[PART I FINANCIAL INFORMATION](index=3&type=section&id=Part%20I%20Financial%20Information) This section provides Teledyne Technologies Incorporated's unaudited condensed consolidated financial statements and management's discussion and analysis for the second quarter and six months ended June 29, 2025 [Item 1. Financial Statements](index=3&type=section&id=Item%201.%20Financial%20Statements) This section presents Teledyne's unaudited condensed consolidated financial statements, including income, comprehensive income, balance sheets, equity, cash flows, and detailed notes for Q2 and H1 2025 [Condensed Consolidated Statements of Income (Loss)](index=3&type=section&id=Condensed%20Consolidated%20Statements%20of%20Income%20(Loss)) This section details Teledyne's net sales, operating income, and net income for the second quarter and six months of 2025 and 2024 Second Quarter Financial Performance (2025 vs. 2024) | Metric | 2025 (Millions USD) | 2024 (Millions USD) | Change (%) | | :----------------------------------- | :-------------- | :-------------- | :--------- | | Net sales | $1,513.7 | $1,374.1 | 10.2% | | Operating income (loss) | $278.2 | $247.0 | 12.6% | | Net income (loss) attributable to Teledyne | $209.9 | $180.2 | 16.5% | | Basic earnings per common share | $4.48 | $3.82 | 17.3% | | Diluted earnings per common share | $4.43 | $3.77 | 17.5% | Six Months Financial Performance (2025 vs. 2024) | Metric | 2025 (Millions USD) | 2024 (Millions USD) | Change (%) | | :----------------------------------- | :-------------- | :-------------- | :--------- | | Net sales | $2,963.6 | $2,724.2 | 8.8% | | Operating income (loss) | $537.5 | $481.3 | 11.7% | | Net income (loss) attributable to Teledyne | $398.5 | $358.7 | 11.1% | | Basic earnings per common share | $8.51 | $7.58 | 12.3% | | Diluted earnings per common share | $8.41 | $7.49 | 12.3% | [Condensed Consolidated Statements of Comprehensive Income (Loss)](index=4&type=section&id=Condensed%20Consolidated%20Statements%20of%20Comprehensive%20Income%20(Loss)) This section presents Teledyne's comprehensive income, including foreign exchange adjustments and hedge activities, for Q2 and H1 2025 and 2024 Second Quarter Comprehensive Income (2025 vs. 2024) | Metric | 2025 (Millions USD) | 2024 (Millions USD) | | :------------------------------------------ | :-------------- | :-------------- | | Net income (loss) including noncontrolling interest | $210.4 | $180.3 | | Foreign exchange translation adjustment | $224.4 | $(5.8) | | Hedge activity, net of tax | $2.5 | $(2.3) | | Comprehensive income (loss) attributable to Teledyne | $438.5 | $174.2 | Six Months Comprehensive Income (2025 vs. 2024) | Metric | 2025 (Millions USD) | 2024 (Millions USD) | | :------------------------------------------ | :-------------- | :-------------- | | Net income (loss) including noncontrolling interest | $399.2 | $359.4 | | Foreign exchange translation adjustment | $375.2 | $(94.6) | | Hedge activity, net of tax | $3.8 | $(6.5) | | Comprehensive income (loss) attributable to Teledyne | $780.7 | $261.8 | [Condensed Consolidated Balance Sheets](index=5&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) This section provides a snapshot of Teledyne's assets, liabilities, and equity as of June 29, 2025, and December 29, 2024 Balance Sheet Highlights (June 29, 2025 vs. December 29, 2024) | Metric | June 29, 2025 (Millions USD) | Dec 29, 2024 (Millions USD) | Change (Millions USD) | Change (%) | | :----------------------------------- | :----------------------- | :---------------------- | :---------------- | :--------- | | Total Assets | $15,135.2 | $14,200.5 | $934.7 | 6.6% | | Cash and cash equivalents | $310.9 | $649.8 | $(338.9) | (52.2)% | | Goodwill | $8,675.8 | $7,990.5 | $685.3 | 8.6% | | Total current liabilities | $1,758.0 | $1,261.6 | $496.4 | 39.3% | | Current portion of long-term debt | $450.2 | $0.3 | $449.9 | * | | Total Stockholders' Equity | $10,376.9 | $9,549.4 | $827.5 | 8.7% | [Condensed Consolidated Statements of Stockholders' Equity](index=6&type=section&id=Condensed%20Consolidated%20Statements%20of%20Stockholders'%20Equity) This section outlines changes in Teledyne's stockholders' equity, including net income, other comprehensive income, and stock transactions for the six months ended June 29, 2025 Stockholders' Equity Changes (Six Months Ended June 29, 2025) | Item | Amount (Millions USD) | | :-------------------------------- | :---------------- | | Balance, December 29, 2024 | $9,549.4 | | Net income (loss) | $398.5 | | Other comprehensive income (loss), net of tax | $382.2 | | Treasury stock repurchased, including excise tax | $(2.9) | | Stock-based compensation and other | $15.5 | | Exercise of stock options | $34.2 | | Balance, June 29, 2025 | $10,376.9 | [Condensed Consolidated Statements of Cash Flows](index=7&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) This section details Teledyne's cash flows from operating, investing, and financing activities for the six months ended June 29, 2025, and June 30, 2024 Cash Flow Highlights (Six Months 2025 vs. 2024) | Activity | 2025 (Millions USD) | 2024 (Millions USD) | Change (Millions USD) | Change (%) | | :----------------------------------- | :-------------- | :-------------- | :---------------- | :--------- | | Net cash provided by operating activities | $469.2 | $609.7 | $(140.5) | (23.0)% | | Net cash used in investing activities | $(805.2) | $(157.1) | $(648.1) | 412.5% | | Purchases of businesses, net of cash acquired | $(757.6) | $(123.6) | $(634.0) | 512.9% | | Net cash provided by (used in) financing activities | $(4.8) | $(637.9) | $633.1 | (99.2)% | | Cash and cash equivalents—end of period | $310.9 | $443.2 | $(132.3) | (29.8)% | [Notes to Condensed Consolidated Financial Statements](index=8&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) This section provides detailed explanations of Teledyne's accounting policies, significant transactions, and financial statement components - The unaudited condensed consolidated financial statements are prepared in accordance with GAAP for interim reporting and should be read in conjunction with the 2024 Form 10-K[20](index=20&type=chunk) - Management believes the financial statements contain all necessary adjustments for fair presentation[21](index=21&type=chunk) - New accounting standards (ASU 2023-09 and ASU 2024-03) are being evaluated for impact, but other ASUs are not expected to have a material effect[22](index=22&type=chunk)[23](index=23&type=chunk)[24](index=24&type=chunk) [Note 2. Business Acquisitions](index=8&type=section&id=Note%202.%20Business%20Acquisitions) This note details Teledyne's business acquisitions in 2025 and 2024, including consideration transferred, goodwill, and acquired intangible assets - In Q1 2025, Teledyne acquired Micropac Industries, Inc. for **$51.2 million** and select aerospace and defense electronics businesses (Qioptiq) from Excelitas Technologies Corp. for **$706.4 million**, both integrated into the Aerospace & Defense Electronics segment[25](index=25&type=chunk)[26](index=26&type=chunk) - In Q2 2024, the company acquired Adimec Holding B.V. for **$88.7 million** (Digital Imaging segment) and Valeport Holdings 2019 Limited for **$35.0 million** (Instrumentation segment)[27](index=27&type=chunk)[28](index=28&type=chunk) Acquisition Details (2025 & 2024) | Acquisitions | Consideration Transferred (a) (Millions USD) | Goodwill Acquired (Millions USD) | Acquired Intangible Assets (Millions USD) | | :--------------------------------- | :--------------------------------------- | :--------------------------- | :------------------------------------ | | **2025 Acquisitions** | | | | | OS and AES businesses (Qioptiq) | $706.4 | $451.0 | $183.6 | | Micropac | $51.2 | $5.0 | $8.1 | | **Total 2025** | **$757.6** | **$456.0** | **$191.7** | | **2024 Acquisitions** | | | | | Adimec | $88.7 | $65.6 | $17.9 | | Valeport | $35.0 | $23.6 | $7.8 | | **Total 2024** | **$123.7** | **$89.2** | **$25.7** | [Note 3. Business Segments](index=9&type=section&id=Note%203.%20Business%20Segments) This note outlines Teledyne's four reportable business segments and their financial performance in terms of net sales and operating income - Teledyne operates in four reportable segments: Digital Imaging, Instrumentation, Aerospace and Defense Electronics, and Engineered Systems, providing sophisticated digital imaging products, instrumentation, aerospace and defense electronics, and engineered systems[31](index=31&type=chunk) Net Sales by Segment (Second Quarter 2025 vs. 2024) | Segment | 2025 (Millions USD) | 2024 (Millions USD) | Change (%) | | :------------------------------ | :-------------- | :-------------- | :--------- | | Digital Imaging | $771.0 | $739.4 | 4.3% | | Instrumentation | $367.6 | $333.5 | 10.2% | | Aerospace and Defense Electronics | $264.8 | $194.4 | 36.2% | | Engineered Systems | $110.3 | $106.8 | 3.3% | | **Total net sales** | **$1,513.7** | **$1,374.1** | **10.2%** | Operating Income by Segment (Second Quarter 2025 vs. 2024) | Segment | 2025 (Millions USD) | 2024 (Millions USD) | Change (%) | | :------------------------------ | :-------------- | :-------------- | :--------- | | Digital Imaging | $119.6 | $113.5 | 5.4% | | Instrumentation | $101.6 | $87.2 | 16.5% | | Aerospace and Defense Electronics | $66.6 | $57.1 | 16.6% | | Engineered Systems | $12.1 | $7.5 | 61.3% | | **Total operating income (loss)** | **$278.2** | **$247.0** | **12.6%** | [Note 4. Revenue Recognition and Contract Balances](index=11&type=section&id=Note%204.%20Revenue%20Recognition%20and%20Contract%20Balances) This note describes Teledyne's revenue recognition policies, contract balances, and sales breakdown by customer type - Approximately **70% of net sales** are recognized at a point in time, with the remaining **30%** recognized over time[38](index=38&type=chunk) Net Sales by Customer Type (Second Quarter 2025) | Segment | U.S. Govt. (Millions USD) | Other (Millions USD) | Total (Millions USD) | | :------------------------------ | :-------------------- | :--------------- | :--------------- | | Digital Imaging | $141.3 | $629.7 | $771.0 | | Instrumentation | $32.6 | $335.0 | $367.6 | | Aerospace and Defense Electronics | $114.2 | $150.6 | $264.8 | | Engineered Systems | $91.4 | $18.9 | $110.3 | | **Total** | **$379.5** | **$1,134.2** | **$1,513.7** | - Remaining performance obligations totaled **$4,452.8 million** as of June 29, 2025, with **73%** expected to be recognized within the next 12 months[46](index=46&type=chunk) [Note 5. Goodwill and Acquired Intangible Assets](index=14&type=section&id=Note%205.%20Goodwill%20and%20Acquired%20Intangible%20Assets) This note details the changes in goodwill and acquired intangible assets by segment, including impairment testing information Goodwill by Segment (June 29, 2025 vs. December 29, 2024) | Segment | June 29, 2025 (Millions USD) | Dec 29, 2024 (Millions USD) | Change (Millions USD) | | :------------------------------ | :----------------------- | :---------------------- | :---------------- | | Digital Imaging | $7,019.6 | $6,854.6 | $165.0 | | Instrumentation | $988.4 | $955.3 | $33.1 | | Aerospace and Defense Electronics | $650.2 | $163.0 | $487.2 | | Engineered Systems | $17.6 | $17.6 | $0.0 | | **Total** | **$8,675.8** | **$7,990.5** | **$685.3** | - Acquired intangible assets (net) increased to **$2,174.6 million** at June 29, 2025, from **$2,012.9 million** at December 29, 2024[50](index=50&type=chunk) - The FLIR reporting unit's estimated fair value exceeded its carrying value by approximately **$420 million (5%)** at the end of 2024, with **$5,922.1 million** of goodwill as of June 29, 2025; no interim impairment review was required for goodwill or indefinite-lived trademarks[51](index=51&type=chunk)[54](index=54&type=chunk)[57](index=57&type=chunk) [Note 6. Supplemental Balance Sheet Information](index=15&type=section&id=Note%206.%20Supplemental%20Balance%20Sheet%20Information) This note provides additional details on specific balance sheet items, including cash equivalents, inventories, and product warranty reserves - Cash equivalents decreased from **$304.1 million** at December 29, 2024, to **$102.1 million** at June 29, 2025[58](index=58&type=chunk) - Inventories, net, increased from **$914.4 million** at December 29, 2024, to **$1,047.0 million** at June 29, 2025[60](index=60&type=chunk) - The product warranty reserve increased from **$50.2 million** at the beginning of 2025 to **$56.5 million** at June 29, 2025[62](index=62&type=chunk) [Note 7. Long-Term Debt](index=16&type=section&id=Note%207.%20Long-Term%20Debt) This note details Teledyne's long-term debt, including total debt, current portion, and available credit facility, as of June 29, 2025 - Total debt, net, was **$2,617.4 million** at June 29, 2025, down from **$2,649.0 million** at December 29, 2024, due to payments on fixed rate senior notes[63](index=63&type=chunk) - The current portion of long-term debt significantly increased to **$450.2 million** at June 29, 2025, from **$0.3 million** at December 29, 2024[63](index=63&type=chunk) - **$1,168.0 million** was available under the **$1.2 billion** credit facility as of June 29, 2025, and the company was in compliance with all financial and operating covenants[63](index=63&type=chunk) [Note 8. Income Taxes](index=16&type=section&id=Note%208.%20Income%20Taxes) This note provides information on Teledyne's income tax provision and effective tax rate for the second quarter of 2025 and 2024 Income Tax Provision and Effective Tax Rate (Second Quarter 2025 vs. 2024) | Metric | 2025 (Millions USD) | 2024 (Millions USD) | | :-------------------------------- | :-------------- | :-------------- | | Provision (benefit) for income taxes | $50.2 | $51.4 | | Income (loss) before income taxes | $260.6 | $231.7 | | Effective tax rate | 19.3% | 22.2% | - The second quarter of 2025 includes **$8.4 million** in net discrete income tax benefits, compared to **$0.7 million** in 2024[65](index=65&type=chunk) [Note 9. Pension Plans](index=17&type=section&id=Note%209.%20Pension%20Plans) This note details Teledyne's pension service and non-service costs, along with the weighted-average discount rate for domestic qualified pension plans - Pension service cost remained consistent at **$1.5 million** for the second quarter of both 2025 and 2024[66](index=66&type=chunk) - Pension non-service cost (income) was **$(2.6) million** for Q2 2025 and **$(2.7) million** for Q2 2024[66](index=66&type=chunk) - The weighted-average discount rate for domestic qualified pension plans increased to **7.05%** in 2025 from **6.86%** in 2024[106](index=106&type=chunk) [Note 10. Stock-Based Compensation](index=17&type=section&id=Note%2010.%20Stock-Based%20Compensation) This note outlines Teledyne's stock-based compensation expense and the number of stock options and restricted stock shares granted - Stock-based compensation expense increased to **$11.3 million** in Q2 2025 from **$9.3 million** in Q2 2024, and was **$20.2 million** for the first six months of 2025 compared to **$21.3 million** in 2024[68](index=68&type=chunk) - In Q2 2025, the company granted **63,062 stock options** and **75,289 restricted stock shares**[68](index=68&type=chunk)[69](index=69&type=chunk) [Note 11. Earnings Per Share](index=18&type=section&id=Note%2011.%20Earnings%20Per%20Share) This note provides Teledyne's diluted earnings per share and weighted average shares outstanding, along with information on stock repurchase programs - Diluted EPS for Q2 2025 was **$4.43**, up from **$3.77** in Q2 2024, and **$8.41** for the first six months of 2025, up from **$7.49** in H1 2024[9](index=9&type=chunk) - Weighted average diluted common shares outstanding were **47.4 million** for Q2 2025 and **47.8 million** for Q2 2024[70](index=70&type=chunk) - A new **$2.0 billion** stock repurchase program was approved in July 2025, superseding prior authorizations; no repurchases were made in Q2 or H1 2025[71](index=71&type=chunk) [Note 12. Accumulated Other Comprehensive Income (Loss)](index=19&type=section&id=Note%2012.%20Accumulated%20Other%20Comprehensive%20Income%20(Loss)) This note explains the changes in Teledyne's Accumulated Other Comprehensive Income (AOCI), primarily driven by foreign currency translation adjustments - Accumulated Other Comprehensive Income (AOCI) improved significantly, moving from a loss of **$(839.9) million** at December 29, 2024, to **$(457.7) million** at June 29, 2025[72](index=72&type=chunk) - The improvement was primarily driven by positive foreign currency translation adjustments of **$375.2 million** for the six months ended June 29, 2025[72](index=72&type=chunk) [Note 13. Derivative Instruments and Hedging Activities](index=21&type=section&id=Note%2013.%20Derivative%20Instruments%20and%20Hedging%20Activities) This note describes Teledyne's use of derivative instruments, including foreign currency forward contracts and cross-currency swaps, to manage market risks - Teledyne uses foreign currency forward contracts for cash flow hedges (Canadian dollars, British pounds) and non-designated hedges (foreign currency monetary assets/liabilities) to manage foreign currency risk[76](index=76&type=chunk)[79](index=79&type=chunk) - In H1 2025, the company entered cross-currency swaps with a total notional amount of **€450.0 million** to hedge euro-denominated net investments, maturing between September 2026 and September 2030[77](index=77&type=chunk) - Net gain recognized in AOCI from foreign exchange contracts was **$4.3 million** for the six months ended June 29, 2025, while cross-currency swaps resulted in a net loss of **$(37.5) million**[80](index=80&type=chunk) [Note 14. Fair Value Measurement](index=22&type=section&id=Note%2014.%20Fair%20Value%20Measurement) This note details Teledyne's financial assets and liabilities measured at fair value, primarily derivative contracts and long-term debt - The company's financial assets and liabilities carried at fair value primarily consist of derivative contracts, measured using Level 2 hierarchy information[83](index=83&type=chunk) - Net derivatives at fair value were **$(25.9) million** at June 29, 2025, compared to **$(15.9) million** at December 29, 2024[83](index=83&type=chunk) - The aggregate fair value of long-term debt was **$2,446.0 million** at June 29, 2025, which was lower than its carrying value of **$2,632.7 million**[85](index=85&type=chunk) [Note 15. Commitments and Contingencies](index=23&type=section&id=Note%2015.%20Commitments%20and%20Contingencies) This note outlines Teledyne's legal proceedings, including trade compliance violations, environmental remediation, and a civil investigation - Teledyne has made voluntary disclosures regarding potential trade compliance violations, including an incorrect de minimis calculation methodology under Export Administration Regulations and local export laws[87](index=87&type=chunk) - Environmental remediation reserves totaled **$6.3 million** at June 29, 2025[88](index=88&type=chunk) - The company is working to resolve a civil investigation by the U.S. Department of Justice relating to an ejection seat sequencer program[89](index=89&type=chunk) - Management does not believe the disposition of any pending legal matters is likely to have a material adverse effect on the company's financial condition[89](index=89&type=chunk) [Note 16. Subsequent Events](index=23&type=section&id=Note%2016.%20Subsequent%20Events) This note reports on significant events occurring after the reporting period, specifically an acquisition in the third quarter of 2025 - In the third quarter of 2025, Teledyne acquired the assets of Maretron, including the brand's Octoplex, MPower, and MConnect product lines from Littelfuse, Inc[90](index=90&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=24&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) This section provides management's analysis of Teledyne's financial performance, strategic direction, and factors affecting its business, including segment results, liquidity, and critical accounting policies Overall Financial Performance (Second Quarter 2025 vs. 2024) | Metric | 2025 (Millions USD) | 2024 (Millions USD) | Change (%) | | :----------------------------------- | :-------------- | :-------------- | :--------- | | Net sales | $1,513.7 | $1,374.1 | 10.2% | | Operating income (loss) | $278.2 | $247.0 | 12.6% | | Net income (loss) attributable to Teledyne | $209.9 | $180.2 | 16.5% | Overall Financial Performance (Six Months 2025 vs. 2024) | Metric | 2025 (Millions USD) | 2024 (Millions USD) | Change (%) | | :----------------------------------- | :-------------- | :-------------- | :--------- | | Net sales | $2,963.6 | $2,724.2 | 8.8% | | Operating income (loss) | $537.5 | $481.3 | 11.7% | | Net income (loss) attributable to Teledyne | $398.5 | $358.7 | 11.1% | [Overview](index=24&type=section&id=Overview) This section provides a general description of Teledyne's business, focusing on its enabling technologies and product offerings across various markets - Teledyne provides enabling technologies for industrial growth markets requiring advanced technology and high reliability, including aerospace and defense, factory automation, environmental monitoring, and medical imaging[91](index=91&type=chunk) - Products include digital imaging sensors, cameras, monitoring and control instrumentation, electronic test and measurement equipment, and engineered systems[91](index=91&type=chunk) [Strategy](index=24&type=section&id=Strategy) This section outlines Teledyne's strategic priorities, including growth in its four segments, targeted acquisitions, product development, and operational excellence - Teledyne's strategy emphasizes growth in its four business segments: Digital Imaging, Instrumentation, Aerospace and Defense Electronics, and Engineered Systems[92](index=92&type=chunk) - The company aims to strengthen and expand its business through targeted acquisitions and product development, focusing on markets with high barriers to entry[92](index=92&type=chunk) - Operational excellence, including rapid integration of acquired businesses and cost containment, is a key focus to improve margins and earnings[92](index=92&type=chunk) [Trends and Other Matters Affecting Our Business](index=24&type=section&id=Trends%20and%20Other%20Matters%20Affecting%20Our%20Business) This section discusses key trends and external factors, such as tariffs, export restrictions, tax law changes, and foreign currency risks, impacting Teledyne's business - New U.S. tariffs and export restrictions, along with retaliatory measures from certain countries (e.g., China's rare earth mineral restrictions), could result in revenue reductions, cost increases, or production delays[94](index=94&type=chunk) - The company is evaluating the impact of the recently enacted 'One Big Beautiful Bill Act,' which includes changes to U.S. tax law[95](index=95&type=chunk) - Teledyne is exposed to foreign currency exchange rate movements, which it mitigates using derivative instruments, and continues to consolidate facilities, reduce headcount, and seek cost reductions[96](index=96&type=chunk)[97](index=97&type=chunk) [Results of Operations](index=25&type=section&id=Results%20of%20Operations) This section analyzes Teledyne's financial performance for the second quarter and first six months of 2025 compared to 2024, detailing changes in sales, income, and expenses [Second Quarter Results](index=26&type=section&id=Second%20Quarter%20Results) This section provides a detailed analysis of Teledyne's financial performance for the second quarter of 2025, highlighting key revenue and income drivers - Net sales increased **10.2%** to **$1,513.7 million**, with **$70.1 million** in incremental sales from recent acquisitions, and net income attributable to Teledyne rose **16.5%** to **$209.9 million**, resulting in diluted EPS of **$4.43**[100](index=100&type=chunk)[101](index=101&type=chunk) - Cost of sales as a percentage of net sales increased to **57.4%** from **56.9%** primarily due to unfavorable product mix[102](index=102&type=chunk) - Selling, general and administrative (SG&A) expense as a percentage of net sales decreased to **15.2%** from **16.4%**, while Research and Development (R&D) expense increased **$10.7 million**[103](index=103&type=chunk)[104](index=104&type=chunk) - Operating income for the second quarter of 2025 increased **12.6%**, with all segments reflecting higher operating income[107](index=107&type=chunk) [First six months of 2025 compared with the first six months of 2024](index=27&type=section&id=First%20six%20months%20of%202025%20compared%20with%20the%20first%20six%20months%20of%202024) This section analyzes Teledyne's financial performance for the first six months of 2025 compared to 2024, detailing sales, income, and expense changes - Net sales for the first six months of 2025 increased **8.8%** to **$2,963.6 million**, including **$125.7 million** from recent acquisitions, and net income rose **11.1%** to **$398.5 million**, with diluted EPS of **$8.41**[111](index=111&type=chunk)[112](index=112&type=chunk) - Cost of sales as a percentage of net sales increased to **57.3%** from **57.0%**, while SG&A expense as a percentage of net sales decreased to **15.6%** from **16.3%**[113](index=113&type=chunk)[114](index=114&type=chunk) - R&D expense increased **$8.5 million**, primarily in the Instrumentation and Aerospace and Defense Electronics segments[115](index=115&type=chunk) - Operating income for the first six months of 2025 increased **11.7%**, with all segments contributing to the growth[118](index=118&type=chunk) [Segment Results](index=28&type=section&id=Segment%20Results) This section provides a detailed breakdown of net sales and operating income for each of Teledyne's four reportable segments, highlighting key performance drivers - This section provides a detailed breakdown of net sales and operating income for each of Teledyne's four reportable segments: Digital Imaging, Instrumentation, Aerospace and Defense Electronics, and Engineered Systems, highlighting key drivers for changes in performance[122](index=122&type=chunk) [Digital Imaging](index=29&type=section&id=Digital%20Imaging) This section details the financial performance of the Digital Imaging segment, including net sales and operating income, and their key drivers Digital Imaging Performance (Q2 2025 vs. 2024) | Metric | 2025 (Millions USD) | 2024 (Millions USD) | Change (%) | | :---------------- | :-------------- | :-------------- | :--------- | | Net sales | $771.0 | $739.4 | 4.3% | | Operating income | $119.6 | $113.5 | 5.4% | - Q2 sales growth was primarily driven by higher sales of unmanned air systems (**+$20.6 million**) and commercial infrared imaging components (**+$16.1 million**)[126](index=126&type=chunk) - Operating income increased due to higher net sales and lower SG&A, partially offset by unfavorable product mix and higher R&D expense[128](index=128&type=chunk) [Instrumentation](index=30&type=section&id=Instrumentation) This section details the financial performance of the Instrumentation segment, including net sales and operating income, and their key drivers Instrumentation Performance (Q2 2025 vs. 2024) | Metric | 2025 (Millions USD) | 2024 (Millions USD) | Change (%) | | :---------------- | :-------------- | :-------------- | :--------- | | Net sales | $367.6 | $333.5 | 10.2% | | Operating income | $101.6 | $87.2 | 16.5% | - Q2 sales increased due to higher sales in Marine Instrumentation (**+$23.7 million**), Environmental Instrumentation (**+$6.4 million**), and Test and Measurement Instrumentation (**+$4.0 million**)[134](index=134&type=chunk) - Operating income increased primarily due to higher Marine Instrumentation sales and favorable product mix, leading to an increase in operating income as a percentage of net sales[136](index=136&type=chunk) [Aerospace and Defense Electronics](index=31&type=section&id=Aerospace%20and%20Defense%20Electronics) This section details the financial performance of the Aerospace and Defense Electronics segment, including net sales and operating income, and their key drivers Aerospace and Defense Electronics Performance (Q2 2025 vs. 2024) | Metric | 2025 (Millions USD) | 2024 (Millions USD) | Change (%) | | :---------------- | :-------------- | :-------------- | :--------- | | Net sales | $264.8 | $194.4 | 36.2% | | Operating income | $66.6 | $57.1 | 16.6% | - Q2 net sales increased significantly due to a **$72.6 million** increase in defense electronics and **$64.3 million** in incremental sales from recent acquisitions[142](index=142&type=chunk) - Operating income as a percentage of net sales decreased primarily due to unfavorable product mix, lower gross margins on sales from 2025 acquisitions, and higher acquired intangible asset amortization[144](index=144&type=chunk) [Engineered Systems](index=32&type=section&id=Engineered%20Systems) This section details the financial performance of the Engineered Systems segment, including net sales and operating income, and their key drivers Engineered Systems Performance (Q2 2025 vs. 2024) | Metric | 2025 (Millions USD) | 2024 (Millions USD) | Change (%) | | :---------------- | :-------------- | :-------------- | :--------- | | Net sales | $110.3 | $106.8 | 3.3% | | Operating income | $12.1 | $7.5 | 61.3% | - Q2 net sales increased due to higher sales of engineered products (**+$4.0 million**)[150](index=150&type=chunk) - Operating income and operating income as a percentage of net sales increased primarily due to higher net sales and favorable program mix[151](index=151&type=chunk) [Financial Condition, Liquidity and Capital Resources](index=32&type=section&id=Financial%20Condition%2C%20Liquidity%20and%20Capital%20Resources) This section discusses Teledyne's financial position, liquidity, and capital management, including cash flows, debt, and stock repurchases - Teledyne's principal cash and capital requirements are to fund working capital, capital expenditures, income tax payments, debt service, and acquisitions, with cash on hand, operating cash flow, and available borrowings expected to be sufficient[154](index=154&type=chunk) - Cash and cash equivalents decreased from **$649.8 million** at December 29, 2024, to **$310.9 million** at June 29, 2025, primarily due to funding 2025 acquisitions[156](index=156&type=chunk) - A new **$2.0 billion** stock repurchase program was approved in July 2025, with no repurchases made in the second quarter or first six months of 2025[160](index=160&type=chunk) [Cash and Cash Equivalents](index=32&type=section&id=Cash%20and%20Cash%20Equivalents) This section details the changes in Teledyne's cash and cash equivalents, primarily influenced by funding for recent acquisitions - Cash and cash equivalents totaled **$310.9 million** at June 29, 2025, a decrease from **$649.8 million** at December 29, 2024, primarily due to funding 2025 acquisitions[156](index=156&type=chunk) [Long-term Debt](index=33&type=section&id=Long-term%20Debt) This section provides information on Teledyne's total debt, available credit, and compliance with debt covenants - Total debt, net, decreased to **$2,617.4 million** at June 29, 2025, from **$2,649.0 million** at December 29, 2024, due to payments on fixed rate senior notes[157](index=157&type=chunk) - **$1,168.0 million** was available under the **$1.20 billion** credit facility at June 29, 2025, and the company was in compliance with all debt covenants[157](index=157&type=chunk)[158](index=158&type=chunk) [Stock Repurchases](index=33&type=section&id=Stock%20Repurchases) This section details Teledyne's stock repurchase programs, including the approval of a new **$2.0 billion** authorization - In July 2025, the Board of Directors approved a new stock repurchase program authorizing up to **$2.0 billion** of common stock, superseding prior authorizations[160](index=160&type=chunk) - No repurchases were made under any authorizations in the second quarter or first six months of 2025[160](index=160&type=chunk) [Cash Flows](index=33&type=section&id=Cash%20Flows) This section analyzes Teledyne's cash flows from operating, investing, and financing activities, highlighting key changes and capital expenditure plans - Net cash provided by operating activities decreased to **$469.2 million** for the first six months of 2025 from **$609.7 million** in 2024, primarily due to higher income tax payments and timing of accounts receivable collections[161](index=161&type=chunk) - Net cash used in investing activities significantly increased to **$805.2 million** for the first six months of 2025 from **$157.1 million** in 2024, primarily due to **$757.6 million** spent on acquisitions[162](index=162&type=chunk) - Capital expenditures for the first six months of 2025 were **$48.3 million**, with plans to invest approximately **$130 million** for capital expenditures in 2025[162](index=162&type=chunk) [Critical Accounting Policies and Estimates](index=33&type=section&id=Critical%20Accounting%20Policies%20and%20Estimates) This section identifies Teledyne's critical accounting policies that involve significant judgments and uncertainties, such as revenue recognition and business combinations - Teledyne's critical accounting policies, involving significant judgments and uncertainties, include revenue recognition, accounting for business combinations, goodwill and acquired intangible assets, and income taxes[164](index=164&type=chunk) [Safe Harbor Cautionary Statement Regarding Forward-Looking Information](index=34&type=section&id=Safe%20Harbor%20Cautionary%20Statement%20Regarding%20Forward-Looking%20Information) This section warns that forward-looking statements involve risks and uncertainties, and actual results may differ due to various factors, including government policies and acquisitions - Forward-looking statements in the report involve risks and uncertainties, and actual results could differ materially due to various factors[166](index=166&type=chunk) - Key risk factors include government policies (tariffs, funding), U.S.-China trade tensions, tax law changes, foreign currency exchange risks, rising interest rates, supply chain shortages, inflation, labor shortages, global economic disruptions, and cybersecurity threats[167](index=167&type=chunk) - Acquisitions involve inherent risks such as integration challenges, retaining key management and customers, and achieving identified synergies[168](index=168&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=34&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) This section states that there were no material changes to the market risk disclosures from the company's 2024 Form 10-K - No material changes to market risk disclosures from the 2024 Form 10-K[172](index=172&type=chunk) [Item 4. Controls and Procedures](index=35&type=section&id=Item%204.%20Controls%20and%20Procedures) This section confirms the effectiveness of Teledyne's disclosure controls and procedures and reports no material changes to internal controls over financial reporting - Disclosure controls and procedures were effective at the reasonable assurance level as of June 29, 2025[173](index=173&type=chunk) - No material changes in internal controls over financial reporting occurred during the quarter ended June 29, 2025[174](index=174&type=chunk) [PART II OTHER INFORMATION](index=36&type=section&id=Part%20II%20Other%20Information) This section covers other required information, including legal proceedings, risk factors, officer trading arrangements, and a list of exhibits [Item 1. Legal Proceedings](index=36&type=section&id=Item%201.%20Legal%20Proceedings) This section refers to Note 15 of the financial statements for detailed information regarding legal proceedings, including trade compliance and environmental matters - Legal proceedings information is detailed in Note 15 of Part I, 'Financial Statements—Note 15—Commitments and Contingencies'[177](index=177&type=chunk) [Item 1A. Risk Factors](index=36&type=section&id=Item%201A.%20Risk%20Factors) This section states no material changes to previously disclosed risk factors, with additional details on tariffs and foreign currency risks in Item 2 - No material changes to risk factors from the 2024 Form 10-K[177](index=177&type=chunk) - Additional information on tariffs and foreign currency exchange rate risks is provided in Item 2[177](index=177&type=chunk) [Item 5. Other Information](index=36&type=section&id=Item%205.%20Other%20Information) This section confirms that no directors or officers adopted or terminated Rule 10b5-1 or non-Rule 10b5-1 trading arrangements during Q2 2025 - No director or officer trading arrangements (Rule 10b5-1 or non-Rule 10b5-1) were adopted or terminated in Q2 2025[178](index=178&type=chunk) [Item 6. Exhibits](index=37&type=section&id=Item%206.%20Exhibits) This section lists all exhibits filed with the 10-Q report, including corporate organizational documents, agreements, and certifications - Exhibits include Restated Certificate of Incorporation, Bylaws, a Retirement, Severance and General Release Agreement, 302 and 906 Certifications, and various XBRL documents[179](index=179&type=chunk) [Signatures](index=38&type=section&id=Signatures) This section confirms the official signing of the report by Stephen F. Blackwood, Executive Vice President and Chief Financial Officer, on July 25, 2025 - The report was signed by Stephen F. Blackwood, Executive Vice President and Chief Financial Officer, on July 25, 2025[181](index=181&type=chunk)

Financial Data and Key Metrics Changes - Teledyne reported record quarterly sales with a 10.2% increase, driven by both organic growth and acquisitions, marking the highest organic sales growth in nearly three years [5][6] - Non-GAAP earnings per share rose by 13.5% year-over-year, also setting a record for any second quarter [6] - Cash flow from operating activities was $226.6 million, down from $318.7 million in 2024, primarily due to higher income tax payments [14][15] - The company ended the quarter with $2.3 billion in net debt, reflecting a debt to EBITDA ratio of 1.6 [16] Business Segment Data and Key Metrics Changes - **Digital Imaging Segment**: Sales increased by 4.3%, the highest growth in three years, driven by strong international defense sales and unmanned air systems [9] - **Instrumentation Segment**: Total sales rose by 10.2%, with marine instruments up 16% and environmental instruments up 5.6% [10] - **Aerospace and Defense Electronics Segment**: Sales surged by 36.2%, primarily due to acquisitions and organic growth in defense electronics products [11] - **Engineered Systems Segment**: Revenue increased by 3.3%, with operating profit rising due to strong execution on government programs [11] Market Data and Key Metrics Changes - Orders exceeded sales for the seventh consecutive quarter, indicating strong demand across segments [6] - The U.S. government defense sector saw a 12.5% year-over-year improvement, while foreign government defense improved over 15% [54] Company Strategy and Development Direction - Teledyne is focusing on smaller acquisitions and stock repurchases, increasing its stock repurchase authorization from $896 million to $2 billion [8] - The company remains cautious about short-cycle businesses due to potential demand pull-ins ahead of U.S. trade policy announcements [7][12] - Management is optimistic about long-term growth, particularly in unmanned systems and defense technologies [12][54] Management's Comments on Operating Environment and Future Outlook - Management expressed caution regarding short-cycle businesses, noting potential pull-ins of $15 million to $20 million [21][22] - Despite this caution, the overall outlook remains positive, with expectations for continued growth in long-cycle businesses [12][13] - The company anticipates GAAP earnings per share for 2025 to be in the range of $4.39 to $4.54, with non-GAAP earnings per share between $5.35 and $5.45 [16] Other Important Information - Teledyne's board has authorized a significant increase in stock repurchase, reflecting confidence in the company's value despite high acquisition prices in the market [8][112] - The company is actively managing its cost structure and focusing on improving margins across its segments [39][52] Q&A Session Summary Question: Guidance for Q3 and caution on pull forward - Management indicated that the caution primarily relates to short-cycle businesses, with visibility on long-cycle businesses being more stable [21][22] Question: Order activity in long-cycle businesses - There has been a healthy book-to-bill ratio across various segments, with specific growth noted in unmanned systems [24][25] Question: Digital imaging sales growth despite strong bookings - Management explained that while FLIR is performing well, some short-cycle businesses are stabilizing, leading to cautious sales projections [31][33] Question: Aerospace and defense margin drivers - Margins are improving due to better execution and integration of recently acquired businesses, despite initial lower margins from acquisitions [36][37] Question: Revenue guidance for Q3 and Q4 - Management expects Q3 to be flat compared to Q2, with a slight uptick from acquired businesses, and has raised full-year revenue guidance [46][47] Question: Defense sector growth contributions - U.S. and foreign government defense sectors have shown significant growth, driven by increased spending and a strong product portfolio [53][54] Question: Drone exposure and opportunities - The company is focusing on both its own drone products and selling sensors to other manufacturers, indicating a broad market strategy [96][97] Question: R&D tax changes and implications - Management noted potential benefits from R&D tax changes, with expectations of lower cash taxes in the second half of the year [100][101] Question: Golden Dome program relevance - Teledyne has a strong presence in space-based imaging and electronic subsystems, positioning it well for opportunities related to the Golden Dome program [108][109] Question: Share buyback implications - The increase in share buyback authorization reflects a strategic decision to maintain flexibility in the face of high acquisition prices [112][113]

Financial Data and Key Metrics Changes - Teledyne reported record quarterly sales with a 10.2% increase, driven by organic growth and acquisitions, marking the highest organic sales growth in nearly three years [4][5] - Non-GAAP earnings per share rose 13.5% year-over-year, also setting a record for any second quarter [5] - Cash flow from operating activities was $226.6 million, down from $318.7 million in 2024, primarily due to higher income tax payments [14] Business Segment Data and Key Metrics Changes - Digital Imaging segment sales increased 4.3%, the highest growth in three years, largely due to strong performance in defense and industrial businesses [8] - Instrumentation segment sales rose 10.2%, with marine instruments up 16% and environmental instruments up 5.6% [10] - Aerospace and Defense Electronics segment saw a 36.2% increase in sales, driven by acquisitions and organic growth [11] - Engineered Systems segment revenue increased 3.3%, with operating profit also rising [11] Market Data and Key Metrics Changes - U.S. government defense sales improved by 12.5% year-over-year, primarily organic, while foreign government sales increased over 15% [49] - The company noted a healthy book-to-bill ratio of 1.1 across its portfolio, marking the seventh consecutive quarter of orders exceeding sales [5][24] Company Strategy and Development Direction - Teledyne is focusing on smaller acquisitions and stock repurchases, increasing its stock repurchase authorization from $896 million to $2 billion [7] - The company remains optimistic about long-term growth, particularly in long-cycle businesses, while expressing caution regarding short-cycle businesses due to potential demand pull-ins [12][6] Management's Comments on Operating Environment and Future Outlook - Management expressed caution about the sustainability of short-cycle business strength, attributing it to potential accelerated demand ahead of U.S. trade policy announcements [6][12] - The outlook for Q3 is expected to remain flat compared to Q2, with a conservative estimate of total sales [6][42] Other Important Information - Teledyne's debt-to-EBITDA ratio stands at 1.6, with $1.17 billion available in its credit facility [6] - The company is actively managing costs and improving margins in acquired businesses, with a focus on integrating new acquisitions effectively [36][38] Q&A Session Summary Question: Guidance for Q3 and caution on pull-forward - Management indicated that the caution primarily relates to short-cycle businesses, with a potential $15 million to $20 million pull-in observed [21][22] Question: Digital Imaging sales growth despite strong bookings - Management explained that while FLIR is performing well, other short-cycle businesses are stabilizing, leading to cautious sales growth expectations [29][30] Question: Aerospace and Defense margin strength - Margins were impacted by acquisitions, but legacy businesses continue to show strong performance, with ongoing efforts to improve margins in newly acquired companies [34][35] Question: Full-year EPS guidance and margin improvement - Management confirmed expectations for operating margin improvement of 55 to 60 basis points for the year, with a focus on stabilizing short-cycle businesses [81][82] Question: Drone exposure and opportunities - The company highlighted its strong position in the drone market, focusing on both its own products and sensor sales to other manufacturers [95][96] Question: Impact of tariffs on sales and costs - Management noted that 82% of revenue is from U.S.-based businesses, minimizing tariff impacts, while also addressing potential cost increases due to imported materials [121][124]

Core Insights - Teledyne Technologies Inc. reported second-quarter 2025 adjusted earnings of $5.20 per share, exceeding the Zacks Consensus Estimate of $5.02 by 3.6% and improving 13.5% from $4.58 in the same quarter last year [1][8] - Total sales reached $1.51 billion, surpassing the Zacks Consensus Estimate of $1.47 billion by 2.8% and increasing 10.2% from $1.37 billion year-over-year [3][8] Operational Highlights - The year-over-year improvement in earnings was driven by higher net sales and operating income compared to the previous year [2] - Instrumentation segment sales increased 10.2% to $367.6 million, with adjusted operating income rising 16.5% to $101.6 million [4] - Digital Imaging sales grew 4.3% to $771 million, with adjusted operating income improving 5.4% to $119.6 million [5] - Aerospace and Defense Electronics segment saw sales rise 36.2% to $264.8 million, with adjusted operating income increasing 16.6% to $66.6 million [5][6] - Engineered Systems revenues rose 3.3% to $110.3 million, with operating income surging 61.3% to $12.1 million [6] Financial Condition - Cash and cash equivalents totaled $310.9 million as of June 29, 2025, down from $649.8 million as of December 29, 2024 [7] - Long-term debt decreased to $2.17 billion from $2.65 billion over the same period [7] - Cash flow from operating activities was $226.6 million, compared to $318.7 million in the prior-year period [7][9] Guidance - For Q3 2025, Teledyne expects adjusted earnings in the range of $5.35-$5.45 per share, below the Zacks Consensus Estimate of $5.52 [10] - For the full year 2025, the company anticipates adjusted earnings between $21.20-$21.50 per share, with the Zacks Consensus Estimate at $21.45 [10]

Core Insights - Teledyne Technologies reported revenue of $1.51 billion for the quarter ended June 2025, reflecting a year-over-year increase of 10.2% and surpassing the Zacks Consensus Estimate of $1.47 billion by 2.84% [1] - The company's EPS for the quarter was $5.20, up from $4.58 in the same quarter last year, exceeding the consensus EPS estimate of $5.02 by 3.59% [1] Financial Performance - Net Sales in Instrumentation reached $367.6 million, exceeding the average estimate of $358.77 million by analysts, with a year-over-year increase of 10.2% [4] - Aerospace and Defense Electronics generated $264.8 million in Net Sales, surpassing the average estimate of $242.22 million and showing a significant year-over-year growth of 36.2% [4] - Engineered Systems reported Net Sales of $110.3 million, slightly above the average estimate of $110.19 million, with a year-over-year increase of 3.3% [4] - Digital Imaging achieved Net Sales of $771 million, exceeding the average estimate of $754.99 million, representing a year-over-year growth of 4.3% [4] Operating Income - Operating Income for Instrumentation was $101.6 million, surpassing the average estimate of $94.4 million [4] - Digital Imaging's Operating Income was reported at $119.6 million, slightly below the average estimate of $121.34 million [4] - Aerospace and Defense Electronics had an Operating Income of $66.6 million, exceeding the average estimate of $59.85 million [4] - Engineered Systems reported Operating Income of $12.1 million, above the average estimate of $10.24 million [4] - Corporate expenses were reported at -$21.7 million, worse than the average estimate of -$19.75 million [4] Stock Performance - Teledyne's shares have returned +12.4% over the past month, outperforming the Zacks S&P 500 composite's +5.9% change [3] - The stock currently holds a Zacks Rank 3 (Hold), indicating expected performance in line with the broader market in the near term [3]

Financial Performance - Teledyne Technologies reported quarterly earnings of $5.2 per share, exceeding the Zacks Consensus Estimate of $5.02 per share, and up from $4.58 per share a year ago, representing an earnings surprise of +3.59% [1] - The company posted revenues of $1.51 billion for the quarter ended June 2025, surpassing the Zacks Consensus Estimate by 2.84%, compared to revenues of $1.37 billion in the same quarter last year [2] - Over the last four quarters, Teledyne has consistently surpassed consensus EPS and revenue estimates [2] Stock Performance - Teledyne shares have increased approximately 19.8% since the beginning of the year, significantly outperforming the S&P 500's gain of 7.3% [3] - The current Zacks Rank for Teledyne is 3 (Hold), indicating that the shares are expected to perform in line with the market in the near future [6] Future Outlook - The current consensus EPS estimate for the upcoming quarter is $5.52 on revenues of $1.54 billion, and for the current fiscal year, it is $21.45 on revenues of $6.05 billion [7] - The outlook for the Aerospace - Defense Equipment industry, where Teledyne operates, is currently in the top 37% of over 250 Zacks industries, suggesting a favorable environment for performance [8]

[Executive Summary](index=1&type=section&id=Executive%20Summary) [Q2 2025 Financial Performance Overview](index=1&type=section&id=Q2%202025%20Financial%20Performance%20Overview) Teledyne reported record Q2 2025 net sales of $1,513.7 million, a 10.2% increase year-over-year, driven by organic growth and acquisitions. GAAP diluted EPS rose 17.5% to $4.43, and non-GAAP diluted EPS increased 13.5% to $5.20. Operating margin improved to 18.4% (GAAP) and 22.2% (non-GAAP) Q2 2025 vs Q2 2024 Financial Highlights | Metric | Q2 2025 (GAAP) | Q2 2024 (GAAP) | Change (%) | | :-------------------------------- | :------------- | :------------- | :--------- | | Net Sales | $1,513.7 million | $1,374.1 million | 10.2% | | Net Income Attributable to Teledyne | $209.9 million | $180.2 million | 16.5% | | Diluted EPS | $4.43 | $3.77 | 17.5% | | Operating Margin | 18.4% | 18.0% | 0.4 pp | | Non-GAAP Net Income Attributable to Teledyne | $246.3 million | $218.7 million | 12.6% | | Non-GAAP Diluted EPS | $5.20 | $4.58 | 13.5% | | Non-GAAP Operating Margin | 22.2% | 21.6% | 0.6 pp | | Cash from Operations | $226.6 million | N/A | N/A | | Free Cash Flow | $196.3 million | N/A | N/A | | Consolidated Leverage Ratio (Quarter-end) | 1.6x | N/A | N/A | - Net sales included **$70.1 million** in incremental sales from current and prior year acquisitions[2](index=2&type=chunk) - Company increased stock repurchase authorization to **$2.0 billion**, replacing previous authorization of which **$896 million** remained[3](index=3&type=chunk) [Management Commentary](index=2&type=section&id=Management%20Commentary) Executive Chairman Robert Mehrabian highlighted record quarterly sales, achieving the greatest total and organic sales growth in three years, with organic growth across all segments and orders exceeding sales for the seventh consecutive quarter. The company raised the low end of its full-year non-GAAP earnings outlook but expressed caution for Q3 due to potential accelerated demand in Q2 from uncertain global trade policies - Achieved greatest total and organic sales growth in three years[4](index=4&type=chunk) - Sales grew organically in every segment, and orders exceeded sales for the **seventh consecutive quarter**[4](index=4&type=chunk) - Raised the low end of full-year non-GAAP earnings outlook[4](index=4&type=chunk) - Exercising caution regarding the third quarter, as the second quarter likely benefited from a degree of accelerated demand given uncertain global trade policies[4](index=4&type=chunk) - Will continue to consider stock repurchases when Teledyne is the best value acquisition available, while pursuing a number of acquisitions[4](index=4&type=chunk) [Segment Performance Review](index=2&type=section&id=Segment%20Performance%20Review) [Digital Imaging](index=2&type=section&id=Digital%20Imaging) The Digital Imaging segment reported a 4.3% increase in net sales to $771.0 million and a 5.4% increase in operating income to $119.6 million in Q2 2025. Sales growth was primarily driven by unmanned air systems and commercial infrared imaging components, partially offset by declines in X-ray and geospatial products Digital Imaging Segment Performance (Q2 2025 vs Q2 2024) | Metric | Q2 2025 | Q2 2024 | Change (%) | | :-------------------- | :---------- | :---------- | :--------- | | Net Sales | $771.0 million | $739.4 million | 4.3% | | Operating Income | $119.6 million | $113.5 million | 5.4% | | Non-GAAP Operating Income | $165.9 million | $159.9 million | 3.8% | - Net sales increased primarily due to higher sales of unmanned air systems and commercial infrared imaging components[7](index=7&type=chunk) - Sales were partially offset by lower sales of X-ray and geospatial products[7](index=7&type=chunk) - Increase in operating income was primarily due to the increase in net sales as well as lower selling, general and administrative expense, offset by unfavorable product mix, higher severance and facility consolidation costs, and higher research and development expense[7](index=7&type=chunk) [Instrumentation](index=2&type=section&id=Instrumentation) The Instrumentation segment's net sales increased by 10.2% to $367.6 million, and operating income grew by 16.5% to $101.6 million in Q2 2025. The growth was primarily fueled by stronger offshore energy and defense markets, leading to increased marine instrumentation sales, as well as higher environmental and electronic test and measurement instrumentation sales Instrumentation Segment Performance (Q2 2025 vs Q2 2024) | Metric | Q2 2025 | Q2 2024 | Change (%) | | :-------------------- | :---------- | :---------- | :--------- | | Net Sales | $367.6 million | $333.5 million | 10.2% | | Operating Income | $101.6 million | $87.2 million | 16.5% | | Non-GAAP Operating Income | $104.9 million | $90.7 million | 15.7% | - Net sales increase resulted from a **$23.7 million** increase in sales of marine instrumentation primarily due to stronger offshore energy and defense markets, a **$6.4 million** increase in sales of environmental instrumentation and a **$4.0 million** increase in sales of electronic test and measurement instrumentation[9](index=9&type=chunk) - Increase in operating income primarily reflected the impact of higher marine instrumentation sales as well as favorable marine instrumentation product mix[9](index=9&type=chunk) [Aerospace and Defense Electronics](index=2&type=section&id=Aerospace%20and%20Defense%20Electronics) The Aerospace and Defense Electronics segment experienced significant growth in Q2 2025, with net sales surging 36.2% to $264.8 million and operating income increasing 16.6% to $66.6 million. This strong performance was largely due to higher defense electronics sales, including $64.3 million from recent acquisitions, partially offset by lower aerospace electronics sales Aerospace and Defense Electronics Segment Performance (Q2 2025 vs Q2 2024) | Metric | Q2 2025 | Q2 2024 | Change (%) | | :-------------------- | :---------- | :---------- | :--------- | | Net Sales | $264.8 million | $194.4 million | 36.2% | | Operating Income | $66.6 million | $57.1 million | 16.6% | | Non-GAAP Operating Income | $73.4 million | $57.3 million | 28.1% | - Net sales reflected higher sales of **$72.6 million** for defense electronics, including **$64.3 million** of incremental defense electronics sales from recent acquisitions[11](index=11&type=chunk) - Sales were partially offset by lower sales of **$2.2 million** for aerospace electronics[11](index=11&type=chunk) - Increase in operating income primarily reflected the impact of higher sales, partially offset by higher transaction and integration costs as well as higher acquired intangible amortization expense[11](index=11&type=chunk) [Engineered Systems](index=3&type=section&id=Engineered%20Systems) The Engineered Systems segment saw a 3.3% rise in net sales to $110.3 million and a substantial 61.3% increase in operating income to $12.1 million in Q2 2025. The improved operating income was primarily driven by a favorable program mix Engineered Systems Segment Performance (Q2 2025 vs Q2 2024) | Metric | Q2 2025 | Q2 2024 | Change (%) | | :-------------------- | :---------- | :---------- | :--------- | | Net Sales | $110.3 million | $106.8 million | 3.3% | | Operating Income | $12.1 million | $7.5 million | 61.3% | - Net sales reflected higher sales of **$4.0 million** for engineered products, partially offset by lower sales of **$0.5 million** for energy systems[13](index=13&type=chunk) - Increase in operating income was primarily driven by favorable program mix in the second quarter of 2025[13](index=13&type=chunk) [Financial Position and Cash Flow](index=3&type=section&id=Financial%20Position%20and%20Cash%20Flow) [Cash Flow Analysis](index=3&type=section&id=Cash%20Flow%20Analysis) Cash provided by operating activities decreased to $226.6 million in Q2 2025 from $318.7 million in Q2 2024, primarily due to higher income tax payments. Capital expenditures increased significantly to $30.3 million, resulting in free cash flow of $196.3 million Cash Flow Summary (Q2 2025 vs Q2 2024) | Metric | Q2 2025 | Q2 2024 | Change | | :-------------------------------- | :---------- | :---------- | :------- | | Cash provided by operating activities | $226.6 million | $318.7 million | -$92.1 million | | Capital expenditures | $30.3 million | $17.7 million | +$12.6 million | | Free Cash Flow | $196.3 million | $301.0 million | -$104.7 million | - Decrease in operating cash flow driven primarily by higher income tax payments in the second quarter of 2025[14](index=14&type=chunk) - Depreciation and amortization expense for the second quarter of 2025 was **$86.5 million** compared with **$77.8 million**[14](index=14&type=chunk) - Stock-based compensation expense for the second quarter of 2025 was **$11.3 million** compared with **$9.3 million**[14](index=14&type=chunk) [Debt and Liquidity](index=3&type=section&id=Debt%20and%20Liquidity) As of June 29, 2025, net debt increased to $2,306.5 million from $1,999.2 million at December 29, 2024. The company repaid $315.0 million on its credit facility and repurchased $30.0 million of senior notes during Q2 2025 Debt and Liquidity (June 29, 2025 vs December 29, 2024) | Metric | June 29, 2025 | December 29, 2024 | Change | | :-------------------------- | :-------------- | :---------------- | :------- | | Total Debt | $2,617.4 million | $2,649.0 million | -$31.6 million | | Cash and Cash Equivalents | $310.9 million | $649.8 million | -$338.9 million | | Net Debt | $2,306.5 million | $1,999.2 million | +$307.3 million | - As of June 29, 2025, **$1,168.0 million** was available under the **$1.20 billion** credit facility[17](index=17&type=chunk) [Income Taxes](index=3&type=section&id=Income%20Taxes) The effective tax rate for Q2 2025 was 19.3%, down from 22.2% in Q2 2024, benefiting from net discrete income tax benefits of $8.4 million Effective Tax Rate (Q2 2025 vs Q2 2024) | Metric | Q2 2025 | Q2 2024 | Change | | :------------------ | :------ | :------ | :----- | | Effective Tax Rate | 19.3% | 22.2% | -2.9 pp | | Net Discrete Income Tax Benefits | $8.4 million | $0.7 million | +$7.7 million | [Other Corporate Financials](index=3&type=section&id=Other%20Corporate%20Financials) Corporate expense increased to $21.7 million in Q2 2025, including $1.3 million in transaction and integration costs. Interest expense, net, rose to $17.6 million due to increased borrowings on the credit facility Other Corporate Financials (Q2 2025 vs Q2 2024) | Metric | Q2 2025 | Q2 2024 | Change | | :-------------------------------- | :---------- | :---------- | :------- | | Corporate Expense | $21.7 million | $18.3 million | +$3.4 million | | Non-service Retirement Benefit Income | $2.7 million | $2.7 million | 0% | | Interest Expense, net | $17.6 million | $15.8 million | +$1.8 million | - Corporate expense for Q2 2025 included **$1.3 million** of pretax transaction and integration costs[20](index=20&type=chunk) - Increase in interest expense, net, due to increased borrowings on the credit facility compared with the second quarter of 2024[20](index=20&type=chunk) [Financial Outlook](index=4&type=section&id=Financial%20Outlook) [Q3 and Full Year 2025 Guidance](index=4&type=section&id=Q3%20and%20Full%20Year%202025%20Guidance) Teledyne raised its full-year 2025 GAAP diluted EPS outlook to $17.59 to $17.97 and narrowed its non-GAAP EPS outlook to $21.20 to $21.50. For Q3 2025, GAAP diluted EPS is projected to be $4.39 to $4.54, and non-GAAP diluted EPS is expected to be $5.35 to $5.45 Q3 and Full Year 2025 Diluted EPS Outlook | Metric | Q3 2025 (Low) | Q3 2025 (High) | FY 2025 (Low) | FY 2025 (High) | Prior FY 2025 (Low) | Prior FY 2025 (High) | | :----------------------------------- | :------------ | :------------- | :------------ | :------------- | :------------------ | :------------------- | | GAAP Diluted EPS Outlook | $4.39 | $4.54 | $17.59 | $17.97 | $17.35 | $17.83 | | Non-GAAP Diluted EPS Outlook | $5.35 | $5.45 | $21.20 | $21.50 | $21.10 | $21.50 | - The non-GAAP outlook excludes acquired intangible asset amortization, transaction and integration costs, inventory step-up expense and FLIR acquisition-related tax matters[21](index=21&type=chunk) [Non-GAAP Financial Measures and Disclosures](index=4&type=section&id=Non-GAAP%20Financial%20Measures%20and%20Disclosures) [Explanation of Non-GAAP Measures](index=4&type=section&id=Explanation%20of%20Non-GAAP%20Measures) Teledyne uses non-GAAP financial measures to supplement GAAP reporting, providing additional insights into performance by adjusting for infrequent or non-recurring acquisition-related items. These measures are used by management, analysts, and investors to evaluate ongoing business trends and comparability, but are not substitutes for GAAP results - Non-GAAP financial measures provide management, financial analysts and investors with additional useful information for evaluating the company's performance and understanding operating results and trends in the ongoing business by adjusting for certain expenses and benefits[22](index=22&type=chunk)[49](index=49&type=chunk) - Non-GAAP financial measures are not meant to be considered superior to, or a substitute for, financial statements prepared in accordance with GAAP and have material limitations[50](index=50&type=chunk) - Specific non-GAAP measures include income before income taxes, net income, diluted earnings per common share, operating income, operating margin, total debt, net debt, cash provided by operations, and free cash flow[51](index=51&type=chunk)[52](index=52&type=chunk)[53](index=53&type=chunk)[54](index=54&type=chunk)[55](index=55&type=chunk) - Adjustments typically exclude acquired intangible asset amortization, transaction and integration costs, inventory step-up expense, and FLIR acquisition-related tax matters[51](index=51&type=chunk)[52](index=52&type=chunk)[57](index=57&type=chunk) [Forward-Looking Statements Cautionary Notice](index=4&type=section&id=Forward-Looking%20Statements%20Cautionary%20Notice) The earnings release contains forward-looking statements subject to risks and uncertainties, which could cause actual results to differ materially from expectations. These risks include governmental and economic policies, trade tensions, tax law changes, foreign currency risks, interest rates, supply chain issues, inflation, labor shortages, and geopolitical conflicts - Forward-looking statements involve risks and uncertainties, are based on current expectations, and are not a guarantee of future performance or results[23](index=23&type=chunk)[24](index=24&type=chunk) - Many factors could change anticipated results, including the impact of U.S. Presidential Administration policies, economic and diplomatic tension between China and the United States, changes in tax and other laws, foreign currency exchange risks, rising interest rates, supply chain shortages, higher inflation, labor shortages, global economic disruptions, and geopolitical conflicts (Israel, Russia-Ukraine)[25](index=25&type=chunk)[26](index=26&type=chunk) - Acquisitions involve various inherent risks, such as the ability to integrate acquired businesses, retain key management and customers, achieve identified synergies, and risks associated with international operations[27](index=27&type=chunk) - Teledyne assumes no obligation to update forward-looking statements to reflect circumstances or events that occur after the date they were made, except as required by federal securities laws[29](index=29&type=chunk) [Conference Call Information](index=5&type=section&id=Conference%20Call%20Information) A live webcast of Teledyne's second quarter earnings conference call was scheduled for July 23, 2025, at 11:00 a.m. (Eastern), with a replay available for one month - A live webcast of Teledyne's second quarter earnings conference call was held at **11:00 a.m. (Eastern)** on Wednesday, July 23, 2025, accessible via www.teledyne.com/investors/events-and-presentations[30](index=30&type=chunk) - A replay of the webcast will be available for **one month** starting at **12:00 p.m. (Eastern)** on Wednesday, July 23, 2025[30](index=30&type=chunk) [Condensed Consolidated Financial Statements (GAAP)](index=6&type=section&id=Condensed%20Consolidated%20Financial%20Statements%20(GAAP)) [Statements of Income](index=6&type=section&id=Statements%20of%20Income) The condensed consolidated statements of income show Teledyne's GAAP financial performance for Q2 and six months ended June 29, 2025, compared to the prior year. Net sales, operating income, and net income attributable to Teledyne all increased year-over-year for both periods Condensed Consolidated Statements of Income (Q2 and Six Months Ended, in millions) | Metric | Q2 2025 | Q2 2024 | Six Months 2025 | Six Months 2024 | | :--------------------------------------- | :---------- | :---------- | :-------------- | :-------------- | | Net sales | $1,513.7 | $1,374.1 | $2,963.6 | $2,724.2 | | Total costs and expenses | $1,235.5 | $1,127.1 | $2,426.1 | $2,242.9 | | Operating income (loss) | $278.2 | $247.0 | $537.5 | $481.3 | | Income (loss) before income taxes | $260.6 | $231.7 | $499.5 | $457.2 | | Net income (loss) attributable to Teledyne | $209.9 | $180.2 | $398.5 | $358.7 | | Diluted earnings per common share | $4.43 | $3.77 | $8.41 | $7.49 | [Summary of Segment Net Sales and Operating Income](index=7&type=section&id=Summary%20of%20Segment%20Net%20Sales%20and%20Operating%20Income) This section provides a detailed breakdown of net sales and operating income by segment for Q2 and six months ended June 29, 2025, highlighting growth across all segments, particularly in Aerospace and Defense Electronics Segment Net Sales (Q2 and Six Months Ended, in millions) | Segment | Q2 2025 | Q2 2024 | % Change (Q2) | Six Months 2025 | Six Months 2024 | % Change (6M) | | :-------------------------- | :---------- | :---------- | :------------ | :-------------- | :-------------- | :------------ | | Digital Imaging | $771.0 | $739.4 | 4.3% | $1,528.0 | $1,480.2 | 3.2% | | Instrumentation | $367.6 | $333.5 | 10.2% | $710.9 | $663.9 | 7.1% | | Aerospace and Defense Electronics | $264.8 | $194.4 | 36.2% | $507.3 | $380.1 | 33.5% | | Engineered Systems | $110.3 | $106.8 | 3.3% | $217.4 | $200.0 | 8.7% | | **Total Net Sales** | **$1,513.7** | **$1,374.1** | **10.2%** | **$2,963.6** | **$2,724.2** | **8.8%** | Segment Operating Income (Q2 and Six Months Ended, in millions) | Segment | Q2 2025 | Q2 2024 | % Change (Q2) | Six Months 2025 | Six Months 2024 | % Change (6M) | | :-------------------------- | :---------- | :---------- | :------------ | :-------------- | :-------------- | :------------ | | Digital Imaging | $119.6 | $113.5 | 5.4% | $241.9 | $227.3 | 6.4% | | Instrumentation | $101.6 | $87.2 | 16.5% | $194.3 | $173.2 | 12.2% | | Aerospace and Defense Electronics | $66.6 | $57.1 | 16.6% | $122.3 | $109.0 | 12.2% | | Engineered Systems | $12.1 | $7.5 | 61.3% | $22.9 | $10.2 | 124.5% | | Corporate expense | ($21.7) | ($18.3) | 18.6% | ($43.9) | ($38.4) | 14.3% | | **Total Operating Income** | **$278.2** | **$247.0** | **12.6%** | **$537.5** | **$481.3** | **11.7%** | [Balance Sheets](index=8&type=section&id=Balance%20Sheets) The condensed consolidated balance sheets show an increase in total assets to $15,135.2 million as of June 29, 2025, from $14,200.5 million at December 29, 2024, primarily driven by growth in goodwill and acquired intangible assets. Total liabilities also increased, with a significant rise in the current portion of long-term debt Condensed Consolidated Balance Sheets (Key Items, in millions) | Metric | June 29, 2025 | December 29, 2024 | | :-------------------------------- | :-------------- | :---------------- | | Cash and cash equivalents | $310.9 | $649.8 | | Total current assets | $2,922.0 | $2,944.6 | | Goodwill and acquired intangible assets, net | $10,850.4 | $10,003.4 | | Total assets | $15,135.2 | $14,200.5 | | Total current liabilities | $1,758.0 | $1,261.6 | | Long-term debt, net of current portion | $2,167.2 | $2,648.7 | | Total liabilities | $4,751.9 | $4,645.1 | | Total stockholders' equity | $10,376.9 | $9,549.4 | - Current portion of long-term debt increased significantly from **$0.3 million** as of December 29, 2024, to **$450.2 million** as of June 29, 2025[36](index=36&type=chunk) [Statements of Cash Flows](index=9&type=section&id=Statements%20of%20Cash%20Flows) The condensed consolidated statements of cash flows indicate a decrease in net cash provided by operating activities in Q2 2025 compared to Q2 2024, while net cash used in investing activities decreased due to no business purchases in Q2 2025. Net cash used in financing activities also decreased significantly Condensed Consolidated Statements of Cash Flows (Q2 Ended, in millions) | Metric | Q2 2025 | Q2 2024 | | :---------------------------------------- | :---------- | :---------- | | Net cash provided by (used in) operating activities | $226.6 | $318.7 | | Net cash provided by (used in) investing activities | ($30.2) | ($141.2) | | Net cash provided by (used in) financing activities | ($344.4) | ($644.0) | | Changes in cash and cash equivalents | ($150.6) | ($469.2) | | Cash and cash equivalents—end of period | $310.9 | $443.2 | - Purchases of businesses, net of cash acquired, were **$0** in Q2 2025 compared to **$123.6 million** in Q2 2024[38](index=38&type=chunk) - In Q2 2025, the company made payments of **$30.0 million** on fixed rate senior notes and net payments of **$315.0 million** on its credit facility[38](index=38&type=chunk) [Reconciliation of GAAP to Non-GAAP Financial Measures](index=10&type=section&id=Reconciliation%20of%20GAAP%20to%20Non-GAAP%20Financial%20Measures) [Net Income and Diluted EPS Reconciliation](index=10&type=section&id=Net%20Income%20and%20Diluted%20EPS%20Reconciliation) This section reconciles GAAP net income and diluted EPS to non-GAAP figures for Q2 and six months ended June 29, 2025, and June 30, 2024, by adjusting for transaction and integration costs, inventory step-up expense, acquired intangible asset amortization, and FLIR acquisition-related tax matters GAAP to Non-GAAP Net Income and Diluted EPS (Q2 2025, in millions, except EPS) | Metric | GAAP | Adjustments | Non-GAAP | | :-------------------------------- | :------- | :---------- | :------- | | Income Before Income Taxes | $260.6 | $57.7 | $318.3 | | Net Income Attributable to Teledyne | $209.9 | $36.4 | $246.3 | | Diluted Earnings per Common Share | $4.43 | $0.77 | $5.20 | GAAP to Non-GAAP Net Income and Diluted EPS (Six Months 2025, in millions, except EPS) | Metric | GAAP | Adjustments | Non-GAAP | | :-------------------------------- | :------- | :---------- | :-------- | | Income Before Income Taxes | $499.5 | $117.1 | $616.6 | | Net Income Attributable to Teledyne | $398.5 | $81.8 | $480.3 | | Diluted Earnings per Common Share | $8.41 | $1.72 | $10.13 | [Operating Income and Operating Margin Reconciliation](index=11&type=section&id=Operating%20Income%20and%20Operating%20Margin%20Reconciliation) This section reconciles GAAP operating income and operating margin to non-GAAP figures for Q2 and six months ended June 29, 2025, and June 30, 2024, by excluding transaction and integration costs, inventory step-up expense, and acquired intangible asset amortization GAAP to Non-GAAP Operating Income and Margin (Q2 2025, in millions) | Metric | GAAP | Adjustments | Non-GAAP | | :-------------------- | :------- | :---------- | :------- | | Operating Income (Loss) | $278.2 | $57.7 | $335.9 | | Operating Margin | 18.4% | N/A | 22.2% | GAAP to Non-GAAP Operating Income and Margin (Six Months 2025, in millions) | Metric | GAAP | Adjustments | Non-GAAP | | :-------------------- | :------- | :---------- | :------- | | Operating Income (Loss) | $537.5 | $117.1 | $654.6 | | Operating Margin | 18.1% | N/A | 22.1% | [Segment Operating Income Reconciliation](index=12&type=section&id=Segment%20Operating%20Income%20Reconciliation) This section provides a detailed reconciliation of GAAP to non-GAAP operating income for each segment, showing the impact of acquired intangible asset amortization, inventory step-up expense, and transaction and integration costs on segment performance for Q2 and six months ended June 29, 2025, and June 30, 2024 GAAP to Non-GAAP Segment Operating Income (Q2 2025, in millions) | Segment | GAAP Operating Income (Loss) | Acquired Intangible Asset Amortization | Inventory Step-up Expense | Transaction and Integration Costs | Non-GAAP Operating Income (Loss) | | :-------------------------- | :--------------------------- | :------------------------------------- | :------------------------ | :------------------------------ | :------------------------------- | | Digital Imaging | $119.6 | $46.3 | — | — | $165.9 | | Instrumentation | $101.6 | $3.3 | — | — | $104.9 | | Aerospace and Defense Electronics | $66.6 | $5.0 | $1.2 | $0.6 | $73.4 | | Engineered Systems | $12.1 | — | — | — | $12.1 | | Corporate expense | ($21.7) | — | — | $1.3 | ($20.4) | | **Total** | **$278.2** | **$54.6** | **$1.2** | **$1.9** | **$335.9** | [Net Debt and Outlook Reconciliation](index=13&type=section&id=Net%20Debt%20and%20Outlook%20Reconciliation) This section reconciles total debt to net debt and provides a non-GAAP diluted EPS outlook for Q3 and full year 2025, adjusting for specific items like transaction and integration costs, inventory step-up expense, acquired intangible asset amortization, and FLIR acquisition-related tax matters Net Debt Reconciliation (June 29, 2025 vs December 29, 2024, in millions) | Metric | June 29, 2025 | December 29, 2024 | | :-------------------------- | :-------------- | :---------------- | | Total debt — non-GAAP | $2,617.4 | $2,649.0 | | Less cash and cash equivalents | ($310.9) | ($649.8) | | Net debt — non-GAAP | $2,306.5 | $1,999.2 | Non-GAAP Diluted EPS Outlook Reconciliation (FY 2025, in millions, except EPS) | Metric | FY 2025 (Low) | FY 2025 (High) | | :----------------------------------- | :------------ | :------------- | | GAAP Diluted Earnings per Common Share Outlook | $17.59 | $17.97 | | Adjustments (Total) | $3.61 | $3.54 | | Non-GAAP Diluted Earnings per Common Share Outlook | $21.20 | $21.50 |

Core Viewpoint Teledyne Technologies is expected to report strong second-quarter 2025 results, with revenue and earnings growth driven by improved sales across all business segments, including Digital Imaging, Instrumentation, Aerospace & Defense Electronics, and Engineered Systems [1][6][7]. Group 1: Revenue Expectations - Teledyne Technologies is projected to post second-quarter revenue of $1.47 billion, reflecting a year-over-year increase of 7.1% [8]. - The Digital Imaging segment's revenues are estimated at $756.5 million, indicating a year-over-year growth of 2.3% [2]. - The Instrumentation segment is expected to generate revenues of $358.5 million, representing a year-over-year rise of 7.5% [3]. - The Aerospace & Defense Electronics unit's revenues are projected at $240.9 million, implying a significant growth of 23.9% compared to the previous year [4]. - Engineered Systems' revenues are estimated at $110.2 million, showing a rise of 3.2% from the year-ago quarter [5]. Group 2: Earnings Expectations - The consensus estimate for second-quarter earnings per share (EPS) is pegged at $5.01, indicating a growth of 9.4% from the prior-year figure [8]. - Positive synergies from the acquisitions of Micropac and Qioptiq are expected to contribute favorably to Teledyne's earnings performance [6][7]. Group 3: Market Position and Predictions - Teledyne Technologies has delivered a four-quarter earnings surprise of 2.69% on average, suggesting a history of exceeding earnings expectations [1]. - The company currently holds a Zacks Rank of 4 (Sell), indicating a less favorable outlook compared to peers [10]. - The Earnings ESP for Teledyne is +1.22%, but the model does not predict a definitive earnings beat this time [9].

Core Viewpoint - Wall Street anticipates a year-over-year increase in earnings for Teledyne Technologies, with a focus on how actual results compare to estimates impacting stock price [1][2]. Earnings Expectations - Teledyne is expected to report quarterly earnings of $5.01 per share, reflecting a +9.4% change year-over-year, with revenues projected at $1.47 billion, up 7.1% from the previous year [3]. - The consensus EPS estimate has been revised 1.24% higher in the last 30 days, indicating a positive reassessment by analysts [4]. Earnings Surprise Prediction - The Zacks Earnings ESP model indicates a positive Earnings ESP of +1.22% for Teledyne, suggesting analysts are optimistic about the company's earnings prospects [12]. - However, Teledyne currently holds a Zacks Rank of 4, complicating predictions of an earnings beat [12]. Historical Performance - Teledyne has consistently beaten consensus EPS estimates, achieving this in the last four quarters [14]. - In the most recent quarter, Teledyne was expected to post earnings of $4.92 per share but delivered $4.95, resulting in a +0.61% surprise [13]. Conclusion - While Teledyne may not be a strong candidate for an earnings beat, investors should consider other factors when evaluating the stock ahead of its earnings release [17].

Core Insights - Axon Enterprise, Inc. (AXON) and Teledyne Technologies Incorporated (TDY) are key players in the aerospace and defense equipment industry, benefiting from increased demand in public safety and surveillance due to rising terrorism and crime rates globally [1] Axon Enterprise, Inc. (AXON) - The Connected Devices segment is a major growth driver for Axon, with revenues increasing by 26.1% year over year in Q1 2025, fueled by the popularity of TASER 10 products and cartridge revenues [2] - Axon's new body-worn camera, Axon Body 4, launched in 2023, has generated significant demand, contributing to the segment's growth [3] - The Software & Services segment is also performing well, with revenues increasing by 39% in Q1 2025 and a year-over-year increase of 33.4% in 2024, driven by a growing user base of the Axon network [4] - Annual recurring revenues (ARR) for Axon reached $1.1 billion in Q1 2025, reflecting a 34% year-over-year increase, supported by high customer satisfaction and demand for digital evidence management [5] - Approximately 70% of Axon's domestic user base is still on basic plans, indicating significant growth potential for the Software & Services segment [6] - However, rising costs and expenses are a concern, with cost of sales and SG&A expenses increasing by 18.2% and 48% year over year, respectively, leading to total operating expenses climbing 54.7% to $374.5 million in Q1 2025 [7] Teledyne Technologies Incorporated (TDY) - Teledyne is experiencing growth due to the recovery in commercial air travel, with first-quarter sales from the Aerospace and Defense Electronics segment improving by 30.6% year over year [8] - The Digital Imaging segment has also shown strength, with first-quarter sales of $757 million, reflecting a 2.2% increase, driven by higher sales of infrared imaging components and surveillance systems [9] - Despite growth, Teledyne faces supply-chain challenges, including increased lead times and cost inflation, which have negatively impacted profit margins and delayed revenue conversion from backlog [11] - In Q1 2025, Teledyne's cost of sales totaled $830 million, a 7.8% year-over-year increase, while SG&A expenses rose by 6.5% [12] - Teledyne's long-term debt reached $2.96 billion, a 12% sequential increase, raising concerns about financial obligations and profitability [13] Price Performance and Valuation - Over the past six months, Axon shares have risen by 25.6%, while Teledyne's stock has gained 12.9% [16] - The Zacks Consensus Estimate for Axon's 2025 sales implies a year-over-year growth of 27.2%, while Teledyne's sales are expected to grow by 6.8% [17][19] - Axon trades at a premium forward P/E ratio of 103.36X, compared to Teledyne's more attractive 23.54X [10][20] Final Assessment - Axon's diversified product portfolio and strong growth in the Connected Devices and Software & Services segments position it favorably in the public safety market, despite its higher valuation [21] - Conversely, Teledyne's growth is hindered by supply-chain issues and high operating costs, along with a highly leveraged balance sheet, suggesting a cautious approach for investors [22] - Overall, Axon appears to be a more favorable investment choice compared to Teledyne at this time [23]