10-QPeriod: Q1 FY2026

TransDigm Group INC Quarterly Report for Q1 Ended Dec 27, 2025

Filed February 3, 2026For Securities:TDG

Summary

TransDigm Group Inc. (TDG) reported strong performance for the thirteen-week period ended December 27, 2025. Net sales increased by 13.9% year-over-year to $2.285 billion, driven by both organic growth and contributions from recent acquisitions. The company's strategic acquisitions, including Simmonds and other bolt-on businesses, are integrating well and contributing to the top line. Despite an increase in the cost of sales as a percentage of net sales, largely due to acquisition impacts, gross profit still saw a healthy increase. The company's robust acquisition pipeline was highlighted with significant subsequent events including agreements to acquire Jet Parts Engineering, Victor Sierra Aviation Holdings for approximately $2.2 billion, and Stellant Systems for approximately $960 million. These strategic moves underscore TransDigm's commitment to expanding its highly engineered, proprietary aerospace components portfolio with significant aftermarket content. The company maintained a strong liquidity position, with $3.387 billion in cash and availability on its revolving credit facility, providing ample resources for its ambitious growth and acquisition strategies.

Financial Highlights

51 data points
Beta

Revenue

$2.29B

59.2% Gross Margin

Net Income

$445.00M

19.5% Net Margin

EPS (Diluted)

$6.62

Total Assets

$23.76B

Cash & Equivalents

$2.53B

Free Cash Flow

$772.00M

Financial Statements
Beta
Revenue$2.29B
Cost of Revenue$933.00M
Gross Profit$1.35B
SG&A Expenses$254.00M
Operating Income$1.04B
Net Income$445.00M
EPS (Basic)$6.62
EPS (Diluted)$6.62
Shares Outstanding (Basic)58.20M
Shares Outstanding (Diluted)58.20M

Key Highlights

  • 1Net sales surged 13.9% to $2.285 billion, fueled by both organic growth and recent acquisitions.
  • 2Company announced two major subsequent acquisitions, Jet Parts Engineering/Victor Sierra Aviation Holdings ($2.2B) and Stellant Systems ($960M), signaling continued aggressive growth strategy.
  • 3Profitability remains strong, with Income from Operations at $1.042 billion and EBITDA As Defined at $1.197 billion.
  • 4Significant investment in acquisitions, with $907 million in net cash used for investing activities in the period, primarily for the Simmonds acquisition and other smaller businesses.
  • 5Robust liquidity position with $3.387 billion in cash and revolving credit facility availability.
  • 6Diluted EPS decreased to $6.62 from $7.62 in the prior year period, largely due to dividend equivalent payments and an increase in interest expense.
  • 7Inventories increased by $278 million to $2.373 billion, reflecting strategic buildup to support future sales demand.

Frequently Asked Questions

Revenue growth was driven by a combination of organic sales increases across defense, commercial OEM, and commercial aftermarket segments, as well as significant contributions from recently acquired businesses like Simmonds. The overall demand for air travel, particularly international traffic, also supported aftermarket sales.

The announced acquisitions of Jet Parts Engineering/Victor Sierra Aviation Holdings and Stellant Systems are expected to be financed using a combination of existing cash on hand and additional debt capacity.

While the company carries a substantial amount of debt, its strong operating performance and EBITDA generation, coupled with a significant portion of fixed-rate debt, help manage interest rate risk. However, interest expense-net increased by 25.7% year-over-year to $475 million, impacting net income and EPS. The company's liquidity position and credit facilities provide flexibility.

Inventories increased to $2.373 billion, a strategic decision to support anticipated fiscal 2026 sales demand, particularly in raw materials. The company actively manages inventory levels to meet customer needs.