Triumph Group, Inc.

Q2 adjusted revenue was $287 million, up year over year, driven by 13% aftermarket growth. Adjusted operating income was $36 million, up $11 million or 44%, with adjusted operating margin of 11% versus 8% last year. Adjusted EBITDA was $43 million, up $9 million or 26%, with adjusted EBITDA margin of 15% versus 12% last year. Management said aftermarket represented 33% of sales but 61% of profit in the quarter, and total backlog was up 7% year over year to $1.9 billion. Cash flow beat guidance by $35 million, but Q2 free cash use was $45 million, including a $42 million semiannual interest payment and $6 million of capex. Net debt was $868 million, leverage was 5.5x, and liquidity was $148 million including $105 million of cash. FY25 guidance was raised: net sales are still expected to be approximately $1.2 billion, adjusted EBITDA is now expected at $190 million-$195 million, and free cash flow is now expected at $20 million-$30 million. Management also said third-quarter free cash flow is expected to be positive and fourth-quarter cash burn should reverse in line with seasonal patterns.

Dan Crowley framed the quarter as evidence that Triumph is becoming an aftermarket-driven company with a stronger balance sheet and more resilient earnings base. He emphasized that aftermarket demand is being supported by aging fleets, 787 landing gear overhaul activity, and military readiness needs, while OEM softness is temporary. He also pointed to ongoing investments in new facilities and products, saying the company is positioned for next-generation aircraft and engine programs, and he spoke confidently about the second half and the long-term plan.

Jim McCabe highlighted that every major financial measure improved year over year, with revenue of $287 million, adjusted operating income of $36 million, and adjusted EBITDA of $43 million. He said the most important development was the interiors settlement, which, together with cost actions, restored interiors to profitability; he also noted $4 million of non-GAAP restructuring adjustment primarily tied to Interiors. On cash, he said the quarter had $45 million of free cash use due to seasonally higher working capital and the $42 million interest payment, but the company beat cash guidance by about $35 million and ended with $148 million of liquidity. He also noted debt reduction, including a $120 million redemption of first lien 9% 2028 notes, lower interest expense, and $55 million of annual interest savings from fiscal '24 and '25 year-to-date debt reduction.

Analysts focused on how Triumph could support higher second-half EBITDA margins and improved free cash flow, and management said the answer was mainly mix, stronger aftermarket, and the Boeing interiors settlement. On cash, management said the second half should be cash positive, with most cash coming in the fourth quarter and supported by backlog already in hand. Questions on interiors led management to say the business is profitable again, full-year EBITDA margins in Interiors should be around 5% to 6%, and year-over-year margins should move back to double digits as Boeing rates recover. Analysts also pressed on Boeing ramp timing, and management said Boeing inventory burn-off and workforce stabilization should allow a step-up in rates, with supply availability less of a constraint than in prior periods.