Letter to Shareholders
As we drive the execution of our pivot to growth strategy, we are compounding earnings at a mid-teens pace while remaining measured with our capital allocation to deliver tremendous value for all of our stakeholders.
To My Fellow Shareholders and Employees,
Curtiss-Wright delivered another successful performance in 2025, with exceptional results that reflected the demand and momentum that continues to accelerate across our portfolio. We achieved numerous financial records, including full-year sales, profitability, diluted earnings per share, free cash flow, new orders and backlog. Our performance reflected the critical positioning of our technologies across our Aerospace & Defense (A&D) and Commercial markets, our ongoing pursuit of operational and commercial excellence, and our drive for continued efficiency in cash management. At the same time, we targeted incremental investments across the organization, focusing on talent, systems and processes, research and development (R&D), and operational initiatives, including facility expansions, to support Curtiss-Wright’s future growth. As we drive the execution of our Pivot to Growth strategy, we are compounding earnings at a mid-teens pace while remaining measured with our capital allocation to deliver tremendous value for all of our stakeholders.
Record Financial Performance
Full-year sales increased 12% overall to a record $3.5 billion, driven by strong organic growth across our A&D and Commercial Nuclear markets, along with contribution from our I&C Solutions acquisition. Adjusted operating income increased 19% to $651 million, resulting in year-over-year margin expansion of 110 basis points to a new high of 18.6%. This improved profitability reflected solid demand across our portfolio, the success of our operational excellence initiatives, and the savings generated by our restructuring actions.
In 2025, we continued to accelerate investments in R&D to support organic growth and maintained our commitment to grow total R&D investments. Adjusted diluted earnings per share (EPS) increased 21% to $13.23, reflecting our strong operational performance, the efficiency of our capital structure, and record distributions to our shareholders. We generated record free cash flow of $554 million, which reflected free cash flow conversion of 111%, based on the growth in earnings and near-record levels of working capital efficiency. We achieved these strong results while increasing Capital Expenditures by nearly 50% year-over-year to invest in growth across all three of our business segments.
Healthy demand across our A&D and Commercial markets yielded record new orders of $4.1 billion, up 10% year over year, reflecting nearly 1.2 times book-to-bill overall. We experienced solid underlying growth in orders across the majority of our markets, with particularly strong demand in our naval defense and commercial nuclear markets. As a result, our overall backlog increased 18% in 2025, reaching a record of more than $4 billion while providing greater confidence in our ability to deliver strong, top-line growth in the years ahead.
Disciplined Capital Allocation Strategy
We continue to follow a disciplined approach to capital allocation to direct resources to the highest and best use of capital to improve shareholder value while generating strong free cash flow. While we did not acquire any businesses this past year, we successfully integrated the two commercial nuclear businesses we acquired in 2024, which helped to expand our global operations and customer base, and enabled us to secure new program wins that will help drive long-term growth in this market. Furthermore, we accelerated distributions to our shareholders by completing a record $465 million in share repurchases and increasing our annual dividend for the ninth consecutive year.
We concluded 2025 with a very healthy balance sheet, including more than $2.7 billion of borrowing capacity, providing exceptional financial flexibility that will enable us to enhance our portfolio with high-quality acquisitions in support of our Pivot to Growth strategy.
Strategically Positioned for Long-Term Growth
Our strong performance in 2025, coupled with our solid outlook for continued growth in 2026, provides line of sight to exceed the three-year financial targets issued at our 2024 Investor Day, which include a minimum of a 5% compound annual growth rate (CAGR) in organic revenue; operating income growth in excess of revenue growth, maintaining top quartile operating margin relative to our peers; an EPS CAGR above 10%; and an average free cash flow conversion rate above 105%.
We remain well aligned with the fastest growth vectors in the markets we serve. For example, in Defense, we are well positioned to capitalize on the continued acceleration of global defense spending, based on the accelerated pace of growth in NATO and allied funding, and our strong alignment with U.S. defense priorities. This includes our continued support of the U.S. Navy’s most critical shipbuilding programs, our ongoing investments with respect to a broad range of technologies at the tactical edge of the battlefield, and our support for the expected increases in ground vehicle production throughout Europe. In Commercial Aerospace, we expect our strong core positions supporting the ongoing production ramps across the major OEM platforms to be supplemented by continued advancements in critical flight data recorder, electromechanical actuation and sensor technologies. In Commercial Nuclear, what continues to play an important role in meeting future energy demand, Curtiss-Wright’s technologies are primed to support the entire lifecycle, including new build AP1000 reactors to the expected transition from prototypes to production of Small Modular Reactors (SMRs), and in our growing, global support in the aftermarket. In our Process and Industrial markets, we continue to drive innovation and diversification of our critical technologies to expand our product offering and build upon our leadership positions. These represent just a few of the many critical growth areas across the Company that have and will continue to drive Curtiss-Wright’s success.
Finally, I would like to thank our 9,100 hard-working employees for their contributions and dedication to driving Curtiss-Wright to yet another record performance this past year. The future is bright, and I look forward to building on this momentum to deliver long-term profitable growth and continued value creation for all stakeholders.
Lynn M. Bamford
Chair & Chief Executive Officer