TDY earnings analysis
What we found in TDY's 10-Q: the parts that mattered, the offsets in the same document, and what the company said about what comes next.
Our reading of the filing · Free to read, no account needed
Teledyne posted strong Q2 execution, with revenue up 9.8% year over year to $1.6625 billion, GAAP EPS up 21.2% to $5.37, and operating margin expanding 140 basis points to 20.0%. Digital Imaging drove the performance, supported by defense and commercial infrared demand, favorable mix and tariff refunds, while all segments delivered sales growth. Cash generation and a $450.0 million note repayment materially improved leverage, although Instrumentation margin pressure and elevated corporate costs are offsets. The 10-Q does not provide EPS or revenue guidance, but it indicates planned 2026 capex of approximately $150 million and adequate liquidity.
The parts that mattered.
Pulled out of the filing itself, with the figures the company reported.
- Revenue and EPS accelerated
- Q2 revenue rose $148.8 million, or 9.8% year over year, to $1.6625 billion; it also increased from $1.56 billion in Q1 2026. GAAP diluted EPS rose to $5.37 from $4.43 a year earlier and $4.85 sequentially.
- Margin expansion drove earnings leverage
- Gross margin expanded to 44.4% from 42.6% a year ago and 43.2% in Q1, while operating margin rose to 20.0% from 18.6% and 18.9%, respectively. Operating income increased 19.8% to $333.2 million.
- Digital Imaging delivered outsized growth
- Digital Imaging was the principal growth engine: sales increased $97.7 million to $868.7 million and operating income increased $50.6 million to $170.2 million. Infrared imaging detector, component and subsystem sales contributed a $29.0 million increase.
- Broad-based segment revenue growth
- All four segments grew sales, led by Digital Imaging at 12.7%; Aerospace and Defense Electronics grew 8.2% to $286.4 million, Engineered Systems grew 8.4% to $119.6 million, and Instrumentation grew 5.5% to $387.8 million.
- Operating cash flow strengthened
- First-half operating cash flow increased $80.0 million to $549.2 million. After $60.2 million of capex, calculated first-half free cash flow was $489.0 million, equivalent to 3.7% of first-half sales of $3.2226 billion.
- Debt repayment improved liquidity
- Net debt fell $448.4 million from year-end to $2.0270 billion after repayment of $450.0 million of senior notes. Available revolver capacity was $1.1607 billion, while cash was $340.1 million.
And the other side of it.
The offsets in the same document — the things a summary that only listed the good news would have left out.
- Instrumentation mix pressure reduced margins
- Instrumentation operating income slipped $0.2 million to $101.4 million despite a $20.2 million revenue increase; its operating margin contracted 150 basis points to 26.1% due primarily to unfavorable product mix.
- Corporate overhead grew faster than sales
- Corporate expense increased $6.3 million, or 29.0%, to $28.0 million, driven by higher incentive compensation and professional-services costs. Total SG&A increased 12.8%, faster than 9.8% sales growth.
- No formal risk-factor changes; geopolitical exposure remains
- Item 1A states there were no material changes to risks disclosed in the 2025 Form 10-K. MD&A nevertheless flags tariffs, China rare-earth restrictions and Middle East conflict; the company had $60.2 million of first-half capex and continues to pay tariffs while assessing developments.
What they reported.
What the company itself reported, taken out of the document.
- Earnings per share
- $5.37
- Gross margin
- 44.4%
- Operating margin
- 20.0%
- Segment
- Digital Imaging: revenue $868.7 million, up 12.7% year over year; operating income $170.2 million, up 42.3%.
- Segment
- Instrumentation: revenue $387.8 million, up 5.5% year over year; operating income $101.4 million, down 0.2%.
- Segment
- Aerospace and Defense Electronics: revenue $286.4 million, up 8.2% year over year; operating income $74.5 million, up 11.9%.
- Segment
- Engineered Systems: revenue $119.6 million, up 8.4% year over year; operating income $15.1 million, up 24.8%.
What they said about what is next.
The 10-Q contains no quantitative revenue or EPS outlook. Management plans approximately $150 million of 2026 capital expenditures and expects cash on hand, operating cash flow and its $1.2 billion credit facility to meet needs over the next 12 months.
The filing reads better than the one before it.
What came before.
- 10-Q · April 24, 2026
- Teledyne reported Q1 2026 net sales of $1,560.1 million (up 7.6% YoY) and GAAP diluted net income per share of $4.85, with operating income of $294.2 million. Cash on hand rose to $521.4 million and operating cash flow…
This is our reading of a public filing, not the filing. Read the original on SEC.gov · Educational only. Nothing here is investment advice.
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