Core Insights - Teledyne Technologies reported strong financial performance in 2025, with record quarterly orders, sales, non-GAAP earnings, and operating margin, alongside a solid outlook for 2026 driven by defense demand and recovery in commercial markets [4][7]. Financial Performance - In 2025, Teledyne spent over $850 million on acquisitions and $400 million on stock repurchases in Q4, generating approximately $1.1 billion in free cash flow for the second consecutive year, ending with a leverage ratio of 1.4x [1][7]. - Fourth-quarter sales increased by 7.3% year over year, while non-GAAP earnings rose by 14.1%. For the full year, sales increased by 7.9% and non-GAAP earnings grew by 11.5% [2]. Business Segments - The Aerospace & Defense Electronics segment saw a significant sales increase of 40.4%, driven by acquisitions and organic growth [6][18]. - Digital Imaging sales rose by 3.4% in Q4, with infrared imaging components growing over 20%. The segment's non-GAAP operating margin reached a record 24.7% [9]. - Instrumentation sales increased by 3.7% in Q4, with marine instrument sales up 3.3% due to strong demand in offshore energy production [9]. 2026 Guidance - Management provided guidance for 2026, expecting revenue of approximately $6.37 billion and non-GAAP EPS near $23.65, with an anticipated organic growth of about 3.6% and 4.2% from acquisitions [5][10]. - First-quarter 2026 GAAP EPS is expected to be between $4.45 and $4.59, with full-year GAAP EPS projected between $19.76 and $20.22 [11]. Defense and Unmanned Systems - Teledyne's combined unmanned businesses generated about $500 million in 2025, with expectations for 10% growth in 2026, reaching approximately $550 million [16]. - The company received its first production-rate contract for loitering munitions and was awarded contracts for space-based infrared detectors [14][15]. Orders and Market Trends - The fourth-quarter book-to-bill ratio was approximately 1.07 overall, with segment-specific ratios indicating strong demand in defense electronics [17]. - Mixed trends were observed in commercial markets, with some segments experiencing growth while others faced challenges [6][18].