Aerospace and defense company Woodward (NASDAQ: WWD) reported Q1 CY2026 results topping the market’s revenue expectations, with sales up 23.4% year on year to $1.09 billion. Its non-GAAP profit of $2.27 per share was 8.6% above analysts’ consensus estimates.
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Woodward (WWD) Q1 CY2026 Highlights:
- Revenue: $1.09 billion vs analyst estimates of $1.01 billion (23.4% year-on-year growth, 8.5% beat)
- Adjusted EPS: $2.27 vs analyst estimates of $2.09 (8.6% beat)
- Adjusted EBITDA: $215.5 million vs analyst estimates of $202.2 million (19.8% margin, 6.6% beat)
- Adjusted EPS guidance for the full year is $9.30 at the midpoint, beating analyst estimates by 5.7%
- Operating Margin: 16.4%, up from 13.5% in the same quarter last year
- Free Cash Flow Margin: 3.5%, down from 6.7% in the same quarter last year
- Market Capitalization: $21.7 billion
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. Even a bad business can shine for one or two quarters, but a top-tier one grows for years. Thankfully, Woodward’s 13% annualized revenue growth over the last five years was excellent. Its growth surpassed the average industrials company and shows its offerings resonate with customers, a great starting point for our analysis.
Long-term growth is the most important, but within industrials, a half-decade historical view may miss new industry trends or demand cycles. Woodward’s annualized revenue growth of 11.8% over the last two years is below its five-year trend, but we still think the results suggest healthy demand. 
This quarter, Woodward reported robust year-on-year revenue growth of 23.4%, and its $1.09 billion of revenue topped Wall Street estimates by 8.5%.
Looking ahead, sell-side analysts expect revenue to grow 7.7% over the next 12 months, a deceleration versus the last two years. Still, this projection is above the sector average and indicates the market sees some success for its newer products and services.
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Operating Margin
Woodward has been an efficient company over the last five years. It was one of the more profitable businesses in the industrials sector, boasting an average operating margin of 12%.
Analyzing the trend in its profitability, Woodward’s operating margin rose by 5.9 percentage points over the last five years, as its sales growth gave it immense operating leverage.
This quarter, Woodward generated an operating margin profit margin of 16.4%, up 2.9 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 23.3% compounded annual growth rate over the last five years, higher than its 13% annualized revenue growth. This tells us the company became more profitable on a per-share basis as it expanded.
We can take a deeper look into Woodward’s earnings to better understand the drivers of its performance. As we mentioned earlier, Woodward’s operating margin expanded by 5.9 percentage points over the last five years. On top of that, its share count shrank by 6.7%. 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 more recent period because it can provide insight into an emerging theme or development for the business.
For Woodward, its two-year annual EPS growth of 19.9% was lower than its five-year trend. We still think its growth was good and hope it can accelerate in the future.
In Q1, Woodward reported adjusted EPS of $2.27, up from $1.69 in the same quarter last year. This print beat analysts’ estimates by 8.6%. Over the next 12 months, Wall Street expects Woodward’s full-year EPS of $8.29 to grow 12.4%.
Key Takeaways from Woodward’s Q1 Results
We were impressed by how significantly Woodward blew past analysts’ revenue expectations this quarter. We were also glad its full-year EPS guidance trumped Wall Street’s estimates. Zooming out, we think this was a good print with some key areas of upside. The stock traded up 3.4% to $379.75 immediately after reporting.
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).
