When Jeff Bezos said that one breakthrough technology would shape Amazon’s destiny, even Wall Street’s biggest analysts were caught off guard. Fast forward a year and Amazon’s new CEO Andy Jassy described generative AI as a “once-in-a-lifetime” technology that is already being used across Amazon to reinvent customer experiences. At the 8th Future Investment Initiative conference, Elon Musk predicted that by 2040 there would be at least 10 billion humanoid robots, with each priced between $20,000 and $25,000 ...

Sales and Revenue Growth - In 2025, sales to the U.S. Government and foreign government end use represented 58% of total net sales, up from 56% in 2023[31] - Total U.S. Government sales reached $1,647,019 thousand in 2025, an increase from $1,314,770 thousand in 2023, reflecting a growth of 25.3%[34] - The Defense Electronics segment generated $761,926 thousand in sales for 2025, compared to $638,597 thousand in 2023, marking a growth of 19.3%[34] - The Naval & Power segment's sales increased to $704,051 thousand in 2025 from $529,968 thousand in 2023, representing a growth of 32.8%[34] - Approximately 47% of total net sales in 2025 were derived from or related to U.S. defense programs[73] - Total sales increased by $377 million, or 12%, to $3,498 million in 2025 compared to 2024, driven by growth in all segments: Aerospace & Industrial (5%), Defense Electronics (12%), and Naval & Power (18%)[177] - Sales in the Defense Electronics segment increased by $108 million, or 12%, to $1,018.61 million, with operating income up 24% to $278.02 million[191][192] - Sales in the Naval & Power segment rose by $225 million, or 18%, to $1,503.00 million, with new orders increasing by 23% to $2,040.66 million[196][198] Strategic Focus and Growth Initiatives - The company’s strategy focuses on maximizing revenue, operating income, and free cash flow growth to drive shareholder value[20] - The company aims to deepen customer relationships and expand global manufacturing capabilities as part of its growth strategy[21] - The Operational Growth Platform is designed to drive margin expansion and support ongoing investments in research and development[22] - The company maintains a strong balance sheet to prioritize acquisitions and returns to shareholders through share repurchases and dividends[22] Employee and Workplace Initiatives - At the end of 2025, Curtiss-Wright had approximately 9,100 employees across more than 20 countries, with about 6% represented by labor unions[37] - The company has made significant investments in employee compensation programs, including equity-based incentive compensation plans to align the interests of employees and shareholders[38] - Curtiss-Wright emphasizes a culture of inclusivity and ethical standards, with annual training programs on various compliance topics for all employees[40][48] - The company offers a range of employee wellness programs, including free annual biometric screenings and mental health support services[50] - Curtiss-Wright's talent management strategy includes regular succession and career development reviews to ensure a diverse pipeline of talent[44] - The company maintains a Code of Conduct that mandates compliance with laws and regulations, addressing conflicts of interest and financial reporting[41][48] - Curtiss-Wright's leadership development programs aim to cultivate skills and experiences critical to the company's future talent needs[45] Financial Position and Capital Management - As of December 31, 2025, the company had approximately $1.0 billion of debt outstanding, which could significantly impact cash flows and operational flexibility[105] - The company had goodwill and other intangible assets of approximately $2.2 billion, representing about 43% of total assets, which are subject to impairment tests[104] - The company paid quarterly dividends in 2025, with the fourth quarter dividend at $0.24 per share, up from $0.21 in 2024[134] - The company has significant discretionary funding capacity through operating cash flows and access to credit markets, although global macroeconomic uncertainty poses risks[115] - The company has consistently focused on mitigating inflation through pricing initiatives and operational excellence, successfully offsetting cost increases in many cases[114] Risks and Challenges - The company expects to incur additional costs to comply with increased cybersecurity protections and information control requirements[53] - Supply chain constraints and improving economic conditions have led to sustained increases in prices for many components and raw materials[59] - The company is facing higher labor costs due to increased competition for personnel and general inflationary conditions[59] - The company’s ability to perform obligations as a prime contractor may be adversely affected if suppliers fail to provide agreed-upon supplies in a timely manner[59] - The company may face risks associated with its acquisition strategy, including integration challenges and unexpected liabilities[64] - U.S. defense spending is subject to cyclical changes and may be impacted by various external factors, potentially affecting the company’s revenues[73] - The company may not be able to fully protect its intellectual property rights, which could lead to increased litigation costs[71] - The company is involved in periodic litigation and regulatory proceedings, which could result in substantial costs and distract management from operations[94] Market and Economic Conditions - The commercial aircraft market is cyclical and can be adversely affected by factors such as passenger traffic levels, fuel costs, and geopolitical events, which could impact financial condition and results of operations[76] - The airline industry is heavily regulated, and failure to comply with applicable requirements could adversely affect business and financial condition[88] - Climate change regulations could require costly changes in manufacturing processes and increase operational costs, impacting overall financial performance[95] - Changes in foreign currency exchange rates could adversely affect results, particularly with significant exposure to the British Pound, Euro, and Canadian dollar[99] - The implementation of new tariffs and trade restrictions could increase material costs and impact pricing strategies, potentially reducing demand[112] Backlog and Future Opportunities - The backlog as of December 31, 2025, was approximately $4.1 billion, but it is subject to reduction and cancellation, which could negatively impact revenues and results of operations[77] - Backlog fluctuations may not necessarily indicate future sales, and project delays could impact timing and revenue recognition[77] - The company is expanding its presence in the government nuclear sector by providing equipment and systems to key customers, including the Idaho National Laboratory[167] - The nuclear industry anticipates a demand for over 90 gigawatts of nuclear power to support decarbonization goals, translating to the potential for 300 new SMRs by 2050[169] - More than 70 new reactors are under construction globally, with nearly 120 additional reactors planned and over 300 proposed in the coming decades[168]

Core Insights - The company reported a record financial performance for the full year 2025, with significant growth in revenue and operating income across all segments, driven by strong demand in naval defense and commercial nuclear markets [1][4][11] - New orders increased by 18% in the fourth quarter, resulting in a book-to-bill ratio of nearly 1.2 times, indicating robust demand [1][6] - The company achieved a record operating margin of 18.6%, reflecting a year-over-year expansion of 110 basis points, attributed to operational excellence initiatives and restructuring actions [1][5][11] Financial Performance - Total sales for the fourth quarter reached $947 million, a 15% increase year-over-year, with organic growth of 11% [3][12] - Operating income rose by 14%, with diluted earnings per share growing by 16% year-over-year, driven by higher aerospace and defense sales [2][5] - Free cash flow was strong at $315 million, up 13%, reflecting a conversion rate of 224% [2] Segment Performance - Aerospace and Defense markets saw a 16% growth, exceeding expectations, driven by increased revenues in Ground and Naval Defense [3][12] - Commercial aerospace sales increased by over 20%, with a 13% growth in commercial markets, primarily due to higher revenues in the Power and Process market [2][15] - The Enablement Power segment reported a 21% increase in sales, driven by strong revenue growth in Naval Defense and aftermarket services [15][16] Future Outlook - For 2026, the company projects organic sales growth of 6% to 8%, with operating income growth expected to outpace sales growth [10][11] - The guidance includes anticipated operating margin expansion of 30 to 60 basis points, reaching a range of 18.9% to 19.2% [10][11] - Diluted EPS is expected to grow by 11% to 15%, supported by strong operational performance and a reduction in share count due to share repurchases [31][32] Market Trends - The company is well-positioned to benefit from increased global defense spending, particularly from the U.S. budget and NATO commitments [35][39] - In the commercial nuclear sector, the U.S. government's support for nuclear energy is expected to accelerate opportunities, including the construction of new reactors [41][42] - The company anticipates strong growth in small modular reactor (SMR) developments as projects transition from design to prototype stages [43][44] Operational Excellence - The company continues to focus on operational and commercial excellence, which has contributed to margin expansion and improved profitability [66][70] - Investments in research and development are being accelerated to support future organic growth, with a commitment to grow R&D faster than sales over time [5][37] - The disciplined approach to capital allocation aims to enhance shareholder value through strategic investments and share repurchases [9][10]

Financial Data and Key Metrics Changes - Overall sales for Q4 2025 reached $947 million, a 15% increase year-over-year, driven by 11% organic growth and contributions from the INC Solutions acquisition [4][5] - Operating income increased by 14%, with an operating margin of 19.7% [5][6] - Diluted earnings per share grew by 16% year-over-year, primarily due to higher A&D sales [5][6] - Free cash flow was strong at $315 million, up 13%, reflecting a 224% conversion rate [6] - For the full year 2025, diluted earnings per share increased by 21%, and adjusted free cash flow reached a record $554 million [7][8] Business Line Data and Key Metrics Changes - Aerospace and Defense (A&D) markets saw a 16% growth, with commercial aerospace sales increasing over 20% [5][6] - The defense electronics segment experienced a 17% sales growth, driven by increased demand for tactical communications equipment [12][14] - The naval and power segment's sales increased by 21%, supported by strong revenue growth in naval defense and aftermarket revenues [15][16] Market Data and Key Metrics Changes - The overall order book reached a record $4.1 billion, up 10% year-over-year, with a book-to-bill ratio of nearly 1.2 times [8][10] - New orders in Q4 increased by 18%, reflecting solid demand in naval defense and commercial nuclear markets [6][10] - Commercial nuclear sales showed tremendous growth, driven by strong demand for aftermarket equipment and advancements in SMR designs [9][21] Company Strategy and Development Direction - The company continues to execute its "Pivot to Growth" strategy, focusing on operational and commercial excellence to drive sales and profitability [4][10] - Investments in research and development are being accelerated to support future organic growth, with a commitment to grow R&D faster than sales over time [7][10] - The company is positioned to benefit from increased global defense spending and the U.S. government's focus on nuclear energy dominance [32][36] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the future, projecting organic sales growth of 6%-8% for 2026, with operating income growth expected to outpace sales growth [10][11] - The company anticipates another year of record free cash flow generation, with a target of $575 million-$595 million for 2026 [29][30] - Management acknowledged challenges in the defense market due to timing delays but remains optimistic about long-term growth opportunities [8][10] Other Important Information - The company executed a record $465 million in share repurchases in 2025 and increased its annual dividend for the ninth consecutive year [10] - Capital expenditures are projected to increase by more than 25% year-over-year, reflecting ongoing investments to support growth [29][30] Q&A Session Summary Question: Exposure to missile programs and growth opportunities - Management indicated that while there is some exposure to missile telemetry and flight test instrumentation, the primary focus remains on broader defense capabilities aligned with U.S. military priorities [43][44] Question: Clarification on expected AP1000 orders - Management stated that the first orders could come from either European customers or the U.S., with ongoing discussions with Westinghouse regarding production ramp scenarios [46][47] Question: Free cash flow guidance and working capital dynamics - Management highlighted improvements in working capital management, with a target of approximately 18% working capital as a percentage of sales for 2026 [55][57] Question: C-17 order timing and defense electronics bookings - Management confirmed that the C-17 order was booked in Q1, and noted that delayed bookings in defense electronics were due to various timing issues [60][61] Question: Operational and commercial excellence initiatives - Management emphasized that operational excellence remains a core focus, with ongoing initiatives expected to contribute positively to margins in 2026 [68][72]

Financial Data and Key Metrics Changes - Sales for Q4 2025 reached $947 million, a 15% increase year-over-year, with organic growth of 11% and contributions from the I&C Solutions acquisition [4][5] - Operating income increased by 14%, with an operating margin of 19.7% [5][6] - Diluted earnings per share grew by 16% year-over-year, driven primarily by higher A&D sales [5][6] - Free cash flow was strong at $315 million, up 13%, reflecting a 224% conversion rate [6] - For the full year 2025, diluted earnings per share increased by 21%, and adjusted free cash flow reached a record $554 million [7][8] Business Line Data and Key Metrics Changes - Aerospace & Industrial segment sales increased by 5%, with strong OEM sales growth in commercial aerospace [12][13] - Defense Electronics segment saw a 17% sales growth, driven by increased demand for tactical communications equipment and embedded computing revenues [14][15] - Naval & Power segment sales increased by 21%, primarily due to strong revenue growth in naval defense and contributions from the I&C Solutions acquisition [15][16] Market Data and Key Metrics Changes - A&D markets experienced a 16% growth, with commercial aerospace sales increasing by over 20% [5][9] - The overall order book reached a record of $4.1 billion, up 10% year-over-year, with a book-to-bill ratio of nearly 1.2 times [8][10] - Commercial nuclear market showed tremendous growth, driven by strong demand for aftermarket equipment and advancements in SMR designs [9][21] Company Strategy and Development Direction - The company continues to execute its "Pivot to Growth" strategy, focusing on operational and commercial excellence to drive sales and profitability [4][10] - Investments in research and development are being accelerated to support future organic growth, with a commitment to grow R&D faster than sales over time [7][10] - The company is well-positioned to benefit from increased global defense spending and the U.S. government's focus on nuclear energy dominance [32][36] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to deliver strong performance in 2026, projecting organic sales growth of 6%-8% [10][11] - The outlook for A&D markets includes anticipated growth driven by U.S. defense budget priorities and increased demand for secure embedded computing solutions [18][20] - Management acknowledged potential headwinds in ground defense due to delays in orders but remains optimistic about future opportunities [8][19] Other Important Information - The company executed a record $465 million in share repurchases in 2025 and increased its annual dividend for the ninth consecutive year [10] - Capital expenditures are expected to increase by more than 25% year-over-year, reflecting ongoing investments to support growth [29][30] Q&A Session Questions and Answers Question: Exposure to missile programs and growth opportunities - The company has minor exposure to missile programs, primarily in telemetry and flight test instrumentation, but is well-positioned in related areas such as the Iron Dome [43][44] Question: Clarification on expected AP1000 orders - Orders could come from either European customers or the U.S., with Westinghouse as the primary customer; specifics on order size are not available at this time [46][47] Question: Free cash flow guidance and working capital dynamics - The company has improved working capital management, targeting a working capital percentage of sales of approximately 18% for 2026, which would be a record [55][57] Question: C-17 order timing and defense electronics bookings - The C-17 order is a Q1 order, and delayed bookings in defense electronics were noted, impacting the book-to-bill ratio [60] Question: Operational and commercial excellence initiatives - The Operational Growth Platform has contributed approximately $12 million to the P&L in 2025, with ongoing initiatives expected to continue driving margin expansion [68][72]

Financial Data and Key Metrics Changes - Sales for Q4 2025 reached $947 million, a 15% increase year-over-year, driven by 11% organic growth and contributions from the INC Solutions acquisition [4][5] - Operating income increased by 14%, with an operating margin of 19.7% [5][6] - Diluted earnings per share grew by 16% year-over-year, primarily due to higher A&D sales [5][6] - Free cash flow was strong at $315 million, up 13%, reflecting a 224% conversion rate [5][6] - For the full year 2025, operating margin expanded by 110 basis points to a record 18.6% [6][7] - Diluted earnings per share for the full year increased by 21% year-over-year [7] Business Line Data and Key Metrics Changes - Aerospace and Defense (A&D) markets saw a 16% growth, driven by ground and naval defense revenues [5][6] - Commercial aerospace sales increased by over 20% [5] - The defense electronics segment experienced a 17% sales growth, with increased demand for tactical communications equipment [12][13] - Naval and power segment sales increased by 21%, driven by strong revenue growth in naval defense [14][15] Market Data and Key Metrics Changes - The overall order book reached a record of $4.1 billion, up 10% year-over-year, with a book-to-bill ratio of nearly 1.2 times [8][10] - New orders in Q4 increased by 18%, reflecting solid demand in naval defense and commercial nuclear markets [6][10] - Commercial nuclear market growth was driven by strong demand for aftermarket equipment and advancements in small modular reactor (SMR) designs [9][19] Company Strategy and Development Direction - The company continues to execute its "Pivot to Growth" strategy, focusing on operational and commercial excellence [4][6] - Investments in research and development are being accelerated to support future organic growth [7][10] - The company is committed to capital allocation towards high-return opportunities to enhance shareholder value [10][30] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the growth in defense spending, particularly with a record U.S. budget and increased NATO commitments [30][34] - The company anticipates organic sales growth of 6%-8% for 2026, with operating income growth expected to outpace sales growth [11][21] - Management noted potential challenges in ground defense due to timing delays but remains confident in the overall defense market [8][80] Other Important Information - The company executed a record $465 million in share repurchases in 2025 and increased its annual dividend for the ninth consecutive year [10][11] - Capital expenditures are projected to increase by more than 25% year-over-year, reflecting ongoing investments to support growth [26] Q&A Session Summary Question: Can you provide more color regarding your exposure to missile programs? - The company has minor content related to missiles, primarily in telemetry and flight test instrumentation, but is well-positioned in broader defense areas related to the Golden Dome initiative [41][43] Question: What is the expected order for AP1000 reactors in 2026? - Orders could come from either European customers or the U.S., with Westinghouse as the primary customer. The size of the first order is not yet determined [45][46] Question: Can you elaborate on the dynamics enabling strong free cash flow despite increased CapEx? - The company has improved working capital management, with a target of approximately 18% working capital as a percentage of sales, which is expected to be a record [54][56] Question: What are the headwinds in the aerospace and industrial segments? - The company anticipates continued growth in naval defense and commercial nuclear, with some challenges in margin due to the transition to prototype work in SMRs [62][63] Question: How will operational and commercial excellence initiatives contribute moving forward? - The company expects continued benefits from operational excellence initiatives, with a projected incremental contribution margin on sales of roughly 25% [67][71]

Q4 2025 - EARNINGS CONFERENCE CALL February 12, 2026 Conference Call Dial-in numbers: (800) 343-5172 (domestic) (203) 518-9856 (international) Conference code: CWQ425 1 | January 8, 2026 | Proprietary | © 2025 Curtiss-Wright SAFE HARBOR STATEMENT STRONG Q4 & RECORD 2025 PERFORMANCE PROVIDE MOMENTUM INTO 2026 Fourth Quarter 2025 Highlights Full Year 2025 Highlights Please note that the information provided in this presentation is accurate as of the date of the original presentation. The presentation will rem ...

Financial Performance - Fourth quarter 2025 reported sales reached $947 million, a 15% increase year-over-year, with operating income of $182 million and an operating margin of 19.2%[6] - Full-year 2025 sales totaled $3.5 billion, up 12%, with operating income of $634 million and diluted EPS of $12.87, reflecting a 21% growth in adjusted diluted EPS[6] - Adjusted operating income for the fourth quarter was $187 million, a 14% increase, with an adjusted operating margin of 19.7%[6] - Total net sales for Q4 2025 reached $946.98 million, a 15% increase from $824.31 million in Q4 2024[21] - Gross profit for the year ended December 31, 2025, was $1.30 billion, up from $1.15 billion in 2024, reflecting a strong performance[21] - Net earnings for Q4 2025 were $137.00 million, compared to $117.85 million in Q4 2024, representing a 16% year-over-year growth[21] - Basic earnings per share increased to $3.71 in Q4 2025 from $3.11 in Q4 2024, marking a 19% rise[21] - Operating income for the same period was $650,994, up 19% from $545,866 in 2024, with an operating margin of 18.6%[29] - Diluted earnings per share (EPS) for the year ended December 31, 2025, were reported at $12.87, up from $10.55 in 2024, reflecting a 22% increase[31] Cash Flow and Investments - The company achieved record free cash flow of $554 million for the full year, representing a 111% free cash flow conversion rate[5] - Free cash flow for the year ended December 31, 2025, was $553.7 million, up from $483.3 million in 2024, indicating a year-over-year increase of 14.5%[36] - Net cash provided by operating activities for the year ended December 31, 2025, was $643.4 million, an increase from $544.3 million in 2024, representing a growth of 18.3%[36] - The company repurchased approximately 934,000 shares for $465 million during the full year 2025[14] - Free cash flow for 2026 is guided to be between $575 million and $595 million, reflecting a year-over-year increase of approximately $25 million compared to 2025[39] Sales and Orders - New orders for the fourth quarter amounted to $1.1 billion, an 18% increase, contributing to a full-year total of $4.1 billion, which is a 10% increase from the previous year[14] - The backlog as of December 31, 2025, was $4.1 billion, reflecting an 18% increase compared to the prior year[14] - The Aerospace & Defense (A&D) market sales increased by 16%, while the Commercial market sales rose by 13% in the fourth quarter[8] - The company achieved a total sales growth of 15% across all segments, with Defense Electronics growing by 17% and Naval & Power by 21% year-over-year[27] - Total sales for the year ended December 31, 2025, reached $3,498,372, representing a 12% increase from $3,121,189 in 2024[29] - Total commercial sales for the year ended December 31, 2025, were $1,047,280, reflecting a 10% increase from $951,289 in 2024[30] Future Projections - For 2026, the company anticipates total organic sales growth of 6% to 8%, with operating margin expansion of 30 to 60 basis points, and diluted EPS growth of 11% to 15%[7] - The 2026 financial guidance includes total sales projected between $3,710 million and $3,765 million, with free cash flow expected to be between $575 million and $595 million[15] - The operating income for 2026 is expected to range from $699 million to $717 million, which is an increase of 8% to 11% from the previous year[38] - Diluted earnings per share for 2026 are projected to be between $14.70 and $15.15, representing a growth of 11% to 15% compared to 2025[38] - The Aerospace & Defense segment is expected to grow by 5% to 7% in 2026, contributing 70% to total sales[41] - The Naval & Power segment is projected to grow by 8% to 9% in 2026, with sales expected to reach between $1.625 billion and $1.645 billion[38] Expenses and Liabilities - Research and development expenses for the year totaled $95.16 million, slightly up from $91.65 million in 2024, indicating continued investment in innovation[21] - Current liabilities increased to $1.41 billion in 2025 from $1.10 billion in 2024, primarily due to higher accounts payable and deferred revenue[23] - The effective tax rate for 2026 is expected to remain stable at 21.5%[38] - The company plans to increase capital expenditures in 2026 to support growth and efficiency initiatives[39]

Core Insights - Curtiss-Wright reported revenue of $946.98 million for the quarter ended December 2025, marking a year-over-year increase of 14.9% and exceeding the Zacks Consensus Estimate by 6.38% [1] - The company's EPS for the same period was $3.79, up from $3.27 a year ago, representing a surprise of 3.49% over the consensus estimate of $3.66 [1] Financial Performance Metrics - Adjusted Sales in Aerospace & Industrial reached $262.39 million, slightly above the average estimate of $261.86 million, reflecting a year-over-year change of +4.6% [4] - Adjusted Sales in Naval & Power were reported at $417.31 million, significantly exceeding the average estimate of $374.01 million, with a year-over-year increase of +20.6% [4] - Adjusted Sales in Defense Electronics amounted to $267.28 million, surpassing the average estimate of $253.01 million, showing a year-over-year growth of +17.5% [4] Operating Income Analysis - Adjusted Operating Income for Naval & Power was $74.82 million, above the estimated $70.29 million [4] - Adjusted Operating Income for Defense Electronics was $69.1 million, exceeding the average estimate of $65.18 million [4] - Adjusted Operating Income for Aerospace & Industrial was reported at $52.74 million, slightly below the average estimate of $54.09 million [4] Stock Performance - Shares of Curtiss-Wright have returned +1.5% over the past month, while the Zacks S&P 500 composite experienced a -0.3% change [3] - The stock currently holds a Zacks Rank 3 (Hold), indicating potential performance in line with the broader market in the near term [3]

Core Viewpoint - Curtiss-Wright reported quarterly earnings of $3.79 per share, exceeding the Zacks Consensus Estimate of $3.66 per share, and showing an increase from $3.27 per share a year ago, indicating a positive earnings surprise of +3.49% [1] Financial Performance - The company achieved revenues of $946.98 million for the quarter ended December 2025, surpassing the Zacks Consensus Estimate by 6.38%, and up from $824.31 million year-over-year [2] - Over the last four quarters, Curtiss-Wright has consistently exceeded consensus EPS estimates and topped revenue estimates three times [2] Stock Performance - Since the beginning of the year, Curtiss-Wright shares have increased by approximately 17.1%, significantly outperforming the S&P 500's gain of 1.4% [3] Future Outlook - The company's earnings outlook will be crucial for determining the stock's future performance, with current consensus EPS estimates at $2.90 for the upcoming quarter and $14.58 for the current fiscal year [7] - The Zacks Rank for Curtiss-Wright is currently 3 (Hold), indicating expected performance in line with the market in the near future [6] Industry Context - The Aerospace - Defense Equipment industry, to which Curtiss-Wright belongs, is currently ranked in the top 24% of over 250 Zacks industries, suggesting a favorable environment for stock performance [8]