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    CW
    Earnings call· Dec 2025(Q4 FY25)

    CURTISS WRIGHT Q4 FY25 earnings call CW

    Feb 12, 2026 Source

    Executive summary

    Curtiss-Wright Q4 FY25 — Record Performance and Strong Outlook

    Curtiss-Wright delivered record Q4 and full-year 2025 financial performance, driven by strong organic growth, operational excellence, and strategic investments. The company is well-positioned for continued profitable growth in 2026, with a positive outlook across defense and commercial nuclear markets, and is on track to exceed its 3-year Investor Day financial targets.

    Highlights

    5

    • Q4 FY25 sales increased 15% year-over-year to $947 million, with 11% organic growth.

    • Q4 FY25 diluted EPS grew 16% year-over-year, slightly ahead of expectations.

    • Q4 FY25 free cash flow was strong at $315 million, up 13%, reflecting 224% conversion.

    • Q4 FY25 new orders increased 18%, reflecting a nearly 1.2x book-to-bill ratio.

    • Full-year 2025 operating margin expanded 110 basis points to a record 18.6%, and backlog increased 18% to over $4 billion.

    Concerns

    5

    • Full-year 2025 A&D orders were partly offset by lighter demand in aerospace and ground defense due to delays from continuing resolution and government shutdown, impacting short-cycle Defense Electronic businesses.

    • Defense Electronics segment recorded a Q4 FY25 book-to-bill of 0.96x due to timing issues.

    • Q4 FY25 operating profitability in Aerospace & Industrial was tempered by a less favorable mix, mainly due to higher customer-funded R&D.

    • Q4 FY25 operating margin in Naval & Power was offset by an unfavorable mix, including higher R&D supporting next-generation SMR designs.

    • Full-year 2026 sales in Ground Defense are anticipated to decline 4% to 6% due to timing delays in embedded computing revenues and tactical communications equipment orders.

    Guidance & targets

    34
    CategoryTargetConfidence
    Full-year 2026 Organic Sales Growth
    6% to 8%
    high materiality
    High
    Full-year 2026 Operating Income Growth
    outpace sales growth
    high materiality
    High
    Full-year 2026 Operating Margin Expansion
    30 to 60 basis points
    high materiality
    High
    Full-year 2026 Diluted EPS Growth
    11% to 15%
    high materiality
    High
    Full-year 2026 Free Cash Flow
    $575 million to $595 million
    high materiality
    High
    Full-year 2026 Free Cash Flow Conversion
    approximately 105%
    medium materiality
    High
    Full-year 2026 Capital Expenditures
    $110 million to $120 million
    medium materiality
    High
    Full-year 2026 Working Capital as % of Sales
    approximately 18%
    medium materiality
    High
    Full-year 2026 Tax Rate
    21.5%
    low materiality
    High
    Q1 2026 Sales Growth
    high single digits
    medium materiality
    High
    Q1 2026 Operating Income Growth
    low double-digit growth
    medium materiality
    High
    Q1 2026 EPS Growth
    high teens growth
    medium materiality
    High
    Full-year 2026 Aerospace Defense Sales Growth
    9% to 11%
    medium materiality
    High
    Full-year 2026 Ground Defense Sales Decline
    4% to 6%
    medium materiality
    Medium
    Full-year 2026 Naval Defense Sales Growth
    5% to 7%
    medium materiality
    High
    Full-year 2026 Commercial Aerospace Sales Growth
    10% to 12%
    medium materiality
    High
    Full-year 2026 Total Aerospace & Defense Sales Growth
    5% to 7%
    high materiality
    High
    Full-year 2026 Power and Process Sales Growth
    12% to 14%
    medium materiality
    High
    Full-year 2026 Commercial Nuclear Sales Growth
    mid-teens growth
    medium materiality
    High
    Full-year 2026 Process Market Sales Growth
    low double-digit growth
    medium materiality
    High
    Full-year 2026 General Industrial Sales Growth
    flat
    low materiality
    Medium
    Full-year 2026 Total Commercial Markets Sales Growth
    7% to 9%
    high materiality
    High
    Full-year 2026 Aerospace & Industrial Sales Growth
    5% to 7%
    medium materiality
    High
    Full-year 2026 Aerospace & Industrial Operating Income Growth
    11% to 14%
    medium materiality
    High
    Full-year 2026 Aerospace & Industrial Operating Margin Expansion
    90 to 110 basis points
    medium materiality
    High
    Full-year 2026 Defense Electronics Sales Growth
    4% to 6%
    medium materiality
    High
    Full-year 2026 Defense Electronics Operating Income Growth
    4% to 6%
    medium materiality
    High
    Full-year 2026 Defense Electronics Operating Margin
    flat to up 20 basis points
    medium materiality
    High
    Full-year 2026 Naval & Power Sales Growth
    8% to 9%
    medium materiality
    High
    Full-year 2026 Naval & Power Operating Income Growth
    10% to 13%
    medium materiality
    High
    Full-year 2026 Naval & Power Operating Margin Expansion
    30 to 50 basis points
    medium materiality
    High
    Full-year 2026 Total Curtiss-Wright Operating Income Growth
    8% to 11%
    high materiality
    High
    Full-year 2026 Standard Share Repurchases
    $60 million
    medium materiality
    High
    AP1000 Reactor Coolant Pumps Order
    expected in 2026
    high materiality
    High

    Segment performance

    3
    SegmentRevenueYoYQoQMargin
    Aerospace & Industrial
    Q4 sales growth was in line with expectations, driven by Commercial Aerospace and Defense markets, while General Industrial remained flat. Operating margin was strong but tempered by mix.
    Commercial Aerospace market: solid OEM sales growth supporting increased production on narrow-body and wide-body platformsDefense markets: increased demand for EM actuation equipment supporting ground-based mobile launcher systemsGeneral Industrial market: sales essentially flat overall, but outpaced global macro conditions affecting industrial vehicle marketsOperating profitability tempered by a less favorable mix of business, mainly due to higher customer-funded R&D
    		—+5%—20.1%
    Defense Electronics
    Q4 sales growth exceeded expectations, primarily due to timing in ground defense. Strong operating margin improvement driven by higher revenues and operational efficiency.
    Ground Defense embedded computing revenues accelerated into the fourth quarterSolid year-over-year growth in sales of tactical communications equipmentIncreased Turret Drive Stabilization Systems supporting international customersAerospace Defense market: higher direct foreign military sales of embedded computing and flight test instrumentation, offset by timing of domestic fighter jet and UAV programsCommercial Aerospace market: solid growth in flight data recorder sales and higher avionics equipment supporting various helicopter programsOperating margin up 160 basis points, reflecting favorable absorption on higher revenues and operational excellence initiatives, partially offset by higher R&D investments
    		—+17%—25.9%
    Naval & Power
    Q4 sales were well ahead of expectations, driven by strong naval defense and commercial nuclear performance. Operating margin was solid but impacted by unfavorable mix from R&D investments.
    Strong revenue growth in naval defense following continued improvements in the supply chain and acceleration of production on Submarine programsIncrease in aftermarket revenue supporting naval shipyards through fleet services workAerospace Defense market: strong sequential and year-over-year increase in revenues for arresting systems products, principally supporting international programsPower and Process market: strong contribution from I&C Solutions acquisition, contributing to higher sales in commercial nuclear and process marketsOrganic growth in commercial nuclear sales reflected continued ramp-up in development across several SMR designs and higher government nuclear revenuesStrong growth in the process market driven by higher MRO valve salesOperating income grew 13%, reflecting favorable absorption on higher sales, more than offset by unfavorable mix including higher R&D supporting next-generation SMR designs
    		—+21%—17.9%

    Operational metrics

    16
    R&D Investment Growth
    faster than sales
    FY25

    Company commitment to grow R&D faster than sales over time.

    Capital Expenditures Increase
    nearly 50%YoY
    FY25

    Increase in capital expenditures to support growth investments across all 3 segments.

    Total Share Repurchases
    $465 millionrecord
    FY25

    Executed a record amount in 2025.

    Dividend Increase Streak
    9th straight year
    FY25

    Increased annual dividend for the ninth consecutive year.

    Working Capital as % of Sales
    19.2%near record levels
    FY25

    Achieved near record levels of working capital efficiency.

    Commercial and Operational Excellence Contribution
    close to $12 million
    FY25

    Contribution to the P&L from commercial and operational excellence initiatives.

    Incremental R&D Investment
    $4 million
    FY26

    Incremental internally funded R&D investments in Defense Electronics.

    Incremental Contribution Margin on Sales
    roughly 25%
    FY26

    Expected strong incremental contribution margin on sales for the upcoming year.

    Maritime Industrial-Based Funding
    $55 millionup from $15 million
    current

    Clear indication of how the Navy sees Curtiss-Wright as a critical supplier.

    NATO Defense Spending Commitment
    upwards of 5%from 2% of GDP
    by 2035

    NATO committed to boost defense spending from 2% of GDP per year to upwards of 5% by 2035.

    U.S. Nuclear Generation Capacity Goal
    400 gigawattsquadruple
    by 2050

    Administration's goal to quadruple U.S. nuclear generation capacity to 400 gigawatts by 2050.

    AP1000 Commitment
    $80 billion
    future

    Administration's commitment to support the construction of 10 new Westinghouse AP1000 reactors.

    Defense Electronics Delayed Orders
    over $100 million
    FY25 pushed to FY26

    Orders fully expected in 2025 that were delayed due to government issues and pushed into 2026.

    North America MRO Growth (Process Markets)
    low single-digit to mid-single-digit
    2026

    Projected growth for North America MRO in the process markets.

    Global Petrochem Growth
    a little bit below GDP
    2026

    Expected global growth for the petrochem market.

    North America Petrochem Growth
    in line with GDP
    2026

    Expected North America growth for the petrochem market.

    Industry KPIs

    9
    MetricValueDetails
    Book to bill rationearly 1.2x
    Free cash flow bridge$554 millionUSD
    Defense program awards—
    Program segment backlog—
    Aftermarket services split—
    Unit deliveries by program—
    Production rates by program—
    Shipbuilding marine program execution—
    Total company backlog total estimated contract vin excess of $4 billionUSD

    Orderbook & backlog

    6
    New Ordersincreased 18%Q4 FY25

    YoY

    Book-to-billnearly 1.2xQ4 FY25
    Total Orders$4.1 billionFY25

    up 10% YoY

    New record

    Book-to-billnearly 1.2xFY25
    Backlogin excess of $4 billionFY25

    increased 18%

    New record, provides greater confidence in future topline growth.

    Defense Electronics Book-to-bill0.96xFY25

    Impacted by delayed orders due to continuing resolution and government shutdown.

    Product announcements

    4
    ProductTypeDetails
    Ruggedized computing solutions with NVIDIA's GPUsupdate
    Fabric100 family of productsupdate
    Ruggedized serversmilestone
    MOSA, SOSA, CMOS compliant productsmilestone

    Deals & partnerships

    6
    I&C Solutionsacquisition

    Acquisition contributed to Q4 sales growth in Naval & Power segment.

    Rheinmetallpartnershipcoming decade

    Well aligned with Rheinmetall for supplying Turret Drive Stabilization Systems to international ground vehicles.

    NVIDIApartnership

    Designing and building ruggedized computing solutions with NVIDIA's GPUs (Blackwell to SWaP optimized).

    Microsoft Azurepartnership

    Ruggedized servers validated as part of Microsoft Azure ecosystem.

    Rolls-Roycepartnership

    Partnership for SMR content development, building out capabilities.

    TerraPowerpartnership

    Working with TerraPower on SMR content development.

    Risks & headwinds

    4
    Timing delays in Defense Electronics ordersQ4 FY25 and FY26

    Q4 FY25 Defense Electronics book-to-bill of 0.96x; over $100 million of expected 2025 orders pushed to 2026; FY26 Ground Defense sales outlook to decline 4% to 6%.

    Mitigation: Expect normal order flow in 60 to 90 days with budget in place; C-17 order already landed in Q1 FY26; programs remain in good standing and technologies align with modernization priorities.

    Less favorable business mix in Aerospace & IndustrialQ4 FY25

    Tempered Q4 FY25 operating profitability.

    Mitigation: Expectations for higher sales, benefits of operational excellence initiatives, and restructuring savings in FY26.

    Unfavorable mix in Naval & Power due to SMR R&DQ4 FY25, continuing into FY26

    Offset Q4 FY25 operating margin.

    Mitigation: Strong revenue growth and restructuring savings expected to drive margin expansion in FY26; SMR work will transition to stronger margins with production.

    Flat sales in General Industrial marketFY26

    Anticipated flat sales for FY26.

    Mitigation: Signs of improvement in Q4 FY25 order book and solid backlog; modest growth expected in medium duty industrial vehicle sales and a small benefit from international growth; cautiously optimistic for improvement through 2027.

    Q&A highlights

    7

    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

    2 min read5 chapters

    Detailed Narrative

    01

    Pivot to Growth Strategy Delivers Record Performance

    Curtiss-Wright successfully executed its 'pivot to growth' strategy, achieving record financial performance in 2025 with strong growth in sales, profitability, free cash flow, and new orders. This momentum is expected to continue into 2026, positioning the company to exceed its 3-year Investor Day financial targets. The strategy has enabled consistent operating income growth in excess of revenue growth, providing funding for reinvestment.

    02

    Defense Market Tailwinds and Strategic Alignment

    The company is benefiting from accelerated global defense spending, including a record U.S. budget of approximately $1 trillion and increased NATO commitments. Curtiss-Wright's technologies are aligned with U.S. military priorities like aircraft modernization and Golden Dome, driving demand for secure embedded computing solutions. Strategic investments include designing ruggedized computing solutions with NVIDIA's GPUs and validating servers for the Microsoft Azure ecosystem, enhancing capabilities for next-generation defense applications.

    03

    Commercial Nuclear Market Momentum and Growth Initiatives

    The commercial nuclear market is experiencing significant momentum, driven by U.S. executive orders, plant life extensions, and an $80 billion commitment for 10 new Westinghouse AP1000 reactors. Curtiss-Wright anticipates an AP1000 order in 2026 and is actively involved in SMR development, transitioning from design to prototype stages for critical systems like those on the X-Energy Advanced Reactor. The company is expanding its content and relationships across leading SMR developers.

    04

    Operational Excellence and R&D Investment Driving Margins

    Curtiss-Wright's operational growth platform, including commercial excellence and supply chain initiatives, contributed approximately $12 million in 2025 and is expected to continue driving margin expansion. The company is accelerating investments in R&D, growing it faster than sales, to support future organic growth and maintain its leadership in defense technology. These efforts are projected to lead to 170 basis points of operating margin expansion over the 3-year plan, reaching a new milestone of 19% in 2026.

    05

    Disciplined Capital Allocation and Shareholder Returns

    The company maintained a disciplined approach to capital allocation, executing a record $465 million in share repurchases in 2025 and increasing its annual dividend for the ninth consecutive year. Increased capital expenditures of $110 million to $120 million are planned for 2026, following a nearly 50% increase in 2025, to support growth investments. Curtiss-Wright expects to generate record free cash flow of $575 million to $595 million in 2026, with a conversion rate of approximately 105%.

    AI-generated summary of the company’s earnings call. Not investment advice.