TransDigm Group Incorporated

Q3 performance topped expectations; guidance raised - TransDigm reported strong Q3 results with EBITDA As Defined margin of 52.8% (including >200 bps dilution from recent acquisitions). - Revenue growth was healthy across all 3 channels (Commercial OEM, Commercial Aftermarket, Defense), with organic growth ~13% in Q3. - Fiscal 2026 guidance raised at midpoint: - Revenue midpoint: $10.51B (~+19% YoY). - EBITDA As Defined midpoint: $5.52B (~+16% YoY), margin ~52.5%. - Adjusted EPS midpoint: $41.04. - Company cited cash generation strength: operating cash flow >$700M in Q3 and ~$2.8B cash at quarter end.

Market demand signals remain positive; aftermarket strength persists (surprising vs “flight activity lag”) - Commercial OEM: Q3 revenue ~+17% YoY, driven by rising Boeing/Airbus production rates; management expects mid-teens growth for FY26 commercial OEM. - Commercial aftermarket: Q3 revenue ~+17% YoY (excluding newly acquired Jet Parts/Victor Sierra). Notably: - Commercial transport aftermarket (ex-bizjet) +18% YoY. - Management raised FY26 commercial aftermarket growth outlook to low-double-digit % (from high-single-digit/previous range). - Defense: Q3 revenue ~+11% YoY with bookings up both YoY and sequentially; FY26 defense growth assumption high-single-digit to low-double-digit. - Potential challenge noted: aircraft RPM declines from the Middle East conflict—but management said they do not yet see meaningful impact on aftermarket demand.

Middle East and RPM/Rates risk acknowledged but not yet material - Management monitored conflict-related effects (jet fuel pricing, short-term capacity changes) and explicitly said they have not seen material slowdowns in commercial aftermarket so far. - They continue to monitor closely with customers and would take action if the situation changes. - Investor takeaway: risk exists, but management currently views it as contained through Q3 and into current expectations.