Digital imaging and instrumentation provider Teledyne (NYSE: TDY) announced better-than-expected revenue in Q1 CY2026, with sales up 7.6% year on year to $1.56 billion. Its non-GAAP profit of $5.80 per share was 6% above analysts’ consensus estimates.
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Teledyne (TDY) Q1 CY2026 Highlights:
- Revenue: $1.56 billion vs analyst estimates of $1.52 billion (7.6% year-on-year growth, 3% beat)
- Adjusted EPS: $5.80 vs analyst estimates of $5.47 (6% beat)
- Adjusted EBITDA: $387 million vs analyst estimates of $368.9 million (24.8% margin, 4.9% beat)
- Management raised its full-year Adjusted EPS guidance to $24 at the midpoint, a 1.5% increase
- Operating Margin: 18.9%, in line with the same quarter last year
- Free Cash Flow Margin: 13.1%, down from 15.5% in the same quarter last year
- Market Capitalization: $29.77 billion
“We started 2026 with record first quarter sales, non-GAAP earnings per share and operating margin with sales and non-GAAP earnings increasing 7.6% and 17.2%, respectively,” said Robert Mehrabian, Executive Chairman.
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 put up a good quarter or two, but the best consistently grow over the long haul. Thankfully, Teledyne’s 14.9% annualized revenue growth over the last five years was exceptional. Its growth beat the average industrials company and shows its offerings resonate with customers, a helpful starting point for our analysis.
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 5.4% over the last two years was well below its five-year trend. 
This quarter, Teledyne reported year-on-year revenue growth of 7.6%, and its $1.56 billion of revenue exceeded Wall Street’s estimates by 3%.
Looking ahead, sell-side analysts expect revenue to grow 4% over the next 12 months, similar to its two-year rate. This projection is underwhelming and indicates its products and services will see some demand headwinds. At least the company is tracking well in other measures of financial health.
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Operating Margin
Operating margin is an important measure of profitability as it shows the portion of revenue left after accounting for all core expenses – everything from the cost of goods sold to advertising and wages. It’s also useful for comparing profitability across companies with different levels of debt and tax rates because it excludes interest and taxes.
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 17.4%. This result isn’t surprising as its high gross margin gives it a favorable starting point.
Looking at the trend in its profitability, Teledyne’s operating margin rose by 5.1 percentage points over the last five years, as its sales growth gave it immense operating leverage.
In Q1, Teledyne generated an operating margin profit margin of 18.9%, in line with the same quarter last year. This indicates the company’s cost structure has recently been stable.
Earnings Per Share
Revenue trends explain a company’s historical growth, but the long-term change in earnings per share (EPS) points to the profitability of that growth – for example, a company could inflate its sales through excessive spending on advertising and promotions.
Teledyne’s remarkable 13.8% 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 shorter period to see if we are missing a change in the business.
Although it wasn’t great, Teledyne’s two-year annual EPS growth of 7.7% topped its 5.4% two-year revenue growth.
We can take a deeper look into Teledyne’s earnings to better understand the drivers of its performance. While we mentioned earlier that Teledyne’s operating margin was flat this quarter, a two-year view shows its margin has expandedwhile its share count has shrunk 2.5%. These are positive signs for shareholders because improving profitability and share buybacks turbocharge EPS growth relative to revenue growth. 
In Q1, Teledyne reported adjusted EPS of $5.80, up from $4.95 in the same quarter last year. This print beat analysts’ estimates by 6%. Over the next 12 months, Wall Street expects Teledyne’s full-year EPS of $22.87 to grow 6.2%.
Key Takeaways from Teledyne’s Q1 Results
We enjoyed seeing Teledyne beat analysts’ revenue expectations this quarter. We were also glad its EBITDA outperformed Wall Street’s estimates. Overall, we think this was a solid quarter with some key areas of upside. The stock traded up 1.4% to $651.85 immediately following the results.
Indeed, Teledyne had a rock-solid quarterly earnings result, but is this stock a good investment here? 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).
