Core Viewpoint - TransDigm Group reported Q3 FY2025 earnings that fell short of analyst expectations, with revenue of $2,237 million and non-GAAP earnings per share of $9.60, despite achieving record profit margins and improved guidance for future profitability [1][12]. Financial Performance - Q3 FY2025 non-GAAP EPS was $9.60, below the estimate of $9.89, but up 6.7% from $9.00 in Q3 FY2024 [2]. - GAAP revenue was $2,237 million, missing the estimate of $2,297.93 million, but representing a 9.3% increase from $2,046 million in Q3 FY2024 [2]. - Net income (GAAP) reached $493 million, a 6.9% increase from $461 million in Q3 FY2024 [2]. - EBITDA As Defined was $1,217 million, up 11.6% from $1,091 million in the prior year, with a margin of 54.4%, improving by 1.1 percentage points year-over-year [2][6]. Business Model and Market Position - TransDigm Group specializes in proprietary aerospace components, with approximately 90% of net sales in FY2024 derived from proprietary products [3]. - The company generates about 55% of its net sales from aftermarket services, driven by long-term aircraft maintenance and repair needs [4]. Segment Performance - The commercial aftermarket segment showed strong growth across all submarkets, particularly in engine and freight components, which exceeded the overall 13% growth in aftermarket sales [7]. - Defense bookings outpaced sales, indicating a positive outlook for future demand across various product types [8][9]. Strategic Moves - TransDigm completed the acquisition of Servotronics and agreed to acquire Simmonds Precision Products for approximately $765 million, focusing on businesses with strong aftermarket potential [10]. - The company repurchased 105,567 shares for $131 million and refinanced $2.65 billion of debt, enhancing financial flexibility [11]. Guidance and Outlook - Management updated full-year GAAP revenue guidance to a range of $8.76–$8.82 billion, reflecting anticipated weakness in commercial OEM sales, while increasing non-GAAP EBITDA guidance by $40 million [12][13]. - Expectations for commercial aftermarket revenue growth remain in the high single-digit to low double-digit range, with defense sales projected to grow similarly [13].

PART I FINANCIAL INFORMATION [Financial Statements](index=4&type=section&id=ITEM%201%20Financial%20Statements) TransDigm Group reported increased net sales and net income for the third quarter and first thirty-nine weeks of fiscal 2025 compared to the prior year, with the balance sheet reflecting a significant decrease in cash due to a large special dividend payment, while the stockholders' deficit improved and cash flow from operations remained strong, offset by substantial financing outflows for dividends and stock repurchases [Condensed Consolidated Balance Sheets](index=4&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) As of June 28, 2025, total assets decreased to **$22.7 billion** from **$25.6 billion**, primarily due to a **$3.5 billion** reduction in cash used for a dividend payment, while total liabilities decreased and the stockholders' deficit improved from **$(6.3) billion** to **$(5.0) billion** Condensed Consolidated Balance Sheet Highlights (in millions) | Account | June 28, 2025 | September 30, 2024 | | :--- | :--- | :--- | | **Total Current Assets** | $6,915 | $10,029 | | *Cash and cash equivalents* | *$2,792* | *$6,261* | | **Total Assets** | **$22,700** | **$25,586** | | **Total Current Liabilities** | $2,211 | $6,339 | | *Dividends payable* | *$—* | *$4,216* | | **Total Liabilities** | **$27,696** | **$31,869** | | **Total Stockholders' Deficit** | **$(4,996)** | **$(6,283)** | [Condensed Consolidated Statements of Income](index=5&type=section&id=Condensed%20Consolidated%20Statements%20of%20Income) For the third quarter of fiscal 2025, net sales increased **9.3%** year-over-year to **$2.24 billion**, and net income attributable to TD Group grew to **$492 million** from **$461 million**; for the thirty-nine week period, net sales rose **11.1%** to **$6.39 billion**, with net income increasing to **$1.46 billion** from **$1.25 billion** in the prior year, and diluted EPS for the quarter was **$8.47**, up from **$7.96** Key Income Statement Data (in millions, except per share amounts) | Metric | Q3 2025 | Q3 2024 | YTD 2025 | YTD 2024 | | :--- | :--- | :--- | :--- | :--- | | **Net Sales** | $2,237 | $2,046 | $6,394 | $5,754 | | **Gross Profit** | $1,332 | $1,220 | $3,841 | $3,413 | | **Income from Operations** | $1,039 | $934 | $3,004 | $2,588 | | **Net Income Attributable to TD Group** | $492 | $461 | $1,464 | $1,246 | | **Earnings Per Share (Diluted)** | $8.47 | $7.96 | $24.31 | $19.81 | [Condensed Consolidated Statements of Cash Flows](index=9&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) For the thirty-nine weeks ended June 28, 2025, the company generated **$1.53 billion** in cash from operating activities, used **$349 million** in investing activities primarily for acquisitions, and had a significant **$4.67 billion** cash outflow from financing activities driven by **$4.4 billion** in dividend payments and **$500 million** in stock repurchases, resulting in a net decrease in cash of **$3.47 billion** Cash Flow Summary for Thirty-Nine Week Periods (in millions) | Cash Flow Activity | Ended June 28, 2025 | Ended June 29, 2024 | | :--- | :--- | :--- | | **Net cash provided by operating activities** | $1,531 | $1,473 | | **Net cash used in investing activities** | $(349) | $(1,739) | | **Net cash (used in) provided by financing activities** | $(4,669) | $152 | | **Net decrease in cash and cash equivalents** | $(3,469) | $(112) | - Major financing outflows in the first thirty-nine weeks of fiscal 2025 included **$4.4 billion** in dividend and dividend equivalent payments and **$500 million** for common stock repurchases[13](index=13&type=chunk) [Notes to Condensed Consolidated Financial Statements](index=10&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) The notes detail significant corporate activities, including a series of acquisitions and a definitive agreement for another major purchase, debt refinancing, revenue recognition policies, segment performance, and stock repurchase activities, with a slight decrease in the effective tax rate compared to the prior year - The company has been highly acquisitive, entering a definitive agreement to acquire Simmonds Precision Products for **~$765 million**, completing the acquisition of Servotronics for **~$133 million**, and acquiring various product lines via its Extant Aerospace subsidiary for **$212 million** in the first thirty-nine weeks of fiscal 2025[20](index=20&type=chunk)[21](index=21&type=chunk)[38](index=38&type=chunk) - In May 2025, the company issued **$2.65 billion** of **6.375%** Senior Subordinated Notes due 2033 and used the proceeds to redeem all of its outstanding **5.50%** Senior Subordinated Notes due 2027 in June 2025[64](index=64&type=chunk)[66](index=66&type=chunk) - During the thirty-nine week period, the company repurchased **401,036 shares** of its common stock for a total of **$500 million**, leaving **$788 million** available under its current repurchase program[57](index=57&type=chunk) Segment Net Sales for Thirty-Nine Week Periods (in millions) | Segment | June 28, 2025 | June 29, 2024 | % Change | | :--- | :--- | :--- | :--- | | **Power & Control** | $3,274 | $2,838 | +15.4% | | **Airframe** | $3,007 | $2,795 | +7.6% | | **Non-aviation** | $113 | $121 | -6.6% | | **Total Net Sales** | **$6,394** | **$5,754** | **+11.1%** | [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=30&type=section&id=ITEM%202%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management attributes the **11.1%** year-to-date revenue growth to strong performance in the commercial aftermarket, driven by increased air travel, and growth in the defense sector from higher government spending, supplemented by recent acquisitions, while commercial OEM sales declined due to supply chain and production challenges; the company maintained strong profitability, with EBITDA As Defined margin expanding to **53.8%**, and liquidity remains robust at **$3.6 billion** despite significant cash outflows [Results of Operations](index=33&type=section&id=Results%20of%20Operations) The analysis details financial performance for both the third quarter and the first thirty-nine weeks of fiscal 2025, with net sales increasing **11.1%** to **$6.4 billion** driven by **6.6%** organic growth and **4.5%** from acquisitions, led by defense (**+12.3%**) and commercial aftermarket (**+9.5%**) sales, while commercial OEM sales declined (**-3.9%**), and gross profit margin improved to **60.1%** with net income rising **17.5%** to **$1.46 billion** Net Sales Growth for Thirty-Nine Week Period Ended June 28, 2025 (in millions) | Sales Type | YTD 2025 | YTD 2024 | Change | % of Total Growth | | :--- | :--- | :--- | :--- | :--- | | **Organic Sales** | $6,092 | $5,712 | $380 | 6.6% | | **Acquisition Sales** | $302 | $42 | $260 | 4.5% | | **Total Net Sales** | **$6,394** | **$5,754** | **$640** | **11.1%** | - Organic sales growth for the thirty-nine week period was primarily driven by a **$271 million (12.3%)** increase in defense sales and a **$168 million (9.5%)** increase in commercial aftermarket sales, partially offset by a **$50 million (3.9%)** decrease in commercial OEM sales[133](index=133&type=chunk) EBITDA As Defined by Segment for Thirty-Nine Week Periods (in millions) | Segment | YTD 2025 | YTD 2024 | % Change | Margin YTD 2025 | | :--- | :--- | :--- | :--- | :--- | | **Power & Control** | $1,868 | $1,626 | +14.9% | 57.1% | | **Airframe** | $1,613 | $1,443 | +11.8% | 53.6% | | **Total Company** | **$3,441** | **$3,023** | **+13.8%** | **53.8%** | [Liquidity and Capital Resources](index=42&type=section&id=Liquidity%20and%20Capital%20Resources) The company maintains a strong liquidity position with **$3.65 billion** available as of June 28, 2025, consisting of **$2.8 billion** in cash and **$856 million** in revolving credit facility availability, having allocated significant capital to a **$4.2 billion** special dividend, **$500 million** in stock repurchases, and acquisitions, while also refinancing **$2.65 billion** of debt and increasing its securitization facility capacity to **$725 million** Cash Liquidity as of June 28, 2025 (in millions) | Component | Amount | | :--- | :--- | | Cash and cash equivalents | $2,792 | | Availability on revolving credit facility | $856 | | **Total Cash Liquidity** | **$3,648** | - Key transactions in fiscal 2025 include: - Payment of a **$75.00 per share** special dividend, totaling **$4.2 billion** - Repurchase of **$500 million** of common stock - Issuance of **$2.65 billion** in new notes to redeem existing notes - Agreement to acquire Simmonds Precision Products for **~$765 million** and completion of the Servotronics acquisition for **~$133 million**[145](index=145&type=chunk) - As of June 28, 2025, approximately **75%** of the company's gross debt was at a fixed rate, aligning with its objective to limit exposure to near-term interest rate changes[149](index=149&type=chunk) [Quantitative and Qualitative Disclosure About Market Risk](index=51&type=section&id=ITEM%203%20Quantitative%20and%20Qualitative%20Disclosure%20About%20Market%20Risk) The company reports that there have been no material changes to its market risks during the third quarter of fiscal year 2025 from those disclosed in its most recent Annual Report on Form 10-K - Market risks have not materially changed for the third quarter of fiscal year 2025 compared to the risks disclosed in the fiscal 2024 Form 10-K[193](index=193&type=chunk) [Controls and Procedures](index=51&type=section&id=ITEM%204%20Controls%20and%20Procedures) Based on an evaluation as of June 28, 2025, the company's management, including the CEO and CFO, concluded that its disclosure controls and procedures are effective, with no material changes in the company's internal control over financial reporting during the quarter - The President, CEO, and CFO concluded that the company's disclosure controls and procedures are effective as of the end of the reporting period[194](index=194&type=chunk) - No changes occurred during the fiscal quarter that materially affected, or are reasonably likely to materially affect, the company's internal control over financial reporting[195](index=195&type=chunk) PART II OTHER INFORMATION [Legal Proceedings](index=52&type=section&id=ITEM%201%20Legal%20Proceedings) The company is involved in various legal actions arising in the ordinary course of business but does not expect them to have a material adverse effect on its financial condition, results of operations, or cash flows, with no material changes since the last annual report - The company believes the results of current legal proceedings will not have a material adverse effect on its financial condition or operations[196](index=196&type=chunk) [Risk Factors](index=52&type=section&id=ITEM%201A%20Risk%20Factors) There have been no material changes to the risk factors disclosed in the company's Annual Report on Form 10-K for the fiscal year ended September 30, 2024 - No material changes to the risk factors described in the Form 10-K have occurred[198](index=198&type=chunk) [Unregistered Sales of Equity Securities and Use of Proceeds](index=52&type=section&id=ITEM%202%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds%3A%20Purchases%20of%20Equity%20Securities%20by%20the%20Issuer) During the third quarter of fiscal 2025, the company repurchased **105,567 shares** of its common stock at an average price of **$1,240.91 per share**, with **$788 million** remaining available for future repurchases under the authorized program as of the end of the quarter Issuer Purchases of Equity Securities (Q3 2025) | Period | Total Shares Repurchased | Average Price Paid Per Share | Approx. Dollar Value Remaining in Program | | :--- | :--- | :--- | :--- | | Mar 30 - Apr 26, 2025 | 105,567 | $1,240.91 | $788 million | | **Total** | **105,567** | **$1,240.91** | **$788 million** | [Other Information](index=52&type=section&id=ITEM%205%20Other%20Information) On June 2, 2025, the company's President and CEO, Kevin Stein, established a new Rule 10b5-1 trading plan for the sale of **171,500 shares** of common stock issuable upon exercise of vested options, with the plan scheduled to begin on September 1, 2025 - President and CEO Kevin Stein entered into a new Rule 10b5-1 trading arrangement for the sale of **171,500 shares**, effective September 1, 2025[199](index=199&type=chunk) [Exhibits](index=53&type=section&id=ITEM%206%20Exhibits) This section lists all exhibits filed with the Form 10-Q, including an amendment to the Receivables Purchase Agreement, a listing of subsidiary guarantors, CEO/CFO certifications, and XBRL data files

Core Insights - TransDigm Group Incorporated reported third-quarter fiscal 2025 adjusted earnings of $9.60 per share, missing the Zacks Consensus Estimate of $9.78 by 1.8%, but showing a year-over-year improvement of 6.7% from $9.00 per share [1][9] - The company’s GAAP earnings were $8.47 per share, compared to $7.96 in the same quarter last year [1] Sales Performance - Sales for the quarter reached $2.24 billion, reflecting a 9.3% increase from $2.05 billion in the prior-year period, although it fell short of the Zacks Consensus Estimate of $2.30 billion by 2.6% [3][9] - Organic sales grew by 6.3% as a percentage of net sales [3] Operating Results - Gross profit was reported at $1.33 billion, up 9.2% from $1.22 billion in the year-ago quarter [4] - Interest expense increased by 25.6% year over year to $397 million [4] - Net income rose by 6.9% year over year to $493 million [4] Financial Position - As of June 28, 2025, cash and cash equivalents totaled $2.79 billion, down from $6.26 billion as of September 30, 2024 [5] - Long-term debt decreased slightly to $24.27 billion from $24.30 billion as of September 30, 2024 [5] - Cash from operating activities was $1.53 billion, compared to $1.47 billion at the end of the third quarter of fiscal 2024 [5] Guidance for Fiscal 2025 - TransDigm updated its fiscal 2025 sales guidance to a range of $8.76-$8.82 billion, narrower than the previous range of $8.75-$8.95 billion, with the Zacks Consensus Estimate at $8.88 billion [6] - The company now expects adjusted earnings for fiscal 2025 to be between $36.33-$37.15 per share, also narrower than the earlier guidance of $35.51-$37.43 per share, with the Zacks Consensus Estimate at $37.30 per share [7]

Financial Data and Key Metrics Changes - The company reported a Q3 EBITDA margin of 54.4%, supported by growth in the commercial aftermarket and a focus on operating strategy [13][39] - Operating cash flow for Q3 exceeded $630 million, with a cash balance of nearly $2.8 billion at the end of the quarter [13][40] - Full fiscal year 2025 sales guidance was decreased by $60 million to a midpoint of $8.79 billion, while EBITDA guidance was raised by $40 million to a midpoint of $4.725 billion, reflecting a 13% increase [14][17] Business Line Data and Key Metrics Changes - Commercial OEM revenue decreased by 7% year-over-year in Q3, attributed to lower production rates at Boeing and Airbus [25][26] - Commercial aftermarket revenue increased by approximately 6% compared to the prior year, with growth across all submarkets [28][29] - Defense market revenue grew by approximately 13% year-over-year, with healthy bookings supporting continued growth [30][31] Market Data and Key Metrics Changes - The commercial OEM market is expected to see revenue growth in the flat to low single-digit percentage range, down from previous expectations [15][16] - The commercial aftermarket and defense revenue growth guidance remains unchanged, with expectations of high single-digit to low double-digit percentage growth [16][31] - The company noted that supply chain issues remain a bottleneck for OEM production ramp-up, but improvements are being observed [28][78] Company Strategy and Development Direction - The company aims to provide private equity-like returns with the liquidity of a public market, focusing on proprietary aerospace businesses with significant aftermarket content [10][11] - Recent acquisitions, including Servotronics and Simmons Precision, align with the company's strategy to enhance its portfolio [21][22] - The company maintains a disciplined approach to capital allocation, prioritizing reinvestment in businesses and accretive M&A [23][40] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the recovery of the commercial OEM market, despite current challenges, and expects a return to positive growth in Q4 [62][63] - The company remains focused on operational excellence and efficient cost structures to navigate uneven demand in the commercial OEM market [19][39] - Management highlighted the importance of monitoring the aerospace and capital markets for future adjustments [18] Other Important Information - The company announced leadership transitions, with Mike Lisman set to take over as CEO on October 1 [38][39] - The company is approximately 75% hedged on its total gross debt balance, providing protection against interest rate fluctuations [41][42] Q&A Session Summary Question: About the aftermarket performance and future expectations - Management indicated that the commercial aftermarket growth is in line with expectations, and they anticipate continued growth in the high single-digit to low double-digit range [47][49] Question: Visibility into fourth-quarter growth rates - Management expressed confidence in achieving the guidance for the year, with expectations for a return to positive growth in the commercial OEM segment [60][63] Question: Supply chain improvements and potential headwinds - Management noted that supply chain conditions are improving, although some issues remain, and they are hopeful for a quick resolution to any disruptions [78][81] Question: Competitive landscape and second sourcing - Management reported no significant changes in the competitive landscape regarding second sourcing or PMA competition, maintaining a strong position in the market [102][104] Question: Insights on recent acquisitions and future opportunities - Management expressed optimism about the acquisition of Simmons and the potential for more carve-outs in the aerospace and defense sector [107][108]

Financial Data and Key Metrics Changes - The company reported an EBITDA margin of 54.4% for Q3, supported by growth in the commercial aftermarket and effective operating strategies [11] - Operating cash flow for Q3 exceeded $630 million, with a cash balance of nearly $2.8 billion at the end of the quarter [11] - Full fiscal year 2025 sales guidance was decreased by $60 million to a midpoint of $8.79 billion, while EBITDA guidance was increased by $40 million to a midpoint of $4.725 billion, reflecting a 13% increase year-over-year [12][14] Business Line Data and Key Metrics Changes - Commercial OEM revenues decreased by 7% year-over-year in Q3, attributed to lower production rates at Boeing and Airbus [22][23] - Commercial aftermarket revenue increased by approximately 6% compared to the prior year, with growth across all submarkets [25] - Defense market revenue grew by approximately 13% year-over-year, with healthy bookings supporting continued growth expectations [27][28] Market Data and Key Metrics Changes - The commercial OEM market is expected to see revenue growth in the flat to low single-digit percentage range, a decrease from previous expectations [14] - The commercial aftermarket and defense markets are projected to grow in the high single-digit to low double-digit percentage range, with no changes to previous guidance [14] Company Strategy and Development Direction - The company aims to provide private equity-like returns with public market liquidity, focusing on proprietary aerospace businesses with significant aftermarket content [6][7] - Recent acquisitions, including Servotronics and Simmons Precision, align with the company's strategy to enhance its portfolio and drive growth [18][19] - The company maintains a disciplined approach to capital allocation, prioritizing reinvestment in businesses, accretive M&A, and returning capital to shareholders [20] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the recovery of the commercial OEM market, despite current challenges, and expects a return to positive growth in Q4 [58] - The company remains vigilant regarding supply chain improvements, noting that while challenges persist, conditions are better than in previous years [71] - Management anticipates continued growth in the commercial aftermarket, supported by stable airline demand and operational excellence [15][25] Other Important Information - The company announced key leadership changes, with Mike Lisman set to become CEO following Kevin Stein's retirement [4][5][34] - The company is actively monitoring credit markets and assessing opportunities for leverage to support future acquisitions and shareholder returns [20][36] Q&A Session Summary Question: About the aftermarket performance and future growth - Management indicated that the commercial aftermarket growth aligns with expectations, and they feel confident about achieving the guidance for the year [42][44] Question: Visibility into fourth quarter growth rates - Management noted that they expect a significant acceleration in aftermarket growth in Q4, driven by improved production rates and easier comparisons [56][58] Question: Supply chain improvements and potential headwinds - Management reported ongoing improvements in the supply chain, though some bottlenecks remain, and they are hopeful for a quick resolution to any disruptions [71][72] Question: Defense business bookings and growth - Defense bookings were strong, with growth evenly distributed across operating units, supporting positive outlooks for the upcoming fiscal year [88][90] Question: Competitive landscape and second sourcing - Management stated that there have been no significant changes in the competitive landscape regarding second sourcing or PMA competition [96][97]

Financial Performance - Q3 2025 - Revenue increased by 9.3% to $2.237 billion, compared to $2.046 billion in Q3 2024[11] - EBITDA As Defined increased by 11.5% to $1.217 billion, compared to $1.091 billion in Q3 2024[11] - Adjusted EPS increased by 6.7% to $9.60, compared to $9.00 in Q3 2024[11] - Net interest expense increased by 25.6% to $397 million, compared to $316 million in Q3 2024[11] Market Segment Performance - Q3 2025 (Pro Forma) - Commercial Transport revenue was down 8% in OEM and up 7% in Aftermarket[9] - Business Jet/Helicopter revenue was down 6% in OEM and up 5% in Aftermarket[9] - Defense OEM outpaced Defense Aftermarket growth[9] Fiscal Year 2025 Outlook - Revenue guidance midpoint is $8.79 billion, a decrease of $60 million from prior guidance[12] - EBITDA As Defined guidance midpoint is $4.725 billion, an increase of $40 million from prior guidance[12] - Adjusted EPS guidance midpoint is $36.74, an increase of $0.27 from prior guidance[12] Capital Structure - Total secured debt is $20.309 billion, with a leverage ratio of 4.4x[17] - Total net secured debt is $17.517 billion, with a leverage ratio of 3.8x[17] - Total debt is $25.188 billion, with a leverage ratio of 5.5x[17] - Total net debt is $22.396 billion, with a leverage ratio of 4.9x[17]

Core Insights - TransDigm Group reported quarterly earnings of $9.6 per share, missing the Zacks Consensus Estimate of $9.78 per share, but showing an increase from $9 per share a year ago, resulting in an earnings surprise of -1.84% [1] - The company posted revenues of $2.24 billion for the quarter ended June 2025, which was below the Zacks Consensus Estimate by 2.55%, compared to $2.05 billion in the same quarter last year [2] - TransDigm shares have increased approximately 27% since the beginning of the year, outperforming the S&P 500's gain of 7.6% [3] Earnings Outlook - The current consensus EPS estimate for the upcoming quarter is $10.61 on revenues of $2.43 billion, and for the current fiscal year, it is $37.30 on revenues of $8.88 billion [7] - The estimate revisions trend for TransDigm was favorable ahead of the earnings release, resulting in a Zacks Rank 2 (Buy) for the stock, indicating expected outperformance in the near future [6] Industry Context - The Aerospace - Defense Equipment industry, to which TransDigm belongs, is currently ranked in the top 41% of over 250 Zacks industries, suggesting a favorable outlook for stocks in this sector [8]

Exhibit 99.1 TransDigm Group Reports Fiscal 2025 Third Quarter Results Cleveland, Ohio, August 5, 2025/PRNewswire/ -- TransDigm Group Incorporated (NYSE: TDG), a leading global designer, producer and supplier of highly engineered aircraft components, today reported results for the third quarter ended June 28, 2025. Third quarter highlights include: Quarter-to-Date Results Net sales for the quarter increased 9.3%, or $191 million, to $2,237 million from $2,046 million in the comparable quarter a year ago. Or ...

Core Insights - TransDigm Group Incorporated reported a 9.3% increase in net sales for Q3 2025, reaching $2,237 million compared to $2,046 million in the same quarter last year, with organic sales growth at 6.3% [2][15] - Net income for the quarter rose by 6.9% to $493 million, driven by increased net sales and a value-driven operating strategy, despite higher interest expenses [3][15] - Adjusted net income increased by 7.1% to $558 million, translating to $9.60 per share, up from $9.00 in the prior year [4][15] - EBITDA for the quarter grew by 12.9% to $1,123 million, with EBITDA As Defined at $1,217 million, reflecting a margin of 54.4% [5][15] Financial Performance - Year-to-date net sales for the thirty-nine weeks ended June 28, 2025, increased by 11.1% to $6,394 million, with organic sales growth at 6.6% [12] - Year-to-date net income rose by 17.4% to $1,465 million, attributed to higher net sales and effective cost management [13] - EBITDA for the year-to-date period increased by 19.0% to $3,299 million, with EBITDA As Defined at $3,441 million, yielding a margin of 53.8% [17] Market and Operational Insights - The commercial aftermarket and defense markets performed well, although growth in the commercial aftermarket moderated, and sales in the commercial OEM market fell short of expectations due to lower OEM build rates and inventory destocking [6] - The company completed the acquisition of Servotronics, Inc. and announced an agreement to acquire Simmonds Precision Products, with a total capital deployment of over $900 million expected for these acquisitions [7][10] - The company raised its fiscal 2025 EBITDA As Defined guidance while lowering sales guidance by $60 million due to lower than expected commercial OEM sales [19] Shareholder Activities - During Q3 2025, TransDigm repurchased 105,567 shares at an average price of $1,240.91, totaling approximately $131 million [9] - For the thirty-nine week period, the company repurchased 401,036 shares at an average price of $1,246.71, amounting to around $500 million [9] Fiscal 2025 Outlook - The company anticipates net sales for fiscal 2025 to be in the range of $8,760 million to $8,820 million, reflecting a 10.7% increase at the midpoint compared to fiscal 2024 [24] - Expected net income for fiscal 2025 is projected to be between $1,932 million and $1,980 million, a 14.1% increase at the midpoint [24] - Adjusted earnings per share for fiscal 2025 is expected to range from $36.33 to $37.15, an increase of 8.1% at the midpoint compared to fiscal 2024 [24]

Core Insights - TransDigm Group Incorporated (TDG) is expected to report its third-quarter fiscal 2025 results on August 5, with a trailing four-quarter average earnings surprise of 5.13% [1][6] - The growth in commercial air travel and strong defense sales are anticipated to positively impact the quarterly performance [1] Segment Performance - The Power & Control segment is projected to generate revenues of $1.20 billion, reflecting a 17.1% increase from the previous year, driven by strong commercial aftermarket sales and improved defense spending [2][3] - The Airframe segment is expected to report revenues of $1.06 billion, indicating a 9% growth year-over-year, supported by rising demand for defense products and increased air travel [4][8] Overall Financial Expectations - The overall sales for TDG in the fiscal third quarter are estimated at $2.30 billion, representing a 12.2% improvement compared to the prior year [5][8] - Earnings per share are projected to be $9.78, which is an 8.7% increase from the same quarter last year, aided by strong revenue growth and cost reduction initiatives [6] Earnings Prediction - The Zacks model indicates a likely earnings beat for TDG, with an Earnings ESP of +0.40% and a Zacks Rank of 2 (Buy) [7][9]