Teledyne’s fourth quarter results received a positive market reaction, reflecting management’s focus on higher-margin defense and imaging businesses as well as continued recovery in commercial segments. CEO George Bobb credited robust performance at Teledyne FLIR, citing “infrared imaging components and subsystems, many of which are used in our customers’ unmanned systems, increased over 20%.” The quarter was also supported by record sales of marine instrumentation and strong execution across long-cycle defense programs. Management pointed to operational cost controls and the impact of recent acquisitions as key contributors to margin improvement.
Is now the time to buy TDY? Find out in our full research report (it’s free for active Edge members).
Teledyne (TDY) Q4 CY2025 Highlights:
- Revenue: $1.61 billion vs analyst estimates of $1.57 billion (7.3% year-on-year growth, 2.5% beat)
- Adjusted EPS: $6.30 vs analyst estimates of $5.83 (8% beat)
- Adjusted EBITDA: $470 million vs analyst estimates of $396.3 million (29.2% margin, 18.6% beat)
- Adjusted EPS guidance for the upcoming financial year 2026 is $23.65 at the midpoint, in line with analyst estimates
- Operating Margin: 20.4%, up from 15.8% in the same quarter last year
- Organic Revenue rose 2.5% year on year (beat)
- Market Capitalization: $28.92 billion
While we enjoy listening to the management's commentary, our favorite part of earnings calls are the analyst questions. Those are unscripted and can often highlight topics that management teams would rather avoid or topics where the answer is complicated. Here is what has caught our attention.
Our Top 5 Analyst Questions From Teledyne’s Q4 Earnings Call
- Greg Konrad (Jefferies) asked about the split between organic and inorganic growth for 2026; Executive Chairman Robert Mehrabian responded that most growth would be organic at around 3.6%, with smaller contributions from recent acquisitions.
- Zach Waljasser (UBS) inquired about the cadence of earnings growth throughout the year; Mehrabian explained that easier Q1 comparisons would drive stronger early growth, with typical seasonality expected over the full year.
- Andrew Buscaglia (BNP Paribas) sought details on the size and margin profile of the tracking layer satellite contract; CEO George Bobb estimated over $100 million in revenue across several years and noted margins would be close to the corporate average.
- Rob Jamieson (Vertical Research Partners) questioned the outlook for the test and measurement segment; Mehrabian and Bobb cited ongoing strength in specialty oscilloscopes and demand from automotive and data center markets, with protocol analyzers expected to rebound later in the year.
- Joe Giordano (TD Cowen) raised concerns about memory price increases and potential risks; Mehrabian said net risk was minimal due to offsetting benefits from sales into memory supplier end markets.
Catalysts in Upcoming Quarters
In upcoming quarters, the StockStory team will be tracking (1) the pace of defense contract execution, particularly for unmanned systems and missile tracking satellites, (2) signs of continued stabilization and growth in short-cycle commercial businesses, and (3) the integration and performance of newly acquired businesses such as Didi Scientific. Additionally, capital deployment decisions between acquisitions and share repurchases will serve as a key indicator of management’s strategic flexibility.
Teledyne currently trades at $616.50, up from $566.23 just before the earnings. At this price, is it a buy or sell? The answer lies in our full research report (it’s free).
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