Teledyne Technologies Incorporated
TDY · NYSE
Sep 2026
Next quarter
Reports Oct 28, 2026.
Consensus is $6.15 EPS for Sep 2026 across 4 estimates, ranging $6.11 to $6.20.
TDY Jun 2026
- 8.65%
- +0.11%
- $5.78
- $6.28
- —
- $1.66B
Reported results
- $1.66B
- 44.40%
- $333.20M
- 20.04%
- $251.70M
- $5.37
Highlights
- Record quarter: Teledyne reported all-time quarterly records for orders, sales and operating profit; revenue was $1.66 billion, up 9.8% year over year and 6.6% from $1.56 billion in Q1 FY2027.
- EPS beat: Non-GAAP diluted EPS was $6.28 versus the $5.78 consensus, an 8.65% surprise, while GAAP diluted EPS was $5.37 versus $4.43 a year ago and $4.85 in the prior quarter.
- Margin expansion: GAAP operating income increased 19.8% year over year to $333.2 million, lifting operating margin to 20.0% from 18.4%; non-GAAP margin rose to 23.4% from 22.2%.
- Digital Imaging led: Revenue increased 12.7% to $868.7 million and operating income rose 42.3% to $170.2 million, driven by infrared imaging, surveillance, industrial and scientific imaging, and X-ray products.
- Broad-based growth: Aerospace and Defense Electronics revenue rose 8.2% to $286.4 million and operating income increased 11.9% to $74.5 million; Engineered Systems revenue grew 8.4% to $119.6 million and operating income rose 24.8% to $15.1 million.
- Instrumentation was mixed: Revenue increased 5.5% to $387.8 million across all three product lines, but operating income slipped 0.2% to $101.4 million because of unfavorable product mix.
- Guidance raised: Full-year 2026 GAAP EPS guidance increased to $20.73-$20.99 from $20.08-$20.44, while non-GAAP guidance rose to $24.45-$24.65 from $23.85-$24.15.
- Cash and backlog: Operating cash flow was $315.2 million and free cash flow was $284.7 million; funded backlog or remaining performance obligations were approximately $5.0 billion and $5.18 billion, respectively.
- Balance sheet strengthened: Teledyne repaid $450.0 million of notes, reducing net debt to $1.69 billion from $2.12 billion at year-end and leaving a 1.1x consolidated leverage ratio.
Analysis
Teledyne’s second quarter was a record operating print, with revenue of $1.66 billion up 9.8% year over year from $1.51 billion and 6.6% sequentially from $1.56 billion. GAAP operating income rose 19.8% to $333.2 million, while net income increased 19.9% to $251.7 million. GAAP diluted EPS was $5.37, up from $4.43 a year ago and $4.85 in Q1. On the company’s non-GAAP measure, EPS was $6.28, 8.65% above the $5.78 consensus, and increased 20.8% year over year.
The quarter was defined by strong Digital Imaging demand and unusually broad growth across the portfolio. Digital Imaging generated 12.7% revenue growth and 42.3% operating-income growth, benefiting from infrared detectors and systems for defense, space, airborne and unmanned applications, along with favorable mix and tariff refunds. Aerospace and Defense Electronics also grew profitably, while Instrumentation’s 5.5% sales increase did not translate into profit growth because of mix. Cash generation supported a $450 million debt repayment, and management raised both GAAP and non-GAAP full-year EPS guidance. The updated outlook implies third-quarter non-GAAP EPS of $6.05-$6.15 and full-year non-GAAP EPS of $24.45-$24.65.
Record results and outlook
- Revenue: Net sales reached $1,662.5 million, up $148.8 million, or 9.8%, from $1,513.7 million in Q2 FY2026. Recent acquisitions contributed $12.2 million, implying that most growth was organic.
- Profitability: GAAP operating income rose to $333.2 million from $278.2 million, while net income attributable to Teledyne increased to $251.7 million from $209.9 million. The effective tax rate was 21.7%, versus 19.3% last year, partly limiting the conversion of operating gains into net income.
- Underlying performance: Excluding $56.0 million of acquired-intangible amortization and $0.2 million of transaction costs, non-GAAP operating income was $389.4 million and margin was 23.4%, compared with $335.9 million and 22.2% a year earlier.
- Guidance: Management raised full-year GAAP EPS guidance by $0.55 at both ends to $20.73-$20.99 and non-GAAP guidance by $0.50 at both ends to $24.45-$24.65. Third-quarter guidance is $5.10-$5.25 GAAP EPS and $6.05-$6.15 non-GAAP EPS.
Digital Imaging strength
- Growth: Digital Imaging revenue increased 12.7% to $868.7 million, with organic growth strongest in infrared detectors, components and subsystems for defense and commercial markets, surveillance systems, industrial and scientific imaging, and X-ray products.
- Product drivers: Infrared imaging sales increased $29.0 million, surveillance systems rose $15.5 million, industrial and scientific imaging increased $9.1 million, and X-ray products added $7.1 million.
- Leverage: GAAP operating income climbed 42.3% to $170.2 million. Non-GAAP operating income increased 31.2% to $217.6 million, as favorable product mix and tariff refunds more than offset higher research and development expense and inventory reserves.
- Investment: Digital Imaging R&D rose 19.7% to $57.7 million, reflecting the timing of FLIR defense and commercial product-development programs.
Other segment performance
- Instrumentation: Revenue rose 5.5% to $387.8 million, with marine instrumentation up $9.7 million, environmental instrumentation up $7.2 million and test and measurement up $3.3 million. Operating income declined 0.2% to $101.4 million because unfavorable mix offset the sales increase.
- Aerospace and Defense Electronics: Revenue increased 8.2% to $286.4 million, led by a $20.8 million increase in defense electronics. Operating income grew 11.9% to $74.5 million, helped by higher sales and lower R&D expense.
- Engineered Systems: Revenue rose 8.4% to $119.6 million and operating income increased 24.8% to $15.1 million. Favorable program mix was the main profit driver.
- Demand mix: U.S. government sales were $421.9 million, or approximately 25% of quarterly revenue, while the company said it continued to benefit from higher global defense spending.
Backlog and cash generation
- Visibility: Management cited approximately $5.0 billion of funded backlog. The filing reported $5,176.1 million of remaining performance obligations at quarter-end, with 72% expected to convert into revenue within 12 months.
- Cash flow: Operating cash flow increased to $315.2 million from $226.6 million, and free cash flow rose to $284.7 million from $196.3 million. The improvement reflected stronger operating results and lower income-tax payments.
- Working capital: Inventory increased to $1,166.4 million from $1,043.3 million at year-end, and first-half cash flow included a $139.5 million inventory investment.
- Capital spending: Second-quarter capital expenditures were $30.5 million, and Teledyne expects approximately $150 million of capital spending for full-year 2026.
Debt and acquisition capacity
- Debt reduction: Teledyne repaid the $450.0 million maturity of its 1.60% senior notes during the quarter. Total debt declined to $2.03 billion from $2.48 billion at year-end, and net debt fell to $1.69 billion from $2.12 billion.
- Liquidity: The consolidated leverage ratio was 1.1x, with $1,160.7 million available under the $1.2 billion credit facility after letters of credit.
- Acquisition strategy: The company completed the $53.6 million DD-Scientific acquisition in January, contributing $6.1 million of quarterly revenue in Instrumentation. Management said it continues to review additional acquisitions, while $1.6 billion remained available under its $2.0 billion share-repurchase authorization; no repurchases were made in the quarter.
