Moog Inc. Q1 FY26 Earnings Analysis

- Missile business expected to grow over 20% annually; projected to exceed $250 million in 2026 (Page 8). - Capacity expansion underway (e.g., Salt Lake City factory) to handle 2x to 4x current missile program volumes (Page 9). - Data center cooling pump sales were $25 million in 2025; expected to double in 2026, with plans to double production volume with new production lines (Page 9). - Overall fiscal 2026 guidance shows double-digit year-over-year sales growth, with increases in Space & Defense, Commercial Aircraft, and Industrial segments (Pages 3-5). - Record sales in all segments and a 30% increase in 12-month backlog set for continued growth momentum (Page 1). - Defense spending increases expected in U.S., Europe, Australia, and Japan, fueling market growth and demand (Page 1).

- Fiscal 2026 guidance for adjusted earnings per share (EPS) increased by $0.20 to a range of $10.20 ± $0.20, reflecting stronger sales growth beyond initial projections. - Adjusted operating margin for FY 2026 is held at 13.4%, a 40 basis point increase over FY 2025. - First quarter adjusted operating margin improved by 90 basis points year-over-year to 13.0%, excluding tariff pressure. - Growth in Space and Defense and Commercial Aircraft sales, alongside Industrial segment strength (notably data center cooling pumps), contribute to positive margin and earnings trends. - Free cash flow conversion is expected to improve in FY 2026 to about 60%, supporting financial strength. - Anticipation of record sales levels, further operating margin expansion, strong EPS growth, and better free cash flow generation in 2026. - Q2 EPS forecast is $2.25 ± $0.10, indicating sustained profitability momentum.

- Moog is investing in the Salt Lake City facility to support PAC-3 and other missile programs, including a new circuit card assembly line. (Page 8) - They are standing up a second production line and boosting capacity at an existing facility to double data center cooling pump production. (Page 9) - Capital expenditures are expected to pick up during the year to support growth opportunities, maintaining similar levels to last year’s quarterly average so far. (Page 4) - Strategic investments include acquisitions aligned with business development plans, led by a new Chief Strategy and Corporate Development Officer role. (Page 2) - The company is optimizing its global manufacturing and supply chain network as part of structural improvements to balance sheet and working capital management. (Page 3) Overall, Moog is making targeted investments to increase capacity, support high-growth defense programs, data center cooling, and pursue strategic acquisitions.

- The call transcript does not mention any current or planned fundraising through debt or equity. - The company’s leverage ratio is 2.0x as of the end of Q1, which is at the low end of their target range of 2 to 3x. - Capital deployment priorities center around organic growth and pursuing strategic acquisitions to complement the existing portfolio. - The company aims for a balanced capital deployment strategy over the long term. - There is no indication of new debt or equity issuance plans in the current earnings call or guidance.

- 12-month backlog increased by 30%, reaching a record level. - Total bookings reached $2.3 billion, reflecting strong commercial aircraft, Space & Defense, and military aircraft demand. - About half of bookings were from Commercial Aircraft, including a multi-year C919 order. - Approximately 25% of orders were from Space & Defense, including a $100M+ PAC-3 missile order and a new Meteor satellite contract. - 60% of military aircraft group orders reflected current platform programs and new developments. - Missile business grew to over $200 million in 2025, expected to exceed $250 million in 2026. - Significant order increases and multiyear contracts from Lockheed Martin indicating potential 2-4x production growth. - Data center cooling pump sales were $25 million in 2025 and expected to double in 2026, with capacity expansions underway.