TransDigm Group — Fiscal 2026 Fourth Quarter and Year-End Earnings Summary

Financial Performance:

• Net sales for the fourth quarter ended September 30, 2026, reached $2,988 million, a 23% increase from $2,437 million in the prior year quarter; organic sales growth was 14% of net sales.
• Fiscal 2026 full-year net sales increased 20% to $10,557 million from $8,831 million in fiscal 2025; organic sales growth was 11% of net sales (13% excluding non-aerospace sales).
• Fourth quarter net income was $586 million, a 4% decrease from $609 million in the prior year quarter, primarily due to higher interest expense and tax expense.
• Fiscal 2026 net income increased 2% to $2,108 million from $2,074 million in fiscal 2025.
• Fourth quarter earnings per share (EPS) were $10.33, up 33% from $7.75 in the prior year quarter.
• Fiscal 2026 GAAP EPS were $35.51, compared to $32.08 in fiscal 2025.
• Fourth quarter adjusted net income increased 12% to $706 million ($12.44 per share) from $629 million ($10.82 per share) in the prior year quarter.
• Fiscal 2026 adjusted net income increased 10% to $2,383 million ($41.35 per share) from $2,171 million ($37.33 per share) in fiscal 2025.
• Fourth quarter EBITDA increased 13% to $1,436 million from $1,269 million in the prior year quarter.
• Fourth quarter EBITDA As Defined increased 20% to $1,583 million from $1,320 million in the prior year quarter; margin was 53.0% (down from 54.2% prior year, including ~2 percentage points of dilution from acquisitions).
• Fiscal 2026 EBITDA increased 14% to $5,217 million from $4,568 million in fiscal 2025.
• Fiscal 2026 EBITDA As Defined increased 17% to $5,563 million from $4,760 million in fiscal 2025; margin was 52.7% (down from 53.9% in fiscal 2025).
• Interest expense-net for the fourth quarter was $536 million compared to $420 million in the prior year quarter; for fiscal 2026, it was $2,008 million compared to $1,572 million in fiscal 2025.
• Cash and cash equivalents were $2,279 million as of September 30, 2026, compared to $2,808 million as of September 30, 2025.
• Long-term debt was $33,743 million as of September 30, 2026, compared to $29,167 million as of September 30, 2025.

Guidance and Future Outlook:

• Fiscal 2027 net sales are anticipated to be $11,950 million to $12,150 million (midpoint increase of 14% vs. fiscal 2026).
• Fiscal 2027 net income is anticipated to be $2,442 million to $2,490 million (midpoint increase of 17% vs. fiscal 2026).
• Fiscal 2027 EPS is expected to be $42.06 to $42.91 per share (midpoint increase of 20% vs. fiscal 2026) based on 56.7 million weighted average shares.
• Fiscal 2027 EBITDA As Defined is anticipated to be $6,195 million to $6,345 million (midpoint increase of 13% vs. fiscal 2026), corresponding to a margin of approximately 52.0%.
• Fiscal 2027 adjusted EPS is expected to be $47.09 to $47.94 per share (midpoint increase of 15% vs. fiscal 2026).
• Market growth assumptions for fiscal 2027 include: Commercial OEM revenue growth in the high single-digit to low double-digit range; Commercial aftermarket revenue growth in the high single-digit range; and Defense revenue growth in the high single-digit range.

Business Segments and Product Lines:

• Completed the acquisition of Prince & Izant ("P&I") for approximately $1.07 billion in cash on September 28, 2026; P&I provides brazing alloys and specialty metal components for aerospace, defense, aeroderivative turbine, and transportation markets.
• Fiscal 2026 acquisitions included Simmonds Precision Products, Jet Parts Engineering, Victor Sierra Aviation, Prince & Izant, and twelve bolt-on acquisitions at the Operating Unit level.
• Total capital deployed in fiscal 2026 was over $7 billion, including approximately $4.4 billion in acquisitions and $2.8 billion in share repurchases.

Market and Competitive Landscape:

• The company operates in three primary end markets: Commercial OEM, Commercial aftermarket, and Defense.
• The company is a leading global designer, producer, and supplier of highly engineered aircraft components for nearly all commercial and military aircraft in service.

Risks and Challenges:

• Risks include sensitivity to flight hours and customer profitability, supply chain constraints, increases in raw material, tax, and labor costs, and failure to complete or integrate acquisitions.
• Risks also include indebtedness, geopolitical events, wars, public health crises, cybersecurity threats, climate change impacts, regulatory compliance, reliance on certain customers, and risks associated with being a government supplier.

Management Commentary and Tone:

• CEO Mike Lisman stated the team's performance was pleasing and that fourth quarter results exceeded the high end of guidance for revenue and EBITDA As Defined.
• Management described fiscal 2026 as a "very successful year" and noted the company enters fiscal 2027 with significant liquidity and financial flexibility to pursue M&A and capital deployment.
• Management noted that EBITDA As Defined margin for the year included approximately two percentage points of dilution related to recent acquisitions.

Other Key Points:

• During the fourth quarter, TransDigm completed a private offering of $3.0 billion of new 6.75% Senior Secured Notes maturing in January 2035.
• Proceeds from the 2035 Notes were used to repurchase approximately $1.8 billion of outstanding 6.75% Senior Secured Notes due 2028 and for general corporate purposes.
• Share repurchases in the fourth quarter totaled $943 million (820 thousand shares at an average price of $1,150 per share).
• Full fiscal 2026 share repurchases totaled $2.8 billion (2.3 million shares at an average price of $1,187 per share).
• GAAP earnings per share are reduced by dividend equivalent payments made pursuant to stock option plans; these were $1.03 per share in fiscal 2026 and $3.58 per share in fiscal 2025.
• Net cash provided by operating activities for fiscal 2026 was $2,187 million, compared to $2,038 million in fiscal 2025.