stockrowWhat it does
Teledyne Technologies is a technology company that makes equipment used to sense, measure, analyze and distribute information in applications where reliability and technical performance matter. It was founded in 1960 and is headquartered in Thousand Oaks. George C. Bobb III is President and Chief Executive Officer.
Its products span digital imaging sensors, cameras and systems that work in visible, infrared, ultraviolet and X-ray wavelengths; instruments used to monitor water, air and industrial processes; electronic test equipment; connectors for harsh environments; aircraft data and connectivity systems; defense electronics; and satellite communications subsystems. It also designs and manufactures larger engineered systems for defense, space, environmental and energy uses.
The company sells into aerospace and defense, industrial automation, environmental monitoring, electronics design, ocean research, offshore energy, medical imaging and pharmaceutical research. In practical terms, its equipment can help a factory inspect products, a laboratory analyze samples, an aircraft operator manage data, an ocean researcher collect underwater measurements, or a defense customer detect and identify threats.
Digital Imaging also makes unmanned aerial and ground systems, semiconductor components and sensors for applications including machine vision, medical and scientific research, space-based imaging, factory-condition monitoring and maritime thermal imaging. Its Instrumentation businesses include marine, environmental, laboratory, gas-detection, test-and-measurement and connectivity products. Aerospace and Defense Electronics supplies components, subsystems and avionics for aircraft, radar, weapon systems, space and satellite communications.
How it makes money
Teledyne operates through four segments: Digital Imaging, Instrumentation, Aerospace and Defense Electronics, and Engineered Systems. It earns revenue by selling specialized products, components, subsystems, software applications and engineered solutions to commercial and government customers.
Digital Imaging was the largest segment in FY2025, with revenue of $3.2 billion and a 51.7% share of revenue. It sells sensors, cameras and systems for industrial, scientific, government, space, defense, security and medical uses, alongside MEMS manufacturing services, high-reliability semiconductors and unmanned systems. Instrumentation generated $1.5 billion in FY2025, or 23.8% of revenue, from marine and environmental monitoring equipment, undersea connectivity, laboratory tools, gas and flame detectors, and electronic test and measurement equipment.
Aerospace and Defense Electronics generated $1.1 billion, or 17.3% of revenue, in FY2025. Its offerings include electronic and optical components, data-acquisition and communications equipment, harsh-environment interconnects, aviation batteries, aircraft data and connectivity products, and satellite-related equipment. Engineered Systems generated $435.7 million, or 7.12% of revenue, through systems engineering, integration, technology development and complex manufacturing for defense, space, environmental and energy applications.
FY2025 revenue was led by Digital Imaging at $3.2 billion; in Q3 2026, company-wide book-to-bill was 1.07. The company also licenses certain intellectual-property rights, although annual royalties received or paid are not significant to its segments or overall operations.
| Segment | Revenue, FY2025 | Share | Change on the year |
|---|---|---|---|
| Digital Imaging | $3.2 billion | 51.7% | 3.03% |
| Instrumentation | $1.5 billion | 23.8% | 5.39% |
| Aerospace and Defense Electronics | $1.1 billion | 17.3% | 36.3% |
| Engineered Systems | $435.7 million | 7.12% | −0.93% |
Customers and how it sells
Teledyne serves commercial customers, government agencies, prime contractors and subcontractors across industrial, scientific, aerospace, defense, environmental, medical, energy and electronics markets. Its government customer base includes the U.S. Department of War, NASA, the U.S. Department of Energy, foreign militaries and commercial customers. No commercial customer accounted for more than 10% of total company sales or of sales in any segment during 2025 or 2024.
The company sells through a direct internal sales force and through third-party sales representatives and distributors. Its businesses also market and sell collaboratively to certain customers across segments. Teledyne aims to work closely with customers to understand their needs and secure preferred-supplier and longer-term relationships.
The United States generated $3.2 billion in FY2025 revenue, representing 52.0% of revenue. Europe generated $1.5 billion, or 25.0%; Asia generated $894.4 million, or 14.6%; and all other geographies generated $512.4 million, or 8.38%. The company sold products in over 100 foreign countries in both 2025 and 2024. Its largest international sales countries in 2025 were the United Kingdom, Germany, Japan, China and France, and no individual country outside the United States represented more than 10% of sales.
| Region | Revenue, FY2025 | Share | Change on the year |
|---|---|---|---|
| United States | $3.2 billion | 52.0% | 8.30% |
| Europe | $1.5 billion | 25.0% | 12.6% |
| Asia | $894.4 million | 14.6% | −0.36% |
| All other | $512.4 million | 8.38% | 7.11% |
Suppliers and costs
Most raw materials used in Teledyne’s operations are readily available. Some materials come from a limited set of suppliers, including international suppliers, because of technical capability, price and other considerations. The company states that it is not dependent on any one supplier for a material amount of purchases.
Manufacturing combines the company’s own production capabilities with third-party suppliers and subcontractors, including international sources. A portion of the value delivered by product businesses is labor-oriented, including design, engineering, assembly and test work. The company has at times had difficulty obtaining raw materials, components, sub-assemblies and other manufacturing supplies because of shortages and supplier allocations.
Cost of sales rose in 2025 mainly with higher net sales and represented 57.2% of net sales, compared with 57.1% in 2024. The company is also exposed to tariffs, trade restrictions and China’s restrictions on exports of certain rare-earth minerals used in its products. Management said on the call that it has a dedicated team working with businesses to secure production inputs.
- Revenue$6.1B
- Cost of revenue−$3.5B
- Research and development−$317.3M
- Selling, general and administrative−$931.1M
- Other operating costs−$216.6M
- Operating income$1.1B
Competitive position
Teledyne competes across a wide range of specialized product categories and markets rather than against a single company offering the same full product range. It competes on quality, product performance and reliability, technical expertise, price and service. The company states that each of its markets is highly competitive and that competitors may have greater name recognition, larger installed product bases, broader engineering, manufacturing, marketing and distribution capabilities, and greater financial, technological and personnel resources.
No individual competitor is named in the available company information, so no named competitors can be listed here. The company owns patents, trade secrets, confidential information, trademarks, trade names and copyrights, and licenses intellectual-property rights from others. It does not regard any individual patent, trademark or group of such rights as essential to the company as a whole or to a reportable segment.
Our reading: Teledyne’s technical specialization is a meaningful moat source because its products address applications requiring advanced technology and high reliability, including harsh environments and defense, aerospace, scientific and industrial uses. This strength is moderated by the company’s own statement that its markets are highly competitive and that rivals can have greater resources and installed bases.
Our reading: The breadth of its segments and end markets provides a second moat source because the company combines imaging, instrumentation, avionics, defense electronics and engineered systems, but it does not prevent product-level competition on performance, price and service.
Growth opportunities
Teledyne’s strategy is to expand its four segments through targeted acquisitions, product development, complementary technologies across its businesses and research and development. It also allocates capital among capital expenditures, acquisitions, stock repurchases and product development. In 2025, the company completed four acquisitions, following two in 2024, across Digital Imaging, Instrumentation and Aerospace and Defense Electronics; it completed another acquisition for Instrumentation after year-end.
The company plans approximately $150 million of capital expenditures during 2026, principally to upgrade facilities and manufacturing equipment and support internal growth initiatives. It also seeks to consolidate or relocate facilities, rationalize products and reduce headcount in selected businesses to lower exposure to weaker end markets and improve operating performance.
Management said on the call that orders had exceeded sales for 12 consecutive quarters and funded backlog was approximately $5.3 billion. Management said about 72.0% of that backlog was available as revenue over the next 12 months. Management also said Q3 2026 Digital Imaging sales increased 15%, including 14.3% organic growth, while Aerospace and Defense Electronics bookings produced a 1.29 book-to-bill ratio.
The company expects the pending Varex acquisition to close in early 2027, subject to regulatory and stockholder approvals. Management said it expects the acquisition to be accretive in its first year and seeks to move the business toward mid-single-digit growth after initial margin-focused restructuring.
- $4.6BFY2021
- $5.5BFY2022
- $5.6BFY2023
- $5.7BFY2024
- $6.1BFY2025
- $6.6BFY2026 guidance
Structural risks
-
A recession in the United States or globally could adversely affect the company. Its end markets are cyclical, and a downturn in one or more markets could materially affect financial results.
-
Acquisitions bring integration, personnel-retention, synergy, valuation, control, cybersecurity, production-delay, transaction-cost and unknown-liability risks. The company’s growth strategy includes acquisitions.
-
International operations expose the company to political and economic instability, export controls, sanctions, tariffs, tax and currency changes, data-protection requirements, intellectual-property enforcement issues and transportation disruption.
-
Tariffs, trade restrictions and retaliatory actions can reduce revenue, raise materials costs or delay production. China’s restrictions on exports of certain rare-earth minerals could disrupt supplies of those minerals and components made from them.
-
Government work carries fixed-price execution and termination risk. Under fixed-price contracts, actual performance costs can exceed the agreed price; government contracts may also be terminated for convenience.
-
The company faces shortages and supplier allocations for components and other inputs. Management said on the call that shortages were causing above-normal, localized input-cost inflation in some areas.
Bottom line
Our reading
Our reading: Teledyne is a diversified supplier of specialized sensing, imaging, measurement, aerospace, defense and engineered products serving commercial and government customers across several technical markets. Its business rests on products used in high-reliability applications, a broad customer base, international sales and government demand. Its exposure includes cyclical end markets, acquisition integration, supply constraints, tariffs and the execution risk of fixed-price government work. The funded backlog of $5.3 billion and orders exceeding sales for 12 consecutive quarters indicate current order momentum, while not removing those structural exposures.