Woodward Reports Strong First Quarter Fiscal Year 2026 Results

Woodward Reports Strong First Quarter Fiscal Year 2026 Results February 2, 2026 Raising Sales and Earnings Guidance Based on First Quarter Outperformance FORT COLLINS, Colo., Feb. 02, 2026 (GLOBE NEWSWIRE) -- Woodward, Inc. (NASDAQ:WWD) today reported financial results for its first quarter ended December 31, 2025. All amounts are presented on an as reported (U.S. GAAP) basis unless otherwise indicated. All per share amounts are presented on a fully diluted basis. All comparisons are made to the same period of the prior year unless otherwise stated. All references to years are references to the Company’s fiscal year unless otherwise stated. First Quarter Overview First Quarter 2026Net sales $996M, +29%Net earnings $134M, +54%Earnings per share (EPS) $2.17, +53%Net cash provided by operating activities $114M, +$80MFree cash flow1 $70M, +$69M "We delivered strong first quarter 2026 performance that exceeded our expectations,” said Chip Blankenship, Chairman and Chief Executive Officer. “Year-over-year growth was broad-based across both segments and reflected strong demand and disciplined execution by our global teams. In Aerospace, margin expansion was driven by higher mix of commercial services activity and robust defense OEM demand. Industrial performance was driven by strength in power generation, transportation, and oil and gas. Our focus on operational excellence continues to drive output improvements and more consistent execution across our portfolio. “Based on a strong start to the year, we are raising our full-year sales and earnings guidance. We remain focused on operational excellence and targeted innovation to deliver sustained profitable growth and long-term value for our shareholders.” First Quarter Fiscal Year 2026 Company Results Total Company Results (Dollars in millions, except per share amounts) Three Months Ended December 31, 2025 2024 Year over Year Income Statement Net sales$996 $773 29%Net earnings 134 87 54%Adjusted net earnings1*$134 $83 62%EPS$2.17 $1.42 53%Adjusted EPS1*$2.17 $1.35 61%EBIT 179 113 59%Adjusted EBIT1*$179 $107 67%Effective tax rate 20.9% 14.5%640 bps Adjusted effective tax rate1* 20.9% 14.0%690 bps Cash Flow and Financial Position Net cash provided by operating activities$114 $35 Capital expenditures44 34 Free cash flow 70 1 Dividends paid 17 15 Share repurchases 129 35 Total debt 888 902 EBITDA1leverage1.2x 1.5x  * There were no adjustments to these measures in the first quarter of fiscal year 2026 Segment Results Aerospace (Dollars in millions) Three Months Ended December 31, 2025 2024 Year over Year Commercial OEM$188 $154 22%Commercial services 245 164 50%Defense OEM 138 113 23%Defense services 64 63 1% Sales 635 494 29%Segment earnings 148 95 57%Segment margin % 23.4% 19.2%420 bps Aerospace segment earnings for the first quarter of 2026 were $148 million, or 23.4 percent of segment net sales. The increase in segment earnings was a result of price realization, favorable mix, and higher sales volume, partially offset by strategic investments in manufacturing capabilities and inflation. Industrial (Dollars in millions) Three Months Ended December 31, 2025 2024 Year over Year Transportation$166 $107 55%Power generation 123 115 7%Oil and gas 72 57 28% Sales 362 279 30%Segment earnings 67 40 67%Segment margin % 18.5% 14.4%410 bps Industrial segment earnings for the first quarter of 2026 were $67 million, or 18.5 percent of segment net sales. The increase in segment earnings was a result of higher sales volume, price realization, and favorable mix, partially offset by inflation. Nonsegment (Dollars in millions) Three Months Ended December 31, 2025 2024 Year over Year Nonsegment expense$(37)$(22) 66%Adjusted nonsegment expenses (37) (28) 31%  Fiscal Year 2026 Guidance Based on the strong first quarter performance, Woodward is raising its fiscal 2026 sales and earnings guidance. This guidance assumes a sustained strong demand environment, supporting continued sales growth and further margin expansion. Prior FY26 Guidance Issued on November 24, 2025Revised FY26 Guidance Issued on February 2, 2026Total Company Sales growthup 7% to 12%up 14% to 18%EPS$7.50 - $8.00$8.20 - $8.60Free cash flow3$300 - $350 millionNo changeCapital expenditures~$290 millionNo changeShares~61 millionNo changeEffective tax rate~22%No change Segment Data Aerospace Sales growthup 9% to 15%up 15% to 20%Segment earnings (% of sales)22% - 23%No changeIndustrial Sales growthup 5% to 9%up 11% to 14%Segment earnings (% of sales)14.5% - 15.5%16% - 17%  Conference Call Woodward will hold an investor conference call at 5:00 p.m. ET, February 2, 2026, to provide an overview of the financial performance for its fiscal first quarter ended December 31, 2025, business highlights, and guidance for fiscal 2026. You are invited to listen to the live webcast of our conference call, or a recording, and view or download accompanying presentation slides at our website, www.woodward.com2. You may also listen to the call by dialing 1-800-715-9871 (domestic) or 1-646-307-1963 (international). Participants should call prior to the start time to allow for registration; the Conference ID is 4675940. The call and presentation will be available on the website by selecting “Investors/Events & Presentations” from the menu and will remain accessible on the company’s website for one year. About Woodward, Inc. Woodward is the global leader in the design, manufacture, and service of energy conversion and control solutions for the aerospace and industrial equipment markets. Our purpose is to design and deliver energy control solutions our partners count on to power a clean future. Our innovative fluid, combustion, electrical, propulsion and motion control systems perform in some of the world’s harshest environments. Woodward is a global company headquartered in Fort Collins, Colorado, USA. Visit our website at www.woodward.com. Cautionary Statement Information in this press release contains forward-looking statements regarding future events and our future results within the meaning of the Private Securities Litigation Reform Act of 1995 that involve risks and uncertainties, including, but not limited to, the results of our ongoing focus on operational excellence, increased output, more consistent execution, and innovation, including whether such focus ultimately leads to sustained profitable growth and long-term shareholder value, and statements regarding our business and guidance for fiscal year 2026, including our guidance for sales, earnings per share, segment sales growth rates, segment earnings margin growth rates, effective tax rate, free cash flow, capital expenditures, and diluted weighted average shares outstanding, as well as our assumptions regarding our guidance, anticipated trends in our business and markets, including our assumptions regarding sales, demand, and margin expansion in fiscal 2026. Factors that could cause actual results and the timing of certain events to differ materially from the forward-looking statements include, but are not limited to: (1) global economic uncertainty and instability, including in the financial markets that affect Woodward, its customers, and its supply chain; (2) risks related to constraints and disruptions in the global supply chain and labor markets; (3) Woodward’s long sales cycle; (4) risks related to Woodward’s concentration of revenue among a relatively small number of customers; (5) Woodward’s ability to implement and realize the intended effects of any restructuring efforts; (6) Woodward’s ability to successfully manage competitive factors including expenses and fluctuations in sales, as well as innovation and new product development; (7) changes and consolidations in the aerospace market; (8) Woodward’s financial obligations including debt obligations and tax expenses and exposures; (9) risks related to Woodward’s U.S. government contracting activities including potential changes in government spending patterns; (10) volatility with respect to the China on-highway natural gas truck market; (11) Woodward’s ability to protect its intellectual property rights and avoid infringing the intellectual property rights of others; (12) changes in the estimates of fair value of reporting units or of long-lived assets; (13) environmental risks; (14) Woodward’s continued access to a stable workforce and favorable labor relations with its employees, including its ability to retain key personnel or attract and retain new qualified personnel; (15) Woodward’s ability to manage various regulatory and legal matters; (16) risks from operating internationally; (17) cybersecurity, data privacy, and other technological risks; and other risk factors and risks described in Woodward's filings with the Securities and Exchange Commission, including its Annual Report on Form 10-K for the fiscal year ended September 30, 2025, its Quarterly Report on Form 10-Q for the quarterly period ended December 31, 2025, which we expect to file shortly, and other risks described in Woodward’s filings with the Securities and Exchange Commission. The forward-looking statements contained in this press release are made as of the date hereof and Woodward assumes no obligation to update such statements, except as required by applicable law. Woodward, Inc. and Subsidiaries Condensed Consolidated Statement of Earnings (Unaudited – In thousands) Three Months Ended December 31, 2025 2024 Net sales$996,454 $772,725 Costs and expenses: Cost of goods sold 704,293 583,091 Selling, general, and administrative expenses 94,985 69,696 Research and development costs 37,756 30,207 Interest expense 10,344 12,341 Interest income (701) (1,377)Other income, net (19,374) (23,087)Total costs and expenses 827,303 670,871 Earnings before income taxes 169,151 101,854 Income taxes 35,432 14,763 Net earnings$133,719 $87,091 Earnings per share amounts: Basic earnings per share$2.23 $1.47 Diluted earnings per share$2.17 $1.42 Weighted average common shares outstanding: Basic 59,837 59,216 Diluted 61,590 61,141 Cash dividends paid per share$0.28 $0.25 Woodward, Inc. and Subsidiaries Condensed Consolidated Balance Sheets (Unaudited – In thousands) December 31, 2025 September 30, 2025 Assets Current assets: Cash and cash equivalents$454,245 $327,431 Accounts receivable 796,760 831,116 Inventories 689,217 654,608 Income taxes receivable 44,934 1,553 Other current assets 63,967 69,706 Total current assets 2,049,123 1,884,414 Property, plant, and equipment, net 1,002,187 986,623 Goodwill 832,065 832,288 Intangible assets, net 425,408 428,080 Deferred income tax assets 45,503 118,711 Other assets 379,611 380,027 Total assets$4,733,897 $4,630,143 Liabilities and stockholders’ equity Current liabilities: Short-term debt$383,000 $122,300 Current portion of long-term debt 48,033 122,934 Accounts payable 269,981 289,417 Income taxes payable 52,429 59,655 Accrued liabilities 245,688 313,083 Total current liabilities 999,131 907,389 Long-term debt, less current portion 457,005 456,968 Deferred income tax liabilities 107,652 107,669 Other liabilities 582,621 591,727 Total liabilities 2,146,409 2,063,753 Stockholders’ equity 2,587,488 2,566,390 Total liabilities and stockholders’ equity$4,733,897 $4,630,143 Woodward, Inc. and Subsidiaries Condensed Consolidated Statements of Cash Flows (Unaudited – In thousands) Three Months Ended December 31, 2025 2024 Net cash provided by operating activities$114,437 $34,516 Cash flows from investing activities: Payments for purchase of property, plant, and equipment (44,129) (33,574)Proceeds from sale of assets - 36 Proceeds from business divestitures - 1,438 Payments for acquisition, net of cash acquired (4,200) - Net cash used in investing activities (48,329) (32,100) Cash flows from financing activities: Cash dividends paid (16,764) (14,781)Proceeds from sales of treasury stock 20,859 28,876 Payments for repurchases of common stock (129,387) (35,473)Borrowings on revolving lines of credit and short-term borrowings 1,254,653 668,300 Payments on revolving lines of credit and short-term borrowings (993,953) (627,300)Payments of long-term debt and finance lease obligations (75,252) (236)Net cash provided by financing activities 60,156 19,386 Effect of exchange rate changes on cash and cash equivalents 550 (20,346)Net change in cash and cash equivalents 126,814 1,456 Cash and cash equivalents at beginning of year 327,431 282,270 Cash and cash equivalents at end of period$454,245 $283,726 Woodward, Inc. and Subsidiaries Segment Net Sales and Net Earnings (Unaudited – In thousands) Three Months Ended December 31, 2025 2024 Segment net sales: Aerospace 634,897 493,882 Industrial 361,557 278,843 Total consolidated net sales$996,454 $772,725 Segment earnings*: Aerospace 148,395 94,725 As a percent of segment net sales 23.4% 19.2%Industrial 66,994 40,197 As a percent of segment net sales 18.5% 14.4%Total segment earnings$215,389 $134,922 Nonsegment expenses (36,595) (22,104)EBIT$178,794 $112,818 Interest expense, net (9,643) (10,964)Consolidated earnings before income taxes$169,151 $101,854 *This schedule reconciles segment earnings, which exclude certain costs, to consolidated earnings before taxes. Payments for property, plant and equipment$44,129 $33,574 Depreciation expense$21,696 $20,962 Woodward, Inc. and Subsidiaries Reconciliation of Net Earnings and EPS to Adjusted Net Earnings1and Adjusted EPS1(Unaudited – In thousands, except per share amounts) Three Months Ended December 31, 2025 2024 Net Earnings Earnings Per Share Net Earnings Earnings Per Share Net Earnings (U.S. GAAP)$133,719 $2.17 $87,091 $1.42 Non-U.S. GAAP Adjustments Product rationalizationa - - (9,361) (0.15)Business development activitiesb - - 3,518 0.06 Tax Effect of Non-U.S. GAAP Net Earnings Adjustments - - 1,319 0.02 Total non-U.S. GAAP Adjustments - - (4,524) (0.07)Adjusted Net Earnings (Non-U.S. GAAP)$133,719 $2.17 $82,567 $1.35 Presented in the line item "Other income, net" in Woodward's Condensed Consolidated Statement of Earnings.Presented in the line item "Selling, general, and administrative expenses" in Woodward's Condensed Consolidated Statement of Earnings. Woodward, Inc. and Subsidiaries Reconciliation of Income Tax Expense to Adjusted Income Tax Expense1 (Unaudited – In thousands) Three Months Ended December 31, 2025 2024 Income tax expense (U.S. GAAP)$35,432 $14,763 Tax Effect of Non-U.S. GAAP Net Earnings Adjustments - (1,319)Adjusted Income Tax Expense (Non-U.S. GAAP)$35,432 $13,444 Adjusted Effective Income Tax Rate (Non-U.S. GAAP) 20.9% 14.0% Woodward, Inc. and Subsidiaries Reconciliation of Net Earnings to EBIT1 and Adjusted EBIT1 (Unaudited – In thousands) Three Months Ended December 31, 2025 2024 Net Earnings (U.S. GAAP)$133,719 $87,091 Income Tax Expense 35,432 14,763 Interest Expense 10,344 12,341 Interest Income (701) (1,377)EBIT (Non-U.S. GAAP) 178,794 112,818 Total non-U.S. GAAP Adjustments - (5,843)Adjusted EBIT (Non-U.S. GAAP)$178,794 $106,975 Woodward, Inc. and Subsidiaries Reconciliation of Net Earnings to EBITDA1and Adjusted EBITDA1 (Unaudited – In thousands) Three Months Ended December 31, 2025 2024 Net Earnings (U.S. GAAP)$133,719 $87,091 Income Tax Expense 35,432 14,763 Interest Expense 10,344 12,341 Interest Income (701) (1,377)Amortization of intangible assets 7,342 6,914 Depreciation Expense 21,696 20,962 EBITDA (Non-U.S. GAAP) 207,832 140,694 Total non-U.S. GAAP Adjustments - (5,843)Adjusted EBITDA(Non-U.S. GAAP)$207,832 $134,851 Woodward, Inc. and Subsidiaries Reconciliation of Non-Segment Expenses to Adjusted Non-Segment Expenses1 (Unaudited – In thousands) Three Months Ended December 31, 2025 2024 Non-Segment Expenses (U.S. GAAP)$36,595 $22,104 Product rationalization - 9,361 Business development activities - (3,518)Adjusted Non-Segment Expenses (Non-U.S. GAAP)$36,595 $27,947 Woodward, Inc. and Subsidiaries Reconciliation of Net Cash Provided by Operating Activities to Free Cash Flow1 (Unaudited – In thousands) Three Months Ended December 31, 2025 2024 Net cash provided by operating activities (U.S. GAAP)$114,437 $34,516 Payments for property, plant, and equipment (44,129) (33,574)Free cash flow (Non-U.S. GAAP)$70,308 $942  1Adjusted and Non-U.S. GAAP Financial Measures: Adjusted net earnings, adjusted earnings per share, adjusted income tax expense, adjusted effective income tax rate, EBIT, adjusted EBIT, EBITDA, adjusted EBITDA, and adjusted nonsegment expenses exclude, as applicable, (i) product rationalization and (ii) costs related to business development activities. The product rationalization adjustment pertains to the elimination and divestiture of certain product lines. The Company believes that these excluded items are short‐term in nature, not directly related to the ongoing operations of the business, and therefore, the exclusion of them illustrates more clearly how the underlying business of Woodward is performing. EBIT (earnings before interest and taxes), adjusted EBIT, EBITDA (earnings before interest, taxes, depreciation and amortization), adjusted EBITDA, free cash flow, adjusted net earnings, adjusted earnings per share, adjusted income tax expenses, adjusted effective income tax rate, and adjusted nonsegment expenses are financial measures not prepared and presented in accordance with accounting principles generally accepted in the United States of America (U.S. GAAP). Management uses EBIT and adjusted EBIT to evaluate Woodward’s operating performance without the impacts of financing and tax related considerations. Management uses EBITDA and adjusted EBITDA in evaluating Woodward’s operating performance, making business decisions, including developing budgets, managing expenditures, forecasting future periods, and evaluating capital structure impacts of various strategic scenarios. Management also uses free cash flow, which is derived from net cash provided by or used in operating activities less payments for property, plant, and equipment in reviewing the financial performance of Woodward’s business segments and evaluating cash generation levels. Securities analysts, investors, and others frequently use EBIT, EBITDA and free cash flow in their evaluation of companies, particularly those with significant property, plant, and equipment, and intangible assets that are subject to amortization. The use of any of these non-U.S. GAAP financial measures is not intended to be considered in isolation of, or as a substitute for, the financial information prepared and presented in accordance with U.S. GAAP. Because adjusted net earnings, adjusted earnings per share, EBIT, EBITDA, adjusted EBIT, and adjusted EBITDA exclude certain financial information compared with net earnings, the most comparable U.S. GAAP financial measure, users of this financial information should consider the information that is excluded. Free cash flow does not necessarily represent funds available for discretionary use and is not necessarily a measure of our ability to fund our cash needs. Management’s calculations of EBIT, EBITDA, adjusted net earnings, adjusted earnings per share, adjusted EBIT, adjusted EBITDA, adjusted effective income tax rate, adjusted nonsegment expenses, and free cash flow may differ from similarly titled measures used by other companies, limiting their usefulness as comparative measures. EBITDA leverage is calculated by taking a rolling twelve month EBITDA divided by total debt. 2Website, Facebook: Woodward has used, and intends to continue to use, its Investor Relations website and its Facebook page as means of disclosing material non-public information and for complying with its disclosure obligations under Regulation FD. 3FY26 Free Cash Flow: Information reconciling our FY26 free cash flow guidance to forward-looking net cash provided by operating activities is not available without unreasonable effort due primarily to uncertainty of timing for capital expenditures. Source: Woodward, Inc.