TransDigm's (NYSE:TDG) Q4 CY2025: Beats On Revenue

Aerospace and defense company TransDigm (NYSE:TDG) reported Q4 CY2025 results exceeding the market’s revenue expectations, with sales up 13.9% year on year to $2.29 billion. The company expects the full year’s revenue to be around $9.94 billion, close to analysts’ estimates. Its non-GAAP profit of $8.23 per share was 2.3% above analysts’ consensus estimates.

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"We are pleased with our team's performance and operating results for the first quarter. This is a solid start to the 2026 fiscal year," stated Mike Lisman, TransDigm Group's CEO.

Company Overview

Supplying parts for nearly all aircraft currently in service, TransDigm (NYSE:TDG) develops and manufactures components and systems for military and commercial aviation.

Revenue Growth

A company’s long-term sales performance is one signal of its overall quality. Any business can put up a good quarter or two, but the best consistently grow over the long haul. Over the last five years, TransDigm grew its sales at an exceptional 13.9% compounded annual growth rate. Its growth surpassed the average industrials company and shows its offerings resonate with customers, a great starting point for our analysis.

We at StockStory place the most emphasis on long-term growth, but within industrials, a half-decade historical view may miss cycles, industry trends, or a company capitalizing on catalysts such as a new contract win or a successful product line. TransDigm’s annualized revenue growth of 14.3% over the last two years aligns with its five-year trend, suggesting its demand was predictably strong.

We can dig further into the company’s sales dynamics by analyzing its organic revenue, which strips out one-time events like acquisitions and currency fluctuations that don’t accurately reflect its fundamentals. Over the last two years, TransDigm’s organic revenue averaged 10% year-on-year growth. Because this number is lower than its two-year revenue growth, we can see that some mixture of acquisitions and foreign exchange rates boosted its headline results.

This quarter, TransDigm reported year-on-year revenue growth of 13.9%, and its $2.29 billion of revenue exceeded Wall Street’s estimates by 1.2%.

Looking ahead, sell-side analysts expect revenue to grow 11.4% over the next 12 months, a slight deceleration versus the last two years. Still, this projection is noteworthy and suggests the market is baking in success for its products and services.

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Operating Margin

TransDigm has been a well-oiled machine over the last five years. It demonstrated elite profitability for an industrials business, boasting an average operating margin of 43.9%.

Looking at the trend in its profitability, TransDigm’s operating margin rose by 9 percentage points over the last five years, as its sales growth gave it immense operating leverage.

This quarter, TransDigm generated an operating margin profit margin of 45.6%, down 3 percentage points year on year. This contraction shows it was less efficient because its expenses grew faster than its revenue.

Earnings Per Share

Revenue trends explain a company’s historical growth, but the long-term change in earnings per share (EPS) points to the profitability of that growth – for example, a company could inflate its sales through excessive spending on advertising and promotions.

TransDigm’s EPS grew at an astounding 26.8% compounded annual growth rate over the last five years, higher than its 13.9% annualized revenue growth. This tells us the company became more profitable on a per-share basis as it expanded.

We can take a deeper look into TransDigm’s earnings to better understand the drivers of its performance. As we mentioned earlier, TransDigm’s operating margin declined this quarter but expanded by 9 percentage points over the last five years. This was the most relevant factor (aside from the revenue impact) behind its higher earnings; interest expenses and taxes can also affect EPS but don’t tell us as much about a company’s fundamentals.

Like with revenue, we analyze EPS over a more recent period because it can provide insight into an emerging theme or development for the business.

For TransDigm, its two-year annual EPS growth of 15.3% was lower than its five-year trend. We still think its growth was good and hope it can accelerate in the future.

In Q4, TransDigm reported adjusted EPS of $8.23, up from $7.83 in the same quarter last year. This print beat analysts’ estimates by 2.3%. Over the next 12 months, Wall Street expects TransDigm’s full-year EPS of $37.76 to grow 7.1%.

Key Takeaways from TransDigm’s Q4 Results

It was good to see TransDigm narrowly top analysts’ revenue expectations this quarter. We were also happy its EBITDA narrowly outperformed Wall Street’s estimates. On the other hand, its organic revenue slightly missed. Zooming out, we think this was a mixed quarter. The stock remained flat at $1,434 immediately following the results.

Should you buy the stock or not? What happened in the latest quarter matters, but not as much as longer-term business quality and valuation, when deciding whether to invest in this stock. We cover that in our actionable full research report which you can read here (it’s free).