Executive Summary

Q4 FY2024 delivered strong top-line and cash generation: net sales $358.6M (+10% YoY), adjusted operating margin 15.6%, adjusted EBITDAP margin 16.3%, and free cash flow $72.1M .
Management initiated FY2025 guidance: net sales ~$1.2B, operating income ~$140M, adjusted EBITDAP ~$182M (15% margin), EPS ~$0.42, CFO $30–50M, FCF $10–25M; margin expansion driven by ~$75M gross price increases and ~$40M cost reductions netting ~$25–30M benefit .
Backlog rose 22% to $1.9B (book-to-bill 1.28), with aftermarket comprising ~34% of Q4 revenue and carrying 2x–3x OEM margins; deleveraging accelerated with >$670M debt reduction, cutting annual interest by ~$55M .
Management adopted conservative Boeing production rate assumptions, lowering FY2025 sales vs prior internal plan by ~~6% (~~$70M) to reflect near-term rate uncertainty; Interiors profitability remains a near-term headwind with targeted fixes in pricing, sourcing, hedging, and productivity .
S&P Global consensus estimates were unavailable for TGI this quarter; estimate comparison omitted (data access limitation).

What Went Well and What Went Wrong

What Went Well

“Eighth consecutive quarter of organic sales growth” with Q4 organic growth +11% and strong aftermarket mix; Q4 adjusted operating margin 15.6%, adjusted EBITDAP margin 16.3% .
Backlog and book-to-bill strengthened: backlog up 22% to $1.9B; book-to-bill 1.28; aftermarket programs (787, A380 landing gear) and military spares contributed .
Balance sheet improvement: sale of third‑party Product Support business, >$670M debt reduction, net debt ~halved to ~$700M, expected ~$55M annual interest savings; liquidity ~$437M at FY24 year‑end .

What Went Wrong

Interiors margins and cash remain below expectations despite higher volumes; Q4 Interiors EBITDAP margin 2.3% vs 7.6% prior-year Q4; drivers include Mexico wage inflation, FX (peso), supplier price hikes, and underestimated transfer costs .
Military OEM revenue softness in Q4 (-11% YoY to $71.2M) offset by aftermarket growth; some deliveries delayed by component shortages .
FY2025 sales outlook tempered by conservative Boeing rate assumptions (20–30% reductions at certain sites), reducing prior internal sales targets by ~~6% (~~$70M) .

Financial Results

Core Financials vs Prior Periods and Estimates

Metric	Q2 2024	Q3 2024	Q4 2024
Net Sales ($USD Millions)	$354.0	$285.0	$358.6
GAAP Diluted EPS – Continuing Ops ($)	N/A	N/A	$0.07
Adjusted EPS – Continuing Ops ($)	N/A	N/A	$0.31
Operating Margin (Adjusted)	11%	7%	15.6%
Adjusted EBITDAP Margin	13%	10%	16.3%
Aftermarket % of Sales	43%	~27%	~34%
Cash from Operations ($USD Millions)	Cash used $37	N/A	$77.7
Free Cash Flow ($USD Millions)	N/A	$22.0	$72.1
Revenue Consensus Mean ($USD Millions)	N/A (S&P unavailable)	N/A (S&P unavailable)	N/A (S&P unavailable)
Primary EPS Consensus Mean ($)	N/A (S&P unavailable)	N/A (S&P unavailable)	N/A (S&P unavailable)

Note: S&P Global consensus estimates were unavailable for TGI; estimate comparisons omitted this quarter.

Q4 Segment and End-Market Breakdown

Segment / End-Market	Q4 2023	Q4 2024
Commercial OEM ($M)	$144.3	$139.6
Military OEM ($M)	$80.2	$71.2
Total OEM ($M)	$224.4	$210.8
Commercial Aftermarket ($M)	$38.4	$56.4
Military Aftermarket ($M)	$54.1	$65.3
Total Aftermarket ($M)	$92.5	$121.6
Non‑Aviation Revenue ($M)	$7.8	$25.4
Systems & Support Net Sales ($M)	$285.6	$310.1
Systems & Support EBITDAP Margin (%)	22.5%	23.1%
Interiors Net Sales ($M)	$39.9	$48.5
Interiors EBITDAP Margin (%)	7.6%	2.3%

KPIs and Balance Sheet

KPI	Value
Backlog ($B)	$1.90 (up 22% YoY from $1.55)
Book‑to‑Bill	1.28
FY2024 Aftermarket Revenue ($M)	$347.1
Q4 Cash from Operations ($M)	$77.7
Q4 Free Cash Flow ($M)	$72.1
Liquidity at FY24 Year‑End ($M)	~$437 (cash $393)
Net Debt Reduction	>$670M debt reduction; annual interest savings ~$55M

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Net Sales ($B)	FY2025	N/A (first formal guide)	~$1.2	Initial; lowered vs prior internal plan by ~$0.07B (~6%)
Operating Income ($M)	FY2025	N/A	~$140 (12% margin)	Initial
Adjusted EBITDAP ($M)	FY2025	N/A	~$182 (15% margin)	Initial
EPS – Diluted ($)	FY2025	N/A	~$0.42	Initial
Cash from Operations ($M)	FY2025	N/A	$30–$50	Initial
Free Cash Flow ($M)	FY2025	N/A	$10–$25	Initial
CapEx ($M)	FY2025	N/A	$20–$25	Initial
Interest Expense / Cash Interest ($M)	FY2025	N/A	$95 / $90	Initial
Cash Income Taxes ($M)	FY2025	N/A	~$12	Initial

Drivers of margin expansion: ~$75M gross price increases cutting in FY2025 (offset partly by inflation), ~~$40M cost reductions (~~$25–$30M net year-over-year) .

Earnings Call Themes & Trends

Topic	Q2 FY2024 (Nov 7, 2023)	Q3 FY2024 (Feb 7, 2024)	Q4 FY2024 (May 23, 2024)	Trend
Aftermarket strength	Commercial aftermarket up 49%; aftermarket 43% of revenue; strongest in years	Aftermarket ~27%; target strong Q4 seasonality; IP-based spares/repairs emphasized	Aftermarket ~34% of sales; margins often 2–3x OEM; programs like 787/A380 LG overhauls	Sustained strength; mix supportive
Supply chain and working capital	Investing in WC for 2H surge; component delays acknowledged	Q3 slips from machine parts/electronics/castings/bearings; Q4 delivery assurance; Q3 ~+$20M revenue delayed	Q4 WC release; CFO $77.7M; Q1 FY25 WC build then 2H reduction	Improving execution; seasonal WC
Boeing rates uncertainty	Building at 30–35/month on 737; planning for higher rates; A320 ramp	Maintains confidence; supplier quality focus; portfolio tailwinds	Adopts conservative FY25 plan; 20–30% rate reduction at some sites; ~$70M (~6%) sales impact; outlook to 40s in FY26, 50 in FY27	Near-term cautious; medium-term ramp
Pricing actions	Value pricing, shorter contracts, inflation pass-through highlighted	Selected IP sales $10–13M in Q4; portfolio pruning	~$75M gross price increases planned in FY25; half of LTAs reset, more ahead	Pricing power increasing
Interiors profitability	Recovery to mid/high single digits targeted for FY24; headwinds: FX, inflation	Expected mid-to-high teens in Q4; later disappointed; actions underway	Q4 EBITDAP margin 2.3%; hedges, alt sourcing, productivity, scope adds (787 ducts to Mexico)	Weaker than plan; remediation ongoing
Deleveraging and interest	Bond repurchases; ~$5M annual savings	Divestiture proceeds reduce net debt >40%; ~4x net leverage at FY end	>$670M debt cut; ~$55M annual interest savings; liquidity ~$437M; next maturity 2028	Material improvement
Regulatory/legal	—	HR litigation context & caps; legacy structures exposure limited	Update: $6M legal contingency in Q4; continued defense; no major FY impact expected	Managed exposure

Management Commentary

“Fiscal ’24 was a successful year… we reduced total debt by over $700 million and accelerated our deleveraging by 2 years… increased aftermarket revenues by 19%… improved free cash flow by $60 million” .
“We generated year-over-year organic sales growth of 11%… grew our total company backlog by 22%… executed $40 million in cost reduction actions… earnings were impacted by $5 million restructuring and continued margin weakness in Interiors” .
“We estimate over $75 million of gross price increases will become effective this year, contributing to a 300 bps YoY increase in EBITDA margins” .
“Interiors… profitability and free cash flow continue to lag… hedges for the peso… second source raw materials… lean events… transfer of 787 ducting work to our plant in Mexico” .
“We have high confidence that our operating plan for the next 2 years is sufficiently derisked… adopted conservative rate assumptions reducing FY’25 sales guidance by approximately $70 million or 6% from prior targets” .

Q&A Highlights

Free cash flow targets: Bridge from prior Investor Day $100M FY26 target to ~~4% FCF margin (~~$56M) reflects divestiture of Product Support (higher margin growth deferral), conservative WC due to Boeing rates, and no assumed refinancing yet; upside from capital structure improvements over time .
Pricing cadence: ~$75M gross price improvement hits FY25; net positive after inflation; contributes to ~300 bps margin expansion; LTAs ~5 years, with resets and mid-term adjustments possible .
Boeing rate assumptions: Adopted conservatism; 737 rates moving from low-30s in FY24 toward 40s in FY26 and ~50 in FY27; awaiting revised schedules; multi-program specifics vary by factory .
Cost actions: $40M gross fixed cost reductions (~$25–$30M net benefit after inflation) largely actioned; $5M restructuring in Q4; aligned with conservative rate planning .
Interiors variance vs Q3 expectations: Underestimated transfer costs (Spokane to Mexico) and timing of hedges/sourcing; plan to restore margins via volume absorption and cost actions; leadership changes implemented .

Estimates Context

S&P Global Wall Street consensus estimates for TGI (Q4 FY2024 and prior quarters) were unavailable due to a data mapping limitation. As a result, comparisons to consensus EPS and revenue are omitted this quarter. If needed, we can supplement with alternative public sources upon request.

Key Takeaways for Investors

Margin expansion drivers are tangible and near-term: ~$75M pricing and ~$25–30M net fixed-cost reductions underpin FY25 adjusted EBITDAP margin ~15% despite conservative OEM rates .
Aftermarket tail provides resilience: ~34% of Q4 sales with 2–3x OEM margins; programs (787/A380 landing gear, V‑22 pylon conversion) support mix and cash generation into FY25 .
Deleveraging is a real catalyst: >$670M debt reduction, ~$55M annual interest savings, next maturity 2028; creates optionality for refinancing and further cash flow accretion .
Boeing rate uncertainty is derisked in guidance: FY25 sales reduced by ~$70M vs prior internal plan; monitor Boeing 737/787 schedules—upside if rates recover faster than assumed .
Interiors is the swing factor: Q4 EBITDAP margin 2.3% indicates continued pressure; success of hedging, alternate sourcing, and scope additions (e.g., 787 ducts) will be key to restoring profitability .
Cash cadence remains seasonal: Expect Q1 FY25 WC build (~$100M cash use), neutral Q2, and stronger FCF in 2H; traders should watch delivery approvals and WC metrics .
Backlog quality improving: 22% YoY backlog growth to $1.9B and diversified customer/program mix reduce reliance on any single OEM; supports multi‑year growth .

View of primary sources: Q4 FY2024 press release and 8‑K , and full Q4 call transcript –; prior quarters for trend – –.

TRIUMPH GROUP INC (TGI)·Q4 2024 Earnings Summary