Carpenter Technology (CRS) Q4 2025 earnings summary

Executive summary

• Achieved record quarterly and annual profitability in FY25, with Q4 adjusted operating income of $151.4M, up 21% year-over-year and 10% sequentially, and FY25 adjusted operating income of $525.4M, up 48% over FY24 and nearly four times FY23, surpassing original four-year targets in two years.

• Generated $201.3M in adjusted free cash flow in Q4 and $287.5M for FY25, supporting share repurchases and dividends.

• SAO segment delivered its fourteenth consecutive quarter of margin expansion, reaching 30.5% in Q4 FY25.

• Strategic investments in brownfield capacity expansion and ongoing share repurchases and dividends reflect a balanced approach to growth and shareholder returns.

• Increased Aerospace and Defense revenue share to over 60%.

Financial highlights

• Q4 adjusted operating income: $151.4M, up 21% year-over-year and 10% sequentially; Q4 gross profit: $213.9M, up 12% year-over-year.

• Q4 EPS: $2.21 per diluted share; FY25 adjusted EPS: $7.48, up from $4.74 in FY24.

• FY25 adjusted free cash flow: $287.5M, net of brownfield expansion investments; Q4 adjusted free cash flow: $201.3M.

• Total liquidity at year-end was $664.4M, including $315.5M cash and $348.9M in available credit.

• FY25 net income was $376.0M.

Outlook and guidance

• FY26 adjusted operating income projected at $660M–$700M, a 26%–33% increase over FY25; Q1 FY26 operating income guidance: $148M–$152M.

• FY26 adjusted free cash flow expected at $240M–$280M, net of brownfield CapEx.

• FY27 operating income target: $765M–$800M, representing a 25% two-year CAGR.

• CapEx for FY26 expected at $300M–$315M, including $175M–$185M for brownfield expansion.