock Performance - TransDigm's shares have returned +8.1% over the past month, outperforming the Zacks S&P 500 composite's +1% change [3] - The stock currently holds a Zacks Rank 3 (Hold), indicating potential performance in line with the broader market in the near term [3]

Financial Performance - Net sales for the thirteen-week period ended December 28, 2024, increased to $2,006 million, up 12.2% from $1,789 million in the same period last year[9] - Gross profit rose to $1,235 million, representing a gross margin of 61.6%, compared to $1,042 million and a margin of 58.2% in the prior year[9] - Net income attributable to TD Group for the period was $493 million, a 29.1% increase from $382 million year-over-year[9] - Earnings per share attributable to TD Group common stockholders increased to $7.62, up 56.8% from $4.87 in the previous year[9] - Operating cash flow for the period was $752 million, up from $636 million year-over-year, reflecting strong operational performance[13] - EBITDA for the thirteen-week period ended December 28, 2024, was $1,087 million, representing a 26.5% increase from $859 million in the same period of 2023[176] - Total segment EBITDA As Defined increased by $156 million, or 16.3%, to $1,113 million for the thirteen-week period ended December 28, 2024, compared to $957 million for the same period in 2023[120] Assets and Liabilities - Total assets decreased to $21,515 million from $25,586 million as of September 30, 2024, reflecting a reduction of 15.9%[8] - Total liabilities decreased to $27,766 million from $31,869 million, a decline of 13.0%[8] - The company reported a cash and cash equivalents balance of $2,459 million, down from $6,261 million, a decrease of 60.7%[8] - The current portion of long-term debt remained stable at $98 million, while total long-term debt was $24,302 million[8] - Total stockholders' equity decreased to $(6,877) million as of December 28, 2024, compared to $(4,266) million as of September 30, 2023[12] - The company’s accumulated deficit improved to $(6,877) million as of December 28, 2024, from $(7,362) million as of September 30, 2024[8] Cash Flow and Dividends - The company did not declare cash dividends for the current period, compared to $35.00 per share in the same period last year[9] - The company paid dividends and dividend equivalent payments totaling $4,396 million during the period, compared to $2,038 million in the prior year[13] - Net cash used in financing activities was $4,516 million during the thirteen-week period ended December 28, 2024, primarily due to dividend payments of $4,396 million[141] - Cash and cash equivalents at the end of the period decreased to $2,459 million from $4,135 million at the end of the previous year[13] Acquisitions - The Company acquired Raptor Scientific for approximately $646 million, financed through existing cash, enhancing its position in the aerospace and defense markets[20] - The acquisition of CPI's Electron Device Business was completed for approximately $1,386 million, also financed through existing cash, further strengthening the Company's capabilities in electronic components[24] - SEI Industries LTD was acquired for approximately $171 million, expanding the Company's offerings in aerial firefighting and liquid transportation solutions[29] - FPT Industries LLC was acquired for approximately $57 million, enhancing the Company's product range in specialist fuel tanks and flotation systems[32] - The total estimated fair value of assets acquired from Raptor Scientific included $9 million in trade accounts receivable and $197 million in other intangible assets[23] - The acquisition of CPI's Electron Device Business included $40 million in trade accounts receivable and $368 million in other intangible assets[28] Revenue Recognition and Sales Performance - The Company recognizes revenue primarily at a point in time, with a significant portion derived from the aerospace and defense industry[39][40] - Organic sales rose by $118 million, or 6.6%, driven by an $80 million increase in defense sales (up 11.8%) and a $57 million increase in commercial aftermarket sales (up 9.9%) for the same period[111] - The Power & Control segment generated net sales of $1,027 million, an increase of 15.4% from $890 million in the prior year[90] - The Airframe segment's net sales rose to $946 million, up 9.8% from $862 million in the previous year[90] Expenses and Taxation - Selling and administrative expenses decreased by $9 million, or 4%, to $211 million, representing 10.5% of net sales compared to 12.3% in the prior year[113] - Interest expense-net increased to $378 million for the thirteen-week period ended December 28, 2024, compared to $300 million in the same period in 2023[90] - The effective income tax rate for the thirteen-week period ended December 28, 2024, was 20.4%, down from 21.7% for the same period in 2023[67] Stock Repurchase and Shareholder Returns - The company repurchased 252,800 shares of common stock at an average price of $1,248.65 per share for a total of $316 million during the first quarter of fiscal 2025[55] - The total amount available for repurchase under the $2,200 million stock repurchase program is $972 million as of December 28, 2024[55] Future Outlook and Standards - The Company plans to adopt new accounting standards effective for fiscal 2025, which may expand disclosures but are not expected to impact consolidated financial statements[17] - The company is currently evaluating the impact of new accounting standards (ASU 2023-09 and ASU 2024-03) on its disclosures, effective for fiscal years starting after December 15, 2024, and December 15, 2026, respectively[18][19]

Core Insights - TransDigm Group reported adjusted earnings per share (EPS) of $7.83, exceeding expectations of $7.67, marking a 9.4% increase year-over-year [2][3] - Revenue for the quarter was $2.006 billion, falling short of the forecast of $2.031 billion, but still representing a 12.1% year-over-year growth [2][3] - The company’s net income rose by 29.1% to $493 million, driven by strong demand in the commercial aftermarket and defense markets [3][6] Financial Performance - Adjusted EPS: $7.83 vs. estimated $7.67, up 9.4% from $7.16 in Q1 2024 [3] - Revenue: $2.006 billion vs. estimated $2.031 billion, up 12.1% from $1.789 billion in Q1 2024 [3] - Net Income: $493 million, up 29.1% from $382 million in Q1 2024 [3] - EBITDA: $1.061 billion, up 16.3% from $912 million in Q1 2024 [3] Business Overview - TransDigm specializes in highly engineered aerospace components for commercial and military use, with approximately 90% of its products being proprietary [4] - Proprietary products and services contribute to around 55% of net sales, ensuring sustained revenue through the lifecycle of aircraft components [4] - The company focuses on balanced growth through selective acquisitions to enhance aftermarket revenue potential [4] Market Position and Strategy - Key success factors include a diversified product base, effective cost controls, and a robust pricing strategy that ensures high margins [5] - The company serves both commercial airline and military markets, stabilizing its business against sector downturns [5] - Management remains committed to pursuing future acquisition opportunities that align with its proprietary business model [8] Quarterly Developments - Gross margin increased, with EBITDA climbing by 16.3% to $1.061 billion [6] - CEO Kevin Stein noted that revenue growth was driven by the commercial aftermarket and defense market [7] - Despite revenue growth, it fell short of Wall Street expectations by 1.2%, partly due to variability in OEM and aftermarket revenue streams [9] Future Outlook - For fiscal 2025, TransDigm expects net sales of $8.75 billion to $8.95 billion, reflecting an anticipated growth of 11.5% at the midpoint [10] - Projected adjusted EPS for fiscal 2025 is between $32.27 and $34.19 [10] - Management remains optimistic about its position in niche aerospace markets and aims to leverage proprietary advantages while navigating potential supply chain disruptions [10][11]

Core Viewpoint - TransDigm Group Incorporated (TDG) reported strong financial results for the first quarter of fiscal 2025, with adjusted earnings per share (EPS) exceeding expectations and showing significant year-over-year growth [1][2]. Financial Performance - Adjusted EPS for Q1 fiscal 2025 was $7.83, beating the Zacks Consensus Estimate of $7.48 by 4.7% and improving 9.4% from $7.16 in the prior-year quarter [1][2]. - GAAP EPS was reported at $7.62, compared to $4.87 in the same quarter last year, indicating substantial growth driven by increased net sales and operational strategies [2]. - Total sales reached $2.01 billion, a 12.1% increase from $1.79 billion in the prior-year period, also surpassing the Zacks Consensus Estimate of $1.99 billion by 0.6% [3]. Operating Results - Gross profit for the quarter was $1.24 billion, up 18.5% from $1.04 billion in the previous year [4]. - Net income increased by 29.1% year over year to $493 million, while interest expenses rose 26% to $378 million [4]. 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 [5]. - Long-term debt remained stable at $24.30 billion, consistent with the previous quarter [5]. - Cash from operating activities was $752 million, an increase from $636 million at the end of Q1 fiscal 2024 [5]. Guidance - The company revised its fiscal 2025 sales guidance to a range of $8.75-$8.95 billion, with the Zacks Consensus Estimate at $8.86 billion [6]. - Adjusted EPS guidance for fiscal 2025 was updated to a range of $35.51-$37.43, higher than the previous range of $35.36-$37.28, with the consensus estimate at $37.08 [7]. Zacks Rank - TransDigm currently holds a Zacks Rank 3 (Hold), indicating a neutral outlook [8].

FY 2025 Q1 Earnings Call February 4, 2025 1 Agenda TransDigm Overview, Highlights and Outlook Kevin Stein Market Review Joel Reiss 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 SPECIAL NOTICE REGARDING PRO FORMA AND NON-GAAP INFORMATION This presentation sets forth certain pro forma financial information. This pro forma financial information gives eff ...

Group 1: Earnings Performance - TransDigm Group reported quarterly earnings of $7.83 per share, exceeding the Zacks Consensus Estimate of $7.48 per share, and up from $7.16 per share a year ago, representing an earnings surprise of 4.68% [1] - The company posted revenues of $2.01 billion for the quarter ended December 2024, surpassing the Zacks Consensus Estimate by 0.60%, and an increase from $1.79 billion year-over-year [2] - Over the last four quarters, TransDigm has consistently surpassed consensus EPS estimates and revenue estimates [2] Group 2: Stock Performance and Outlook - TransDigm shares have increased approximately 6.8% since the beginning of the year, outperforming the S&P 500's gain of 1.9% [3] - The company's earnings outlook is crucial for investors, as it includes current consensus earnings expectations for upcoming quarters and any recent changes to these expectations [4] - The current consensus EPS estimate for the upcoming quarter is $8.90 on revenues of $2.15 billion, and for the current fiscal year, it is $37.08 on revenues of $8.86 billion [7] Group 3: Industry Context - The Aerospace - Defense Equipment industry, to which TransDigm belongs, is currently ranked in the bottom 41% of over 250 Zacks industries, indicating potential challenges for stock performance [8] - Empirical research suggests a strong correlation between near-term stock movements and trends in earnings estimate revisions, which can impact investor sentiment [5] - The Zacks Rank for TransDigm is currently 3 (Hold), indicating that shares are expected to perform in line with the market in the near future [6]

Exhibit 99.1 TransDigm Group Reports Fiscal 2025 First Quarter Results Cleveland, Ohio, February 4, 2025/PRNewswire/ -- TransDigm Group Incorporated (NYSE: TDG), a leading global designer, producer and supplier of highly engineered aircraft components, today reported results for the first quarter ended December 28, 2024. First quarter highlights include: Quarter-to-Date Results Net sales for the quarter increased 12.1%, or $217 million, to $2,006 million from $1,789 million in the comparable quarter a year ...

CLEVELAND, Feb. 4, 2025 /PRNewswire/ -- TransDigm Group Incorporated (NYSE: TDG), a leading global designer, producer and supplier of highly engineered aircraft components, today reported results for the first quarter ended December 28, 2024.First quarter highlights include: Net sales of $2,006 million, up 12% from $1,789 million in the prior year's quarter; Net income of $493 million, up 29% from the prior year's quarter; Earnings per share of $7.62, up 56% from the prior year's quarter; EBITDA As Defined ...

Core Viewpoint - TransDigm Group (TDG) is expected to report quarterly earnings of $7.48 per share, reflecting a 4.5% increase year-over-year, with revenues projected at $1.99 billion, indicating an 11.5% growth compared to the previous year [1]. Earnings Estimates - There has been a slight downward revision of 0.1% in the consensus EPS estimate over the last 30 days, indicating analysts' reassessment of their initial forecasts [2]. - Revisions to earnings projections are crucial for predicting investor behavior and are strongly correlated with short-term stock price performance [3]. Key Metrics Forecast - Analysts predict 'Net sales to external customers- Non-aviation' will reach $48.40 million, a year-over-year increase of 15.3% [5]. - 'Net sales to external customers- Airframe' is estimated at $935.12 million, reflecting an 8.5% increase from the prior year [5]. - 'Net sales to external customers- Power & Control' is forecasted to be $977.02 million, indicating a 10.4% year-over-year change [6]. - 'Net sales to external customers- Airframe- Commercial and non-aerospace OEM' is expected to be $276.49 million, with a 1.7% increase from the previous year [6]. - 'Net sales to external customers- Airframe- Defense' is projected at $304.38 million, showing a 14.4% increase year-over-year [7]. - 'Net sales to external customers- Power & Control- Defense' is estimated to reach $443.58 million, reflecting a 7.7% increase [7]. - 'Net sales to external customers- Power & Control- Commercial and non-aerospace aftermarket' is expected to be $333.97 million, indicating a 12.8% year-over-year change [8]. - 'Net sales to external customers- Power & Control- Commercial and non-aerospace OEM' is forecasted at $182.49 million, with a 3.1% increase [8]. - 'Net sales to external customers- Airframe- Commercial and non-aerospace aftermarket' is projected to be $352.32 million, reflecting an 8.7% increase [9]. EBITDA Estimates - 'EBITDA- Power & Control' is expected to reach $535.76 million, compared to $509 million in the same quarter last year [9]. - 'EBITDA- Non-aviation' is projected at $18.34 million, up from $17 million in the previous year [10]. - 'EBITDA- Airframe' is estimated to be $461.50 million, compared to $431 million in the same quarter last year [10]. Stock Performance - Over the past month, shares of TransDigm have returned +8.8%, outperforming the Zacks S&P 500 composite's +2.9% [11].