Curtiss Wright (CW) Q4 FY25 earnings call: guidance and Q&A

What is Curtiss-Wright's exposure to increased missile volumes and the Golden Dome initiative, specifically in radar/sensors or Defense Electronics?

Lynn Bamford clarified that direct missile content is minor (telemetry/flight test instrumentation). However, Curtiss-Wright is very well-positioned across the three technology buckets of Golden Dome (sensors, networking, effectors) with active developments and existing capabilities, leveraging its long history and alignment with U.S. and allied modernization priorities.

“However, as the demand and the belief that we need to restock pile is all connected to the Golden Dome and very many things that are related to the defense of our country where we have fantastic exposure.”

asked by Kristine Liwag · answered by Lynn Bamford

Regarding the anticipated AP1000 order in 2026, which customer is expected (Poland, Bulgaria, or U.S.), how many units are expected, and what is the financial impact on 2026 guidance?

Lynn stated that the first orders could come from either European or U.S. customers, depending on Westinghouse's decisions, and the size is not yet clear. Chris explained that the order is not included in 2026 guidance but would involve upfront labor and material orders, with revenue accelerating over a 5-year 'bell curve' and a focus on working capital management.

“I was just going to add, you had asked about the financial impact. And I think as you think about the timing of the order and when that hits us during the year, there's going to obviously be some labor that we're going to incur upfront in the contract. But we mentioned the bell curve and that taking place over a 5-year period.”

asked by Kristine Liwag · answered by K. Farkas

Given the significant step-up in CapEx in 2025 and 2026, how is Curtiss-Wright maintaining strong free cash flow conversion, specifically regarding working capital dynamics?

Chris Farkas detailed that working capital as a percentage of sales was 19.2% in 2025, with a target of approximately 18% for 2026, which would be a new record. This improvement is driven by increased deferred income from commercial excellence, higher DPO, and future opportunities in DSO and inventory turns, supported by enhanced systems for cash flow management.

“But as we head into this next year, we're going to continue to improve upon collections. We've got opportunity across the board, whether it's DSO, inventory turns, DPO, and we'll be targeting a working capital percentage of sales of approximately 18%, that will be record.”

asked by Gregory Dahlberg · answered by K. Farkas

Was the recently announced C-17 order booked in Q4 2025 or Q1 2026, and does it indicate a quick snapback in Defense Electronics bookings?

Lynn Bamford confirmed that the C-17 order was a Q1 2026 booking for Curtiss-Wright. She stated it is a very exciting new platform and is indicative of the delayed bookings from 2025 (due to government shutdown and continuing resolution) that are now starting to materialize, supporting the expectation for a snapback in Defense Electronics bookings.

“So to be clear, it was a Q1 order for us, and it's a very exciting new platform for us, but it's also very indicative of the bookings we clearly saw that we believed would come in 2025 that were delayed partly due to the shutdown, partly due to the CR, some structure changes within the government.”

asked by Gregory Dahlberg · answered by Lynn Bamford

Were the Q4 2025 mix headwinds in the Naval & Power segment seasonal or structural, and how will they impact 2026 guidance?

Chris Farkas explained that 2026 will see a heavy ramp-up in Naval Defense (CVN-81, Virginia-Class) and Commercial Nuclear, including SMR prototyping. While process markets show MRO growth with margin benefits, SMR prototyping work is initially lower margin but will transition to stronger margins with production. These factors contribute to the mix dynamics.

“So thematically, I think, process and maybe the transition into prototyping are probably the two things that you can think about as we go into 2026.”

asked by Bradley Eyster · answered by K. Farkas

Beyond timing issues, what explains the deceleration in pure defense revenue growth (from 13% average to 6% guide), especially given strong foreign military sales?

Lynn Bamford expressed strong optimism for defense growth matching or beating the U.S. DOW. She acknowledged timing issues from the CR/shutdown led to a conservative ground defense guide, noting over $100 million of expected 2025 orders pushed to 2026. She emphasized technology alignment (Fabric100, NVIDIA, Microsoft Azure) and the Navy's increased maritime industrial base funding ($15M to $55M) as long-term positives, indicating no long-term disruptive issues.

“Broadly speaking, across Defense Electronics specifically, we can clearly have line of sight over $100 million of orders, we fully expected to get in '25 that have been pushed into '26 and that C-17 is one of the first ones that has landed.”

asked by Michael Ciarmoli · answered by Lynn Bamford

Has the Navy's Palantir-powered shipbuilding operating system, which involves 30 key suppliers, had any impact on Curtiss-Wright's volumes or margin expansion?

Lynn Bamford stated that the initiative is still in the 'forming stage' and has had no impact on Curtiss-Wright's volumes or margins to date. She confirmed that Curtiss-Wright is in discussions with Palantir and will participate as appropriate.

“I'd say to date, it's definitely still in the forming stage. And so no, I wouldn't say there's any impact to date, but it is something that is an initiative by the Navy and Curtiss-Wright will participate as is appropriate for us as a business.”

asked by Louie Dipalma · answered by Lynn Bamford