Curtiss-Wright Corp (CW)

How it makes money

Revenue comes from selling engineered hardware and from the aftermarket and services that follow it. A large part is long-cycle contract work for the US Navy, defence primes and government agencies, often booked into backlog years ahead: 47% of 2025 net sales came from contracts with US Government agencies and prime contractors. The rest is commercial — aerospace OEM and aftermarket content, surface-treatment services, nuclear plant components and upgrades, and general industrial products. The economics rest on being qualified into a platform or a reactor: once the part is certified, it is re-ordered through production, spares and refurbishment cycles. Backlog stood at roughly $4.1 billion at the end of 2025, but the company discloses that backlog can be reduced or cancelled.

Revenue by segment

Curtiss-Wright's advantage is qualification, not brand or scale. Its parts are designed into naval reactors, aircraft and defence platforms and then certified by the customer or the regulator; replacing a qualified supplier means re-testing and re-certifying, which customers avoid for decades. That produces long, sticky programme content and a recurring aftermarket. It is narrow rather than wide because the company itself discloses that it operates in competitive markets and competes with companies larger than it, and because it does not control the platforms — when a programme's funding or production rate changes, the content changes with it.

Roughly two thirds of demand follows defence and nuclear programme cycles rather than the economy: naval shipbuilding and reactor work are funded years ahead and move with appropriations, not with GDP, which is why backlog reached about $4.1 billion at the end of 2025. The commercial half of Aerospace & Industrial behaves differently — commercial aerospace follows the airframe build rate and the flying-hours-driven aftermarket, and general industrial follows the off-highway vehicle and process-equipment cycle; in 2025 general industrial sales were flat while every other end market grew. So the company is neither defensive nor fully cyclical: a long, politically-funded core with a genuinely cyclical commercial edge.

Key risks

• Dependence on continued US Government willingness to fund its programmes — The company states that a substantial portion of its revenues and earnings depends on the continued willingness of the US Government to buy its products; 47% of 2025 net sales came from US Government agencies and prime contractors. Budget priorities, appropriations timing or programme termination are outside its control.
• Government procurement rules and regulations — As a US Government contractor the company is subject to numerous procurement rules and regulations, and more broadly to domestic and international laws, regulations and restrictions. Audits, investigations or non-compliance can bring penalties or loss of contracts.
• Backlog can be reduced or cancelled — The company discloses that its backlog is subject to reduction and cancellation: orders already booked are not guaranteed revenue, since customers can modify or cancel contracts and backlog excludes unexercised options.
• Downturn in the commercial aircraft market — The company identifies a downturn in the commercial aircraft market as a risk to its business, and separately notes that the airline industry is heavily regulated and that failure to comply with applicable requirements could hurt results.
• Disruption in the commercial nuclear power industry and nuclear regulatory exposure — Any significant disruption in the commercial nuclear power industry could adversely affect results, and the nuclear business subjects the company to various regulatory and financial risks.
• Subcontractors, raw materials and complex manufacturing — Earnings and margins depend in part on subcontractor performance and on the availability and pricing of raw materials and components; the business also involves risks associated with complex manufacturing processes, plus product liability and warranty obligations on what it sells.
• Acquisitions and technology development — Implementing the acquisition strategy involves risks and a failure to execute it could have a material adverse effect; future success also depends in part on developing new technologies and on the ability to protect the value of its intellectual property in competitive markets.
• Intrusion on its information systems — The company lists intrusion on its systems as a risk that could damage its business — a material exposure for a defence contractor handling classified and export-controlled programme data.

The 10-K states that no customer accounted for more than 10% of total net sales during 2025, 2024 or 2023, so the filing gives no top-customer percentage. The real concentration is institutional rather than commercial: 47% of 2025 net sales came from contracts with US Government agencies and prime contractors, much of it tied to a small number of naval nuclear programmes.