Teledyne Technologies Reports Second Quarter Results

THOUSAND OAKS, Calif.–(BUSINESS WIRE)–Teledyne Technologies Incorporated (NYSE:TDY)

• Record quarterly net sales of $1,513.7 million, an increase of 10.2% compared with last year
• Record second quarter GAAP diluted earnings per share of $4.43 and non-GAAP diluted earnings per share of $5.20
• Second quarter GAAP operating margin of 18.4% and second quarter non-GAAP operating margin of 22.2%
• Second quarter cash from operations of $226.6 million and free cash flow of $196.3 million
• Raising full year 2025 GAAP diluted earnings per share outlook to $17.59 to $17.97, compared with the prior outlook of $17.35 to $17.83, and narrowing full year 2025 non-GAAP earnings per share outlook to $21.20 to $21.50, compared with the prior outlook of $21.10 to $21.50
• Quarter-end consolidated leverage ratio of 1.6x
• Increasing stock repurchase authorization to $2.0 billion replacing previous authorization of which $896 million remained

Teledyne today reported second quarter 2025 net sales of $1,513.7 million compared with net sales of $1,374.1 million for the second quarter of 2024, an increase of 10.2%. The second quarter of 2025 net sales included $70.1 million in incremental sales from current and prior year acquisitions. Net income attributable to Teledyne was $209.9 million ($4.43 diluted earnings per share) for the second quarter of 2025 compared with $180.2 million ($3.77 diluted earnings per share) for the second quarter of 2024, an increase of 16.5%. The second quarter of 2025 included $54.6 million of pretax acquired intangible asset amortization expense, $1.9 million of pretax transaction and integration costs, $1.2 million of pretax inventory step-up expense and $7.7 million of income tax benefits from FLIR acquisition-related tax matters. Excluding those items, non-GAAP net income attributable to Teledyne for the second quarter of 2025 was $246.3 million ($5.20 diluted earnings per share). The second quarter of 2024 included $49.1 million of pretax acquired intangible asset amortization expense, $1.0 million of pretax transaction and integration costs and $0.2 million of income tax expense from FLIR acquisition-related tax matters. Excluding those items, non-GAAP net income attributable to Teledyne for the second quarter of 2024 was $218.7 million ($4.58 diluted earnings per share). Operating margin was 18.4% for the second quarter of 2025 compared with 18.0% for the second quarter of 2024. Excluding the items discussed above, non-GAAP operating margin for the second quarter of 2025 was 22.2% compared with 21.6% for the second quarter of 2024.

“Today we reported record quarterly sales, having achieved the greatest total and organic sales growth in three years,” said Robert Mehrabian, Executive Chairman. “Furthermore, sales grew organically in every segment, and orders exceeded sales for the seventh consecutive quarter. Both GAAP and non-GAAP earnings per share increased at double-digit rates. Given our strong second quarter results, we are raising the low end of our full year non-GAAP earnings outlook. However, we are exercising some caution regarding the third quarter, as our second quarter likely benefited from a degree of accelerated demand given uncertain global trade policies. While we are pursuing a number of acquisitions, we will continue to consider stock repurchases when we believe Teledyne is the best value acquisition available.”

Review of Operations

Comparisons are with the second quarter of 2024, unless noted otherwise.

Digital Imaging

The Digital Imaging segment’s second quarter 2025 net sales were $771.0 million compared with $739.4 million, an increase of 4.3%. Operating income was $119.6 million for the second quarter of 2025 compared with $113.5 million, an increase of 5.4%. Acquired intangible amortization expense for the second quarter of 2025 was $46.3 million compared with $45.4 million. The second quarter of 2024 included $1.0 million of pretax transaction and integration costs. Excluding those items, non-GAAP operating income for the second quarter of 2025 was $165.9 million compared with $159.9 million, an increase of 3.8%.

Second quarter of 2025 net sales increased primarily due to higher sales of unmanned air systems and commercial infrared imaging components, partially offset by lower sales of X-ray and geospatial products. The second quarter of 2025 included $5.8 million of incremental sales from a recent acquisition. The increase in operating income was primarily due to the increase in net sales as well as lower selling, general and administrative expense due to the reduction of a contingent liability, offset by unfavorable product mix, higher severance and facility consolidation costs, and higher research and development expense.

Instrumentation

The Instrumentation segment’s second quarter 2025 net sales were $367.6 million compared with $333.5 million, an increase of 10.2%. Operating income was $101.6 million for the second quarter of 2025 compared with $87.2 million, an increase of 16.5%. Acquired intangible amortization expense for the second quarter of 2025 was $3.3 million compared with $3.5 million. Excluding that item, non-GAAP operating income for the second quarter of 2025 was $104.9 million compared with $90.7 million, an increase of 15.7%.

The second quarter of 2025 net sales increase resulted from a $23.7 million increase in sales of marine instrumentation primarily due to stronger offshore energy and defense markets, a $6.4 million increase in sales of environmental instrumentation and a $4.0 million increase in sales of electronic test and measurement instrumentation. The increase in operating income primarily reflected the impact of higher marine instrumentation sales as well as favorable marine instrumentation product mix.

Aerospace and Defense Electronics

The Aerospace and Defense Electronics segment’s second quarter 2025 net sales were $264.8 million compared with $194.4 million, an increase of 36.2%. Operating income was $66.6 million for the second quarter of 2025 compared with $57.1 million, an increase of 16.6%. The second quarter of 2025 included $0.6 million of pretax transaction and integration costs, with no comparable amounts in the second quarter of 2024. Acquired intangible amortization expense for the second quarter of 2025 was $5.0 million compared with $0.2 million. Inventory step-up expense for the second quarter of 2025 was $1.2 million, with no comparable amounts in the second quarter of 2024. Excluding those items, non-GAAP operating income for the second quarter of 2025 was $73.4 million compared with $57.3 million, an increase of 28.1%.

Second quarter of 2025 net sales reflected higher sales of $72.6 million for defense electronics, partially offset by lower sales of $2.2 million for aerospace electronics. The second quarter of 2025 included $64.3 million of incremental defense electronics sales from recent acquisitions. The increase in operating income primarily reflected the impact of higher sales, partially offset by higher transaction and integration costs as well as higher acquired intangible amortization expense.

Engineered Systems

The Engineered Systems segment’s second quarter 2025 net sales were $110.3 million compared with $106.8 million, an increase of 3.3%. Operating income was $12.1 million for the second quarter of 2025 compared with $7.5 million, an increase of 61.3%.

Second quarter of 2025 net sales reflected higher sales of $4.0 million for engineered products, partially offset by lower sales of $0.5 million for energy systems. The increase in operating income was primarily driven by favorable program mix in the second quarter of 2025.

Additional Financial Information

Cash Flow

Cash provided by operating activities was $226.6 million for the second quarter of 2025 compared with $318.7 million, with the decrease driven primarily by higher income tax payments in the second quarter of 2025. Depreciation and amortization expense for the second quarter of 2025 was $86.5 million compared with $77.8 million. Stock-based compensation expense for the second quarter of 2025 was $11.3 million compared with $9.3 million.

Capital expenditures for the second quarter of 2025 were $30.3 million compared with $17.7 million. Teledyne received $4.7 million from the exercise of stock options in the second quarter of 2025 compared with $2.4 million.

As of June 29, 2025, net debt was $2,306.5 million, which is calculated as total debt of $2,617.4 million, net of cash and cash equivalents of $310.9 million. As of December 29, 2024, net debt was $1,999.2 million, representing total debt of $2,649.0 million, net of cash and cash equivalents of $649.8 million. In the second quarter of 2025, the company repaid $315.0 million of outstanding borrowings on its credit facility and repurchased $30.0 million of its fixed rate senior notes.

As of June 29, 2025, $1,168.0 million was available under the $1.20 billion credit facility after reductions of $32.0 million in outstanding letters of credit.

Income Taxes

The effective tax rate for the second quarter of 2025 was 19.3% compared with 22.2%. The second quarter of 2025 included net discrete income tax benefits of $8.4 million compared with $0.7 million.

Other

Corporate expense was $21.7 million for the second quarter of 2025 compared with $18.3 million, and the second quarter of 2025 included $1.3 million of pretax transaction and integration costs. Non-service retirement benefit income was $2.7 million for both the second quarter of 2025 and 2024. Interest expense, net of interest income, was $17.6 million for the second quarter of 2025 compared with $15.8 million, with the increase due to increased borrowings on the credit facility compared with the second quarter of 2024. Other income (expense), net, primarily consisted of foreign currency exchange losses in both the second quarter of 2025 and 2024.

Outlook

Based on its current outlook, the company’s management believes that third quarter 2025 GAAP diluted earnings per share will be in the range of $4.39 to $4.54, and full year 2025 GAAP diluted earnings per share will be in the range of $17.59 to $17.97. The company’s management further believes that third quarter 2025 non-GAAP diluted earnings per share will be in the range of $5.35 to $5.45, and full year 2025 non-GAAP diluted earnings per share will be in the range of $21.20 to $21.50. The non-GAAP outlook excludes acquired intangible asset amortization, transaction and integration costs, inventory step-up expense and FLIR acquisition-related tax matters.

Use of Non-GAAP Financial Measures

We report our financial results in accordance with generally accepted accounting principles in the United States (“GAAP”). We supplement the reporting of our financial results determined under GAAP with certain non-GAAP financial measures. The non-GAAP financial measures provide management, financial analysts and investors with additional useful information for evaluating the company’s performance. The non-GAAP financial measures should be considered in addition to and not as substitutes for financial measures prepared in accordance with GAAP. Further details on reasons we use non-GAAP financial measures, a reconciliation of those measures to the most directly comparable GAAP measures, and other information related to those measures are included after our GAAP financial statements.

Forward-Looking Statements Cautionary Notice

This earnings release contains forward-looking statements, as defined in the Private Securities Litigation Reform Act of 1995, with respect to management’s beliefs about the financial condition, results of operations, acquisitions and product synergies, integration costs, tax matters and businesses of Teledyne in the future. Forward-looking statements involve risks and uncertainties, are based on the current expectations of the management of Teledyne and are subject to uncertainty and changes in circumstances.

The forward-looking statements contained herein may include statements relating to sales, sales growth, stock-based compensation expense, tax rates, tariffs, governmental and economic policies, anticipated capital expenditures, stock repurchases, product developments and other strategic options. Forward-looking statements generally are accompanied by words such as “projects”, “intends”, “expects”, “anticipates”, “targets”, “estimates”, “will” and words of similar import that convey the uncertainty of future events or outcomes. All statements made in this communication that are not historical in nature should be considered forward-looking. By its nature, forward-looking information is not a guarantee of future performance or results and involves risks and uncertainties because it relates to events and depends on circumstances that will occur in the future.

Actual results could differ materially from these forward-looking statements. Many factors could change anticipated results, including: the impact of policies of the U.S. Presidential Administration, especially with respect to new and higher tariffs, cutbacks in the funding of government agencies and programs, and the scaling back of environmental and green energy policies; escalating economic and diplomatic tension between China and the United States, including a potential “trade war” that results in higher tariffs and restrictions on sales of goods and services; reciprocal tariffs from other countries, especially from members of the European Union; changes in relevant tax and other laws; foreign currency exchange risks; rising interest rates; risks associated with indebtedness, as well as our ability to reduce indebtedness and the timing thereof; the impact of semiconductor and other supply chain shortages; higher inflation, including wage competition and higher shipping costs; labor shortages and competition for skilled personnel; the inability to develop and market new competitive products; inherent uncertainties involved in the estimates and judgments used in the preparation of financial statements and the providing of estimates of financial measures, in accordance with GAAP and related standards; disruptions in the global economy; the ongoing conflict in Israel and neighboring regions, including related protests, attacks on defense contractors and suppliers and the disruption to global shipping routes; the ongoing conflict between Russia and Ukraine, including the impact to energy prices and availability, especially in Europe; customer and supplier bankruptcies; changes in demand for products sold to the defense electronics, instrumentation, digital imaging, energy exploration and production, commercial aviation, semiconductor and communications markets; funding, continuation and award of government programs; cuts to defense spending resulting from existing and future deficit reduction measures or changes to U.S. and foreign government spending and budget priorities triggered by inflation, rising interest costs, and economic conditions; the imposition and expansion of, and responses to, trade sanctions and tariffs; the continuing review and resolution of FLIR’s trade compliance and tax matters; threats to the security of our confidential and proprietary information, including cybersecurity threats; risks related to artificial intelligence; natural and man-made disasters; and our ability to achieve emission reduction targets and decrease our carbon footprint. Lower oil and natural gas prices, as well as instability in the Middle East or other oil producing regions, and new regulations or restrictions relating to energy production could further negatively affect our businesses that supply the oil and gas industry. Weakness in the commercial aerospace industry negatively affects the markets of our commercial aviation businesses. Lower aircraft production rates at Boeing or Airbus could result in reduced sales of our commercial aerospace products. In addition, financial market fluctuations affect the value of the company’s pension assets. Changes in the policies of U.S. and foreign governments, including economic sanctions or in regard to support for Ukraine, could result, over time, in reductions or realignment in defense or other government spending and further changes in programs in which the company participates.

While the company’s growth strategy includes possible acquisitions, we cannot provide any assurance as to when, if or on what terms any acquisitions will be made. Acquisitions involve various inherent risks, such as, among others, our ability to integrate acquired businesses, retain key management and customers and achieve identified financial and operating synergies. There are additional risks associated with acquiring, owning and operating businesses internationally, including those arising from U.S. and foreign government policy changes or actions and exchange rate fluctuations.

Additional factors that could cause results to differ materially from those described above can be found in Teledyne’s Annual Report on Form 10-K for the year ended December 29, 2024, as well as subsequent Quarterly Reports on Form 10-Q and Current Reports on Form 8-K, all of which are on file with the U.S. Securities and Exchange Commission (“SEC”) and available in the “Investors” section of Teledyne’s website, teledyne.com, under the heading “Investor Information” and in other documents Teledyne files with the SEC.

All forward-looking statements speak only as of the date they are made and are based on information available at that time. Teledyne assumes no obligation to update forward-looking statements to reflect circumstances or events that occur after the date the forward-looking statements were made or to reflect the occurrence of unanticipated events except as required by federal securities laws. As forward-looking statements involve significant risks and uncertainties, caution should be exercised against placing undue reliance on such statements.

A live webcast of Teledyne’s second quarter earnings conference call will be held at 11:00 a.m. (Eastern) on Wednesday, July 23, 2025. To access the call, go to www.teledyne.com/investors/events-and-presentations approximately 10 minutes before the scheduled start time. A replay will also be available for one month starting at 12:00 p.m. (Eastern) on Wednesday, July 23, 2025.

These condensed consolidated financial statements were prepared in accordance with U.S. GAAP.

* Not meaningful

These condensed consolidated financial statements were prepared in accordance with U.S. GAAP.

These condensed consolidated financial statements were prepared in accordance with U.S. GAAP.

Contacts

Jason VanWees

(805) 373-4542

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