At Teledyne’s Q3 2026 earnings call, the company raised its full-year outlook on the strength of the Digital Imaging segment. Backlog reached $5.3 billion, while quarterly revenue and profit both set new records.
At its Q3 2026 earnings call, Teledyne said that quarterly revenue and operating income both reached record highs and that bookings had exceeded revenue for 12 consecutive quarters. Growth in the Digital Imaging segment drove overall performance, and the company emphasized that it had raised its full-year revenue outlook and Non-GAAP EPS forecast. Secured backlog reached approximately $5.3 billion. In addition, the segment’s Non-GAAP operating margin expanded to 25.4%. As a result, full-year revenue was revised to $6.625 billion and the Non-GAAP EPS forecast to $25.40–$25.50. Uncertainty over government budgets and higher raw-material costs were cited as risk factors.
By business, Digital Imaging was the largest growth driver, with substantial increases in sales of infrared detectors for space-observation imaging and unmanned systems-related products. Growing demand in both defense and commercial markets contributed to a 15% increase in segment revenue and 14.3% organic growth. Free cash flow also reached a record high in other businesses, and share repurchases were carried out.
Financial data showed that third-quarter free cash flow reached a record $319.50 million, while operating cash flow was $352.50 million. Full-year GAAP EPS was forecast at $21.71–$21.87, and Non-GAAP EPS at $25.40–$25.50. Fourth-quarter GAAP EPS was forecast at $5.68–$5.83 and Non-GAAP EPS at $6.60–$6.70. Approximately 72% of secured backlog is expected to convert to revenue over the next 12 months.
Risk factors included uncertainty over government budgets, higher costs for electronic components and printed circuit boards, and constraints on cash flow caused by increased inventories. Regulatory procedures for the acquisition of Varex are also under way, with completion expected in early 2027.