TransDigm Group Incorporated stock research
FY2026 Q1
TransDigm Group (TDG) Gross Margin — Quarter Ended Dec 27, 2025
Revenue, gross profit, and cost of revenue all decreased from the prior quarter, but the gross margin weakened as the decline in cost of revenue was proportionally smaller than the decline in revenue. Compared to the same quarter last year, revenue and gross profit were higher, yet the gross margin was lower, indicating that cost of revenue grew faster than revenue.
Gross margin takeaway
Quarter ended Dec 27, 2025 · FY2026 Q1
Revenue, gross profit, and cost of revenue all decreased from the prior quarter, but the gross margin weakened as the decline in cost of revenue was proportionally smaller than the decline in revenue. Compared to the same quarter last year, revenue and gross profit were higher, yet the gross margin was lower, indicating that cost of revenue grew faster than revenue.
- The strongest observable driver of the gross margin change is the relationship between cost of revenue and revenue. In the current quarter, cost of revenue decreased relative to the prior quarter, but the decrease was not enough to maintain the margin level.
- Compared to the immediately preceding quarter, gross margin weakened. Compared to the same quarter one year earlier, gross margin also weakened.
Gross margin snapshot
The selected quarter's reported revenue, gross profit, direct costs, and margin comparisons.
Gross margin
59.2%
Gross profit
$1.4B
Revenue
$2.3B
Cost of revenue
$933.0M
Quarter-over-quarter change
-1.2 pts
Year-over-year change
-2.4 pts
Quarterly gross margin trend
A four-quarter view of the revenue and direct-cost bridge behind gross margin.
| Period | Revenue | Gross profit | Cost of revenue | Gross margin |
|---|---|---|---|---|
| Mar 29, 2025 | $2.1B | $1.3B | $876.0M | 59.3% |
| Jun 28, 2025 | $2.2B | $1.3B | $905.0M | 59.5% |
| Sep 30, 2025 | $2.4B | $1.5B | $967.0M | 60.3% |
| Dec 27, 2025 | $2.3B | $1.4B | $933.0M | 59.2% |
Quarterly comparisons
Compare the selected margin with the preceding quarter and the same fiscal quarter one year earlier.
Previous-quarter change
Sep 30, 2025
-1.2 pts
Year-over-year change
Dec 28, 2024
-2.4 pts
What the margin says
Filing-constrained interpretation of margin direction, comparisons, and what to monitor next.
The strongest observable driver of the gross margin change is the relationship between cost of revenue and revenue. In the current quarter, cost of revenue decreased relative to the prior quarter, but the decrease was not enough to maintain the margin level.
Compared to the immediately preceding quarter, gross margin weakened. Compared to the same quarter one year earlier, gross margin also weakened.
Monitor the trajectory of cost of revenue relative to revenue in future quarters to assess margin stability.