Transdigm Group Incorporated
Q2 2026 Earnings
Market Reaction
S&P 500 over the same 30 days: +1.90%.
Did TDG Beat Earnings? Q2 2026 Results
TransDigm Group posted a strong fiscal second quarter, with adjusted EPS of $9.85 beating the $9.31 consensus estimate by 5.80% as revenue climbed 18.3% year-over-year to $2.54 billion, powered by 11% organic growth and broad-based strength across all three of its major market channels. Commercial transport aftermarket, historically the highest-margin contributor to TransDigm's model, led the way with 16% growth, while commercial OEM continued to benefit from firming aircraft build rates and defense revenues added double-digit gains of their own. EBITDA As Defined reached $1.34 billion, up 15.1%, though acquisition activity modestly diluted margins to 52.6% from 54.0% a year ago. The company's dealmaking remained active, with a $2.20 billion acquisition of two proprietary aftermarket parts businesses completed shortly after quarter-end and a pending $960 million defense-focused deal still in the pipeline. Management responded to the momentum by lifting full-year adjusted EPS guidance to a range of $38.83 to $40.21 and raising the net sales outlook to $10.30 billion to $10.42 billion, citing stronger-than-expected base business performance as the primary driver.
- Double-digit revenue growth across all three major market channels (commercial aftermarket, commercial OEM, defense)
- Commercial transport aftermarket grew 16% in the quarter, the highest growth across end markets
- Commercial OEM revenue increased in the double digits supported by higher OEM build rates
- 11.0% organic sales growth as a percentage of net sales
- Application of TransDigm's value-driven operating strategy
- Lower non-cash stock and deferred compensation expense
- Base business EBITDA margins improved year-over-year when adjusting for acquisition dilution
“We are pleased with our team's performance and operating results for the second quarter. Total revenue continued ahead of our expectations with double-digit growth across all three of our major market channels compared to the prior year's second quarter. Commercial aftermarket exhibited the highest growth across our three end markets, driven by our commercial transport segment growing 16% in the quarter. Commercial OEM market revenue increased in the double digits on a percentage basis as we continued supporting higher build rates at the OEMs. Our reported EBITDA As Defined margin for the quarter was 52.6%. Adjusting for acquisition dilution, the EBITDA margins of our base businesses improved nicely on a year over year basis and in line with our expectations. The team continues to execute our value drivers.”
TransDigm Group CEO, on the earnings call
Forward Guidance & Outlook
TransDigm raised full-year fiscal 2026 guidance across all metrics. Net sales are now expected in the range of $10,300 million to $10,420 million (up $420 million at midpoint from prior guidance), representing 17.3% growth at the midpoint over fiscal 2025. EBITDA As Defined is guided to $5,370 million to $5,470 million (up $210 million at midpoint), corresponding to approximately 52.3% EBITDA As Defined margin. Adjusted EPS is expected at $38.83 to $40.21 (up $1.14 at midpoint from prior guidance). GAAP EPS is guided to $33.91 to $35.29. GAAP net income is expected at $2,026 million to $2,106 million, down 0.4% at midpoint versus fiscal 2025 primarily due to higher interest expense. Market channel growth assumptions: Commercial OEM revenue growth in the low double-digit to mid-teens percentage range; commercial aftermarket growth in the high single-digit to low double-digit percentage range; defense growth in the high single-digit percentage range. Guidance excludes any contribution from the pending Stellant acquisition. Management acknowledged uncertainty in the broader aerospace environment that could impact commercial aftermarket.
TDG YoY Financials
Figures from SEC filings and company reports. Not investment advice.