TransDigm Guides 14% Revenue Growth for Fiscal 2027

By Sophie Lindqvist

TransDigm expects revenue of roughly $12.05 billion in fiscal 2027, growth of about 14 percent, on continued commercial aircraft production increases, aftermarket demand and a strong defense backlog. The guidance, detailed on the Q4 earnings call, follows a fiscal 2026 in which all three major end markets posted double-digit growth in both the fourth quarter and the full year. Revenue and EBITDA As Defined (the company's adjusted profit measure) exceeded the most recent guidance, Chief Executive Officer Mike Lisman said.

The forecast lands despite what Lisman called a short-term "air pocket" in commercial aerospace, driven by elevated oil prices and weaker-than-forecast passenger traffic. He described the disruption as temporary rather than a source of lasting demand destruction. One air pocket, in other words. The company repurchased approximately $940 million of stock in the fourth quarter, bringing the fiscal-year total to $2.75 billion.

What does fiscal 2027 look like?

TransDigm projected EBITDA As Defined of $6.27 billion at the midpoint, up approximately 13 percent, and adjusted earnings per share of $47.51. The expected EBITDA margin of roughly 52 percent absorbs about two percentage points of dilution from recent acquisitions.

The outlook includes Prince & Izant, the acquisition that closed in late September, and assumes no additional acquisitions or divestitures. Management expects:

• Commercial original equipment manufacturer (OEM) revenue growth at a high-single-digit to low-double-digit rate
• Commercial aftermarket revenue growth at a high-single-digit rate
• Defense revenue growth at a high-single-digit rate

Chief Operating Officer Joel Reiss said the aftermarket outlook reflects a bottom-up forecast developed with input from airline customers and distributors. Revenue passenger kilometers, a measure of air traffic, are expected to slow, but aftermarket demand does not move in lockstep with that metric, he noted.

Lisman cautioned that first-quarter revenue, EBITDA As Defined and margin should run below the remaining quarters, because the period contains about 10 percent fewer working days. The calendar, not the customer, is the culprit.

How strong was the aftermarket?

Commercial aftermarket revenue rose approximately 17 percent in the fourth quarter on a pro forma basis and 14 percent for the full year, Reiss said. Fourth-quarter commercial transport aftermarket revenue increased 16 percent, while business jet aftermarket revenue climbed 20 percent.

Aftermarket bookings exceeded sales for the full fiscal year, and fourth-quarter bookings rose by double digits from a year earlier. The company had not seen a meaningful impact on aftermarket orders from elevated oil prices or Middle East tensions affecting passenger traffic, Reiss said.

Commercial OEM revenue increased approximately 15 percent in both the quarter and the full year on a pro forma basis, supported by higher Boeing and Airbus production rates. Defense revenue rose approximately 12 percent in the quarter and 10 percent for the year, with full-year bookings significantly exceeding the prior year.

The pro forma comparisons assume the same mix of businesses in both periods. They include Simmonds Precision Products, Jet Parts Engineering and Victor Sierra Aviation, but exclude Prince & Izant.

Where is the capital going?

TransDigm deployed approximately $4.4 billion on acquisitions in fiscal 2026, covering four standalone businesses and nearly $440 million across 12 smaller bolt-on deals. Lisman said the company continues to focus on aerospace and defense targets and holds more than $10 billion of acquisition capacity.

During the analyst question-and-answer session, Lisman described the blocked Stellant acquisition as a one-off situation that would not change TransDigm's approach to future deals. Regulators occasionally object. TransDigm intends to keep shopping.

Reiss said capital expenditures should reach about $380 million in fiscal 2027, roughly $100 million more than in fiscal 2026. About 70 percent of that spending supports new-business and productivity projects, including more than 230 new automation projects.

What about debt and Washington?

Chief Financial Officer Sarah Wynne said TransDigm ended fiscal 2026 with $2.3 billion in cash and a net debt-to-EBITDA ratio of 5.9 times. Approximately 75 percent of its $35 billion in gross debt is fixed or hedged through fiscal 2029.

Wynne forecast approximately $2.9 billion in fiscal 2027 free cash flow, defined as EBITDA As Defined less cash interest, capital expenditures and cash taxes. She expects leverage to fall below five times by year-end, assuming no further acquisitions, divestitures, share repurchases or dividends. Assumptions of that kind have historically had a short shelf life at this company.

Reiss also addressed pending defense right-to-repair legislation, saying the final requirements remain uncertain but that TransDigm does not currently expect a material impact. Direct sales to the U.S. government have historically represented approximately 6 percent of total sales, he said, and the portion that could lend itself to repair is estimated at less than 1 percent.

TransDigm designs and supplies highly engineered aerospace components, including mechanical and electromechanical systems, pumps, valves, ignition systems, batteries, power-conditioning devices and cockpit components, serving commercial, military and business aviation markets worldwide.