Triumph Group (TGI) Q2 2025 earnings summary

Executive summary

• Achieved tenth consecutive quarter of year-over-year sales growth, with Q2 FY2025 net sales rising to $287.5 million, driven by strong aftermarket performance and Interiors segment returning to profitability after cost reductions and settlements.

• Aftermarket sales surged 13%–34% year-over-year, now representing 33% of sales and 61% of profit for the quarter, driving margin expansion and profitability.

• Interiors business returned to profitability due to settlements with Boeing and significant cost reductions, positioning it for higher future margins.

• Cash flow outperformed guidance by $35 million, with strong working capital management and liquidity at $148 million.

• Backlog increased to $1.90 billion, with $1.20 billion expected to ship by September 2025.

Financial highlights

• Q2 net sales were $287.5 million (up 1% year-over-year), with adjusted operating income up to $36 million (13% margin) and adjusted EBITDAP/EBITDA up to $43 million (15% margin).

• Q2 net income reached $11.9 million ($0.15 per diluted share), reversing a prior year loss.

• Gross margin for Q2 increased to 32.9% from 26.3% year-over-year.

• Free cash use in Q2 was $45 million, including a $42 million semiannual interest payment; interest payments were $27 million lower than last year due to debt reduction.

• Net debt at quarter-end was $868 million, down 43% year-over-year, with leverage reduced to 5.5x and liquidity at $148 million.

Outlook and guidance

• FY25 net sales expected at approximately $1.2 billion, with adjusted EBITDAP/EBITDA guidance raised to $190–$195 million (16% margin) and free cash flow guidance increased to $20–$30 million.

• Operating income guidance raised to $140.5–$145.5 million (12% margin); EPS guidance raised to $0.47–$0.53.

• Third quarter free cash flow expected to be positive, with rapid working capital burn-off forecasted in Q4.

• Multi-year targets reaffirmed, with terminal year EBITDA margin over 20% and free cash flow conversion approaching 10%.

• Full-year capital expenditures for FY2025 expected to be $20–$25 million, focused on manufacturing efficiency.