Curtiss-Wright (NYSE:CW) executives highlighted record financial results for 2025 and issued guidance for continued growth in 2026, citing sustained demand across naval defense, defense electronics, commercial aerospace and commercial nuclear markets. Management also emphasized ongoing investments in research and development, margin expansion initiatives, and disciplined capital allocation.
Fourth-quarter results driven by defense and commercial momentum
Chair and CEO Lynn Bamford said the company’s “momentum continues to build,” pointing to fourth-quarter 2025 sales of $947 million, up 15% year over year, including 11% organic growth and contribution from the I&C Solutions acquisition. Bamford said aerospace and defense (A&D) sales grew 16%, exceeding expectations due to an acceleration of ground and naval defense revenues into 2025, while commercial aerospace sales increased by more than 20%. Commercial markets rose 13%, primarily driven by the power and process market.
New orders increased 18% in the quarter, reflecting nearly 1.2x book-to-bill, driven by naval defense and commercial nuclear demand, according to management.
Record full-year 2025 performance and expanding backlog
For full-year 2025, management reported record performance with growth in revenue and operating income across all three segments and margin expansion of 110 basis points to a record 18.6%. Bamford said results reflected sales growth, benefits from operational excellence initiatives, and restructuring savings, alongside accelerated R&D investment intended to grow faster than sales over time.
Diluted EPS increased 21% year over year, driven by operational performance and a lower share count. Adjusted free cash flow reached a record $554 million, with 111% conversion, despite a nearly 50% increase in capital expenditures to support growth investments.
The company ended 2025 with a record order book of $4.1 billion, up 10%, and nearly 1.2x book-to-bill. Bamford said strong demand for nuclear propulsion equipment tied to submarine programs supported A&D orders, though this was partly offset by lighter-than-anticipated aerospace and ground defense orders due to delays from a continuing resolution and government shutdown. She said this particularly affected the timing of orders in short-cycle defense electronics businesses, including tactical communications, and resulted in a 0.96x book-to-bill for defense electronics.
Backlog increased 18% in 2025 to a record of more than $4 billion, which Bamford said provides confidence in future top-line growth.
Segment details: mix, timing, and investment themes
CFO Chris Farkas said fourth-quarter Aerospace & Industrial sales increased 5%, with commercial aerospace benefiting from OEM production increases on narrow-body and wide-body platforms. Defense markets saw increased demand for EM actuation equipment supporting ground-based mobile launcher systems, while general industrial was essentially flat. Segment operating margin was 20.1%, helped by absorption on higher A&D sales but tempered by mix, “mainly due to higher customer-funded R&D.”
Defense Electronics sales grew 17%, exceeding expectations, primarily due to timing in ground defense as embedded computing revenues accelerated into the fourth quarter. Farkas also cited growth in tactical communications, turret drive stabilization systems for international customers, and commercial aerospace demand including flight data recorders. Operating margin in the segment was 25.9%, up 160 basis points, reflecting absorption and operational excellence benefits, partially offset by higher R&D.
Naval & Power sales increased 21%, well ahead of expectations, driven by naval defense revenue growth as supply chain conditions improved and production accelerated on submarine programs. Farkas also cited higher aftermarket revenues supporting naval shipyards and growth in arresting systems supporting international programs. The segment benefited from the I&C Solutions acquisition, lifting sales in commercial nuclear and process markets. Segment operating margin was 17.9%, with favorable absorption more than offset by mix, including higher R&D supporting next-generation SMR designs.
2026 guidance: growth, margin expansion, and cash flow outlook
Management guided to 6%-8% organic sales growth in 2026 and expects operating income growth to outpace sales again, with operating margin expansion of 30-60 basis points to 18.9%-19.2%. Diluted EPS is expected to rise 11%-15% to $14.70-$15.15. Free cash flow is projected at a record $575 million-$595 million, with conversion of approximately 105%.
Farkas said the company expects first-quarter 2026 sales growth in the “high single digits” year over year and “low double-digit” operating income growth, with margin improvement across all segments. He also said first-quarter EPS is expected to grow in the “high teens,” aided by a $0.10 benefit from a lower year-over-year first-quarter tax rate.
Key end-market expectations discussed on the call included:
- Aerospace defense: sales growth of 9%-11%, aligned to FY 2026 U.S. defense budget priorities including aircraft modernization and Iron Dome.
- Ground defense: sales decline of 4%-6%, reflecting tough comparisons, fourth-quarter 2025 embedded computing timing, and delayed tactical communications orders; management said it is taking a conservative stance.
- Naval defense: sales growth of 5%-7%, driven by CVN-81 and Virginia-class submarine programs.
- Commercial aerospace: sales growth of 10%-12%, reflecting the order book and expected OEM production ramps.
- Power and process: sales growth of 12%-14%, including mid-teens commercial nuclear growth and low double-digit process growth.
Farkas noted guidance does not include an AP1000 order, though management said it continues to anticipate receiving an order for reactor coolant pumps in 2026.
Capital allocation, working capital, and investor day progress
Bamford said Curtiss-Wright repurchased a record $465 million of shares in 2025 and increased its annual dividend for the ninth straight year. For 2026, Farkas said the company expects $60 million of standard share repurchases to offset dilution.
On free cash flow drivers, Farkas attributed working capital improvement to rising deferred income over several years tied to “commercial excellence” in contract negotiations, along with higher days payable outstanding in 2025 and continued focus on collections, inventory turns and payables. He said the company is targeting working capital at approximately 18% of sales in 2026, which he said would be a record.
Bamford also said the company is on track to exceed three-year financial targets presented at its 2024 Investor Day, citing an estimated organic revenue CAGR of approximately 8.5% versus a 5% target, and said the company expects to potentially reach a 19% operating margin milestone in 2026.
During Q&A, management reiterated that missile-related content is “relatively minor” and mainly tied to telemetry and flight test instrumentation, but said it sees broad exposure tied to Iron Dome across sensors, networking and effectors. Executives also said they have line of sight to more than $100 million of defense electronics orders expected in 2025 that shifted into 2026, and confirmed a recently discussed C-17 order was booked in Q1 for Curtiss-Wright.
About Curtiss-Wright (NYSE:CW)
Curtiss-Wright Corporation (NYSE: CW) is a diversified, global engineering company that designs, manufactures and services highly engineered products and integrated systems for the aerospace, defense, and industrial markets. Its offerings span a range of electromechanical, motion control and flow control technologies, including flight control and actuation systems, sensors and avionics components, pumps and valves, power conversion and heat exchangers, and platform integration solutions for marine and ground systems.
