Woodward Reports Third Quarter Fiscal Year 2025 Results

Rhea-AI Summary

Woodward Inc. (NASDAQ:WWD) reported strong Q3 2025 financial results, with net sales increasing 8% to $915 million and earnings per share rising 8% to $1.76. The company's Aerospace segment showed remarkable performance with 15.2% sales growth, driven by commercial aftermarket (+30%) and defense OEM (+55.7%) growth. The Industrial segment experienced a 3.2% decline in sales, primarily due to lower China on-highway volume.

Based on strong year-to-date performance, Woodward raised its FY2025 guidance, projecting sales of $3.45-3.525 billion and adjusted EPS of $6.50-6.75. However, the company lowered its free cash flow guidance to $315-350 million due to higher working capital needs in the dynamic supply chain environment.

Positive

• None.

Negative

• Free cash flow declined 28% to $99 million in Q3
• Industrial segment earnings decreased 20.3% with margins declining 320 basis points
• Transportation sales dropped 12% in Industrial segment
• Company lowered full-year free cash flow guidance
• Capital expenditures increased 67% to $27 million

Insights

Financial Analyst

Woodward raised 2025 guidance on strong Q3 results with impressive Aerospace growth offsetting Industrial weakness; cash flow concerns emerge.

Woodward delivered a solid third quarter with $915 million in sales, up 8% year-over-year, and earnings per share of $1.76, also up 8%. The performance was strong enough to warrant raising full-year guidance for both sales and earnings.

Breaking down the segments reveals a tale of two businesses. The Aerospace segment is firing on all cylinders with 15.2% sales growth and expanding margins that reached 21.1% in Q3. This growth was primarily driven by commercial aftermarket (+30%) and defense OEM (+55.7%) sales, which more than offset weakness in commercial OEM (-7.6%) and defense aftermarket (-16.2%).

Meanwhile, the Industrial segment is facing headwinds with overall sales declining 3.2% and segment margins contracting significantly from 18.1% to 14.9%. The primary culprit is transportation sales, down 12% due to weakness in China's on-highway natural gas truck market. Oil and gas provided a bright spot with 16.1% growth.

The revised guidance reflects management's increased confidence in the business, with EPS guidance raised from $5.95-$6.25 to $6.50-$6.75. However, there's a concerning development on the cash flow front. Free cash flow decreased 27.8% in Q3 and 29.2% year-to-date, prompting management to lower full-year free cash flow guidance from $350-$400 million to $315-$350 million.

This cash flow deterioration, attributed to supporting higher sales in a "dynamic supply chain and production environment," suggests Woodward is experiencing working capital pressures. The company is likely holding more inventory and extending payment terms to navigate supply chain constraints while meeting increased demand. Despite these challenges, the overall financial position remains solid with an EBITDA leverage ratio steady at 1.5x.

Raises 2025 Sales and Earnings Guidance on Strong Year-to-Date Performance and Outlook

FORT COLLINS, Colo., July 28, 2025 (GLOBE NEWSWIRE) -- Today, Woodward, Inc. (NASDAQ:WWD) reported financial results for its third quarter of fiscal year 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.

Third Quarter Overview

	Third Quarter 2025		Year-to-Date 2025
Net Sales	$915M, 8%		$2.6B, 4%
Net Earnings	$108M, 6%		$304M, 5%
Adjusted Net Earnings1	-		$294M, 1%
Earnings Per Share (EPS)	$1.76, 8%		$4.96, 7%
Adjusted EPS1	-		$4.80, 2%
Cash from Operations	$126, -18%		$238, -20%
Free Cash Flow1	$99, -28%		$159, -29%

"We delivered strong results in the third quarter underpinned by robust demand across our end markets, coupled with disciplined execution by our global teams,” said Chip Blankenship, Chairman and Chief Executive Officer. “The Aerospace segment generated substantial sales growth and margin expansion, driven by smart defense and commercial services. This was partially offset by lower commercial OEM and defense services, although both achieved sequential improvement. Our Industrial business again delivered double-digit sales growth in oil and gas and marine transportation. This was offset by an expected decrease in China on-highway natural gas truck sales.

Based on our strong year-to-date performance and solid fourth quarter outlook, we are raising our full-year sales and earnings guidance. However, given the demands to support higher sales in a dynamic supply chain and production environment, we are lowering our full-year free cash flow guidance. We remain focused on growth, operational excellence, and innovation, which continue to position Woodward to deliver sustained long-term shareholder value.”

Third Quarter and Fiscal Year 2025 Company Results
Total Company Results (Dollars in millions, except per share amounts)
	Three Months Ended June 30								Nine Months Ended June 30
	2025			2024			Year over Year		2025			2024			Year over Year
Income Statement
Total Sales	$	915		$	848		8.0	%	$	2,572		$	2,470		4.1	%
Net Earnings		108			102		6.2	%		304			290		5.1	%
Adjusted Net Earnings1		-			-		-			294			293		0.6	%
EPS	$	1.76		$	1.63		8.0	%	$	4.96		$	4.65		6.7	%
Adjusted EPS1		-			-		-		$	4.80		$	4.70		2.1	%
EBIT		137			132		4.1	%		394			382		3.0	%
Adjusted EBIT1		-			-		-			381			386		-1.4	%
Effective Tax Rate		14.5	%		16.4	%	-190 bps			15.8	%		17.8	%	-200 bps
Adjusted Effective Tax Rate1		-			-		-			15.5	%		17.8	%	-230 bps
Cash Flow and Financial Position
Cash from Operating Activities	$	126		$	153		-18.0	%	$	238		$	297		-20.0	%
Capital Expenditures	27				16		67.0	%	79				72		8.8	%
Free Cash Flow		99			137		-27.8	%		159			225		-29.2	%
Dividends Paid		17			15		10.7	%		48			43		10.9	%
Share Repurchases		45			305		-			124			305		-
Total Debt		-			-		-			933			923		1.1	%
EBITDA1Leverage	-			-			-		1.5x			1.5x			-

Segment Results
Aerospace (Dollars in millions)
	Three Months Ended June 30								Nine Months Ended June 30
	2025			2024			Year over Year		2025			2024			Year over Year
Commercial OEM	$	175		$	190		-7.6	%	$	497		$	545		-8.8	%
Commercial Aftermarket		215			166		30.0	%		581			467		24.4	%
Defense OEM		150			97		55.7	%		401			281		42.7	%
Defense Aftermarket		55			66		-16.2	%		173			183		-5.7	%
Sales		596			518		15.2	%		1,652			1,476		11.9	%
Segment Earnings		126			102		23.5	%		345			279		23.6	%
Segment Margin %		21.1	%		19.7	%	140 bps			20.9	%		18.9	%	200 bps

The increase in Aerospace segment earnings in the third quarter was primarily a result of price realization and volume, partially offset by planned strategic investments in manufacturing capabilities to meet current and future growth, inflation, and unfavorable mix.

The increase in Aerospace segment earnings for the nine months ended June 30, 2025, was primarily a result of price realization and volume, partially offset by planned strategic investments in manufacturing capabilities to meet current and future growth, inflation, and unfavorable mix.

Industrial (Dollars in millions)
	Three Months Ended June 30								Nine Months Ended June 30
	2025			2024			Year over Year		2025			2024			Year over Year
Transportation	$	144		$	163		-12.0	%	$	402		$	512		-21.4	%
Power Generation		109			110		-0.2	%		326			315		3.5	%
Oil and Gas		66			57		16.1	%		193			168		14.7	%
Sales		319			330		-3.2	%		920			994		-7.4	%
Segment Earnings		48			60		-20.3	%		134			192		-30.3	%
Segment Margin %		14.9	%		18.1	%	-320 bps			14.5	%		19.3	%	-480 bps

The decrease in Industrial segment earnings in the third quarter was primarily a result of lower China on-highway volume and inflation, partially offset by price realization.

The decrease in Industrial segment earnings in the nine months ended June 30, 2025, was primarily a result of lower China on-highway volume and unfavorable mix, partially offset by price realization.

Nonsegment (Dollars in millions)
	Three Months Ended June 30								Nine Months Ended June 30
	2025			2024			Year over Year		2025			2024			Year over Year
Nonsegment Expenses	$	(36	)	$	(30	)	21.8	%	$	(85	)	$	(89	)	-4.2	%
Adjusted Nonsegment Expenses		-			-		-			(98	)		(85	)	15.6	%

Fiscal Year 2025 Guidance
Woodward, Inc. and Subsidiaries​ Revised Guidance (In millions, except per share amount and percentages)
	Prior FY25 Guidance	Revised FY25 Guidance
	April 28, 2025	July 28, 2025
Total Company
Sales	$3,375 - $3,500	$3,450 - $3,525
Adjusted Effective Tax Rate	~19%	~17%
Adjusted Free Cash Flow	$350 - $400	$315 - $350
Capital Expenditures	~$115	No change
Shares	~61.5	No change
Adjusted EPS	$5.95 - $6.25	$6.50 - $6.75
Segment Data
Aerospace
Sales Growth	Up 8% to 13%	Up 11% to 13%
Segment Earnings (% of Sales)	20% - 21%	21% - 21.5%
Industrial
Sales Growth	Down 7% to 9%	Down 5% to 7%
Segment Earnings (% of Sales)	13% - 14%	~14.5%

Conference Call

Woodward will hold an investor conference call at 5:00 p.m. ET, July 28, 2025, to provide an overview of the financial performance for its fiscal year 2025 and third quarter ending June 30, 2025, business highlights, and guidance for fiscal 2025. 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 within the meaning of the Private Securities Litigation Reform Act of 1995 that involve risks and uncertainties, including, but not limited to, our focus on growth, operational excellence and innovation, including the outcome of such efforts on our long-term success and shareholder value; statements regarding our business, expectations and guidance for the fourth quarter and fiscal year 2025, our guidance for sales, segment sales growth as compared to the prior fiscal year, adjusted earnings per share, segment earnings margin, adjusted effective tax rate, free cash flow, capital expenditures, and diluted weighted average shares outstanding, as well as our assumptions and expectations regarding our guidance and the factors that may impact guidance, and anticipated trends in our business and markets. 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 a potential global or regional recession, inflation and the impact on customer demand and our costs and expenses; (2) changes in or uncertainty with respect to global trade and economic policy, including tariff levels and retaliatory measures; (3) risks related to constraints and disruptions in the global supply chain and labor markets; (4) Woodward’s long sales cycle; (5) risks related to Woodward’s concentration of revenue among a relatively small number of customers; (6) Woodward’s ability to implement and realize the intended effects of any restructuring efforts; (7) Woodward’s ability to successfully manage competitive factors including expenses and fluctuations in sales; (8) changes and consolidations in the aerospace market; (9) Woodward’s financial obligations including debt obligations and tax expenses and exposures; (10) risks related to Woodward’s U.S. government contracting activities including potential changes in government spending patterns; (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; (15) Woodward’s ability to manage various regulatory and legal matters; (16) risks from operating internationally; (17) cybersecurity 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, 2024, any subsequently filed Quarterly Report on Form 10-Q, as well as its Quarterly Report on Form 10-Q for the quarter ended June 30, 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 June 30						Nine Months  Ended June 30
	2025			2024			2025			2024
Net sales	$	915,446		$	847,688		$	2,571,800		$	2,469,761
Costs and expenses:
Cost of goods sold		666,287			617,702			1,892,908			1,801,037
Selling, general, and administrative expenses		88,703			73,812			242,241			229,770
Research and development costs		41,088			38,728			108,525			105,987
Interest expense		11,234			11,516			35,464			34,482
Interest income		(838	)		(1,728	)		(3,236	)		(4,494	)
Other (income) expense, net		(17,864	)		(14,438	)		(65,755	)		(49,461	)
Total costs and expenses		788,610			725,592			2,210,147			2,117,321
Earnings before income taxes		126,836			122,096			361,653			352,440
Income taxes		18,388			20,021			57,165			62,765
Net earnings	$	108,448		$	102,075		$	304,488		$	289,675
Earnings per share amounts:
Basic earnings per share	$	1.82		$	1.69		$	5.12		$	4.80
Diluted earnings per share	$	1.76		$	1.63		$	4.96		$	4.65
Weighted average common shares outstanding:
Basic		59,680			60,425			59,442			60,290
Diluted		61,488			62,522			61,374			62,295
Cash dividends paid per share	$	0.28		$	0.25		$	0.81		$	0.72

Woodward, Inc. and Subsidiaries​ Condensed Consolidated Balance Sheets (Unaudited – In thousands)
	June  2025			September 2025
Assets
Current assets:
Cash and cash equivalents	$	473,159		$	282,270
Accounts receivable		829,581			770,066
Inventories		657,121			609,092
Income taxes receivable		35,883			22,016
Other current assets		65,413			60,167
Total current assets		2,061,157			1,743,611
Property, plant, and equipment, net		942,103			940,715
Goodwill		813,779			806,643
Intangible assets, net		435,057			440,419
Deferred income tax assets		85,714			84,392
Other assets		374,040			353,135
Total assets	$	4,711,850		$	4,368,915
Liabilities and stockholders’ equity
Current liabilities:
Short-term debt	$	353,000		$	217,000
Current portion of long-term debt		76,020			85,719
Accounts payable		284,029			287,457
Income taxes payable		35,768			40,692
Accrued liabilities		261,381			292,642
Total current liabilities		1,010,198			923,510
Long-term debt, less current portion		503,851			569,751
Deferred income tax liabilities		127,744			121,858
Other liabilities		601,491			577,380
Total liabilities		2,243,284			2,192,499
Stockholders’ equity		2,468,566			2,176,416
Total liabilities and stockholders’ equity	$	4,711,850		$	4,368,915

Woodward, Inc. and Subsidiaries​ Condensed Consolidated Statements of Cash Flows (Unaudited – In thousands)
	Nine Months Ended June 30
	2025			2024
Net cash provided by operating activities	$	237,976		$	297,329
Cash flows from investing activities:
Payments for purchase of property, plant, and equipment		(78,537	)		(72,193	)
Proceeds from sale of assets		41			84
Proceeds from business divestitures		48,043			900
Payments for short-term investments		-			(6,767	)
Proceeds from sales of short-term investments		2,935			9,737
Net cash used in investing activities		(27,518	)		(68,239	)
Cash flows from financing activities:
Cash dividends paid		(48,195	)		(43,457	)
Proceeds from sales of treasury stock		96,064			90,142
Payments for repurchases of common stock		(124,276	)		(304,811	)
Borrowings on revolving lines of credit and short-term borrowings		1,957,900			2,258,600
Payments on revolving lines of credit and short-term borrowings		(1,821,900	)		(1,983,800	)
Payments of long-term debt and finance lease obligations		(85,719	)		(75,644	)
Net cash used in financing activities		(26,126	)		(58,970	)
Effect of exchange rate changes on cash and cash equivalents		6,557			765
Net change in cash and cash equivalents		190,889			170,885
Cash and cash equivalents at beginning of year		282,270			137,447
Cash and cash equivalents at end of period	$	473,159		$	308,332

Woodward, Inc. and Subsidiaries​ Segment Net Sales and Net Earnings (Unaudited – In thousands)
	Three Months Ended June 30						Nine Months Ended June 30
	2025			2024			2025			2024
Segment net sales:
Aerospace		595,990			517,560			1,651,601			1,475,828
Industrial		319,456			330,128			920,199			993,933
Total consolidated net sales	$	915,446		$	847,688		$	2,571,800		$	2,469,761
Segment earnings*:
Aerospace		125,740			101,842			345,081			279,295
As a percent of segment net sales		21.1	%		19.7	%		20.9	%		18.9	%
Industrial		47,622			59,717			133,786			191,842
As a percent of segment net sales		14.9	%		18.1	%		14.5	%		19.3	%
Total segment earnings	$	173,362		$	161,559		$	478,867		$	471,137
Nonsegment expenses		(36,130	)		(29,675	)		(84,986	)		(88,709	)
EBIT	$	137,232		$	131,884		$	393,881		$	382,428
Interest expense, net		(10,396	)		(9,788	)		(32,228	)		(29,988	)
Consolidated earnings before income taxes	$	126,836		$	122,096		$	361,653		$	352,440
*This schedule reconciles segment earnings, which exclude certain costs, to consolidated earnings before taxes.
Payments for property, plant and equipment	$	26,547		$	15,892		$	78,537		$	72,193
Depreciation expense	$	21,482		$	20,661		$	63,238		$	61,494

There were no adjustments to net earnings, earnings per share, adjusted effective tax rate, adjusted nonsegment, and adjusted income tax expense in the three months ended June 30, 2025 or the three months ended June 30, 2024.

Woodward, Inc. and Subsidiaries​ Reconciliation of Net Earnings to Adjusted Earnings1​ (Unaudited – In thousands, except per share amounts)
​	Nine Months Ended June 30
​	2025						2024
​	Net Earnings​			Earnings​  Per Share			Net Earnings​			Earnings  ​Per Share
Net Earnings (U.S. GAAP)​	$	304,488		$	4.96		$	289,675		$	4.65
Non-U.S. GAAP Adjustments​	​						​			​
Product rationalization1		(20,524	)		(0.33	)		-			-
Non-recurring gain related to a previous acquisition1		-			-			(4,803	)		(0.08	)
Business development activities1		7,310			0.12			5,902			0.09
Certain non-restructuring separation costs2		-			-			2,666			0.05
Tax Effect of Non-U.S. GAAP ​Net Earnings Adjustments		3,130			0.05			(729	)		(0.01	)
Total non-U.S. GAAP Adjustments​		(10,084	)		(0.16	)		3,036			0.05
Adjusted Net Earnings​(Non-U.S. GAAP)	$	294,404		$	4.80		$	292,711		$	4.70

1. Presented in the line item "Other (income) expense, net" in Woodward's Condensed Consolidated Statement of Earnings.
2. Presented in 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)
​	Nine Months Ended June 30
​	2025			2024
Income tax expense (U.S. GAAP)​	$	57,165		$	62,765
Tax Effect of Non-U.S. GAAP ​Net Earnings Adjustments		(3,130	)		729
Adjusted Income Tax Expense (Non-U.S. GAAP)	$	54,035		$	63,494
Adjusted Income Tax Rate (Non-U.S. GAAP)		15.5	%		17.8	%

Woodward, Inc. and Subsidiaries​ Reconciliation of Net Earning to EBIT1 (Unaudited – In thousands)
​	Three Months Ended June 30
​	2025			2024
Net Earnings (U.S. GAAP)​	$	108,448		$	102,075
Income Tax Expense		18,388			20,021
Interest Expense		11,234			11,516
Interest Income		(838	)		(1,728	)
EBIT (Non-U.S. GAAP)		137,232			131,884

Woodward, Inc. and Subsidiaries​ Reconciliation of Net Earning to EBIT1and Adjusted EBIT1​ (Unaudited – In thousands)
​	Nine Months Ended June 30
​	2025			2024
Net Earnings (U.S. GAAP)​	$	304,488		$	289,675
Income Tax Expense		57,165			62,765
Interest Expense		35,464			34,482
Interest Income		(3,236	)		(4,494	)
EBIT (Non-U.S. GAAP)		393,881			382,428
Total non-U.S. GAAP Adjustments​		(13,214	)		3,765
Adjusted EBIT​ (Non-U.S. GAAP)	$	380,667		$	386,193

Woodward, Inc. and Subsidiaries​ Reconciliation of Net Earning to EBITDA1 (Unaudited – In thousands)
​	Three Months Ended June 30
​	2025			2024
Net Earnings (U.S. GAAP)​	$	108,448		$	102,075
Income Tax Expense		18,388			20,021
Interest Expense		11,234			11,516
Interest Income		(838	)		(1,728	)
Amortization of intangible assets​		7,172			8,131
Depreciation Expanse​		21,482			20,661
EBITDA (Non-U.S. GAAP)		165,886			160,676

Woodward, Inc. and Subsidiaries​ Reconciliation of Net Earning to EBITDA1and Adjusted EBITDA1​ (Unaudited – In thousands)
​	Nine Months Ended June 30
​	2025			2024
Net Earnings (U.S. GAAP)​	$	304,488		$	289,675
Income Tax Expense		57,165			62,765
Interest Expense		35,464			34,482
Interest Income		(3,236	)		(4,494	)
Amortization of Intangible Assets​		20,858			25,348
Depreciation Expanse​		63,238			61,494
EBITDA (Non-U.S. GAAP)		477,977			469,270
Total non-U.S. GAAP Adjustments​		(13,214	)		3,765
Adjusted EBITDA​ (Non-U.S. GAAP)	$	464,763		$	473,035

Woodward, Inc. and Subsidiaries​ Reconciliation of Non-Segment Expenses ​ to Adjusted Non-Segment Expenses1 (Unaudited – In thousands)
​	Nine Months Ended June 30
​	2025			2024
Non-Segment Expenses (U.S. GAAP)	$	(84,986	)	$	(88,709	)
Product rationalization		(20,524	)		-
Non-recurring gain related to a previous acquisition		-			(4,803	)
Business development activities		7,310			5,902
Certain non-restructuring separation costs		-			2,666
Adjusted Non-Segment Expenses (Non-U.S. GAAP)	$	(98,200	)	$	(84,944	)

Woodward, Inc. and Subsidiaries​ Reconciliation of Cash Flow from Operating Activities to Free Cash Flow1 (Unaudited – In thousands)
​	Nine Months Ended June 30
​	2025			2024
Net cash provided by operating activities (U.S. GAAP)	$	237,976		$	297,329
Payments for property, plant, and equipment		(78,537	)		(72,193	)
Free cash flow (Non-U.S. GAAP)	$	159,439		$	225,136

¹Adjusted and Non-U.S. GAAP Financial Measures: Adjusted net earnings, adjusted earnings per share, adjusted EBIT, adjusted EBITDA, adjusted income tax expense, adjusted effective tax rate, and adjusted nonsegment expenses exclude, as applicable (i) product rationalization, (ii) a non-recurring gain related to a previous acquisition, (iii) costs related to business development activities, and (iv) certain non-restructuring separation costs. The product rationalization adjustment pertains to gains related to the elimination 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. Guidance with respect to non-U.S. GAAP measures as provided in this release excludes, as applicable, (i) product rationalization, and (ii) business development activities. 

EBIT (earnings before interest and taxes), EBITDA (earnings before interest, taxes, depreciation and amortization), free cash flow, adjusted net earnings, adjusted earnings per share, adjusted EBIT, adjusted EBITDA, adjusted income tax expense, adjusted effective 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 various 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. Woodward’s calculations of EBIT, EBITDA, adjusted net earnings, adjusted earnings per share, adjusted EBIT, adjusted EBITDA, adjusted effective 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.

²Website, Facebook, LinkedIn: Woodward has used, and intends to continue to use, its Investor Relations website, LinkedIn page, and Facebook page as means of disclosing material non-public information and for complying with its disclosure obligations under Regulation FD.

Contact:

Dan Provaznik Director, Investor Relations 970-498-3849 Dan.Provaznik@woodward.com

FAQ

What were Woodward's (WWD) key financial results for Q3 2025?

Woodward reported net sales of $915M (up 8%), net earnings of $108M (up 6%), and earnings per share of $1.76 (up 8%) for Q3 2025.

How did Woodward's Aerospace segment perform in Q3 2025?

The Aerospace segment achieved 15.2% sales growth with commercial aftermarket up 30% and defense OEM up 55.7%. Segment earnings increased 23.5% with margins improving to 21.1%.

What is Woodward's updated guidance for fiscal year 2025?

Woodward raised its FY2025 guidance with sales projected at $3.45-3.525B, adjusted EPS at $6.50-6.75, but lowered free cash flow guidance to $315-350M.

Why did Woodward's Industrial segment decline in Q3 2025?

The Industrial segment declined primarily due to lower China on-highway volume, resulting in a 3.2% sales decrease and 20.3% lower segment earnings.

What caused Woodward to lower its free cash flow guidance for 2025?

Woodward lowered free cash flow guidance due to increased working capital needs to support higher sales in a dynamic supply chain and production environment.