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Digital imaging and instrumentation provider Teledyne (NYSE:TDY) reported in Q2 CY2026, with sales up 9.8% year on year to $1.66 billion. Its non-GAAP profit of $6.28 per share was 8.4% above analysts’ consensus estimates.
Is now the time to buy Teledyne? Find out by accessing our full research report, it’s free.
Teledyne (TDY) Q2 CY2026 Highlights:
・Revenue: $1.66 billion vs analyst estimates of $1.58 billion (9.8% year-on-year growth, 5.3% beat)
・Adjusted EPS: $6.28 vs analyst estimates of $5.79 (8.4% beat)
・Management raised its full-year Adjusted EPS guidance to $24.55 at the midpoint, a 2.3% increase
・Operating Margin: 20%, up from 18.4% in the same quarter last year
・Free Cash Flow Margin: 17.1%, up from 13% in the same quarter last year
・Market Capitalization: $30 billion
“This morning, we were pleased to announce the strongest quarterly orders, sales, and operating profit in the company’s history,” said Robert Mehrabian, Executive Chairman.
Company Overview
Playing a role in mapping the ocean floor as we know it today, Teledyne (NYSE:TDY) offers digital imaging and instrumentation products for various industries.
Revenue Growth
A company’s long-term sales performance is one signal of its overall quality. Any business can put up a good quarter or two, but the best consistently grow over the long haul. Thankfully, Teledyne’s 12.8% annualized revenue growth over the last five years was excellent. Its growth beat the average industrials company and shows its offerings resonate with customers, a helpful starting point for our analysis.
Long-term growth is the most important, but within industrials, a half-decade historical view may miss new industry trends or demand cycles. Teledyne’s recent performance shows its demand has slowed significantly as its annualized revenue growth of 7.2% over the last two years was well below its five-year trend.
This quarter, Teledyne reported year-on-year revenue growth of 9.8%, and its $1.66 billion of revenue exceeded Wall Street’s estimates by 5.3%.
Looking ahead, sell-side analysts expect revenue to grow 3.6% over the next 12 months, a deceleration versus the last two years. This projection doesn’t excite us and implies its products and services will see some demand headwinds. At least the company is tracking well in other measures of financial health.
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Operating Margin
Operating margin is a key measure of profitability. Think of it as net income - the bottom line - excluding the impact of taxes and interest on debt, which are less connected to business fundamentals.
Teledyne has been a well-oiled machine over the last five years. It demonstrated elite profitability for an industrials business, boasting an average operating margin of 17.9%. This result isn’t surprising as its high gross margin gives it a favorable starting point.
Looking at the trend in its profitability, Teledyne’s operating margin rose by 3.8 percentage points over the last five years, as its sales growth gave it operating leverage.
This quarter, Teledyne generated an operating margin profit margin of 20%, up 1.7 percentage points year on year. Since its gross margin expanded more than its operating margin, we can infer that leverage on its cost of sales was the primary driver behind the recently higher efficiency.
Earnings Per Share
Revenue trends explain a company’s historical growth, but the long-term change in earnings per share (EPS) points to the profitability of that growth — for example, a company could inflate its sales through excessive spending on advertising and promotions.
Teledyne’s solid 11.5% annual EPS growth over the last five years aligns with its revenue performance. This tells us its incremental sales were profitable.
Like with revenue, we analyze EPS over a shorter period to see if we are missing a change in the business.
Teledyne’s two-year annual EPS growth of 10.5% was good and topped its 7.2% two-year revenue growth.
Diving into the nuances of Teledyne’s earnings can give us a better understanding of its performance. Teledyne’s operating margin has expanded over the last two yearswhile its share count has shrunk 1.9%. These are positive signs for shareholders because improving profitability and share buybacks turbocharge EPS growth relative to revenue growth.
In Q2, Teledyne reported adjusted EPS of $6.28, up from $5.20 in the same quarter last year. This print beat analysts’ estimates by 8.4%. Over the next 12 months, Wall Street expects Teledyne’s full-year EPS to grow 4.3% from $23.95 to $24.99.
Key Takeaways from Teledyne’s Q2 Results
We were impressed by Teledyne's revenue beat vs. analysts’ expectations this quarter. We were also glad its full-year EPS guidance exceeded Wall Street’s estimates. Zooming out, we think this was a good print with some key areas of upside. The stock traded up 2.4% to $663.10 immediately following the results.
Sure, Teledyne had a solid quarter, but if we look at the bigger picture, is this stock a buy? The latest quarter does matter, but not nearly as much as longer-term fundamentals and valuation, when deciding if the stock is a buy. We cover that in our actionable full research report which you can read here (it’s free).
