Sign in

You're signed outSign in or to get full access.

MI

MOOG INC. (MOG-A)·Q3 2025 Earnings Summary

Executive Summary

  • Record quarter: net sales $971M (+7% YoY), adjusted EPS $2.37 (+24% YoY), adjusted operating margin 13.6% (+130 bps YoY) .
  • Material beat vs S&P Global consensus: revenue +5.4% and adjusted EPS +10.0% vs estimates; strong aftermarket in Commercial Aircraft and broad-based demand in Space & Defense drove upside *.
  • FY25 guidance raised for sales to $3.8B (from $3.7B), but margin/EPS moderated to include net tariff pressure; adjusted EPS now $8.25 and FCF conversion 30–50% .
  • Backlog reached a record $2.7B (12-month), supported by Military Aircraft (FLRAA ramp), satellites and missiles; FCF conversion improved to 123% on $93M FCF .

What Went Well and What Went Wrong

What Went Well

  • Commercial Aircraft strength: sales +16% YoY to $219M; adjusted segment margin 14.9% (+180 bps YoY) on record aftermarket and non-core product line sale benefit .
  • Space & Defense momentum: sales +11% YoY to $288M; adjusted margin 14.1% (+140 bps YoY) on profitable growth; backlog contribution from satellite components and missile control programs .
  • Cash generation: $125M CFO and $93M FCF in Q3; conversion 123% driven by earnings and working capital release .
    “ We have just delivered another quarter of record financial results… strong order intake and a record 12‑month backlog.” — CEO Pat Roche .

What Went Wrong

  • Military Aircraft margin pressure: operating margin down 360 bps YoY to 8.0% (adjusted 11.6%, −30 bps) due to program termination charges, less favorable mix, and higher R&D .
  • Tariffs: adjusted margin guidance reduced (12.8% vs 13.0% prior) and FY25 EPS moderated to include $15–$20M estimated tariff pressure; FCF conversion moderated to 30–50% .
  • Industrial sales −4% YoY (portfolio shaping/divestitures); reported margin −20 bps YoY to 9.6% despite simplification benefits; investment losses and rationalization charges weighed .

Financial Results

Key Metrics (YoY and Sequential)

MetricQ3 2024Q1 2025Q2 2025Q3 2025
Revenue ($USD Millions)$905 $910 $935 $971
Diluted EPS ($)$1.74 $1.64 $1.75 $1.87
Adjusted Diluted EPS ($)$1.91 $1.78 $1.92 $2.37
Operating Margin (%)11.6% 11.1% 11.7% 11.5%
Adjusted Operating Margin (%)12.3% 11.8% 12.5% 13.6%
Free Cash Flow ($USD Millions)$(2) $(165) $2 $93

Actual vs S&P Global Consensus (Q3 2025)

MetricConsensusActualSurprise
Revenue ($USD Millions)$921.8*$971.4 +5.4%*
Adjusted EPS ($)$2.155*$2.37 +10.0%*
Values with asterisk retrieved from S&P Global.

Segment Breakdown (Q3)

SegmentNet Sales Q3 2024 ($M)Net Sales Q3 2025 ($M)Operating Margin Q3 2024 (%)Operating Margin Q3 2025 (%)
Space & Defense$258.4 $287.7 12.6% 13.3%
Military Aircraft$207.2 $224.7 11.6% 8.0%
Commercial Aircraft$189.4 $219.4 12.9% 14.9%
Industrial$249.8 $239.6 9.8% 9.6%

KPIs

KPIQ1 2025Q2 2025Q3 2025
12‑month backlog ($B)$2.5 $2.5 $2.7
Net cash from operations ($M)$(132.3) $39.4 $125.3
Free Cash Flow Conversion (%)(286%) 3% 123%
Capital Expenditures ($M)$32.8 $37.6 $33.0
Dividend per share ($)$0.29 (declared Jan 2025) $—$0.29

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Net Sales ($B)FY 2025$3.7 $3.8 Raised
Operating Margin (%)FY 202512.7% 11.9% Lowered (tariffs included)
Adjusted Operating Margin (%)FY 202513.0% 12.8% Lowered (tariffs included)
Diluted EPS ($)FY 2025$7.89 $7.44 Lowered (tariffs included)
Adjusted Diluted EPS ($)FY 2025$8.20 $8.25 Raised
FCF Conversion (%)FY 202550% 30–50% Lowered

Note: Current guidance includes net tariff pressures; previous guidance excluded them .

Earnings Call Themes & Trends

TopicPrevious Mentions (Q‑2 and Q‑1)Current Period (Q3 2025)Trend
Tariffs/MacroQ2: Potential net tariff risk $10–$20M noted; margins otherwise improving . Q1: Emphasis on pricing and simplification driving margin expansion .Guidance now explicitly includes $15–$20M tariff pressure; adjusted EPS guided up to $8.25 despite headwind .Headwind recognized; mitigation ongoing.
Commercial AftermarketQ1/Q2: Strong aftermarket drove sales; production delays at some OEMs .Record aftermarket and non‑core product line sale lifted margins (14.9%) .Strengthening.
Space & Defense ProgramsQ1: Record bookings; satellite and defense components growth . Q2: Broad‑based defense demand .Sales +11% YoY; backlog support from satellites and missiles .Positive momentum.
Military Aircraft/FLRAAQ1: Ramp‑up on FLRAA and new production programs . Q2: Sales +6%; margin +280 bps .Sales +8% YoY; adjusted margin −30 bps on mix and higher R&D; program termination charges hit reported margin .Mixed: growth with near‑term margin pressure.
Industrial SimplificationQ1: Segment sales down on divestitures; adjusted margin +60 bps . Q2: Adjusted margin +90 bps .Sales −4% YoY (divestitures); adjusted margin 13.5% (+180 bps YoY) .Margin improving; sales reset lower.
AI/Data Centers & Technology—MOU with USA Rare Earth to prototype neo magnets for Moog’s CoreMotion pumps used in data center cooling (AI infrastructure); highlights supply chain localization .Emerging opportunity.
Connectivity/Defense Tech—Acquisition of COTSWORKS ($63M) to strengthen ruggedized fiber‑optic transceivers portfolio across aerospace/defense platforms .Strategic expansion.
R&D/Tax Legislation—CFO noted FY26 FCF conversion target 75–100% supported by recent legislation enabling acceleration of R&D deduction .FY26 tailwind.

Management Commentary

  • “We have just delivered another quarter of record financial results… strong order intake and a record 12‑month backlog.” — Pat Roche, CEO .
  • “We are increasing our sales guidance… updating our adjusted operating margin guidance to reflect expected tariff pressures… moderating our free cash flow guidance… We’re on track to close out a record year for sales in 2025.” — Jennifer Walter, CFO .
  • “Adjusted earnings per share is projected to be $8.25… the increase reflects the strength of our business, and the benefit associated with the third quarter product line sale, offset by $15–$20 million of estimated pressure from tariffs now included.” — Management on call .

Q&A Highlights

  • Cash flow drivers: CFO detailed stronger receivables collections in Q3 and expected inventory benefits into Q4; FCF conversion moderated for FY25 but FY26 target remains 75–100% aided by R&D deduction legislation .
  • Tariff impact and guidance: Management clarified the inclusion of $15–$20M tariff headwind in FY25 guidance while maintaining adjusted EPS uplift to $8.25 .
  • Demand signals: CEO highlighted exposure to hypersonics, space‑based assets, and missiles as growth areas sustaining backlog .

Estimates Context

  • Q3 2025 beats vs S&P Global consensus: revenue $971.4M vs $921.8M* and adjusted EPS $2.37 vs $2.155*; upside driven by Commercial Aircraft aftermarket and Space & Defense demand *.
  • Consensus depth: 3 revenue estimates and 4 EPS estimates for Q3; results likely to drive upward revisions to FY25 sales while margins remain constrained by tariffs*. Values with asterisk retrieved from S&P Global.

Key Takeaways for Investors

  • Quality beat: Broad-based revenue strength and adjusted margin expansion drove a double‑digit EPS beat vs consensus; sequential step‑up from Q2 on both sales and adjusted EPS *.
  • Guidance remix: Sales raised to a record $3.8B while margins/EPS now incorporate tariff headwinds; focus on execution and pricing/simplification to sustain adjusted EPS at $8.25 .
  • Backlog visibility: Record $2.7B 12‑month backlog provides multi‑quarter revenue visibility across Commercial aftermarket, satellites, missiles, and FLRAA .
  • Cash inflection: FCF conversion improved to 123% in Q3; FY25 conversion moderated, but FY26 conversion target 75–100% supported by R&D tax changes .
  • Strategic moves: COTSWORKS acquisition enhances rugged fiber-optic capabilities; USA Rare Earth MOU underscores AI‑related data‑center cooling opportunity and supply chain localization .
  • Segment lens: Favor Commercial Aircraft and Space & Defense near term; monitor Military Aircraft margin recovery as R&D and mix normalize post program termination .
  • Dividend continuity: $0.29 quarterly dividend declared; capital return alongside growth investments .

Additional notes

  • Non‑GAAP adjustments: Q3 included ~$20M of charges (simplification and program termination) vs $6M in Q3 2024; adjusted EPS reconciles to $2.37 .
  • Conference call and financials were furnished via 8‑K Item 2.02 with full exhibits, and included detailed segment reconciliations .