Breaking Down Triumph Group, Inc. (TGI) Financial Health: Key Insights for Investors

You're looking at Triumph Group, Inc. (TGI) and wondering if the aerospace supplier's turnaround story has finally landed, especially with a major acquisition on the horizon. The short answer is: the financials for fiscal year 2025, which ended in March, defintely show momentum, but the real story is the strategic pivot. Triumph reported full-year net sales of $1.26 billion, a solid 6% year-over-year increase, driven by strong demand in their intellectual property-based aftermarket business-that's where the profit margins really shine. Look at the cash flow: they hit their goal of being cash-flow positive, generating $37.9 million in cash flow from operations and $18.8 million in free cash flow for the year. Plus, the pending $3 billion acquisition by Warburg Pincus LLC and Berkshire Partners LLC, expected to close in the second half of 2025, fundamentally changes the risk-reward calculation for investors. This move, coupled with an adjusted EBITDAP (Earnings Before Interest, Taxes, Depreciation, Amortization, and Pension) of $204.5 million, suggests the business model simplification is paying off, but you still need to map out the execution risks in the integration.

Revenue Analysis

You need to know where Triumph Group, Inc. (TGI) is actually making its money, and the answer is clear: the high-margin aftermarket business is the engine powering the company's turnaround. In fiscal year 2025, Triumph Group, Inc. delivered $1.26 billion in net sales, marking a solid 6% year-over-year growth. That growth is defintely not uniform, but it shows the strategic shift is working.

The company's revenue streams are now heavily weighted toward proprietary content and maintenance, repair, and overhaul (MRO) services, which is a much healthier mix than relying on low-margin original equipment manufacturer (OEM) production. The key takeaway is that aftermarket sales, which include both repair services and spare parts, are disproportionately profitable. For instance, in the first quarter of FY 2025, aftermarket sales accounted for about 33% of total revenue but generated a stunning 73% of the company's profit.

Here's the quick math on where the growth is coming from:

• Aftermarket Sales: Commercial and military aftermarket revenue grew by more than 7% across FY 2025. Commercial aftermarket sales specifically surged, with a quarterly year-over-year increase as high as 42.6% in Q1 FY25.
• OEM Sales: Total OEM sales grew by 10% in FY 2025, but this masks some internal friction. Military OEM sales were up by 4.6% on key platforms like the F/A-18 and CH-47.

The commercial side is a mixed bag, which is why precision matters. Commercial OEM sales actually decreased by 1.5% for the full year. This softness is primarily tied to reduced shipment rates on the Boeing 737 program, a known industry headwind. Still, this was partially offset by increased volume on the Boeing 787 program and business jet platforms. The Interiors business remains a drag, hurt by the 737 MAX production issues, but the management expects a recovery as narrowbody rates ramp up.

This strategic focus on intellectual property (IP)-based products and services is a deliberate move to improve margin, and it's translating to tangible financial results. The aftermarket segment, which includes the lucrative 787 landing gear overhaul cycle, is expected to remain strong, driven by the aging global aircraft fleet and new aircraft delivery delays. If you want to dig deeper into who is betting on this strategy, you should check out Exploring Triumph Group, Inc. (TGI) Investor Profile: Who's Buying and Why?

To be fair, the concentration in aftermarket profit means any disruption to the MRO cycle-like a sudden drop in flight hours or a major shift in military readiness spending-could hit the bottom line hard. The table below summarizes the core revenue drivers and their performance, showing the clear shift in TGI's business model toward higher-margin work.

Profitability Metrics

You're looking at Triumph Group, Inc. (TGI) because the aerospace and defense sector is in a multi-year upcycle, but what matters is whether the company can translate that demand into real profit. The short answer is: TGI is definitely improving its gross-level profitability, but its net margin still trails the high-end of the industry, largely due to its capital structure.

For the fiscal year 2025 (FY2025), which ended March 31, 2025, Triumph Group, Inc. reported net sales of nearly $1.26 billion. The real story is the operational efficiency gains, particularly in the gross profit (the money left after paying for Cost of Goods Sold). Here's the quick math on their core profitability metrics:

• Gross Profit: $367.42 million, yielding a Gross Profit Margin of 31.5%.
• Operating Income (GAAP): $139.43 million, resulting in an Operating Margin of approximately 11%.
• Net Income (Reported): $40.87 million, which translates to a Net Profit Margin of about 3.24%.

Margin Trends and Operational Efficiency

The most compelling trend is the significant jump in gross profitability. The Gross Profit Margin climbed to 31.5% in FY2025, a massive increase from 27.1% in the prior year. This is not a small move; it shows the strategic shift to higher-margin business is working.

This margin expansion is directly tied to operational efficiency and a favorable sales mix. The company attributes the improvement to better pricing power and a greater mix of aftermarket sales, which are inherently more profitable than original equipment manufacturer (OEM) production. Management also executed on cost-reduction actions and benefited from a gross price uplift of approximately $75 million, which helped expand margins against a backdrop of persistent supply chain and inflationary pressure. They are getting smarter about what they sell and how they make it.

Peer Comparison: Where TGI Stands

Triumph Group, Inc.'s Operating Margin of 11% puts it squarely in line with major, diversified defense contractors like Northrop Grumman, which reported an Operating Margin of around 11% in Q3 FY2025, and General Dynamics, which was around 10%. That's solid performance.

But when you look at specialized, high-margin component suppliers in the sector, like RTX Corporation's Collins Aerospace segment, which posted an Operating Margin of 16% in Q3 FY2025, you see the ceiling is still higher. The gap between TGI's Gross Margin (31.5%) and its Operating Margin (11%) suggests selling, general, and administrative (SG&A) expenses and depreciation are still a substantial drag. Also, the relatively thin 3.24% Net Profit Margin highlights the impact of interest expense from their debt load, a key area for investors to watch.

Here's a quick snapshot of the core profitability metrics for Triumph Group, Inc. in FY2025:

The bottom line is that the core business is getting healthier, but the balance sheet is still dictating the final net profit. You can learn more about the corporate context and the pending acquisition in Exploring Triumph Group, Inc. (TGI) Investor Profile: Who's Buying and Why?

Debt vs. Equity Structure

You need to understand how Triumph Group, Inc. (TGI) funds its operations, and the short answer is: heavily through debt, but with a recent, aggressive push toward deleveraging. The company's financial health is defined by a high debt load, but its strategic actions in fiscal year 2025 have improved its profile significantly.

As of the fiscal year ending March 31, 2025, Triumph Group, Inc.'s total debt stood at approximately $0.98 billion USD. This figure represents the sum of all current and non-current debt obligations. Their net debt-total debt minus cash-was $868 million as of the second quarter of fiscal 2025, which shows a substantial reduction from the prior year.

The company's reliance on debt is starkly visible in its debt-to-equity (D/E) ratio. For the fiscal year 2025, Triumph Group, Inc. reported a D/E ratio of approximately -12.91. Honestly, that negative number is the key takeaway here. It means the company has negative shareholder equity, a situation where total liabilities exceed total assets. In contrast, the average D/E ratio for the broader Aerospace & Defense industry sits much lower, around 0.38, underscoring Triumph Group, Inc.'s highly leveraged position.

To be fair, management has been laser-focused on fixing this capital structure. The most critical action was the full repayment of the 2025 notes and a partial repayment of the 2028 notes. This strategic debt reduction is expected to yield substantial annual interest savings of approximately $55 million. This deleveraging effort led to a significant positive signal from the credit markets:

• Moody's upgraded Triumph Group, Inc.'s corporate family rating to B3 from Caa1 in July 2024.
• S&P Global Ratings upgraded the issuer credit rating to B- from CCC+.

These upgrades, both with a stable outlook, recognize the materially reduced leverage and stronger balance sheet. This is a clear move toward debt financing stability, even with the negative equity. The company's strategy is not about balancing debt and equity in the traditional sense yet, but rather reducing high-cost debt to stabilize the foundation before considering significant equity funding, which would dilute ownership. For a deeper dive into the company's long-term direction, you should check out their Mission Statement, Vision, & Core Values of Triumph Group, Inc. (TGI).

Here's the quick math on their leverage profile: the company's Debt-to-EBITDA ratio was down to 5.39 in fiscal 2025, a marked improvement from the prior year's 7.06, but still indicating a high level of leverage relative to earnings. The remaining notes are not due until 2028, giving the company a crucial window to continue generating positive free cash flow, which was $18.8 million in fiscal 2025, to further pay down debt. That free cash flow is defintely a good sign.

Liquidity and Solvency

You want to know if Triumph Group, Inc. (TGI) has the immediate cash to cover its bills, and the simple answer is yes, with a strong caveat on how they got there. The company's liquidity position, measured by its current and quick ratios, looks defintely healthy, but the real story is the dramatic working capital turnaround in the back half of fiscal year 2025.

To assess their short-term financial health, we look at the two core liquidity ratios (liquidity positions). The current ratio tells you if current assets (cash, receivables, inventory) cover current liabilities (bills due in one year). The quick ratio (or acid-test ratio) is tougher; it excludes inventory, which is harder to turn into cash quickly.

• Current Ratio (FY2025): 2.22. This means Triumph Group, Inc. has $2.22 in current assets for every dollar of current liabilities. A ratio over 1.5 is generally considered good.
• Quick Ratio (FY2025/TTM): 1.27. Even without counting inventory, they have $1.27 to cover every dollar of short-term debt. That's solid.

The working capital story is where the action is. Triumph Group, Inc. had a challenging start to the year, with cash used in operations of $(104.5) million in the first quarter of fiscal year 2025, largely due to working capital needs. But the company executed a major reversal, ending the full year with a positive cash flow from operations (CFO) of $37.9 million. This pivot shows management's ability to tighten the screws on receivables and inventory when needed, which is a huge operational strength.

Here's the quick math on the full-year cash flow statement (CFO, CFI, CFF) trends in millions of USD:

The company achieved its goal of being free cash flow (FCF) positive for the year, coming in at $18.8 million. This is a clear strength, as it means they generated enough cash from core operations to cover capital spending and still have cash left over. What this estimate hides, however, is the heavy lift required in the latter half of the year to overcome the early-year working capital drag.

The biggest potential liquidity concern remains their overall debt load, but the debt retirement actions-like the $120 million reduction in Q1 FY2025-show a clear, actionable strategy to improve solvency over time. The trend is positive: they are generating cash and using it to pay down debt, which is exactly what you want to see in a restructuring story. You can dive deeper into the market's perception of this progress by Exploring Triumph Group, Inc. (TGI) Investor Profile: Who's Buying and Why?

Valuation Analysis

You're looking at Triumph Group, Inc. (TGI) and trying to figure out if the stock is overvalued, undervalued, or just right, especially with all the noise around the aerospace sector. The short answer is that the stock is currently trading right at its consensus target, effectively making it a 'Hold' for most investors, but the underlying metrics tell a more complex, turnaround-focused story.

The crucial context here is the significant corporate action: Triumph Group, Inc. was acquired by Warburg Pincus and Berkshire Partners and subsequently delisted in July 2025. This means the valuation is less about future market speculation and more about the final transaction price. The stock's price of approximately $26.01 as of November 2025 is essentially locked in near the acquisition value.

Is Triumph Group, Inc. Overvalued or Undervalued?

Based on traditional multiples, Triumph Group, Inc. appears expensive, which is common for a company undergoing a major turnaround and restructuring. However, the analyst consensus is a firm 'Hold,' with the average price target sitting right at $26.00, reflecting the reality of the acquisition. Honestly, there's no meaningful upside left.

Here's the quick math on the trailing-twelve-month (TTM) valuation ratios as of November 2025:

• Price-to-Earnings (P/E) Ratio: The TTM P/E ratio is around 49.59x. This is a high multiple, suggesting investors are paying a premium for expected future earnings growth, not current profitability.
• Enterprise Value-to-EBITDA (EV/EBITDA) Ratio: This ratio stands at approximately 14.9x. This is a more reasonable, yet still elevated, figure for an aerospace and defense company, showing the market values the company's core operating cash flow (EBITDA) more favorably than its net income.
• Price-to-Book (P/B) Ratio: This is where things get tricky. The P/B ratio is a negative -26.35x as of November 2025, which is a huge red flag. This negative value stems from a negative book value per share (total assets minus total liabilities), signaling that the company's liabilities exceed its assets. This is defintely a key risk factor that the new private owners will need to address immediately.

What this estimate hides is the company's focus on its intellectual property (IP)-based business and aftermarket sales, which is the long-term value driver. You can read more about their strategic focus in the Mission Statement, Vision, & Core Values of Triumph Group, Inc. (TGI).

Stock Trend and Shareholder Returns

The stock price trend over the last 12 months, leading up to the acquisition, was incredibly strong. The share price increased by a substantial +56.75% over the 365 days prior to the acquisition announcement. This performance significantly outperformed the broader market, suggesting the market had already begun to price in the success of the company's restructuring efforts and the potential for a sale.

For income-focused investors, there's a clear answer on distributions: Triumph Group, Inc. does not currently pay a dividend. Consequently, the dividend yield for the 2025 fiscal year is 0.00%. The company's strategy has been to retain capital for debt reduction and operational investment, not shareholder payouts, which is the right move for a company in a turnaround phase.

The key takeaway is this: the valuation ratios show a company still working through its balance sheet issues (the negative P/B), but the market's recent price appreciation and the ultimate acquisition confirm that the operational improvements-like the 6% net sales growth in fiscal 2025-were real. Finance: track the new private owners' debt repayment schedule for a clearer view of future financial health.

Risk Factors

You're looking at Triumph Group, Inc. (TGI) to understand the landscape, but the biggest factor for public investors is already settled: the company was acquired by Warburg Pincus and Berkshire Partners and became a privately-held entity on July 24, 2025. Still, understanding the risks TGI managed in its final public fiscal year (FY2025) is defintely crucial for market context, especially for their peers.

TGI's financial health in FY2025 showed resilience, with full-year net sales hitting approximately $1.26 billion, but the underlying risks were significant, primarily revolving around debt, legal issues, and the cyclical nature of the aerospace industry.

Here's the quick math on the key risks TGI was navigating:

• Commercial OEM Softness: Revenue from Original Equipment Manufacturers (OEMs) saw a temporary dip, decreasing 8.9% in the second quarter of FY2025, mainly due to lower volumes on programs like the 737 MAX.
• High Debt Load: The company's net debt remained high at approximately $821 million at the end of Q1 FY2025, which limits financial flexibility for growth investments and increases vulnerability to economic downturns.
• Cash Flow Pressure: Despite a full-year free cash flow of $18.8 million, TGI experienced significant near-term cash use, including a free cash use of ($112.7 million) in Q1 FY2025, driven by working capital build-up ahead of expected OEM ramps.
• Legal and Contingency Costs: The company incurred a notable $7.5 million legal contingency loss in Q1 FY2025 related to environmental liabilities from its legacy Structures business.

The aerospace industry is highly cyclical, so TGI's performance will always be sensitive to global economic shifts and demand fluctuations. Plus, operating in a heavily regulated sector means changes in environmental or safety rules can trigger unexpected costs.

To be fair, TGI had clear mitigation strategies in place that were already showing results, which likely made the company an attractive acquisition target. The core of their strategy was doubling down on their Intellectual Property (IP)-based aftermarket business-spares and repairs-which generated a high gross margin of 57% in Q2 FY2025. This aftermarket strength was the engine offsetting the OEM softness.

They also aggressively managed their balance sheet, retiring $120 million of debt in Q1 FY2025 alone, and executed a turnaround in their Interiors segment in Q2 FY2025 through substantial cost reductions. That's how you de-risk a portfolio.

For a deeper dive into the numbers that drove this acquisition, you can read the full analysis at Breaking Down Triumph Group, Inc. (TGI) Financial Health: Key Insights for Investors.

Growth Opportunities

You're looking at Triumph Group, Inc. (TGI) post-restructuring, and the direct takeaway is this: the company's future growth is defintely anchored in its high-margin aftermarket business, plus a pivotal shift to private ownership that unlocks capital for expansion. The strategic pivot to focus on proprietary, mission-critical systems is paying off, moving TGI from a complex conglomerate to a focused aerospace supplier.

The Aftermarket Engine and Core Strategy

TGI's primary growth driver isn't just new aircraft production; it's the lucrative aftermarket business-meaning maintenance, repair, and overhaul (MRO) services. This segment is a goldmine because it's built on proprietary products, which means TGI is the sole-source provider for many critical components over the aircraft's entire lifespan. Here's the quick math: in the second quarter of fiscal year 2025, the aftermarket segment delivered 61% of the company's profit, even though it was only about a third of total sales.

This focus on intellectual property (IP)-based systems is a clear competitive advantage. The commercial and military aftermarket sales grew by more than 7% in the fourth quarter of fiscal year 2025, with commercial aftermarket sales seeing a massive 25.2% jump. That growth is driven by two key trends:

• Rising average fleet age, requiring more repairs.
• The emerging 787 landing gear overhaul cycle, a multi-decade stream of high-margin work.

Financial Trajectory and Earnings Estimates

Triumph Group, Inc. (TGI) finished fiscal year 2025 (ending March 31, 2025) strong, confirming the turnaround is real. Net sales for the year climbed to $1.26 billion, representing a 6% year-over-year increase. More importantly, the company achieved its goal of being cash flow positive, reporting $18.8 million in free cash flow for the year.

The earnings picture looks even better. Analysts had been projecting significant growth, with the consensus earnings per share (EPS) estimate for the next fiscal year (FY2026) at around $1.03 per share, a projected increase of over 51% from the prior year's consensus. What this estimate hides is the potential for accelerated growth now that the company has secured new capital and a new strategic direction. You can see the foundation of the company's long-term vision in their Mission Statement, Vision, & Core Values of Triumph Group, Inc. (TGI).

Strategic Acquisition and Future Expansion

The biggest near-term opportunity is the new ownership structure. In July 2025, the acquisition of Triumph Group, Inc. by private equity firms Warburg Pincus and Berkshire Partners for approximately $3 billion was completed. This transition to a privately-held company is a game-changer. It removes the pressure of quarterly public reporting, allowing the new CEO, Jorge L. Valladares III, to make more agile, long-term strategic decisions.

The private equity backing provides a deep well of financial support and expertise. This capital is expected to fuel investment in research and development (R&D) and expansion into new markets, accelerating the growth of their mission-critical aerospace systems. They have a clear path to deleveraging (reducing debt) and are projected to see free cash flow grow significantly, potentially hitting $72 million by fiscal year 2027. That's a huge jump from the current positive position, and it means more money to reinvest in the business or pursue strategic acquisitions of their own.

Next step: Finance should model the impact of the acquisition's capital structure on the FY2026 EPS forecast by the end of the month.