Teledyne Technologies Reports Q4 Results

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Teledyne reported fourth quarter 2025 net sales of $1,612.3 million compared with net sales of $1,502.3 million for the fourth quarter of 2024, an increase of 7.3%. The fourth quarter of 2025 net sales included $73.0 million in incremental sales from recent acquisitions. Net income attributable to Teledyne was $275.6 million ($5.84 diluted earnings per share) for the fourth quarter of 2025 compared with $198.5 million ($4.20 diluted earnings per share) for the fourth quarter of 2024, an increase of 38.8%. The fourth quarter of 2025 included $54.9 million of pretax acquired intangible asset amortization expense, $0.8 million of pretax transaction and integration costs, $0.2 million of pretax inventory step-up expense, and $20.8 million of income tax benefits from FLIR acquisition-related tax matters. Excluding those items, non-GAAP net income attributable to Teledyne for the fourth quarter of 2025 was $297.5 million ($6.30 diluted earnings per share). The fourth quarter of 2024 included $49.7 million of pretax acquired intangible asset amortization expense, $52.5 million of pre-tax non-cash trademark impairments, $1.5 million of pretax transaction and integration costs, and $16.6 million of income tax benefits from FLIR acquisition-related tax matters. Excluding those items, non-GAAP net income attributable to Teledyne for the fourth quarter of 2024 was $260.9 million ($5.52 diluted earnings per share). Operating margin was 20.4% for the fourth quarter of 2025 compared with 15.8% for the fourth quarter of 2024. Excluding the items discussed above, non-GAAP operating margin for the fourth quarter of 2025 was 23.9% compared with 22.7% for the fourth quarter of 2024.

“We concluded 2025 with the best quarterly orders, sales, and non-GAAP earnings and operating margin in the company’s history,” said Robert Mehrabian, Executive Chairman. “Throughout Teledyne, our defense businesses remained healthy, and our shorter cycle commercial businesses continued to recover with most product families increasing either sequentially or year-over-year. In Digital Imaging, Teledyne FLIR performed very well with particular strength in unmanned and other defense surveillance systems, while within Marine Instrumentation we achieved record sales of autonomous underwater vehicles. In the fourth quarter, we were awarded our first production-rate contract in the loitering munition market, and we were selected to supply space-based infrared detectors to the majority of prime contractors on the newly awarded U.S. Space Development Agency Tranche 3 Tracking Layer program. In terms of capital deployment, 2025 was our second largest year in history. However, having generated over $1.0 billion in free cash flow for two consecutive years, we maintained a strong balance sheet with ample financial flexibility.”

Full Year

Full year net sales for 2025 were $6,115.4 million compared with $5,670.0 million for 2024, an increase of 7.9%. Net income attributable to Teledyne was $894.8 million ($18.88 diluted earnings per share) for fiscal year 2025, compared with $819.2 million ($17.21 diluted earnings per share) for fiscal year 2024, an increase of 9.2%.

Full year 2025 net sales included $270.1 million in incremental net sales from acquisitions. The full year of 2025 included $216.6 million of pretax acquired intangible asset amortization expense, $10.2 million of pretax transaction and integration costs, $3.4 million of inventory step-up expense, and $28.3 million of income tax benefits from FLIR acquisition-related tax matters. Excluding these items, non-GAAP net income attributable to Teledyne for the full year of 2025 was $1,042.3 million ($21.99 diluted earnings per share). The full year of 2024 included $198.0 million of pretax acquired intangible asset amortization expense, $8.4 million of pretax transaction and integration costs, $52.5 million of pretax non-cash trademark impairments, and $77.8 million of income tax benefits from FLIR acquisition-related tax matters. Excluding these items, non-GAAP net income attributable to Teledyne for the full year of 2024 was $939.2 million ($19.73 diluted earnings per share). Operating margin was 18.8% for 2025 compared with 17.4% for 2024. Excluding the items discussed above, non-GAAP operating margins were 22.6% for 2025 and 22.0% for 2024.

Full year 2025 income tax expense included $28.3 million of income tax benefits from FLIR acquisition-related tax matters as well as $8.3 million of income tax benefits related to share-based accounting. Full year 2024 income tax expense included $77.8 million of income tax benefits from FLIR acquisition-related tax matters as well as $12.7 million of income tax benefits related to share-based accounting.

Review of Operations

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

Digital Imaging

The Digital Imaging segment’s fourth quarter 2025 net sales were $850.5 million compared with $822.2 million, an increase of 3.4%. Operating income was $162.9 million for the fourth quarter of 2025 compared with $90.8 million, an increase of 79.4%. Acquired intangible asset amortization expense for the fourth quarter of 2025 was $46.8 million compared with $46.1 million, and the fourth quarter of 2024 also included $1.5 million of pretax transaction and integration costs and a $49.5 million pretax non-cash trademark impairment. Excluding those items, non-GAAP operating income for the fourth quarter of 2025 was $209.7 million compared with $187.9 million, an increase of 11.6%.

Fourth quarter of 2025 net sales increased primarily due to higher sales of infrared imaging components and subsystems, as well as surveillance and unmanned air systems for defense applications. These increases were partially offset by lower sales of detectors and cameras for health care and science applications. The fourth quarter of 2025 included $4.5 million of incremental Digital Imaging sales from recent acquisitions. The increase in operating income primarily reflected higher net sales in the fourth quarter of 2025 and lower selling, general and administrative expense due to the reduction of a contingent liability in the fourth quarter of 2025 as well as a non-cash trademark impairment recorded in the fourth quarter of 2024, partially offset by higher severance costs in the fourth quarter of 2025.

Instrumentation

The Instrumentation segment’s fourth quarter 2025 net sales were $382.6 million compared with $368.9 million, an increase of 3.7%. Operating income was $107.3 million for the fourth quarter of 2025 compared with $100.8 million, an increase of 6.4%. Acquired intangible asset amortization expense for the fourth quarter of 2025 was $3.1 million compared with $3.4 million, and in the fourth quarter of 2024, Teledyne also recorded a $3.0 million pretax non-cash trademark impairment. Excluding these items, non-GAAP operating income for the fourth quarter of 2025 was $110.4 million compared with $107.2 million, an increase of 3.0%.

The fourth quarter of 2025 net sales increase resulted from a $6.9 million increase in sales of environmental instrumentation primarily due to stronger sales of gas detection products, a $5.6 million increase in sales of marine instrumentation primarily due to stronger offshore energy and defense markets, and a $1.2 million increase in sales of electronic test and measurement instrumentation. The increase in operating income primarily reflected the impact of higher sales as well as the non-cash trademark impairment recorded in the fourth quarter of 2024 with no comparable amount recorded in the fourth quarter of 2025.

Aerospace and Defense Electronics

The Aerospace and Defense Electronics segment’s fourth quarter 2025 net sales were $275.9 million compared with $196.5 million, an increase of 40.4%. Operating income was $69.4 million for the fourth quarter of 2025 compared with $56.4 million, an increase of 23.0%. The fourth quarter of 2025 included $0.5 million of pretax transaction and integration costs, with no comparable amounts in the fourth quarter of 2024. Acquired intangible asset amortization expense for the fourth quarter of 2025 was $5.0 million compared with $0.2 million. Inventory step-up expense for the fourth quarter of 2025 was $0.2 million, with no comparable amounts in the fourth quarter of 2024. Excluding the pretax transaction and integration costs, acquired intangible asset amortization expense and inventory step-up expense, non-GAAP operating income for the fourth quarter of 2025 was $75.1 million compared with $56.6 million, an increase of 32.7%.

Fourth quarter of 2025 net sales reflected higher sales of $72.3 million for defense electronics and higher sales of $7.1 million for aerospace electronics. The fourth quarter of 2025 included $68.5 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 asset amortization expense.

Engineered Systems

The Engineered Systems segment’s fourth quarter 2025 net sales were $103.3 million compared with $114.7 million, a decrease of 9.9%. Operating income was $11.5 million for the fourth quarter of 2025 compared with $9.8 million, an increase of 17.3%.

Fourth quarter of 2025 net sales reflected lower sales of $8.2 million for engineered products and lower sales of $3.2 million for energy systems. The increase in operating income was primarily driven by $2.9 million of unfavorable contract estimate changes in the fourth quarter of 2024, with no comparable amount in the fourth quarter of 2025.