MOG-B — Moog Inc.

Summary of Moog Inc. Q2 2026 Earnings Call

1. Key Financial Results and Metrics

• Sales: $1.1 billion, up 13% year-over-year.
• Adjusted Earnings Per Share (EPS): Record high of $10.60, an increase of $0.40 from previous guidance.
• Adjusted Operating Margin: 13.4%, a 90 basis point improvement from the prior year, despite 110 basis points of pressure from tariffs.
• Free Cash Flow: Nearly $100 million generated in Q2, with year-to-date performance in solid positive territory.
• Backlog: Record total and 12-month backlog, up 33% from the prior year.

2. Strategic Updates and Business Highlights

• Defense Sector: Strong demand driven by increased U.S. defense spending due to geopolitical tensions, particularly in the Middle East. Moog is positioned to ramp up production significantly, especially in missile defense programs.
• Commercial Aerospace: Continued strong demand with increased production rates anticipated. Moog is managing inventory carefully to align with customer needs, reflecting a deliberate decision to avoid excess inventory.
• Industrial Markets: Stability observed, with growth in data center cooling pump demand.
• Recognition: Moog received Supplier of the Year awards from Embraer and General Dynamics Land Systems, highlighting operational excellence and innovation.
• Sustainability Initiatives: Continued focus on community engagement and environmental sustainability.

3. Forward Guidance and Outlook

• Fiscal Year 2026 Guidance: Increased sales and adjusted EPS guidance, reaffirming adjusted operating margin and free cash flow conversion targets.
• Sales Growth: Expected solid double-digit year-over-year growth, with adjustments made for specific segments:
  • Space and Defense: Increased guidance by $35 million.
  • Industrial: Increased by $30 million.
  • Military Aircraft: Increased by $25 million.
  • Commercial Aircraft: Decreased by $20 million due to inventory management.
• Third Quarter EPS Forecast: $2.65, plus or minus $0.10.

4. Bad News, Challenges, or Points of Concern

• Tariff Pressure: Increased from previous guidance, now expecting 110 basis points of pressure due to a higher volume of business in tariff-sensitive areas.
• Commercial Aircraft Segment: Adjusted guidance reflects a cautious approach to inventory management, which could impact short-term sales recognition.
• Geopolitical Risks: Ongoing conflicts, particularly in the Middle East, could affect supply chains and operational costs, although no immediate negative impacts were reported.

5. Notable Q&A Insights

• Missile Business Growth: Moog is prepared to meet increased demand for missile production, with discussions ongoing with customers about ramping up capacity.
• Commercial Aircraft Demand: The company is managing inventory timing rather than facing a decline in demand, indicating strong long-term prospects.
• Defense Spending Outlook: Despite potential political changes, Moog believes it is well-positioned in priority programs that will continue to receive funding.
• Operational Efficiency: The company has achieved 100% delivery performance on missile contracts, enhancing its competitive position.

Overall, Moog Inc. reported a strong Q2 2026 performance, with robust growth across segments and a positive outlook, despite facing some challenges related to tariffs and geopolitical tensions.