HWM · Q4 2025 Earnings

Bullish

Howmet Aerospace

Reported February 12, 2026

30-second summary

Howmet reported Q4 FY2025 revenue of $2.168B (+15% YoY), non-GAAP EPS of $1.05, and adjusted EBITDA margin of 30.1% — beating its own Q4 guide by $58M+ on revenue, $0.09+ on EPS, and 100-120bps on margin. FY2025 closed at $8.252B revenue (+11%), $3.77 EPS, and 29.3% EBITDA margin ($2.416B), with $1.431B FCF (93% conversion) clearing the raised guide by another $106M+. The FY2026 guide hardens last quarter's ~$9B placeholder into $9.0–9.2B (mid $9.1B) revenue, $4.35–4.55 EPS (mid $4.45, implying ~18% growth on $3.77), and $1.55–1.65B FCF — and management framed gas turbines, not just aerospace, as the largest growth phase in years.

Headline numbers

EPS

Q4 FY2025

$1.05

Revenue

Q4 FY2025

$2.17B

+15.0% YoY

Free cash flow

Q4 FY2025

$0.53B

Operating margin

Q4 FY2025

22.6%

Key financials

Q4 FY2025

Metric	Q4 FY2025	YoY	Q3 FY2025	QoQ
Revenue	$2.17B	+15.0%	$2.09B	+3.8%
EPS	$1.05	—	$0.95	+10.5%
Operating margin	22.6%	—	25.9%	-330bps
Free cash flow	$0.53B	—	$0.42B	+25.3%

Guidance

Guidance is issued for the full year only, refreshed each quarter. Prior and new below are the same FY updated this quarter.

Actuals vs prior guidance

Metric	Period	Prior guide	Actual	Δ	Result
Revenue	Q4 FY2025	$2.090B to $2.110B	$2.168B	+$0.058B to $0.078B above guide	Beat
Adjusted EPS	Q4 FY2025	$0.94 to $0.96	$1.05	+$0.09 to $0.11 above guide	Beat
Adjusted EBITDA	Q4 FY2025	$605M to $615M	$653M	+$38M to $48M above guide	Beat
Adjusted EBITDA Margin	Q4 FY2025	28.9% to 29.1%	30.1%	+100 to 120 bps above guide	Beat
Revenue	FY2025	$8.175B to $8.195B	$8.252B	+$0.057B to $0.077B above guide	Beat
Adjusted EBITDA	FY2025	$2.370B to $2.380B	$2.476B	+$0.096B to $0.106B above guide	Beat
Free Cash Flow	FY2025	$1.275B to $1.325B	$1.431B	+$0.106B to $0.156B above guide	Beat

New guidance

Metric	Period	Guide	YoY
Adjusted EPS	FY2026	$4.35 to $4.55 (midpoint $4.45)	—

Changes to prior guidance

Metric	Period	Prior guide	New guide	Δ	Result
EPS (Full Year)	FY2025	$3.66 to $3.68	$3.77	+$0.09 to $0.11	Raised
Adjusted EBITDA Margin	FY2025	29.0%	30.0%	+100 bps	Raised
Revenue	FY2026	~$9.0B (~10% YoY)	$9.0B to $9.2B (midpoint $9.1B; ~10% YoY)	+$0.1B at high end; range clarification from point estimate	Raised

Segment KPIs

Q4 FY2025

Segment	Q4 FY2025	YoY
Engine Products	$1.163B	+20.0%
Fastening Systems	$0.454B	+13.0%
Engineered Structures	$0.287B	+4.0%
Forged Wheels	$0.264B	+9.0%
Commercial Aerospace Revenue Growth	13%	—
Defense Aerospace Revenue Growth	20%	—
Gas Turbines Revenue Growth	32%	—
Commercial Transportation Revenue Growth	-5%	—

Other KPIs

Q4 FY2025

Segment	Q4 FY2025
Adjusted EBITDA (excluding special items)	$653M
Adjusted EBITDA Margin (excluding special items)	30.1%
Free Cash Flow Conversion	93% of Net Income (excl. special items)
Share Repurchases	$200M (Q4 2025)

Management tone

Narrative arc: Q1 cautious raise → Q2 MAX rate-step + spares inflection → Q3 growth-over-margin pivot + early FY2026 anchor → Q4 gas turbine reframe + multi-lever capital deployment.

Through 2025 management framed gas turbines as a recovering cyclical segment they had historically been "leery" of investing in; this quarter it became the single largest reframe of the call. Per prepared remarks: "The gas turbine business is entering its largest growth phase in years... the demand for electricity generation, especially from natural gas for data centers, is extremely high." Management now expects the combined gas turbine business (large + small/medium) to double from ~$1B to ~$2B over the next three to five years. This converts the qualitative IGT/data-center thesis flagged on the Q3 watch list into a specific revenue doubling.

Capital allocation has shifted toward integrated multi-lever deployment. The CAM acquisition ($1.8B) closes alongside Bruna (~$120–150M of capital, ~$60M of revenue), buybacks expected to exceed 2025's pace, dividends rising, and FY2026 capex of ~$470M (plus possible upside, with 2027 flagged as potentially higher still). Per prepared remarks: "The theme has been, and will continue to be, to play to our strengths and allocate capital decisively to businesses that are growing and show the strongest returns on capital and cash generation." Last quarter's growth-over-margin pivot has hardened into growth-and-M&A-and-buybacks, underwritten by $1.55–1.65B of guided FCF.

Margin posture remains cautious but operationally specific. Management explicitly acknowledged near-term labor drag from absorbing another ~1,500 net new engine employees in 2026, on top of the ~1,500 absorbed in 2025. Per prepared remarks: "the engine product segment added approximately 1,440 net new employees, which has a near-term margin drag but positions us well for the future." This is a tradeoff management is naming rather than burying.

The aerospace demand caveat has effectively been retired. Per prepared remarks: "Outstanding demand combined with the recent multi-year underbuild of commercial aircraft have together led to a record OEM backlog stretching into the next decade." In Q2 management still hedged on wide-body acceleration; in Q3 they quantified rates; this quarter the framing is that backlog visibility extends past 2030 with no caveat on demand persistence — which is what's underwriting the record capex commitment.

Recurring themes management leaned on this quarter:

Gas turbine demand acceleration driven by data centers and natural gas electricity generationRecord spares growth across aerospace and defense (33% FY, 21% of total revenue)Aggressive capacity investments across five manufacturing plants with expected FY2026 capex of ~470M (plus potential upside)Commercial aerospace backlog extending into 2030s supporting sustained double-digit growthM&A as integrated capital deployment strategy (CAM $1.8B, Bruna ~$120-150M) to expand fastener/fittings adjacenciesMargin expansion opportunity through manufacturing flow optimization and automation despite near-term labor/startup headwinds

Risks management surfaced:

Execution risk on five simultaneous manufacturing plant buildouts and labor integrationAircraft build rate dependency — guidance assumes specific Boeing 737/787 and Airbus A320/A350 production ratesCommercial transportation/wheels segment volume headwind (down 13% FY2025) though stabilizing in H2 2026Ability to achieve yield improvements and repeatable product flow while absorbing 1,500+ net new employees in engines segmentIntegration execution on CAM acquisition closing and Bruna organic growth leverage

Answers to last quarter's watch list

FY2026 revenue guide refinement — Tightened, not widened. The ~$9B placeholder hardened to $9.0–9.2B with midpoint $9.1B (+$100M at the midpoint vs the Q3 anchor) and ~10% YoY reaffirmed. Management also added FY2026 EPS ($4.35–4.55), EBITDA ($2.71–2.81B), and FCF ($1.55–1.65B) for the first time.

Resolved positively

Engine Products margin durability at 33.3% — Engine Products grew +20% YoY in Q4 (accelerating from +17% in Q3); segment EBITDA margin expanded to 34.0% (+70bps QoQ from 33.3%). Management acknowledged absorbing ~1,440 net new heads in 2025 (and ~1,500 more planned for 2026) as a margin headwind but framed batch-to-flow conversion as the offsetting pathway.

Resolved positively

CapEx 2026 number — Disclosed at ~$470M (vs $453M FY2025), with management flagging that 2027 could rise further "if all of our discussions come home." This is a meaningful but not dramatic step-up — FY2026 EBITDA growth ($344M at midpoint) comfortably absorbs the ~$17M capex increment, which is why FCF guide of $1.6B (+$169M YoY) holds.

Resolved positively

IGT order conversion — Resolved positively. Management disclosed completion of three of four major large gas turbine OE customer agreements (four of seven across the full gas turbine customer set) and committed to the gas turbine business doubling from ~$1B to ~$2B over three to five years. Q4 gas turbine revenue grew +32% YoY (FY +25%). This converts last quarter's qualitative thesis to named multi-year commitments.

Resolved positively

Engineered Structures +14% YoY sustainability — Did not hold. Engineered Structures grew only +4% YoY in Q4, a 1,000bps deceleration from Q3's +14%. The Q3 step-up appears to have been the one-quarter benefit of the F-35 destock closure rather than a new run-rate.

Resolved negatively

Forged Wheels margin print in Q4 — Forged Wheels Q4 revenue grew +9% YoY (inflection complete from Q3's +0.8%) and segment EBITDA margin expanded to 29.9% (+270bps YoY). Management guided Q1 FY2026 as the "quarterly low point" in commercial transportation with healthy H2 FY2026 demand — implying margin pressure could resume near-term before easing.

Resolved positively

What to watch into next quarter

Q1 FY2026 commercial transportation print: Management explicitly flagged Q1 as "the quarterly low point" for the segment. Watch whether Forged Wheels revenue inflects negative again after the +9% Q4 print, and whether segment margin holds the ~29-30% area on the down volume.

Engineered Structures recovery or fade: With +4% YoY in Q4 after +14% in Q3, the read is unclear. Watch whether Q1 trends back toward double-digit growth (confirming wide-body underwriting) or stays in low single digits (signaling the F-35 step was one-quarter).

Engine Products margin against the labor drag: Absorbing another ~1,500 net new employees in 2026 while running engines at +20% YoY revenue growth. Watch segment EBITDA margin against the 34.0% Q4 print — any compression below 32% would indicate labor cost is outpacing the spares mix tailwind.

CAM closing and contribution: $1.8B acquisition closing in H1 FY2026; watch first quarter of contribution disclosure (revenue, EBITDA margin, accretion) and any update on the integration ramp.

Fourth large gas turbine OE agreement: Three of four done on the large-frame side (four of seven across the full customer set); watch for the remaining agreements and any disclosure of multi-year volume commitments that would underwrite the $1B→$2B doubling thesis.

FY2026 EPS guide refinement: Watch the Q1 print for a tightening or widening of the $4.35–4.55 range. Last year's quarterly raise cadence is the template to compare against.

Sources

Howmet Aerospace Q4 2025 earnings press release (SEC Form 8-K Exhibit 99.1), filed 2026-02-12. https://www.sec.gov/Archives/edgar/data/4281/000110465926013832/tm266060d1_ex99-1.htm
Howmet Aerospace Q4 2025 earnings conference call transcript, February 12, 2026 (prepared remarks and Q&A).
Howmet Aerospace Q3 2025 earnings press release (prior-quarter baseline for guidance comparison), filed 2025-10-30.

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