Moog Inc delivered a solid top-line gain in Q1 2025 with revenue of $910.3 million, up 6.2% year-over-year, driven by continued demand for precision motion controls across its Aircraft Controls and Space & Defense Controls segments. The quarter showed meaningful profitability expansion before financing and tax considerations, with gross margin at approximately 26.6% and operating margin near 10.0%. Net income of $53.1 million translated to an EPS of $1.66 (diluted $1.64), signaling the business remains leverageable with scale and mix benefits.
However, Moog faces notable margin pressures and liquidity headwinds. Operating cash flow was negative at $132.3 million, and the quarter featured a substantial working capital outflow (~$214.7 million), contributing to negative free cash flow of $165.1 million. The company carries a meaningful debt burden (total debt of $1.104 billion and net debt around $1.031 billion), with an interest coverage of roughly 5.35x. Liquidity is supported by cash of about $73.8 million and a sizable financing infusion of $163.2 million, but the balance sheet remains exposed to cyclicality in aerospace, funding for defense programs, and working capital dynamics.
Moog’s diversified exposure to aerospace, defense, and industrial systems provides a resilience cushion against near-term fragility in any single market. The Q1 2025 results illustrate disciplined cost structure on a gross and operating basis, but the investment thesis centers on the ability to convert revenue strength into sustainable free cash flow and to responsibly manage debt as defense and commercial aerospace cycles evolve.