TransDigm Sales Jump 23% in Q4; Net Income Slips 4% on Debt Costs

TransDigm Group (NYSE: TDG) reported fourth-quarter net sales of $2.99 billion, up 23% from $2.44 billion a year earlier, according to its SEC 8-K filing dated Nov. 10, 2026. Net income moved the other way: $586 million, down 4% from $609 million, on a larger gross debt balance and higher tax expense. The gap between those two numbers is the story.

Organic sales growth (revenue excluding acquisitions and currency effects) ran at 14% in the quarter, below the reported 23%. For fiscal 2026 as a whole, 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, while organic growth reached 11%, or 13% excluding non-aerospace sales.

Where do margins and profit stand?

Profit grew more slowly than sales, and TransDigm told investors why. EBITDA As Defined (the company's non-GAAP profit measure) rose 20% to $1.58 billion in the quarter, with its margin slipping to 53.0% from 54.2%. The company said recent acquisitions cut the margin by roughly two percentage points.

For the full year, EBITDA As Defined climbed 17% to $5.56 billion from $4.76 billion, with margin at 52.7% versus 53.9% in fiscal 2025. Adjusted earnings per share came in at $41.35, up from $37.33. Net interest expense reached $2.01 billion, up from $1.57 billion. Interest is now consuming more than a quarter of EBITDA. That is a financing choice, not an accident.

How is the company funding its growth?

TransDigm funded expansion 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. The capital structure, in short, grew faster than the cash pile.

The debt activity was specific:

• On Sept. 28, the company sold $3.0 billion of 6.75% Senior Secured Notes due January 2035.
• It used the 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 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 price of $1,150. For the year, buybacks reached $2.8 billion, or 2.3 million shares at an average of $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.

What does fiscal 2027 guidance promise?

The guidance extends the growth path, at a price. TransDigm expects fiscal 2027 net sales of $11.95 billion to $12.15 billion; the $12.05 billion midpoint sits $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 happens next?

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

The watch items are now defined. 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.