Key Highlights

  • Fiscal fourth quarter EPS of USD 12.44 beat the USD 12.21 estimate, and Revenue reached USD 2.99 billion.
  • EBITDA As Defined Margin reached 53% in the quarter, the year's highest, including about two points of Acquisition dilution.
  • The company repurchased about USD 940 million of stock in the quarter and USD 2.75 billion across fiscal 2026.
  • Fiscal 2027 guidance centers on revenue of USD 12.05 billion, up about 14%, and adjusted EPS of USD 47.51.

TransDigm Group (NYSE:TDG) reported fiscal fourth quarter 2026 EPS of USD 12.44, ahead of the USD 12.21 estimate, on revenue of USD 2.99 billion against an estimate of USD 2.95 billion. EBITDA As Defined margin reached 53%, the highest of the year, which management attributed to higher volumes and strong execution. That figure includes roughly two percentage points of dilution from recent acquisitions. The company ended the year with nearly USD 2.3 billion of cash.

The Annual Report states that about 90% of fiscal 2026 net sales came from proprietary products and about 55% from the aftermarket, most of it commercial and military. Management said commercial aftermarket Demand remains healthy, even with elevated oil prices and passenger traffic below the level forecast when fiscal 2026 guidance was first given.

Segment Trends and Capital Deployment

Total commercial OEM revenue rose about 15% in both the quarter and the full year, and commercial transport OEM revenue, which excludes Business jets, was up 25% over the comparable prior period. Management also said it built a very healthy defense Backlog during the year.

Capital allocation was active. The company deployed more than USD 7 billion in fiscal 2026 across acquisitions and share repurchases. Repurchases were about USD 940 million in the fourth quarter, taking the year to USD 2.75 billion, and management said it used the dip in its share price to buy stock. Acquisitions consumed about USD 4.4 billion, covering Simmonds Precision Products, Jet Parts Engineering, Victor Sierra Aviation and Prince & Izant, which closed in late September, plus nearly USD 440 million across 12 bolt-on deals.

Management said acquisition returns remain at 30% or better on an Equity IRR basis under its long-standing framework, and that it retains M&A capacity in excess of USD 10 billion.

Fiscal 2027 Guidance

The midpoint of fiscal 2027 revenue guidance is USD 12.05 billion, up about 14% from the prior year. The midpoint of EBITDA As Defined guidance is USD 6.27 billion, up about 13%, with a margin of around 52%, again including about two points of dilution from recent acquisitions. Adjusted EPS guidance centers on USD 47.51. The guidance includes all completed acquisitions, including Prince & Izant.

Management noted that the first quarter carries roughly 10% fewer working days than later quarters, so first-quarter revenue, EBITDA As Defined and margin are projected to run below the rest of the year. The company said its guidance assumes the momentum in commercial aftermarket continues and that the defense backlog supports another strong year.

Aftermarket and Capital Factors to Watch

Several items shape how the guidance plays out: air traffic compared with the forecast embedded in guidance, oil prices, integration of the four stand-alone acquisitions, and the pace of repurchases relative to acquisitions.

Because the first quarter has fewer working days, the seasonal pattern is another marker when the company reports its next quarter.