Digital imaging and instrumentation provider Teledyne (NYSE: TDY) beat Wall Street’s revenue expectations in Q2 CY2025, with sales up 10.2% year on year to $1.51 billion. Its non-GAAP profit of $5.20 per share was 3% above analysts’ consensus estimates.

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“Today we reported record quarterly sales, having achieved the greatest total and organic sales growth in three years,” said Robert Mehrabian, Executive Chairman. “Furthermore, sales grew organically in every segment, and orders exceeded sales for the seventh consecutive quarter. Both GAAP and non-GAAP earnings per share increased at double-digit rates. Given our strong second quarter results, we are raising the low end of our full year non-GAAP earnings outlook. However, we are exercising some caution regarding the third quarter, as our second quarter likely benefited from a degree of accelerated demand given uncertain global trade policies. While we are pursuing a number of acquisitions, we will continue to consider stock repurchases when we believe Teledyne is the best value acquisition available.”

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 can indicate its overall quality. Any business can experience short-term success, but top-performing ones enjoy sustained growth for years. Thankfully, Teledyne’s 13.3% annualized revenue growth over the last five years was excellent. Its growth beat the average industrials company and shows its offerings resonate with customers.

We at StockStory place the most emphasis on long-term growth, but within industrials, a half-decade historical view may miss cycles, industry trends, or a company capitalizing on catalysts such as a new contract win or a successful product line. Teledyne’s recent performance shows its demand has slowed significantly as its annualized revenue growth of 2.8% over the last two years was well below its five-year trend. We also note many other Inspection Instruments businesses have faced declining sales because of cyclical headwinds. While Teledyne grew slower than we’d like, it did do better than its peers.

This quarter, Teledyne reported year-on-year revenue growth of 10.2%, and its $1.51 billion of revenue exceeded Wall Street’s estimates by 2.7%.

Looking ahead, sell-side analysts expect revenue to grow 5.1% over the next 12 months. While this projection suggests its newer products and services will catalyze better top-line performance, it is still below the sector average.

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Operating Margin

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 17.1%. This result isn’t surprising as its high gross margin gives it a favorable starting point.

Analyzing the trend in its profitability, Teledyne’s operating margin rose by 3.2 percentage points over the last five years, as its sales growth gave it operating leverage.

In Q2, Teledyne generated an operating margin profit margin of 18.4%, in line with the same quarter last year. This indicates the company’s cost structure has recently been stable.

Earnings Per Share

We track the long-term change in earnings per share (EPS) for the same reason as long-term revenue growth. Compared to revenue, however, EPS highlights whether a company’s growth is profitable.

Teledyne’s spectacular 14.8% 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 more recent period because it can provide insight into an emerging theme or development for the business.

Although it wasn’t great, Teledyne’s two-year annual EPS growth of 5.4% topped its 2.8% two-year revenue growth.

Diving into the nuances of Teledyne’s earnings can give us a better understanding of its performance. A two-year view shows that Teledyne has repurchased its stock, shrinking its share count by 1%. This tells us its EPS outperformed its revenue not because of increased operational efficiency but financial engineering, as buybacks boost per share earnings.

In Q2, Teledyne reported EPS at $5.20, up from $4.58 in the same quarter last year. This print beat analysts’ estimates by 3%. Over the next 12 months, Wall Street expects Teledyne’s full-year EPS of $20.77 to grow 8.7%.

Key Takeaways from Teledyne’s Q2 Results

We enjoyed seeing Teledyne beat analysts’ EBITDA expectations this quarter. We were also glad its revenue outperformed Wall Street’s estimates. On the other hand, its EPS guidance for next quarter missed and its full-year EPS guidance was in line with Wall Street’s estimates. Overall, we think this was still a decent quarter with some key metrics above expectations. The stock traded up 4.4% to $579.89 immediately after reporting.

Teledyne put up rock-solid earnings, but one quarter doesn’t necessarily make the stock a buy. Let’s see if this is a good investment. What happened in the latest quarter matters, but not as much as longer-term business quality and valuation, when deciding whether to invest in this stock. We cover that in our actionable full research report which you can read here, it’s free.