Aerospace and defense company Woodward (NASDAQ: WWD) reported revenue ahead of Wall Streets expectations in Q4 CY2025, with sales up 29% year on year to $996.5 million. Its GAAP profit of $2.17 per share was 29.4% above analysts’ consensus estimates.

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"We delivered strong first quarter 2026 performance that exceeded our expectations,” said Chip Blankenship, Chairman and Chief Executive Officer.

Company Overview

Initially designing controls for water wheels in the early 1900s, Woodward (NASDAQ: WWD) designs, services, and manufactures energy control products and optimization solutions.

Revenue Growth

Examining a company’s long-term performance can provide clues about its quality. Any business can put up a good quarter or two, but many enduring ones grow for years. Over the last five years, Woodward grew its sales at a solid 10.4% compounded annual growth rate. Its growth beat the average industrials company and shows its offerings resonate with customers, a helpful starting point for our analysis.

We at StockStory place the most emphasis on long-term growth, but within industrials, a half-decade historical view may miss cycles, industry trends, or a company capitalizing on catalysts such as a new contract win or a successful product line. Woodward’s annualized revenue growth of 10.9% over the last two years aligns with its five-year trend, suggesting its demand was predictably strong.

This quarter, Woodward reported robust year-on-year revenue growth of 29%, and its $996.5 million of revenue topped Wall Street estimates by 11.9%.

Looking ahead, sell-side analysts expect revenue to grow 6.4% over the next 12 months, a deceleration versus the last two years. This projection doesn't excite us and indicates its products and services will face some demand challenges. At least the company is tracking well in other measures of financial health.

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Operating Margin

Woodward has managed its cost base well over the last five years. It demonstrated solid profitability for an industrials business, producing an average operating margin of 11.8%.

Analyzing the trend in its profitability, Woodward’s operating margin rose by 4.8 percentage points over the last five years, as its sales growth gave it operating leverage.

This quarter, Woodward generated an operating margin profit margin of 17.9%, up 6.3 percentage points year on year. This increase was a welcome development and shows it was more efficient.

Earnings Per Share

We track the long-term change in earnings per share (EPS) for the same reason as long-term revenue growth. Compared to revenue, however, EPS highlights whether a company’s growth is profitable.

Woodward’s EPS grew at a spectacular 17.4% compounded annual growth rate over the last five years, higher than its 10.4% annualized revenue growth. This tells us the company became more profitable on a per-share basis as it expanded.

Diving into Woodward’s quality of earnings can give us a better understanding of its performance. As we mentioned earlier, Woodward’s operating margin expanded by 4.8 percentage points over the last five years. On top of that, its share count shrank by 5.1%. These are positive signs for shareholders because improving profitability and share buybacks turbocharge EPS growth relative to revenue growth.

Like with revenue, we analyze EPS over a shorter period to see if we are missing a change in the business.

For Woodward, its two-year annual EPS growth of 29.4% was higher than its five-year trend. We love it when earnings growth accelerates, especially when it accelerates off an already high base.

In Q4, Woodward reported EPS of $2.17, up from $1.42 in the same quarter last year. This print easily cleared analysts’ estimates, and shareholders should be content with the results. Over the next 12 months, Wall Street expects Woodward’s full-year EPS of $7.94 to grow 5.8%.

Key Takeaways from Woodward’s Q4 Results

It was good to see Woodward beat analysts’ EPS expectations this quarter. We were also excited its EBITDA outperformed Wall Street’s estimates by a wide margin. Zooming out, we think this quarter featured some important positives. The stock traded up 8.6% to $356.54 immediately following the results.

Woodward may have had a good quarter, but does that mean you should invest right now? We think that the latest quarter is only one piece of the longer-term business quality puzzle. Quality, when combined with valuation, can help determine if the stock is a buy. We cover that in our actionable full research report which you can read here (it’s free).