Hexcel reported fourth-quarter 2025 sales of $491 million, up from $474 million in the same period a year earlier.

Hexcel Corporation (NYSE: HXL) today reported fourth quarter 2025 results including net sales of $491 million and adjusted diluted EPS of $0.52 per share.

Chairman, CEO and President Tom Gentile said, "Although 2025 was another challenging year for commercial aircraft production, we began to see positive trends in the fourth quarter that suggest a stronger 2026. Earlier this past year, our commercial aerospace OEM customers delayed aircraft production rate ramps, particularly on the Airbus A350, Hexcel's largest program, due to industry-wide supply chain disruptions leading to channel destocking that weighed on our 2025 sales and margins. Recent trends of rising commercial aircraft build rates are encouraging as are the global trends of increasing defense and space spending. We closed 2025 on a strong note with a solid fourth quarter and particularly favorable order trends in December as destocking abates, which reinforces our view that the commercial aerospace recovery is accelerating."

Mr. Gentile continued, "We expect growth in 2026, consistent with the confidence we signaled by executing the accelerated share repurchase or ASR program in October 2025. As sales grow from customer rate ramps, operating leverage will drive margin expansion, supported by disciplined execution and continuing cost control. Our 2026 guidance is for 8% sales growth at the midpoint and adjusted EPS to grow 25% at the midpoint, illustrating the inherent operating leverage within our business. This guidance incorporates what we believe are prudent assumptions on timing and rate ramp cadence. Hexcel has the needed capacity to exceed prior peak sales levels and the Company is well-positioned to execute and benefit as commercial aircraft production rates increase. When commercial aerospace OEMs achieve their production targets across all their programs, it will generate approximately $500 million of incremental annual revenue for Hexcel."

Markets

Sales in the fourth quarter of 2025 were $491.3 million compared to $473.8 million, a 3.7% increase from the fourth quarter of 2024.

Commercial Aerospace

Commercial Aerospace sales of $299.5 million for the fourth quarter of 2025 increased 7.6% (5.8% in constant currency) compared to the fourth quarter of 2024 led by strong growth in Airbus A320neo sales. Boeing 787 and 737 MAX sales also increased year over year whereas Airbus A350 sales decreased on lingering destocking. Other Commercial Aerospace sales increased 16.1% in the fourth quarter of 2025 compared to the fourth quarter of 2024 primarily from strength in regional jets.

Defense, Space & Other

Defense, Space & Other sales of $191.8 million decreased 1.9% (4.3% in constant currency) for the quarter as compared to the fourth quarter of 2024. Defense sales increased from strength in military helicopter programs and Space sales increased from launchers whereas sales for the Other category were lower following the September 30, 2025 divestment of the Austrian-based industrial business.

Consolidated Operations

Gross margin for the fourth quarter of 2025 was 24.6% compared to 25.0% in the fourth quarter of 2024. As a percentage of sales, selling, general and administrative expenses for the fourth quarter of 2025 was 8.5% compared to 10.1% for the fourth quarter of 2024. R&T expenses as a percentage of sales was 2.9% for the fourth quarter of 2025 compared to 2.8% for the fourth quarter of 2024. Adjusted operating income in the fourth quarter of 2025 was $65.1 million or 13.3% of sales, compared to $57.1 million or 12.1% of sales in 2024. The impact of foreign exchange rates to operating income as a percentage of sales was unfavorable by approximately 110 basis points in the fourth quarter of 2025 compared to the fourth quarter of 2024. Other operating expenses for the fourth quarter of 2025 included restructuring charges associated with the previously disclosed facility closure in Welkenraedt, Belgium, and Other non-operating expense in the fourth quarter primarily included a retirement plan curtailment gain related to this facility closure. Other operating expense for the fourth quarter of 2024 included asset impairments and other charges primarily associated with the divestiture of the Neumarkt, Austria business.

FY 2025 Results

Sales for the full year of 2025 were $1,893.9 million compared to $1,903.0 million, a 0.5% decrease from 2024 sales.

Commercial Aerospace (61% of sales)

Commercial Aerospace sales of $1,146.9 million decreased 4.0% (4.4% in constant currency) for the full year of 2025 compared to the full year of 2024. Sales were lower in 2025 compared to 2024 for the A350, 787 and 737 MAX, partially offset by increased A320neo sales. Other Commercial Aerospace sales increased 9.5% for the full year of 2025 as compared to the full year of 2024 from strength in regional jets.

Defense, Space & Other (39% of sales)

Defense, Space & Other sales of $747.0 million increased 5.4% (4.0% in constant currency) for the full year of 2025 as compared to the full year of 2024. Growth was driven by domestic and international helicopter programs including the Sikorsky Black Hawk and CH-53K as well as a European fighter program and growth in Space sales, including launchers, rocket motors and satellites.

Consolidated Operations

Gross margin for 2025 was 23.0% compared to 24.7% in the prior year as inventory reduction actions and sales mix led to unfavorable cost leverage. As a percentage of sales, selling, general and administrative expense for the full year of 2025 was 8.9% compared to 9.3% for 2024. R&T expenses as a percentage of sales was 3.0% for the full year of 2025, which was unchanged compared to 3.0% for the full year of 2024. Adjusted operating income for the full year of 2025 was $209.4 million or 11.1% of sales, compared to $236.1 million or 12.4% of sales in 2024. The impact of foreign exchange rates on operating income as a percentage of sales was unfavorable by approximately 10 basis points for 2025 compared to 2024. Other operating expense for 2025 included charges for the divestiture of the Neumarkt, Austria business, the divestiture of the Hartford, Connecticut business, and the closure of the Welkenraedt, Belgium facility. Other operating expense for 2024 included asset impairments and other charges primarily associated with the divestiture of the Neumarkt, Austria business. Other non-operating expense for 2025 primarily included a curtailment and settlement gains related to retirement plans partially offset by debt extinguishment costs.

Cash and other

Net cash provided by operating activities in 2025 was $230.5 million, compared to $289.9 million in 2024. Working capital was a cash use of $1.5 million in 2025 compared to a use of $0.8 million in 2024. Capital expenditures on a cash basis were $73.3 million in 2025 compared to $87.0 million in 2024. Free cash flow was $157.2 million in 2025 compared to $202.9 million in 2024. Free cash flow is defined as cash generated from operating activities less cash paid for capital expenditures. Capital expenditures on an accrual basis were $76.7 million in 2025 and $81.1 million in 2024.

The Company entered into a $350 million accelerated share repurchase (ASR) agreement on October 22, 2025. The Company received an initial delivery of approximately 3.95 million shares of the Company's common stock on October 24, 2025, representing 80% of the shares expected to be repurchased under the ASR agreement. The final settlement under the ASR agreement is scheduled to occur in the first quarter of 2026. The remaining authorization under the Company's share repurchase program was $380.6 million as of December 31, 2025.

As announced today, the Board of Directors declared a quarterly dividend of $0.18 per share, an increase of $0.01 per share, payable to stockholders of record as of February 9, 2026, with a payment date of February 17, 2026.

2026 Guidance

Sales of $2.0 billion to $2.1 billion

Adjusted diluted earnings per share of $2.10 to $2.30

Free cash flow of greater than $195 million

Capital Expenditures less than $100 million

Hexcel will host a conference call at 9:00 a.m. ET, on January 29, 2026 to discuss fourth quarter and full- year 2025 results. 

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