TransDigm (NYSE: TDG) sales jump 23% in the quarter, but net income slips

Posted by Latisha Jones on Nov 10th, 2026

What happened

TransDigm Group Incorporated (NYSE: TDG) said fourth-quarter net sales rose 23% to $2.99 billion, but net income fell 4% on higher interest costs.

Net sales were $2.44 billion in the prior year's quarter. Net income was $586 million, down from $609 million. The company blamed a larger gross debt balance and higher tax expense. Organic sales growth was 14%, below the reported rate.

For fiscal 2026, net sales rose 20% to $10.56 billion from $8.83 billion. Net income edged up 2% to $2.11 billion from $2.07 billion. Organic growth for the year was 11%, or 13% excluding non-aerospace sales.

Key numbers

Metric	Latest	Change	Source
Q4 net sales	$2.99 billion	from $2.44 billion, +23%	SEC 8-K
Fiscal 2026 net sales	$10.56 billion	from $8.83 billion, +20%	SEC 8-K
Q4 net income	$586 million	from $609 million, -4%	SEC 8-K
Fiscal 2026 EBITDA As Defined	$5.56 billion	from $4.76 billion, +17%	SEC 8-K
Fiscal 2026 EBITDA As Defined margin	52.7%	from 53.9%, -1.2 percentage points	Calculated from SEC 8-K
Fiscal 2027 net sales guidance midpoint	$12.05 billion	from $10.56 billion, +14.1%	Calculated from SEC 8-K

Where margin and profit stand

Profit grew more slowly than sales. EBITDA As Defined, the company's non-GAAP profit measure, rose 20% to $1.58 billion in the quarter. Its margin slipped to 53.0% from 54.2% a year earlier. TransDigm said recent acquisitions cut the margin by about two percentage points.

For the year, EBITDA As Defined climbed 17% to $5.56 billion from $4.76 billion. The margin was 52.7%, compared with 53.9% in fiscal 2025. Adjusted earnings per share were $41.35, up from $37.33. Net interest expense was $2.01 billion, up from $1.57 billion.

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Debt, deals and buybacks

TransDigm funded growth with more debt. Long-term debt reached $33.74 billion on Sept. 30, up from $29.17 billion a year earlier. Cash fell to $2.28 billion from $2.81 billion.

On Sept. 28, the company sold $3.0 billion of 6.75% Senior Secured Notes due January 2035. It used the net proceeds to buy back about $1.8 billion of its $2.1 billion of 6.75% Senior Secured Notes due 2028 in a tender offer, and for general corporate purposes.

TransDigm also completed the Prince Izant acquisition for approximately $1.07 billion in cash, including certain tax benefits. Prince Izant makes brazing alloys and specialty metal components.

Share repurchases totaled $943 million in the quarter, or 820 thousand shares at an average $1,150. For the year they reached $2.8 billion, or 2.3 million shares at an average $1,187. CEO Mike Lisman said more than $7 billion went to acquisitions and buybacks in fiscal 2026, including approximately $4.4 billion on acquisitions.

Why it matters

OptimistFi has argued that TransDigm's value rests on proprietary aircraft parts that support aftermarket demand, pricing power and acquisition reinvestment. The results fit that view. Organic growth ran in double digits while the company kept buying businesses and repurchasing shares.

The guidance extends the growth path. TransDigm expects fiscal 2027 net sales of $11.95 billion to $12.15 billion. OptimistFi's calculation puts the $12.05 billion midpoint $1.49 billion above fiscal 2026, or 14.1% growth. The company guides net income up 17% at the midpoint, earnings per share to $42.06 to $42.91 from $35.51, and adjusted earnings per share to $47.09 to $47.94.

The caveat is margin and leverage. The filing guides the fiscal 2027 EBITDA As Defined margin to approximately 52.0%, below this year's 52.7%. Net income grew far more slowly than sales in fiscal 2026 as interest expense climbed with debt. Part of the reported growth is financed with borrowing.

What's next

TransDigm hosts its earnings call at 10:00 a.m. Eastern on Nov. 10. Fiscal 2027 guidance assumes commercial OEM revenue growth in the high single-digit to low double-digit range. It assumes high single-digit growth for both commercial aftermarket and defense revenue.

Net sales below the low end of the guided range, or a margin under the 52.0% guide, would weaken the case. Growth at or above the midpoint with the margin holding would strengthen it.