Please see the tables and related footnotes in the earnings release for a presentation of the most directly comparable GAAP measures and applicable reconciliations. Most of our EBITDA comes from aftermarket revenues, which generally have significantly higher margins and over any extended period have typically provided relative stability in the downturns. Lastly, our capital structure and allocations are a key part of our value creation methodology. To do this, we stay focused on both the details of value creation as well as careful allocation of our capital.
As you saw from our earnings release, we closed out the year with a good quarter. For the full year, our fiscal 2025 revenue and EBITDA as defined margins surpassed our most recently published guidance. Airline demand for new aircraft remains high, and the OEMs have long backlogs. OEMs are working to increase aircraft production to meet this demand, but the recovery to date has been bumpy and will likely remain so.
Contributing to this solid Q4 margin is the continued growth in our commercial aftermarket, along with diligent focus on our operating strategy, which is allowing margin performance to expand across all segments. During our full fiscal 2025 and continuing into October, we are pleased to have allocated approximately $7 billion of capital in the aggregate across M&A and return of capital to our shareholders. As you know, we are continuously assessing our capital allocation options, and we were very pleased to return this capital to our shareholders. Regarding the current M&A activities in the pipeline, we continue to actively look for opportunities that fit our model.
| Metric | Period | Current guidance |
|---|---|---|
| Total revenue (midpoint) | FY2026 | $9.85B (~+12%) (new) |
| EBITDA as defined (midpoint) | FY2026 | $5.15B (~+8%), ~52.3% margin (new) |
| Commercial OEM revenue growth | FY2026 | high single-digit to mid-teens % (new) |
| Commercial aftermarket revenue growth | FY2026 | high single-digit % (down) |
| Defense revenue growth | FY2026 | mid-single to high single-digit % (down) |
| Free cash flow | FY2026 | ~$2.4B (flat) |
| CapEx | FY2026 | ~$300M (new) |
| Interest expense | FY2026 | ~$1.9B (~6.3% rate) (new) |
| Tax rate (GAAP/cash/adjusted) | FY2026 | 22%-24% (new) |
| Weighted avg shares | FY2026 | 58.5M (new) |
| Metric | YoY | Note |
|---|---|---|
| Organic growth rate (Q4) | ~+11% | All market channels contributed |
| Commercial OEM revenue (Q4, pro forma) | +7% | Returned to growth on higher build rates after destocking |
| Commercial OEM revenue (FY, pro forma) | -1% | Boeing strike and Airbus ramp-up challenges hurt build rates |
| Commercial aftermarket revenue (Q4) | +11% | All submarkets positive; strength in freight, interiors, engines |
| Commercial aftermarket revenue (FY) | +10% | In line with original expectations; strong interiors and engine content |
| Defense market revenue (Q4) | +16% | New business wins and strong domestic/international performance |
| Defense market revenue (FY) | +13% | New business wins and rising US defense spend outlays |
| EBITDA as defined margin (Q4) | 54.2% | Continued aftermarket growth and operating strategy across segments |
| Free cash flow (FY) | ~$2.4B | Slightly above ~$2.3B estimate |
| Topic | Previous mention | Current period | Trend |
|---|---|---|---|
| Commercial OEM recovery | Brief destocking blip last quarter | Returned to growth in Q4; ramp still bumpy | Improving but uneven |
| Acquisition margin dilution | Servotronics/Simmonds folded in | 200 bps of FY2026 dilution; margins to march up over time | Near-term headwind |
| Defense growth | +13% in FY2025 | Guided to mid-to-high single digit; deliberately conservative | Decelerating in guide |
| Capital allocation | Consistent priorities | ~$7B deployed including record $90/share dividend | Active |
| Productivity / automation | Ongoing value driver | 150+ automation projects; headcount roughly flat despite OEM growth | Expanding |
| New defense program wins | — | F-47 content awarded across several op units | Positive |