TransDigm Q4 EPS Jumps 33% as Sales Hit $2.99B, Guides FY27 Higher

TransDigm Group Incorporated reported on 10 November 2026 that fiscal fourth-quarter net sales rose 23% to $2,988 million and earnings per share climbed 33% to $10.33, while adjusted EPS of $12.44 beat the prior year's $10.82. The Cleveland-based aircraft component maker also issued fiscal 2027 guidance calling for net sales of $11,950 million to $12,150 million and EBITDA As Defined of $6,195 million to $6,345 million, both above fiscal 2026 levels.

Context — Why TransDigm's Q4 Beat Matters Now

TransDigm's fiscal 2026 was a capital deployment year. The company said it deployed over $7 billion across acquisitions and share repurchases, including roughly $4.4 billion in acquisitions spanning Simmonds Precision Products, Jet Parts Engineering, Victor Sierra Aviation, Prince & Izant, and twelve bolt-on deals at the operating unit level.

The fourth quarter closed with the $1.07 billion cash acquisition of Prince & Izant, a maker of brazing alloys and specialty metal components. That deal contributed roughly two percentage points of margin dilution, the company said, a recurring theme in recent TransDigm results as acquired businesses carry lower initial profitability than the core aftermarket franchise.

Interest expense is the other pressure point. Q4 interest expense, net, rose to $536 million from $420 million a year earlier, and full-year interest expense reached $2,008 million versus $1,572 million in fiscal 2025. The increase reflects a higher gross debt balance tied to acquisition funding.

Despite that, the company's value-driven operating strategy on its core aerospace components business kept adjusted net income rising 12% in the quarter to $706 million. The quarter's results exceeded the high end of management's most recent guidance for both revenue and EBITDA As Defined, according to CEO Mike Lisman.

Data — What the Numbers Show

Q4 net sales of $2,988 million compare with $2,437 million a year earlier. Organic sales growth was 14% of net sales. Net income slipped 4% to $586 million from $609 million, driven by higher interest and tax expense, but adjusted net income rose 12% to $706 million.

Metric	Q4 FY26	Q4 FY25	Change
Net sales	$2,988M	$2,437M	+23%
EPS	$10.33	$7.75	+33%
Adjusted EPS	$12.44	$10.82	+15%
EBITDA As Defined	$1,583M	$1,320M	+20%
EBITDA As Defined margin	53.0%	54.2%	-1.2 pts

Full-year fiscal 2026 net sales rose 20% to $10,557 million from $8,831 million, with organic growth of 11% and 13% excluding non-aerospace sales. Full-year net income was $2,108 million, up 2%, while adjusted net income rose 10% to $2,383 million, or $41.35 per share.

EBITDA As Defined for the full year rose 17% to $5,563 million, with a margin of 52.7% versus 53.9% in fiscal 2025. The company said the full-year margin included roughly two percentage points of acquisition-related dilution. GAAP EPS was reduced by $1.03 per share in fiscal 2026 and $3.58 per share in fiscal 2025 from dividend equivalent payments under stock option plans.

Analysis — What It Means for Markets and Sectors

TransDigm's results sit at the intersection of aerospace aftermarket demand and defense spending. The company's fiscal 2027 assumptions call for commercial OEM revenue growth in the high single-digit to low double-digit percentage range, commercial aftermarket growth in the high single-digit range, and defense growth in the high single-digit range.

Those assumptions matter for the broader aerospace supply chain. TransDigm supplies components used on nearly all commercial and military aircraft in service today, so its organic growth rate is a read on aftermarket volume trends across carriers and MRO providers. A 14% organic growth quarter implies steady flight-hour demand, though the report does not break out aftermarket versus OEM revenue by segment.

The balance sheet is the key risk. TransDigm ended the quarter with a $3.0 billion private offering of 6.75% senior secured notes maturing January 2035, using proceeds to repurchase roughly $1.8 billion of its $2.1 billion outstanding 6.75% notes due 2028. Refinancing costs of $27 million hit the quarter. Higher rates on new issuance would pressure interest coverage if the company continues its acquisition strategy.

A counter-argument: net income actually fell 4% in Q4 and rose only 2% for the full year. The headline EPS growth is flattered by a lower share count, with weighted-average shares down to 56.7 million from 58.1 million. Share repurchases of $943 million in Q4 and $2.8 billion for the year reduced the denominator. Investors focused on GAAP earnings see a slower picture than the adjusted figures suggest.

Positioning-wise, TransDigm remains a widely held aerospace name. The buyback pace and M&A cadence signal management's confidence in cash generation, while the debt-funded strategy keeps credit investors focused on use metrics.

Outlook — What to Watch Next

TransDigm guided fiscal 2027 net income to $2,442 million to $2,490 million, EPS to $42.06 to $42.91, and adjusted EPS to $47.09 to $47.94. EBITDA As Defined is guided to $6,195 million to $6,345 million, implying a margin of approximately 52.0%.

That margin guide is below the 52.7% delivered in fiscal 2026, suggesting continued acquisition dilution. The company said it enters fiscal 2027 with significant liquidity and financial flexibility for additional M&A.

The earnings call scheduled for 10 November 2026 at 10:00 a.m. Eastern Time is the next catalyst, where management may detail segment-level aftermarket trends and the pace of further dealmaking. Investors will also watch whether the 52.0% margin guide proves conservative given the company's record of exceeding guidance.

Frequently Asked Questions

Why did TransDigm's net income fall while EPS rose?

Net income fell 4% in Q4 to $586 million because interest expense rose to $536 million from $420 million and tax expense increased. EPS rose 33% to $10.33 because the weighted-average share count dropped to 56.7 million from 58.1 million, the result of $2.8 billion in full-year share repurchases at an average price of $1,187 per share.

What does TransDigm's FY27 guidance imply for the aerospace cycle?

The company's assumptions call for high single-digit to low double-digit growth in commercial OEM, high single-digit growth in commercial aftermarket, and high single-digit defense growth. Those figures imply continued flight-hour recovery and steady defense budgets, but the report does not disclose segment revenue or order-book data that would confirm demand durability.

How does the Prince & Izant acquisition affect TransDigm's margins?

Prince & Izant, acquired for approximately $1.07 billion in cash, contributed roughly two percentage points of margin dilution in Q4 and the full year. The company's fiscal 2027 EBITDA As Defined margin guide of approximately 52.0% sits below the 52.7% delivered in fiscal 2026, reflecting continued drag from recently acquired businesses before integration and pricing actions take effect.

Bottom Line

TransDigm beat its own Q4 guidance and guided fiscal 2027 revenue and EBITDA higher, but the 52.0% margin guide signals acquisition dilution persists.

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