Question · Q3 2025
Michael Chermoey asked about TAT Technologies' path to further operating leverage and EBITDA margin expansion beyond the current 15% target, including the potential for pricing to contribute. He also inquired about the impact of increased Boeing 737 MAX production rates on TAT's thermal system OEM business and any related destocking or inventory trends.
Answer
President and CEO Igal Zamir confirmed the 15% EBITDA target is nearly met and highlighted ongoing opportunities for further margin improvement through operational efficiencies, waste reduction, and reduced purchasing costs, even before revenue or pricing increases. He noted that pricing escalation is built into contracts based on indexes but is not a primary tool for margin expansion. Regarding OEM, he stated that the 737 MAX has minimal dramatic impact, but overall OEM business grows linearly with increasing aircraft production rates across various platforms, leading to an increase in purchase orders.
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