Slides
Page 1
TRANSDIGM GROUP INC . FY 2026 Q3 Earnings Call August 4 , 2026
Page 2
Agenda TransDigm Overview, Highlights and Outlook Mike Lisman CEO Market Review Patrick Murphy Co-COO Operating Performance and Financial Results Sarah Wynne CFO Q&A 1
Page 3
FORWARD LOOKING STATEMENTS This presentation contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 , including information regarding our guidance for future periods. These forward-looking statements are based on management’s current expectations and beliefs, as well as a number of assumptions concerning future events, many of which are outside of our control. Consequently, such forward looking statements should be regarded solely as our current plans, estimates and beliefs. These statements are subject to risks and uncertainties that could cause actual results to differ materially from those expressed or implied in the forward- looking statement. The Company does not undertake, and specifically declines, any obligation, to publicly release the results of any revisions to these forward-looking statements that may be made to reflect any future events or circumstances after the date of such statements or to reflect the occurrence of anticipated or unanticipated events. All forward-looking statements attributable to the Company or persons acting on its behalf are expressly qualified in their entirety by these cautionary statements. These risks and uncertainties include but are not limited to: the sensitivity of our business to the number of flight hours that our customers’ planes spend aloft and our customers’ profitability, both of which are affected by general economic conditions; supply chain constraints; increases in r aw material costs, taxes and labor costs that cannot be recovered in product pricing; failure to complete or successfully integrate acquisitions; our indebtedness; current and future geopolitica l or other worldwide events, including, without limitation, wars or conflicts and public health crises; cybersecurity threats; risks related to the transition or physical impacts of climate cha nge and other natural disasters or meeting regulatory requirements; our reliance on certain customers; the United States (“U.S.”) defense budget and risks associated with being a government supplier including government audits and investigations; failure to maintain government or industry approvals; risks related to changes in laws and regulations, including increases in compliance costs a nd potential changes in trade policies and tariffs; potential environmental liabilities; liabilities arising in connection with litigation; risks and costs associated with our international sales and operations; and other factors. Further information regarding the important factors that could cause actual results to differ materially from projected results can be found in TransDigm Group’s most recent Annual Report on Form 10-K and other reports that TransDigm Group or its subsidiaries have filed with the Securities and Exchange Commission. You are cautioned not to place undue reliance on our forward-looking statements. TransDigm Group Incorporated assumes no obligation to, and expressly disclaims any obligation to, update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. SPECIAL NOTICE REGARDING PRO FORMA AND NON-GAAP INFORMATION This presentation sets forth certain pro forma financial information. This pro forma financial information gives effect to certain recently completed acquisitions and divestitures. Such pro forma information is based on certain assumptions and adjustments and does not purport to present TransDigm's actual results of operations or financial condition had the transactions reflected in such pro forma financial information occurred at the beginning of the relevant period, in the case of income statement information, or at the end of such period, in the case of balance sheet information, nor is it necessarily indicative of the results of operations that may be achieved in the future. This presentation also sets forth certain non-GAAP financial measures. A presentation of the most directly comparable GAAP measures and a reconciliation to such measures are set forth in the appendix. Forward Looking Statements & Special Notice Regarding Pro Forma and Non-GAAP Information 2
Page 4
Highly engineered aerospace components Proprietary products Distinguishing Characteristics Proprietary Revenues (1) Pro Forma Revenues (1) Pro Forma EBITDA As Defined (1) Significant aftermarket content High free cash flow (1) Pro forma revenue is for the fiscal year ended 9/30/2025. Includes full year impact of the Simmonds Precision Products, Inc. acquisition completed October 2025 and Servotronics, Inc. acquisition completed July 2025. Excludes Jet Parts Engineering and Victor Sierra Aviation Holdings acquisition completed April 2026. Please see the Special Notice Regarding Pro Forma and Non-GAAP Information. TransDigm Overview Non- Proprietary Proprietary OEM Aftermarket Comm OEM 25% Comm Afterma rket 32% Defen se 43% 3
Page 5
65% Com Transport Q3 Review – Pro Forma Revenues⁽¹⁾ Commercial OEM: Q3 ’26 Commercial Transport Revenue Up 25% Q3 ’26 Business Jet/Helicopter Revenue Up 3% Commercial Aftermarket: Q3 ’26 Commercial Transport Revenue Up 18% Q3 ’26 Business Jet/Helicopter Revenue Up 13% Defense: Q3 ’26 Defense Aftermarket Growth Outpaced Defense OEM Revenue Growth Well Distributed Across Businesses Highlights Q3 YTD Commercial OEM: Up 17% Up 15% Commercial Aftermarket: Up 17% Up 13% Defense: Up 11% Up 10% Actual vs. Prior Year 2026 Q3 Financial Performance by Markets – Pro Forma 35% Biz Jet/Heli (1) Pro forma revenue for all periods. Includes full year impact of the Simmonds Precision Products, Inc. acquisition completed October 2025 and Servotronics, Inc. acquisition completed July 2025. Excludes Jet Parts Engineering and Victor Sierra Aviation Holdings acquisition completed April 2026. Please see the Special Notice Regarding Pro Forma and Non-GAAP Information. 20% Biz Jet/Heli 80% Com Transport 4
Page 6
($ in millions, except per share amounts) Q3 FY 2026 Q3 FY 2025 Revenue $2,741 $2,237 22.5% Increase Gross Profit $1,628 $1,332 59.4% 59.5% -0.1% SG&A $332 $242 % to Sales 12.1% 10.8% 1.3% Interest Expense - Net $514 $397 29.5% Increase EBITDA As Defined $1,447 $1,217 18.9% Increase Margin % 52.8% 54.4% Adjusted EPS $10.87 $9.60 13.2% Increase GAAP Tax Rate 24.3% 22.4% Adjusted Tax Rate 24.0% 24.2% Third Quarter 2026 Select Financial Results • Interest on the debt raised 5 Organic growth 13% • Driven by double-digit growth in all 3 major market channels • Offset by lower Non-Aero growth • Application of our value-driven operating strategy • Acquisition dilution
Page 7
25% Commercial OEM 32% Commercial Aftermarket 43% Defense High Single-Digit to Low Double-Digit % Range Market FY 2025 Pro Forma Revenue Mix Mid-Teens % Range Low Double-Digit % Range FY 2026 Expected Growth Market Growth Assumptions(1) Fiscal 2026 Outlook Guidance Summary (1) Pro forma revenue is for the fiscal year ended 9/30/2025. Includes full year impact of the Simmonds Precision Products, Inc. acquisition completed October 2025 and Servotronics, Inc. acquisition completed July 2025. Excludes Jet Parts Engineering and Victor Sierra Aviation Holdings acquisition completed April 2026. Please see the Special Notice Regarding Pro Forma and Non-GAAP Information. ($ in millions, except per share amounts) 6 Low High Revenues 10,470$ 10,550$ Net Income 2,102$ 2,150$ GAAP EPS 35.38$ 36.21$ EBITDA As Defined 5,490$ 5,550$ % of sales 52.4% 52.6% Adj. EPS 40.62$ 41.46$ FY 26 Guidance Current Prior ∆ Revenues 10,510$ 10,360$ 150$ EBITDA As Defined 5,520$ 5,420$ 100$ % of sales 52.5% 52.3% Adj. EPS 41.04$ 39.52$ 1.52$ FY 26 Guidance Midpoint Change
Page 8
Fiscal 2026 Select Financial Assumptions (1) Other EBITDA As Defined Add-Backs primarily include estimates for refinancing costs, foreign currency gains or losses, employer withholding taxes on stock option exercises, acquisition-related expenses and adjustments and other, net. Select Financial Assumptions for Fiscal 2026 Prior Assumptions (Issued May 2026) Updated Assumptions Capital Expenditures $280 to $310 million No change Full Year Net Interest Expense ≈ $2.02 billion (includes $60 million of interest income) No change Full Year Effective Tax Rate ≈ 22% to 24% for GAAP EPS, Adjusted EPS and Cash Taxes No change Depreciation & Amortization Expense (ex backlog) $395 to $405 million No change Backlog Amortization $35 to $40 million No change Non-Cash Stock Compensation and Deferred Compensation Expense $160 to $180 million No change Other EBITDA As Defined Add- Backs (1) $85 to $95 million $105 to $115 million Weighted Average Shares 58.0 million 57.7 million 7
Page 9
FY 2026 Guidance Midpoint Net income 2,126$ Adjustments: Depreciation and amortization expense 438 Interest expense - net 2,020 Income tax provision 653 EBITDA 5,237 Adjustments: Acquisition transaction and integration-related expenses (1) 90 Non-cash stock and deferred compensation expense (1) 170 Other, net (1) 23 Gross Adjustments to EBITDA 283 EBITDA As Defined $5,520 EBITDA As Defined Margin (1) 52.5% GAAP earnings per share $35.80 Adjustments to earnings per share: Inclusion of the dividend equivalent payments 1.03 Acquisition transaction and integration-related expenses 1.65 Non-cash stock and deferred compensation expense 2.33 Other, net 0.23 Adjusted earnings per share $41.04 Weighted-average shares outstanding 57.7 GAAP & Adj Tax Rate 22% - 24% Reconciliation of Fiscal 2026 Outlook (1) Refer to tables in Appendix for definitions of Non-GAAP measurement adjustments. ($ in millions, except per share amounts) 8 Includes approx. $38m of backlog amortization
Page 10
Full Year Guidance Mid-Point GAAP earnings per share 9.39$ 8.47$ 25.20$ 24.31$ 35.80$ Adjustments to earnings per share: Dividend equivalent payments - - 1.02 0.83 1.03 Acquisition transaction and integration- related expenses 0.54 0.20 1.16 0.60 1.65 Non-cash stock and deferred compensation expense 0.87 0.67 1.55 1.62 2.33 Tax adjustment on income from continuing operations before taxes 0.04 (0.19) (0.20) (0.67) - Other, net 0.03 0.45 0.21 (0.16) 0.23 Adjusted earnings per share 10.87$ 9.60$ 28.94$ 26.53$ 41.04$ Thirteen Week Periods Ended Thirty-Nine Week Periods Ended September 30, 2026June 28, 2025June 27, 2026June 28, 2025June 27, 2026 Reconciliation of GAAP EPS to Adjusted EPS - Guidance 9
Page 11
Actual ($ in millions) 6/27/26 Rate Cash $2,773 $910mm revolver – S + 2.250% $1,000mm AR securitization facility (1) 725 S + 1.350% First lien term loan J due 2031 3,578 S + 2.500% First lien term loan K due 2030 3,526 S + 2.250% First lien term loan L due 2032 1,477 S + 2.500% First lien term loan M due 2032 2,488 S + 2.500% First lien term loan N due 2033 1,800 S + 2.500% Senior secured notes due 2028 2,100 6.750% Senior secured notes due 2029 2,750 6.375% Senior secured notes due 2030 1,450 6.875% Senior secured notes due 2031 1,000 7.125% Senior secured notes due 2032 2,200 6.625% Senior secured notes due 2033 1,500 6.000% Senior secured notes due 2034 500 6.250% Total secured debt $25,094 4.7x Total net secured debt $22,321 4.2x Senior subordinated notes due 2029 1,200 4.625% Senior subordinated notes due 2029 750 4.875% Senior subordinated notes due 2033 2,650 6.375% Senior subordinated notes due 2034 2,000 6.750% Senior subordinated notes due 2034 1,700 6.125% Finance Lease Obligations (Gross) 312 Total debt $33,706 6.4x Total net debt $30,933 5.8x FY26 Forecasted Weighted Average Interest Rate 6.2% Capital Structure Capital Structure ($ in millions) (1) On July 10, 2026, the Company amended the AR securitization facility to increase the borrowing capacity from $725 million to $1,000 million at an interest rate of Term SOFR plus 1.350%. 10
Page 12
Interest Rate Sensitivity • Interest rates on TDG’s $33.7Bn of gross Debt is ~ 75% hedged/fixed rate through fiscal year 2029 • Achieved via a combination of interest rate caps, swaps and collars • Significantly reduces near-term exposure to any variable rate increases 11 (1) FY 26 Weighted Average Variable rate is the average Term SOFR for TDG's 2026 fiscal year based on current consensus and management estimates. (2) Interest expense shown includes $60M amortization of debt issuance costs and fees and $60M of Interest income. $ in millions Current FY 26 Assumptions Average Variable Rate (1) ~ 3.8% 5.0% 6.0% 7.0% Interest Expense - Pre-Tax (2) $2,020 $2,130 $2,205 $2,280 Interest Rate - Pre-Tax 6.2% 6.7% 6.9% 7.1%
Page 13
$0 $1,000 $2,000 $3,000 $4,000 $5,000 $6,000 $7,000 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035 Secured Term Loans Secured Notes Sr Sub Notes Calendar Year Debt Maturity Profile and Interest Rates Debt Maturity Profile ($MM) Note 1: $910M Revolver matures in February 2029 Note 2: $1B AR Securitization renews annually in July Debt Maturity Profile 12
Page 14
June 27, 2026 June 28, 2025 June 27, 2026 June 28, 2025 Net Income 540$ 493$ 1,521$ 1,465$ Adjustments: Depreciation and amortization expense 118 91 324 271 Interest expense - net 514 397 1,472 1,152 Income tax provision 173 142 464 411 EBITDA 1,345 1,123 3,781 3,299 Adjustments: Acquisition transaction and integration-related expenses (1) 35 9 66 32 Non-cash stock and deferred compensation expense (2) 65 51 118 124 Other, net (3) 2 34 16 (14) Gross Adjustments to EBITDA 102 94 200 142 EBITDA As Defined 1,447$ 1,217$ 3,981$ 3,441$ EBITDA As Defined, Margin (4) 52.8% 54.4% 52.6% 53.8% (4) The EBITDA As Defined Margin represents the amount of EBITDA As Defined as a percentage of net sales. Thirteen Week Periods Ended Thirty-Nine Week Periods Ended (1) Repr esents c osts inc ur r ed to integr ate ac quir ed businesses into our oper ations; fac ility r eloc ation c osts and other ac quisition-r elated c osts; tr ansac tion and v aluation-r elated costs for acquisitions comprising deal fees, legal, financial and tax due diligence expenses; and amortization expense of inventory step-up recorded in connection with the purchase accounting of acquired businesses. (2) Represents the compensation expense recognized under our stock option plans and deferred compensation plans. (3) Primarily represents foreign currency transaction gains or losses, costs expensed related to debt financing activities, including new issuances, extinguishments, refinancings and amendments to existing agreements, payroll withholding taxes related to dividend equivalent payments and stock option exercises, non-service related pension costs, deferred compensation payments and other miscellaneous income or expense, such as gain on sale of business. Appendix: Reconciliation of Net Income to EBITDA and EBITDA As Defined ($ in millions) 13
Page 15
Reported Earnings Per Share June 27, 2026 June 28, 2025 June 27, 2026 June 28, 2025 Net i ncome 540$ 493$ 1,521$ 1,465$ Less: Net income attributable to noncontrolling interests (1) (1) (2) (1) Net income attributable to TD Group 539 492 1,519 1,464 Less: Dividends paid on participating securities - - (59) (49) Net income applicable to TD Group common stockholders - basic and diluted 539$ 492$ 1,460$ 1,415$ Weighted-average shares outstanding under the two-class method: Weighted-average common shares outstanding 55.7 56.2 56.1 56.2 Vested options deemed participating securities 1.7 1.9 1.8 2.0 Total shares for basic and diluted earnings per share 57.4 58.1 57.9 58.2 Earnings per share -- basic and diluted 9.39$ 8.47$ 25.20$ 24.31$ Adjusted Earnings Per Share Net i ncome 540$ 493$ 1,521$ 1,465$ Gross adjustments to EBITDA 102 94 200 142 Purchase accounting backlog amortization 7 6 23 14 Tax adjustment (1) (25) (35) (67) (78) Adjusted net income 624$ 558$ 1,677$ 1,543$ Adjusted diluted earnings per share under the two-class method 10.87$ 9.60$ 28.94$ 26.53$ Thirteen Week Periods Ended Thirty-Nine Week Periods Ended (1) For the thirteen and thirty-nine week periods ended June 27, 2026 and June 28, 2025, the Tax adjustment represents the tax effect of the adjustments at the applicable effective tax rate, as well as the impact on the effective tax rate when excluding the excess tax benefits on stock option exercises. Stock compensation expense is excluded from adjusted net income and therefore we have excluded the impact that the excess tax benefits on stock option exercises have on the effective tax rate for determining adjusted net income. Appendix: Reconciliation of Reported EPS to Adjusted EPS ($ in millions, except per share amounts) 14
Page 16
T June 27, 2026 June 28, 2025 Net cash provided by operating activities 1,691$ 1,531$ Adjustments: Changes in assets and liabilities, net of effects from acquisitions and sales of businesses 305 337 Interest expense - net (1) 1,437 1,124 Income tax provision - current 466 414 Gain on sale of businesses, net - 17 Non-cash stock and deferred compensation expense (2) (118) (124) EBITDA 3,781 3,299 Adjustments: Acquisition transaction and integration-related expenses (3) 66 32 Non-cash stock and deferred compensation expense (2) 118 124 Other, net (4) 16 (14) EBITDA As Defined 3,981$ 3,441$ (4) Primarily represents foreign currency transaction gains or losses, costs expensed related to debt financing activities, including new issuances, extinguishments, refinancings and amendments to existing agreements, payroll withholding taxes related to dividend equivalent payments and stock option exercises, non-service related pension costs, deferred compensation payments and other miscellaneous income or expense, such as gain on sale of business. (3) Repr esents c osts inc ur r ed to integr ate ac quir ed businesses into our oper ations; fac ility r eloc ation c osts and other ac quisition-r elated c osts; tr ansac tion and v aluation- related costs for acquisitions comprising deal fees, legal, financial and tax due diligence expenses; and amortization expense of inventory step-up recorded in connection with the purchase accounting of acquired businesses. (1) Represents interest expense, net of interest income, excluding the amortization of debt issuance costs and premium and discount on debt. (2) Represents the compensation expense recognized under our stock option plans and deferred compensation plans. Thirty-Nine Week Periods Ended Appendix: Reconciliation of Net Cash Provided by Operating Activities to EBITDA and EBITDA As Defined ($ in millions) 15