10q10k10q10k.net

What changed in Woodward, Inc.'s 10-K — 2024 vs 2025

vs

Paragraph-level year-over-year comparison of Woodward, Inc.'s 2024 and 2025 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2025 report.

+318 added−295 removedSource: 10-K (2025-11-25) vs 10-K (2024-11-26)

Top changes in Woodward, Inc.'s 2025 10-K

318 paragraphs added · 295 removed · 241 edited across 7 sections

Item 1. Business

Business — how the company describes what it does

45 edited+7 added−9 removed41 unchanged
Biggest changeEnvironmental Matters and Climate Change The Company is regulated by federal, state, and international environmental laws governing our use, transport and disposal of substances and control of emissions. Compliance with these existing laws has not had a material impact on our capital expenditures, earnings or global competitive position. We use hazardous materials and/or regulated materials in our manufacturing operations.
Biggest changeCompliance with these existing laws has not had a material impact on our capital expenditures, earnings or global competitive position. We use hazardous materials and/or regulated materials in our manufacturing operations. We also own, operate, have acquired, and may in the future acquire facilities that were formerly owned and operated by others that used such materials.
OEM customers with internal capabilities for similar products include Caterpillar, Cummins, GE Vernova, Rolls-Royce Power Systems, Wärtsilä, and Weichai Power. We believe we are a market leader in providing our customers advanced technology and superior product performance at a competitive price. We focus on developing and maintaining close relationships with our OEM customers’ engineering teams.
OEM customers with internal capabilities for similar products include Caterpillar, Cummins, GE Vernova, Rolls-Royce Power Systems, Wärtsilä, and Weichai Power. We believe we are a market leader in providing our customers with advanced technology and superior product performance at a competitive price. We focus on developing and maintaining close relationships with our OEM customers’ engineering teams.
Government Contracts and Regulation Portions of our business, particularly in our Aerospace segment, are heavily regulated. We contract with numerous U.S. Government agencies and entities, including all of the branches of the U.S. military, the National Aeronautics and Space Administration (“NASA”), and the Departments of Defense, Homeland Security, and Transportation.
Government Contracts and Regulation Portions of our business, particularly in our Aerospace segment, are heavily regulated. We contract with numerous U.S. Government agencies and entities, including all branches of the U.S. military, the National Aeronautics and Space Administration (“NASA”), and the Departments of Defense, Homeland Security, and Transportation.
Available Information Through a link on the Investor Information section of our website, www.woodward.com, we make available, free of charge, the following filings as soon as reasonably practicable after they are electronically filed or furnished to the SEC: our Annual Report on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K, Proxy Statements on Schedule 14A, and any amendments to those reports filed or furnished pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as well as Section 16 reports of our officers and directors.
Available Information Through a link on the Investor Information section of our website, www.woodward.com, we make available, free of charge, the following filings as soon as reasonably practicable after they are electronically filed or furnished to the SEC: our Annual Report on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K, Proxy Statements on Schedule 14A, and any amendments to those reports filed or furnished pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), as well as Section 16 reports of our officers and directors.
We have used, and intend to continue to use, our investor relations website, as well as the following as of the date of this filing, as means of disclosing material non-public information and for complying with the disclosure obligations under Regulation FD: • X: X.com/@woodward_inc • Facebook: Facebook.com/woodwardinc • Instagram: Instagram.com/@woodward_inc • LinkedIn: Linkedin.com/company/woodwardinc • YouTube: YouTube.com/user/woodwardinc All links to websites are intended to be inactive.
We have used, and intend to continue to use, our investor relations website, as well as the following as of the date of this filing, as means of disclosing material non-public information and for complying with the disclosure obligations under Regulation FD: • Facebook: Facebook.com/woodwardinc • Instagram: Instagram.com/@woodward_inc • LinkedIn: Linkedin.com/company/woodwardinc • YouTube: YouTube.com/user/woodwardinc All links to websites are intended to be inactive.
Aerospace Aerospace has significant product certification requirements to meet safety regulations, which form a basis for competition as well as a barrier to entry. Technological innovation and design, product performance including increased efficiency and thrust, conformity with customer specifications, and product quality and reliability are of utmost importance 3 in the aerospace and defense industry.
Aerospace Aerospace has significant product certification requirements to meet safety regulations, which form a basis for competition as well as a barrier to entry. Technological innovation and design, product performance including increased efficiency and thrust, conformity with customer specifications, and product quality and reliability are of utmost importance in the aerospace and defense industry.
Further, we believe our close collaboration with our customers during preliminary design stages allows us to provide products that deliver the component and system performance necessary to bring greater value to our customers. This preliminary work may include opportunities to test new products in order to validate concepts and demonstrate performance in challenging environments.
Further, we believe our close collaboration with our 5 customers during preliminary design stages allows us to provide products that deliver the component and system performance necessary to bring greater value to our customers. This preliminary work may include opportunities to test new products in order to validate concepts and demonstrate performance in challenging environments.
Our competitors in aerospace include divisions of Eaton, Honeywell, Moog, Parker Hannifin, and RTX Corporation. In addition, some of our OEM customers are capable of developing and manufacturing similar products internally. Several competitors are also customers for our products, such as Honeywell, Parker Hannifin, and RTX Corporation.
Our competitors in aerospace 3 include divisions of Eaton, Honeywell, Moog, Parker Hannifin, and RTX Corporation. In addition, some of our OEM customers are capable of developing and manufacturing similar products internally. Several competitors are also customers for our products, such as Honeywell, Parker Hannifin, and RTX Corporation.
The customers who account for approximately 10% or more of net sales of each of Woodward’s reportable segments are as follows: For the Year Ended September 30, 2024 2023 Aerospace RTX Corporation, The Boeing Company RTX Corporation, GE, The Boeing Company Industrial Weichai Power, Rolls-Royce PLC Rolls-Royce PLC, Caterpillar Inc., Weichai Power On April 2, 2024, The General Electric Company ("GE") split into two separate companies, GE Aerospace and GE Vernova.
The customers who account for 10% or more of net sales of each of Woodward’s reportable segments are as follows: For the Year Ended September 30, 2025 2024 2023 Aerospace RTX Corporation, GE Aerospace, The Boeing Company RTX Corporation, The Boeing Company RTX Corporation, General Electric Company, The Boeing Company Industrial Rolls-Royce PLC, Caterpillar Inc., GE Vernova Weichai Power, Rolls-Royce PLC Rolls-Royce PLC, Caterpillar Inc., Weichai Power On April 2, 2024, The General Electric Company ("GE") split into two separate companies, GE Aerospace and GE Vernova.
Item 1. B usiness General We are an independent designer, manufacturer, and service provider of control solutions for the aerospace and industrial markets. Our innovative fluid energy, combustion control, electrical energy, and motion control systems help customers offer cleaner, more reliable, and more efficient equipment. Our customers include leading original equipment manufacturers and end users of their products.
Item 1. B usiness General We are an independent designer, manufacturer, and services provider of control solutions for the aerospace and industrial markets. Our innovative fluid energy, combustion control, electrical energy, and motion control systems help customers offer cleaner, more reliable, and more efficient equipment. Our customers include leading original equipment manufacturers and end users of their products.
We also have significant content on defense applications such as Blackhawk and Apache helicopters, F-35 and F-15 fighter jets, and smart defense weapons. Revenues from the Aerospace segment are generated by sales to OEMs, tier-one suppliers, and prime contractors, and through aftermarket sales of components, such as provisioning spares or replacements.
We also have significant content on defense applications such as Blackhawk and Apache helicopters, F-35 and F-15 fighter jets, and smart defense weapons. Revenues from the Aerospace segment are generated by sales to OEMs, tier-one suppliers, prime contractors, and through services sales of components, such as provisioning spares or replacements.
Our recruiting team uses internal and external resources to recruit highly skilled and talented workers, and we encourage and reward employee referrals for open positions. In addition to our comprehensive investment in our members’ success, we strive to maintain an inclusive environment that values and leverages the uniqueness of each member to the benefit of all our stakeholders.
Our recruiting team uses internal and external resources to recruit highly skilled and talented workers, and we encourage and reward member referrals for open positions. In addition to our comprehensive investment in our members’ success, we strive to maintain an environment that values and leverages the uniqueness of each member to the benefit of all our stakeholders.
None of the information contained on our website, or the above-mentioned social media sites, is incorporated into this document by reference. 8
None of the information contained on our website, or the above-mentioned social media sites, is incorporated into this document by reference.
We address competition in aftermarket service through responsiveness to our customers’ needs, providing short turnaround times, greater performance such as longer time between repairs, and maintaining a global presence. We also compete in part by establishing relationships with our customers’ engineering organizations, and by offering innovative technical and commercial solutions to meet their market requirements.
We address competition in services through responsiveness to our customers’ needs, providing short turnaround times, greater performance such as longer time between repairs, and maintaining a global presence. We also compete in part by establishing relationships with our customers’ engineering organizations, and by offering innovative technical and commercial solutions to meet their market requirements.
Our customers expect us to maintain adequate levels of certain finished goods and certain component parts to support our warranty commitments and sales to our aftermarket customers, and to deliver such parts on a timely basis to support our customers’ standard and customary needs.
Our customers expect us to maintain adequate levels of certain finished goods and certain component parts to support our warranty commitments and sales to our services customers, and to deliver such parts on a timely basis to support our customers’ standard and customary needs.
Human Capital Our employees (whom we call “members”) are Woodward’s most valuable resource for current and future success. We promote an environment that ensures safety, encourages diversity and inclusion, fosters growth and self-development, and provides meaningful work. All members participate in our success through attractive and aligned total rewards programs.
Human Capital Our employees (whom we call “members”) are Woodward’s most valuable resource for current and future success. We promote an environment that ensures safety, fosters growth and self-development, and provides meaningful work. All members participate in our success through attractive and aligned total rewards programs.
Notable programs we offer to our full-time members include: • employer sponsored health insurance; • employer 401(k) matching contributions; • annual Woodward stock contributions for U.S. members; • a tuition assistance program; • training and professional development courses through our Woodward University curriculum; and • other values-based and technical development training 6 Tenure of all employees averages ten years, reflective of our positive workplace culture.
Notable programs we offer to our full-time members include: • employer sponsored health insurance; • employer 401(k) matching contributions; • annual Woodward stock contributions for U.S. members; • a tuition assistance program; • training and professional development courses through our Woodward University curriculum; and • other values-based and technical development training Tenure of all members averages 10 years, reflective of our positive workplace culture.
We also provide aftermarket maintenance, repair and overhaul, as well as other services to commercial airlines, repair facilities, military depots, third party repair shops, and other end users. 2 Industrial Our Industrial segment designs, produces, and services systems and products for the management of energy in the form of fuel, air, fluids, gases, motion, combustion, and electricity.
We provide services, including maintenance, repair, and overhaul ("MRO"), as well as other services to commercial airlines, repair facilities, military depots, third-party repair shops, and other end users. 2 Industrial Our Industrial segment designs, produces, and services systems and products for the management of energy in the form of fuel, air, fluids, gases, motion, combustion, and electricity.
We view the combination of diverse perspectives and backgrounds as a powerful force for innovation. To promote diversity and our core principles, we emphasize dignity, value, and equality of all members, regardless of race, color, religion, age, gender or sexual orientation, through our actions and the workplace training programs we provide.
We view the combination of unique perspectives and backgrounds as a powerful force for innovation. To promote our core principles, we emphasize 6 dignity, value, and equality of all members, regardless of race, color, religion, age, gender or sexual orientation, through our actions and the workplace training programs we provide.
Sales to our five largest customers represented approximately 35% of our consolidated net sales for the fiscal year ended September 30, 2024 and 40% in fiscal year ended September 30, 2023. We had no customers who accounted for approximately 10% or more of our consolidated net sales for the fiscal year ended September 30, 2024.
Sales to our five largest customers represented approximately 36% of our consolidated net sales for the fiscal year ended September 30, 2025 and 35% in the fiscal year ended September 30, 2024. We had no customers who accounted for 10% or more of our consolidated net sales for the fiscal years ended September 30, 2025 and September 30, 2024.
We also have partnered with our customers in the past, such as our strategic joint venture with one of our largest customers, GE which, following the split of GE is acting now through GE Aerospace. We believe our products offer high levels of field reliability, which provides end users with an advantage in life-cycle cost.
We have also partnered with our customers in the past, such as our strategic joint venture with one of our largest customers, GE Aerospace. We believe our products offer high levels of field reliability, which provides end users with an advantage in life-cycle cost.
While our intellectual property assets taken together are important, we do not believe our business or either of our segments would be materially affected by the expiration of any particular intellectual property right or termination of any particular intellectual property patent license agreement. 7 As of September 30, 2024, our Consolidated Balance Sheets includes $440,419 of net intangible assets.
While our intellectual property assets taken together are important, we do not believe our business or either of our segments would be materially affected by the expiration of any particular intellectual property right or termination of any particular intellectual property patent license agreement. As of September 30, 2025, our Consolidated Balance Sheets includes $428,080 of net intangible assets.
Revenues from our Industrial segment are generated primarily by sales to OEMs and by providing aftermarket products and other related services to our OEM customers. Our Industrial segment also sells products through an independent network of distributors and authorized system integrators, repairs and overhaul facilities, and directly to end users around the globe.
Revenues from our Industrial segment are generated primarily by sales to OEMs for both new unit production and providing other related services. Our Industrial segment also sells products and services through an independent network of distributors and authorized system integrators, repairs and overhaul facilities, and directly to end users around the globe.
Government contracts; 4 • impose manufacturing specifications and other quality standards that may be more restrictive than for non-government business activities; and • restrict the use and dissemination of information classified for national security purposes due to the regulations of the U.S. Government and foreign governments pertaining to the export of certain products and technical data.
Government contracts; • impose manufacturing specifications and other quality standards that may be more restrictive than for non-government business activities; and • restrict the use and dissemination of information classified for national security purposes due to the regulations of the U.S.
We carry certain finished goods and component parts in inventory to meet these rapid delivery requirements of our customers. Research and Development We finance our research and development activities primarily with our own funds.
We carry certain finished goods and component parts in inventory to meet these rapid delivery requirements of our customers. Research and Development We finance our research and development activities primarily with our own funds. Our research and development costs include basic research, applied research, component and systems development, and concept formulation studies.
As of October 31, 2024, we employed approximately 9,300 full-time members of which approximately 2,880 were located outside of the United States, with the majority of such members located in Germany, Poland, and China. In the United States, approximately 13% of our total full-time workforce were union members as of October 31, 2024.
As of October 31, 2025, we employed approximately 10,200 full-time members of which approximately 30% were located outside of the United States, with the majority of such members located in Germany, Poland, and China. In the United States, approximately 13% of our total full-time workforce were union members as of October 31, 2025.
Most technology development programs begin years before an expected entry to service, such as those for the next generation of commercial aircraft. Other development programs result in nearer-term product launches associated with new OEM offerings, product upgrades, or product replacements on existing programs. We developed the fuel system, air management system, and actuation hardware for CFM International’s LEAP engine program.
Most technology development programs begin years before an expected entry to service, such as those for the next generation of commercial aircraft. Other development programs result in nearer-term product launches associated with new OEM offerings, product upgrades, or product replacements on existing programs.
We strive to comply with all federal and local workplace laws and regulations where we do business. We are always looking for ways to exceed compliance standards by utilizing continuous improvement discipline to proactively eliminate risks in the workplace.
We have implemented appropriate procedures and precautions to ensure the continued safety and well-being of members. We strive to comply with all federal and local workplace laws and regulations where we do business. We are always looking for ways to exceed compliance standards by utilizing continuous improvement discipline to proactively eliminate risks in the workplace.
However, our sales have generally been lower in the first quarter of our fiscal year as compared to the immediately preceding quarter due to fewer working days resulting from the observance of various holidays and scheduled plant shutdowns for annual maintenance.
Seasonality We believe our sales, in total or in either reportable segment, are not subject to significant seasonal variation. However, our sales have generally been lower in the first quarter of our fiscal year as compared to the immediately preceding quarter due to fewer working days resulting from the observance of various holidays and scheduled plant shutdowns for annual maintenance.
We continually strive to harness the diversity of our global workforce by cultivating a climate that permits all our members to bring their authentic selves to work every day. The health and safety of our members is also a top priority. We have implemented appropriate procedures and precautions to ensure the continued safety and well-being of members.
We continually strive to harness the range of skills and experiences of our global workforce by cultivating a climate that permits all our members to bring their authentic selves to work every day. The health and safety of our members is also a top priority.
Our remaining performance obligations by segment, excluding material rights, is shown in the table below: October 31, 2024 Percent Expected to be satisfied by September 30, 2025 October 31, 2023 Percent Expected to be satisfied by September 30, 2024 Aerospace $ 2,240,597 55 % $ 1,716,613 63 % Industrial 662,750 85 % 773,240 93 % $ 2,903,347 62 % $ 2,489,853 73 % Our remaining performance obligations relate to the aggregate amount of the total contract transaction price of firm orders for which the performance obligation has not yet been recognized in revenue.
Our remaining performance obligations by segment, excluding material rights, are shown in the table below: October 31, 2025 Percent Expected to be satisfied by September 30, 2026 October 31, 2024 Percent Expected to be satisfied by September 30, 2025 Aerospace $ 2,683,116 74 % $ 2,240,597 55 % Industrial 736,912 89 % 662,750 85 % $ 3,420,028 78 % $ 2,903,347 62 % Our remaining performance obligations relate to the aggregate amount of the total contract transaction price of firm orders for which the performance obligation has not yet been recognized in revenue.
All union members in the United States work for our Aerospace segment. The collective bargaining agreements with our union members are generally renewed through contract renegotiation near the contract expiration dates. The MPC Employees Representative Union contract, which covered approximately 800 members as of October 31, 2024, expires September 30, 2025.
All union members in the United States work for our Aerospace segment. The collective bargaining agreements with our union members are generally renewed through contract renegotiation near the contract expiration dates. The MPC Employees Representative Union contract, which covered approximately 825 members as of October 31, 2025, expired on October 17, 2025, and there has been no work stoppage.
When it is reasonably probable that we will incur remediation costs at a site, and those costs can be reasonably estimated, we accrue a liability for such future costs with a related charge against our earnings.
In addition, we may be exposed to other environmental costs including participation in superfund sites or other similar jurisdictional initiatives. When it is reasonably probable that we will incur remediation costs at a site, and those costs can be reasonably estimated, we accrue a liability for such future costs with a related charge against our earnings.
Our aerospace systems and components optimize the performance of fixed wing and rotorcraft platforms in commercial, business and military aircraft, missiles, weapons and space, ground vehicles, and other equipment. Our key focus areas within this market are propulsion and combustion control solutions for turbine powered aircraft; and fluid and motion control solutions for critical aerospace and defense applications.
Within the aerospace market, we provide systems, components, and solutions for both commercial and defense applications. Our aerospace systems and components optimize the performance of fixed wing and rotorcraft platforms in commercial, business and military aircraft, missiles, weapons and space, ground vehicles, and other equipment.
Outside of the United States, we enter into employment contracts and agreements in those countries in which such relationships are mandatory or customary, including coordination through local works’ councils. The provisions of these agreements correspond in each case with the required or customary terms in the subject jurisdiction.
We believe we have good, collaborative relationships with our union members and the representative unions. Outside of the United States, we enter into employment contracts and agreements in those countries in which such relationships are mandatory or customary, including coordination through local works’ councils.
Industrial is focused on developing innovative technologies, including integrated control systems and system components, that enable our customers to cost-effectively meet mandated emissions regulations and fuel efficiency demands, allow for usage of a wider range of fuel sources, increase reliability (particularly in harsh environments), and reduce total cost of ownership.
Industrial focuses on developing innovative technologies—integrated control systems and system components—that help customers cost ‑ effectively meet emissions regulations and fuel ‑ efficiency requirements, support a wider range of fuel sources, boost reliability in harsh environments, and lower the total cost of ownership.
Our research and development costs include basic research, applied research, component and systems development, and concept formulation studies. 5 We collaborate closely with our customers as they develop their technology plans, which leads to new product concepts.
We collaborate closely with our customers as they develop their technology plans, which leads to new product concepts.
We also developed actuation system, combustion system, and oil system components for Pratt & Whitney’s Geared Turbo Fan (“GTF” or “PurePower”) engine program. We continue to support GE Aerospace and CFM for improvements to the LEAP fuel system, and Collins Aerospace and Pratt & Whitney for improvements to the PurePower engine programs.
We developed the fuel system, air management system, and actuation hardware for CFM International’s Leading Edge Aviation Propulsion ("LEAP") engine program. We also developed actuation system, combustion system, and oil system components for Pratt & Whitney’s Geared Turbo Fan (“GTF” or “PurePower”) engine program.
This value represents the carrying values, net of amortization, of certain assets acquired in various business acquisitions and does not purport to represent the fair value of our acquired intellectual property as of September 30, 2024.
This value represents the carrying values, net of amortization, of certain assets acquired in various business acquisitions and does not purport to represent the fair value of our acquired intellectual property as of September 30, 2025. 7 Environmental Matters and Climate Change The Company is regulated by federal, state, and international environmental laws governing our use, transport and disposal of substances and control of emissions.
Our customers require technological solutions to meet their needs for performance, efficiency, and reliability, and to reduce cost of operation of their products. Within the aerospace market, we provide systems, components, and solutions for both commercial and defense applications.
Markets and Principal Lines of Business We serve the aerospace and industrial markets through our two reportable segments – Aerospace and Industrial . Our customers require technological solutions to meet their needs for performance, efficiency, and reliability, and to reduce cost of operation of their products.
We also provide aftermarket repair, maintenance, replacement, and other service support for our installed products. Woodward was established in 1870, incorporated in 1902, and is headquartered in Fort Collins, Colorado. The mailing address of our world headquarters is 1081 Woodward Way, Fort Collins, Colorado 80524. Our telephone number at that location is (970) 482-5811, and our website is www.woodward.com.
The mailing address of our world headquarters is 1081 Woodward Way, Fort Collins, Colorado 80524. Our telephone number at that location is (970) 482-5811, and our website is www.woodward.com. None of the information contained on our website is incorporated into this document by reference.
Sales made directly to U.S. Government agencies and entities, or indirectly through third party manufacturers utilizing our parts and subassemblies, collectively represented 17% of our sales for both fiscal year 2024 and fiscal year 2023. Seasonality We believe our sales, in total or in either reportable segment, are not subject to significant seasonal variation.
Government and foreign governments pertaining to the export of certain products and technical data. 4 Sales made directly to U.S. Government agencies and entities, or indirectly through third-party manufacturers utilizing our parts and subassemblies, collectively represented 20% of our sales for fiscal year 2025 and 17% of our sales for fiscal year 2024.
Almost all of our other members in the United States were at-will members as of October 31, 2024, and therefore, not subject to any type of employment contract or agreement. Our executive officers each have severance and change-in-control agreements which have been filed with the SEC.
The Local Lodge 727-N International Association of Machinists and Aerospace Workers agreement, which covers approximately 500 members as of October 31, 2025, expires April 23, 2027. Almost all of our other members in the United States were at-will members as of October 31, 2025, and therefore, not subject to any type of employment contract or agreement.
Our Woodward L’Orange members are part of the IG Metall union in Germany. IG Metall covered approximately 1,200 members as of October 31, 2024. We believe we have good, collaborative relationships with our union members and the representative unions.
In Germany, approximately 12% of our total full-time workforce were union members as of October 31, 2025, all of whom work for our Industrial segment. Our Woodward L’Orange members are part of the IG Metall union in Germany. IG Metall covered approximately 1,200 members as of October 31, 2025.
We also own, operate, have acquired, and may in the future acquire facilities that were formerly owned and operated by others that used such materials. We believe the risk that a significant release of regulated materials has occurred in the past or will occur in the future cannot be completely eliminated or prevented.
We believe the risk that a significant release of regulated materials has occurred in the past or will occur in the future cannot be completely eliminated or prevented. From time to time, we engage in environmental remediation activities, generally in coordination with other companies, pursuant to federal and state laws.
Removed
None of the information contained on our website is incorporated into this document by reference. Markets and Principal Lines of Business We serve the aerospace and industrial markets through our two reportable segments – Aerospace and Industrial .
Added
We also provide repair, maintenance, replacement, and other services support for our installed products. We have traditionally referred to this part of our business as “aftermarket”; however, to better reflect the nature and scope of these offerings, we will now refer to it as “services”. Woodward was established in 1870, incorporated in 1902, and is headquartered in Fort Collins, Colorado.
Removed
RTX Corporation was our largest customer during the fiscal year ended September 30, 2024 and accounted for approximately 9% of our consolidated net sales and 10% in the fiscal year ended September 30, 2023. Accounts receivable from RTX Corporation represented approximately 6% of accounts receivable at September 30, 2024 and 4% at September 30, 2023.
Added
Our key focus areas within this market are propulsion and combustion control solutions for turbine powered aircraft and fluid and motion control solutions for critical aerospace and defense applications.
Removed
We believe RTX Corporation, and our other significant customers are creditworthy and will be able to satisfy their credit obligations to us.
Added
However, each of our reportable segments did have customers that represented 10% or more of their respective segment sales.
Removed
The Local Lodge 727-N International Association of Machinists and Aerospace Workers agreement, which covers approximately 400 members as of October 31, 2024, expires April 23, 2027. In Germany, approximately 13% of our total full-time workforce were union members as of October 31, 2024, all of whom work for our Industrial segment.
Added
We continue to support CFM LEAP engine program through our joint venture with GE Aerospace, and Pratt & Whitney PurePower engine program through Collins Aerospace.
Removed
Intellectual property not covered by patents (or patent applications) includes trade secrets and other technological know-how that is not patentable or for which we have elected not to seek patent protection, including intellectual property relating to our manufacturing processes and engineering designs.
Added
We are continuing to honor this contract as the status quo. Due to actions taken by an external union during our negotiations for a successor agreement, we are waiting for a National Labor Relations Board election to take place to determine our future bargaining obligations.
Removed
Such unpatented technology, including research, development and engineering technical skills and know-how, as well as unpatented software, is important to our overall business and to the operations of each of our segments.
Added
The provisions of these agreements correspond in each case with the required or customary terms in the subject jurisdiction. Our executive officers each have severance and change-in-control agreements which have been filed with the SEC.
Removed
From time to time, we engage in environmental remediation activities, generally in coordination with other companies, pursuant to federal and state laws. In addition, we may be exposed to other environmental costs including participation in superfund sites or other similar jurisdictional initiatives.
Added
Non‑patented intellectual property encompasses trade secrets and technological know‑how that are either not patentable or intentionally unpatented — for example, proprietary manufacturing methods, engineering designs, unpatented software, and specialized R&D and engineering skills — all of which are vital to our business and each operating segment.
Removed
In 2023, we released our fourth sustainability report, where we continue to build upon our commitments to sustainability in areas of environmental stewardship, social responsibility, and corporate governance. We apply a systematic approach to identifying, evaluating, and managing risks across our operations, with the goal to be a supplier, community partner, and employer of choice.
Removed
The full report can be found on the Sustainability at Woodward section of our website.

Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

68 edited+22 added−8 removed97 unchanged
Biggest changeGAAP; • changes in the projected realization of deferred tax assets and liabilities; • changes in management’s assessment of the amount of earnings indefinitely reinvested offshore; • changes in management’s intentions regarding the amount of earnings reinvested offshore; and • the results of audits and examinations of previously filed tax returns and continuing assessments of our tax exposures. 12 We derive a significant amount of revenue and obtain components from outside of the United States; accordingly, we are subject to the risks of doing business in other countries.
Biggest changeWe derive a significant amount of revenue and obtain components from outside of the United States; accordingly, we are subject to the risks of doing business in other countries.
Accordingly, our business and results of operations are subject to risks associated with doing business internationally, including: • transportation delays and interruptions; • political, social and economic instability and disruptions; • natural disasters or pandemics; • terrorism, war, and international tensions and conflicts; • the imposition of taxes, import and export controls, duties and tariffs, embargoes, sanctions and other trade restrictions; • fluctuations in currency exchange rates; • different and changing regulatory environments; • cost of compliance with increasingly complex and often conflicting regulations governing various matters worldwide; • cost of labor, labor shortages, and other changes in labor conditions; • the potential for nationalization of enterprises; • potential limitations on the Company’s ability to enforce legal rights and remedies, including protection of intellectual property; • difficulty of enforcing agreements and collecting receivables through some foreign legal systems; • potentially adverse tax consequences, including limitations on repatriations of earnings; and • difficulties in implementing restructuring actions on a timely basis.
Accordingly, our business and results of operations are subject to risks associated with doing business internationally, including: • transportation delays and interruptions; • political, social and economic conditions, instability and disruptions; • natural disasters or pandemics; • terrorism, war, and international tensions and conflicts; • the imposition of taxes, import and export controls, duties and tariffs, embargoes, sanctions and other trade restrictions; • fluctuations in currency exchange rates; • different and changing regulatory environments; • cost of compliance with increasingly complex and often conflicting regulations governing various matters worldwide; • cost of labor, labor shortages, and other changes in labor conditions; • the potential for nationalization of enterprises; • potential limitations on the Company’s ability to enforce legal rights and remedies, including protection of intellectual property; • difficulty of enforcing agreements and collecting receivables through some foreign legal systems; • potentially adverse tax consequences, including limitations on repatriations of earnings; and • difficulties in implementing restructuring actions on a timely basis.
Further, any unauthorized disclosure or use or acquisition of our intellectual property and/or confidential business information could harm our competitive position, result in a loss of intellectual property protection, and otherwise reduce the value of our investment in research and development and other strategic initiatives or otherwise adversely affect our business.
Further, any unauthorized disclosure, use, or acquisition of our intellectual property and/or confidential business information could harm our competitive position, result in a loss of intellectual property protection, and otherwise reduce the value of our investment in research and development and other strategic initiatives or otherwise adversely affect our business.
Any such security breach or incident or the perception that it has occurred, also may result reputational damage and increased operational costs, regulatory investigations, proceedings, and orders, litigation or other demands, indemnity obligations, damages for contract breach, fines or penalties relating to actual or alleged violation of applicable laws, regulations, or contractual obligations, incentives offered to customers or other business partners in an effort to maintain business relationships, and other costs and liabilities.
Any such security breach or incident or the perception that it has occurred, also may result in reputational damage and increased operational costs, regulatory investigations, 16 proceedings, and orders, litigation or other demands, indemnity obligations, damages for contract breach, fines or penalties relating to actual or alleged violation of applicable laws, regulations, or contractual obligations, incentives offered to customers or other business partners in an effort to maintain business relationships, and other costs and liabilities.
If these activities are not as successful as currently anticipated, are not completed on a timely basis, or are more costly than currently anticipated, or if we are not able to produce newly developed products at a cost that meets the anticipated product cost structure, then our future sales, margins and/or earnings could be lower than expected, which could have a material adverse effect on our business, financial condition, results of operations, and cash flows.
If these activities are not as successful as currently anticipated, are not completed on a timely basis, or are more costly than currently anticipated, or if we are not able to produce newly developed products at a cost that meets the anticipated 18 product cost structure, then our future sales, margins and/or earnings could be lower than expected, which could have a material adverse effect on our business, financial condition, results of operations, and cash flows.
If we are unable to structure our operations in the light of evolving market conditions, it could have a material adverse effect on our business, financial condition, results of operations, and cash flows. Our manufacturing activities may result in future environmental costs or liabilities. We use hazardous materials and/or regulated materials in our manufacturing operations.
If we are unable to structure our operations in light of evolving market conditions, it could have a material adverse effect on our business, financial condition, results of operations, and cash flows. Our manufacturing activities may result in future environmental costs or liabilities. We use hazardous materials and/or regulated materials in our manufacturing operations.
Any of these events could have a material adverse effect on our business, financial condition, results of operations, and cash flows. Additional tax expense or additional tax exposures could impact our future profitability. We are subject to income taxes in both the United States and jurisdictions outside of the United States.
Any of these events could have a material adverse effect on our business, financial condition, results of operations, and cash flows. Unforeseen additional tax expense or additional tax exposures could impact our future profitability. We are subject to income taxes in both the United States and jurisdictions outside of the United States.
Defense budgets tend to rise when perceived threats to national security increase the level of concern over the country’s safety, but we can provide no assurance that an increase in defense spending will be allocated to programs that 10 would benefit our business. Decreases in U.S.
Defense budgets tend to rise when perceived threats to national security increase the level of concern over the country’s safety, but we can provide no assurance that an increase in defense spending will be allocated to programs that would benefit our business. Decreases in U.S.
Government defense spending, changes in the spending allocation, phase-outs or terminations of certain aerospace and defense programs on which we have content could have a material adverse effect on our sales unless they are offset by other aerospace and defense programs and opportunities. If the priorities of the U.S.
Government defense spending, changes in the spending allocation, and 10 phase-outs or terminations of certain aerospace and defense programs on which we have content could have a material adverse effect on our sales unless they are offset by other aerospace and defense programs and opportunities. If the priorities of the U.S.
We currently have and have had in the past product liability claims relating to our products, and we will likely be subject to additional product liability claims in the future for past, current, and future products. Some of these claims may have a material adverse effect on our business, financial condition, results of 17 operations, and cash flows.
We currently have and have had in the past product liability claims relating to our products, and we will likely be subject to additional product liability claims in the future for past, current, and future products. Some of these claims may have a material adverse effect on our business, financial condition, results of operations, and cash flows.
These proceedings could lead to enforcement actions, adverse changes to our business practices, fines and penalties, business remedies, or the assertion of private litigation claims and/or damages that could be material, and of which could have a material adverse effect on our business, financial condition, results of operations, and cash flows.
These proceedings could lead to enforcement actions, adverse changes to our business practices, fines and penalties, business remedies, or the assertion of private litigation claims and/or damages that could be material, and of which could have a 15 material adverse effect on our business, financial condition, results of operations, and cash flows.
These techniques include, but are not limited to, the use of malicious software, destructive malware, ransomware, denial of service attacks, phishing and other means of social engineering, and other means of causing system or network disruptions, obtaining unauthorized access to data or systems, or causing other cybersecurity breaches and 15 incidents.
These techniques include, but are not limited to, the use of malicious software, destructive malware, ransomware, denial-of-service attacks, phishing and other means of social engineering, and other means of causing system or network disruptions, obtaining unauthorized access to data or systems, or causing other cybersecurity breaches and incidents.
These could result in substantial costs, diversion of resources, fines, penalties, and other damages and liabilities, and harm to our customer 16 relationships, our market position, and our ability to attract new customer engagements. Any of these could harm our business, financial condition, results of operations, and cash flows, potentially in a material manner.
These could result in substantial costs, diversion of resources, fines, penalties, and other damages and liabilities, and harm to our customer relationships, our market position, and our ability to attract new customer engagements. Any of these could harm our business, financial condition, results of operations, and cash flows, potentially in a material manner.
Many of our Industrial segment OEM and aftermarket customers and our Aerospace segment rotorcraft product lines’ customers provide goods and services that support various industrial extraction activities, including mining, oil and gas exploration and extraction, and transportation of raw materials from extraction sites to refineries and/or processing facilities.
Many of our Industrial segment OEM and services customers and our Aerospace segment rotorcraft product lines’ customers provide goods and services that support various industrial extraction activities, including mining, oil and gas exploration and extraction, and transportation of raw materials from extraction sites to refineries and/or processing facilities.
The technologies 14 and inventions developed by us in the future may not be considered valuable by customers or provide us with a competitive advantage, or competitors may develop similar or identical technologies and inventions independently of us and before we do.
The technologies and inventions developed by us in the future may not be considered valuable by customers or provide us with a competitive advantage, or competitors may develop similar or identical technologies and inventions independently of us and before we do.
These proceedings may include, without limitation, product liability matters, intellectual property matters, contract disputes or claims, pending or threatened litigation, governmental investigations, as well as employment, tax, environmental, or other matters.
These proceedings may include, without limitation, product liability matters, intellectual property matters, contract disputes or claims, pending or threatened litigation, and governmental investigations, as well as employment, tax, environmental, or other matters.
A variety of risks could cause us not to realize expected cost savings, including, among others, higher than expected severance costs related to staff reductions, higher than expected costs of closing plants, higher costs to hire new employees or delays or difficulty hiring the employees needed, higher than expected operating costs associated with moving production lines, delays in the anticipated timing of activities related to our cost-saving plan, and other unexpected costs associated with operating the business.
A variety of risks could cause us not to realize expected cost savings, including, among others, higher than expected severance costs related to staff reductions, higher than expected costs of closing plants, higher costs to hire new members or delays or difficulty hiring the members needed, higher than expected operating costs associated with moving production lines, delays in the anticipated timing of activities related to our cost-saving plan, and other unexpected costs associated with operating the business.
Changes in competitive conditions, including the availability of new technologies, products and services, the introduction of new channels of distribution, changes in OEM and aftermarket pricing, and further consolidation of companies in our industries, could impact our relationships with our customers and may adversely affect future sales and margins, which could have a material adverse effect on our business, financial condition, results of operations, and cash flows.
Changes in competitive conditions, including the availability of new 8 technologies, products and services, the introduction of new channels of distribution, changes in OEM and services pricing, and further consolidation of companies in our industries, could impact our relationships with our customers and may adversely affect future sales and margins, which could have a material adverse effect on our business, financial condition, results of operations, and cash flows.
Achieving this objective may be difficult due to many factors, including fluctuations in global economic and industry conditions, management changes, increasing local and global competition for talent, the availability of qualified employees, challenges associated with retaining qualified employees, restructuring and alignment activities, and the attractiveness of our compensation and benefit programs.
Achieving this objective may be difficult due to many factors, including fluctuations in global economic and industry conditions, management changes, increasing local and global competition for talent, the availability of qualified members, challenges associated with retaining qualified members, restructuring and alignment activities, and the attractiveness of our compensation and benefit programs.
For example, in the European Union, the General Data Protection Regulation imposes stringent requirements applicable to processing personal data and provides for substantial penalties for noncompliance, and in the U.S., California and numerous other states have adopted comprehensive privacy laws, with other states considering such laws.
In addition, in the European Union, the General Data Protection Regulation imposes stringent requirements applicable to processing personal data and provides for substantial penalties for noncompliance, and in the U.S., California and numerous other states have adopted comprehensive privacy laws, with other states considering such laws.
Failure to develop, obtain, enforce, and protect intellectual property rights or third parties claims that we are infringing their intellectual property could harm our business. Our success depends in part on our ability to develop technologies and inventions and other intellectual property, and obtain intellectual property rights and enforce such intellectual property rights worldwide.
Failure to develop, obtain, enforce, and protect intellectual property rights or third parties' claims that we are infringing their intellectual property could harm our business. Our success depends in part on our ability to develop technologies and inventions and other intellectual property, and obtain intellectual property rights and enforce such intellectual property rights worldwide.
Even if the legal proceedings we face are decided in our favor, or are unfounded, we may incur material expenses and such matters may require significant management attention, and may harm our reputation with customers, employees or investors.
Even if the legal proceedings we face are decided in our favor, or are unfounded, we may incur material expenses and such matters may require significant management attention, and may harm our reputation with customers, members or investors.
We store sensitive data, including proprietary business information, intellectual property, classified information, customer information, supplier information, and confidential employee or other personal data on our servers and databases. Also, due to political uncertainty and hostile military actions, we may be subject to heightened risks of cybersecurity incidents and security breaches initiated by nation-state or affiliated actors.
We store sensitive data, including proprietary business information, intellectual property, classified information, customer information, supplier information, and confidential employee or other personal data on our servers and databases. Also, due to political uncertainty and hostile military actions, we are subject to heightened risks of cybersecurity incidents and security breaches initiated by nation-state or affiliated actors.
Our financial and operating performance depends on continued access to a stable workforce and on favorable labor relations with our employees. We rely on a highly trained workforce due to the specialized nature of our business.
Our financial and operating performance depends on continued access to a stable workforce and on favorable labor relations with our members. We rely on a highly trained workforce due to the specialized nature of our business.
We are subject to legal proceedings, investigations, claims and/or regulatory proceedings which could have a significant impact on our business and operations. We are currently involved or may become involved in legal, regulatory, and other proceedings.
We are subject to legal proceedings, investigations, claims and/or regulatory proceedings that could have a significant impact on our business and operations. We are currently involved or may become involved in legal, regulatory, and other proceedings.
Difficulties in the integration of the acquired business may include consolidating the operations, processes, and systems of the acquired business, retaining and motivating key management and employees, and integrating existing business relationships with suppliers and customers.
Difficulties in the integration of the acquired business may include consolidating the operations, processes, and systems of the acquired business, retaining and motivating key management and members, and integrating existing business relationships with suppliers and customers.
Further, we may require additional capital to repay our debt obligations when they mature, and such capital may not be available on terms acceptable to us or at all. 11 Our existing revolving credit facility and note purchase agreements impose financial covenants on us and our subsidiaries that require us to maintain certain leverage ratios and minimum levels of consolidated net worth.
Further, we may require additional capital to repay our debt obligations when they mature, and such capital may not be available on terms acceptable to us or at all. 11 Our existing revolving credit facility and note purchase agreements impose financial covenants on us and our subsidiaries that require us to maintain certain leverage ratios and minimum levels of consolidated interest coverage.
In addition, we sell products that have varying profit margins, and fluctuations in the mix of sales of our various products may affect our overall profitability. Reductions, delays or changes in U.S. Government spending could adversely affect our business. Sales made directly to U.S.
In addition, we sell products that have varying profit margins, and fluctuations in the mix of sales of our various products have impacted our overall profitability, and may do so in the future. Reductions, delays or changes in U.S. Government spending could adversely affect our business. Sales made directly to U.S.
In addition, orders expected in one quarter may shift to another quarter or be cancelled with little advance notice as a result of customers’ budgetary constraints, internal acceptance reviews, and other factors affecting the timing of customers’ purchase decisions.
In addition, orders expected in one quarter may shift, and from time to time have shifted, to another quarter or be cancelled with little advance notice as a result of customers’ budgetary constraints, internal acceptance reviews, and other factors affecting the timing of customers’ purchase decisions.
Government agencies and entities, or indirectly through third party manufacturers, such as tier-one prime contractors, utilizing our parts and subassemblies, accounted for approximately 17% of total sales in both fiscal year 2024 and fiscal year 2023. The U.S.
Government agencies and entities, or indirectly through third-party manufacturers, such as tier-one prime contractors utilizing our parts and subassemblies, accounted for approximately 20% of total sales in fiscal year 2025 and 17% in fiscal year 2024. The U.S.
In fiscal year 2024, approximately 49% of our total sales were made to customers in jurisdictions outside of the United States (including products manufactured in the United States and sold outside the United States as well as products manufactured in international locations). We also purchase raw materials and components from suppliers outside the United States.
In fiscal year 2025, approximately 46% of our total sales were made to customers in jurisdictions outside of the United States (including products manufactured in the United States and sold outside the United States as well as products manufactured in international locations). We also purchase raw materials and components from suppliers outside the United States.
Our restructuring activities may reduce our profitability, and may not have the intended effects. From time to time, we have implemented restructuring and other actions designed to reduce structural costs, improve operational efficiency, and position the Company for long-term profitable growth. Historically, our restructuring activities have included workforce management and other restructuring charges related to acquired businesses.
From time to time, we have implemented restructuring and other actions designed to reduce structural costs, improve operational efficiency, and position the Company for long-term profitable growth. Historically, our restructuring activities have included workforce management and other restructuring charges related to acquired businesses.
We are not likely to have the same level of control over the divested business, and the performance of those divested businesses could affect our future financial results through additional payment obligations, higher costs or asset write-downs, any of which could have a material adverse effect on our business, financial condition, results of operations, and cash flows.
We are not likely to have the same level of control over the divested business, and the performance of those divested businesses could affect our future financial results through additional payment obligations, higher costs or asset write-downs, any of which could have a material adverse effect on our business, financial condition, results of operations, and cash flows. 19 Our restructuring activities may reduce our profitability and may not have the intended effects.
Maintaining our market position requires continued investment in research and development. During an economic downturn or a subsequent recovery, we may need to maintain our investment in research and development, which may limit our ability to reduce these expenses in proportion to a sales shortfall.
During an economic downturn or a subsequent recovery, we may need to maintain our investment in research and development, which may limit our ability to reduce these expenses in proportion to a sales shortfall.
Some of our suppliers have experienced, and others may similarly experience, financial difficulties, delivery delays or other performance problems, and, as a result, we have from time to time been, and may in the future be, unable to meet commitments to our customers and/or incur additional costs.
Some of our suppliers have experienced, and others may similarly experience, financial difficulties, inflationary pressures, production quality issues, labor instability, delivery delays or other performance problems, and, as a result, we have from time to time been, and may in the future be, unable to meet commitments to our customers and/or incur additional costs.
Although we have implemented measures to prevent, detect, and respond to malicious activity, we cannot guarantee that such measures will be effective or sufficient to prevent a cyberattack or other means of effecting cybersecurity breaches or incidents.
We cannot guarantee that the measures we have implemented to prevent, detect, and respond to malicious activities will be effective or sufficient to prevent a cyberattack or other means of effecting cybersecurity breaches or incidents.
Changes in the estimates of fair value of reporting units or of long-lived assets, particularly goodwill, may result in future impairment charges, which could have a material adverse effect on our business, financial condition, and results of operation. At September 30, 2024, we had $806,643 of goodwill, representing approximately 18% of our total assets.
Changes in the estimates of fair value of reporting units or of long-lived assets, particularly goodwill, may result in future impairment charges, which could have a material adverse effect on our business, financial condition, and results of operations. At September 30, 2025, we had $832,288 of goodwill, representing approximately 18% of our total assets.
We are obligated to make interest and scheduled principal payments under the agreements governing our long-term debt, which requires us to dedicate a portion of our cash flow from operations to payments on our indebtedness, and which may reduce the availability of our cash flow for other purposes, including business development efforts and mergers and acquisitions.
We are obligated to make interest and scheduled principal payments under the agreements governing our long-term debt, which requires us to dedicate a portion of our net cash provided by operating activities to payments on our indebtedness, and which may reduce the availability of our cash for other purposes, including business development efforts and mergers and acquisitions.
The success of these transactions depends on, among other things, our ability to integrate these businesses into our operations and realize the planned synergies. Integration of acquired operations may take longer, or be more costly or disruptive to our business, than originally anticipated.
If we are able to complete a transaction, the success of these transactions depends on, among other things, our ability to integrate these businesses into our operations and realize the planned synergies. Integration of acquired operations may take longer, or be more costly or disruptive to our business, than originally anticipated.
Any such impairment charges could have a material adverse effect on our business, financial condition, and results of operations. 13 There can be no assurance that our estimates and assumptions of the fair value of our reporting units, the current economic environment, or the other inputs used in forecasting the present value of forecasted cash flows used to estimate the fair value of our reporting units will prove to be accurate projections of future performance, and any material error in our estimates and assumptions, could result in us needing to take a material impairment charge, which would have the effects discussed above.
There can be no assurance that our estimates and assumptions of the fair value of our reporting units, the current economic environment, or the other inputs used in forecasting the present value of forecasted cash flows used to estimate the fair value of our reporting units will prove to be accurate projections of future performance, and any material error in our estimates and assumptions, could result in us needing to take a material impairment charge, which would have the effects discussed above.
We are dependent upon suppliers for parts and raw materials used in the manufacture of products that we sell to our customers, and our raw material costs are subject to commodity market fluctuations and have been impacted by the current inflationary environment.
We are dependent upon suppliers for parts and raw materials used in the manufacture of products that we sell to our customers, and our raw material costs are subject to commodity market fluctuations and have been impacted by the current inflationary environment. We have experienced shortages of certain parts and raw materials due to challenges in our supply chain.
We may continue to experience shortages of parts or raw materials for the same or other reasons, such as the loss of a significant supplier, high overall demand creating shortages in parts and supplies we use, financial distress, work stoppages, natural disasters, fluctuations in commodity prices, the imposition of tariffs or other duties, or production or distribution difficulties that may affect one or more of our suppliers.
Our strategic investments to simplify and strengthen our supply chain may not be successful, and we may continue to experience shortages of parts or raw materials for the same or other reasons, such as the loss of a significant supplier, global supply chain constraints, high overall demand creating shortages in parts and supplies we use, financial distress, work stoppages, natural disasters, fluctuations in commodity prices, the imposition of tariffs or other duties, or production or distribution difficulties that may affect one or more of our suppliers.
There are many different techniques used to obtain unauthorized access to systems and data, and such techniques continue to evolve and become more sophisticated, and the adversaries are becoming more advanced, including nation states and actors sponsored by or affiliated with nation states, which target us and other defense contractors because we protect national security information, and other actors with substantial financial and technological resources.
There are many different techniques used to obtain unauthorized access to systems and data, and such techniques continue to evolve and become more sophisticated, including the increasing use by threat actors of artificial intelligence, and the adversaries are becoming more advanced, including nation-states and actors sponsored by or affiliated with nation-states, which target us and other defense contractors because we have national security information in our possession, and other actors with substantial financial and technological resources.
If we are found to be liable for FCPA or other similar anti-bribery law or regulatory violations, we could be subject to civil and criminal penalties or other sanctions that could have a material adverse impact on our business, financial condition, results of operations, and cash flows.
If we are found to be liable for FCPA or other similar anti-bribery law or regulatory violations, we could be subject to civil and criminal penalties or other sanctions that could have a material adverse impact on our business, financial condition, results of operations, and cash flows. 13 Also, a material disruption to the financial institutions with whom we transact business could have a material adverse effect on our international operations or on our business, financial condition, results of operations, and cash flows.
Our strategic joint venture with GE Aerospace may make it more difficult to secure long-term sales in certain aerospace markets. In January 2016, Woodward and GE, consummated the formation of a strategic joint venture (the “JV”) and since April 2024, GE has been acting through GE Aerospace.
Our strategic joint venture with GE Aerospace may make it more difficult to secure long-term sales in certain aerospace markets. In January 2016, Woodward and GE (now GE Aerospace), consummated the formation of a strategic joint venture (the “JV”).
Any significant increases in labor costs, deterioration of employee relations, including any conflicts with works’ councils or unions, or slowdowns or work stoppages at any of our locations, whether due to employee turnover, changes in availability of qualified technical personnel, failure to have a collaborative and effective relationship with our employees, including our union employees, or an effective collective bargaining agreement in place with our union employees, or otherwise, could impair our ability to supply products or fulfill orders, and could otherwise have a material adverse effect on our business, our relationships with customers, and our financial condition, results of operations, and cash flows.
Any significant increases in labor costs, deterioration of member relations, or slowdowns or work stoppages at any of our locations, whether due to member turnover, changes in availability of qualified technical personnel, failure to have a collaborative and effective relationship with our members, or otherwise, could impair our ability to supply products or fulfill orders, and could otherwise have a material adverse effect on our business, our relationships with customers, and our financial condition, results of operations, and cash flows.
The identification, evaluation, and negotiation of potential acquisitions and other strategic transactions may divert the attention of management and entail various expenses, whether or not such transactions are ultimately completed. If we are able to complete a transaction.
The identification, evaluation, and negotiation of potential acquisitions and other strategic transactions may divert the attention of management and entail various expenses, whether or not such transactions are ultimately completed.
If we are unable to develop competitive technologies, future sales or earnings could be lower than expected, which could have a material adverse effect on our business, financial condition, results of operations, and cash flows.
If we are unable to develop competitive technologies, make innovations, launch products with quality problems, or the market does not accept our new products, future sales or earnings could be lower than expected, which could have a material adverse effect on our business, financial condition, results of operations, and cash flows.
A significant increase in our supply costs, including for raw materials that are subject to commodity price fluctuations, inflationary pressures, and/or the imposition of tariffs, or a protracted interruption of supplies for any reason, could result in the delay of one or more of our customer contracts, increase our costs, result in lost revenue or could damage our reputation and relationships with customers.
Significant increases in our supply costs, including for raw materials that are subject to commodity price fluctuations, inflationary pressures, the imposition of tariffs, or a protracted interruption of supplies for any reason, have resulted in, and could result in further production and shipment delays, increased costs, and in lost revenue. Significant issues could damage our reputation and relationships with customers.
There is also a danger of loss, misuse, theft, unavailability, or unauthorized disclosure or other processing of information or assets (including source code), or damage to or other compromise of systems, components, and other IT assets, including the introduction of malicious code or other vulnerabilities by people who obtain unauthorized access to our facilities, systems, or information.
We face many ongoing cybersecurity threats, such as the loss, misuse, theft, unavailability, or unauthorized disclosure or other processing of information or assets (including source code), or damage to or other compromise of systems, components, and other IT assets, including the introduction of malicious code or other vulnerabilities by people who obtain unauthorized access to our facilities, systems, or information.
For the fiscal year ended September 30, 2024, sales to our largest 5 customers represented approximately 35% of our consolidated net sales and approximately 31% of our accounts receivable.
For the fiscal year ended September 30, 2025, sales to our largest five customers represented approximately 36% of our consolidated net sales and approximately 34% of our accounts receivable.
If these emission standards are eased, developed products may become unnecessary and/or our future sales could be lower as potential customers select alternative products or delay adoption of our products, which would have a material adverse effect on our business, financial condition, results of operations, and cash flows.
If these emission standards are eased, developed products may become unnecessary and/or our future sales could be lower as potential customers select alternative products or delay adoption of our products, which would have a material adverse effect on our business, financial condition, results of operations, and cash flows. 17 Prices for fossil fuels may increase significantly and disproportionately to other sources of fuels used for power generation, which could reduce our sales and adversely affect our business, financial condition, results of operations, and cash flows.
Further, approximately 13% of our workforce in the United States is unionized, and certain of our operations in the United States and internationally involve different employee/employer relationships and the existence of works’ councils.
Further, approximately 13% of our workforce in the United States is unionized, and certain of our operations in the United States and internationally involve different member/employer relationships and the existence of works’ councils. We cannot predict how stable our union relationships will be.
Business Risks Our product development activities may not be successful, may be more costly than anticipated, or we may not be able to produce newly developed products at a cost that meets the anticipated product cost structure. Our business involves a significant level of product development activities, generally in connection with our customers’ development activities.
Our product development may be more costly than anticipated, or we may not be able to produce newly developed products at a cost that meets the anticipated product cost structure. Our business involves a significant level of product development activities and research and development costs. Maintaining our market position requires continued investment in research and development.
Further, the markets in which we operate experience rapidly changing technologies and frequent introductions of new products and services. Our technologies and the technological expertise we have developed and maintained could become less valuable if a competitor were to develop a new technology that would allow it to match or exceed the performance of existing technologies at a lower cost.
Our technologies and the technological expertise we have developed and maintained could become less valuable if a competitor were to develop a new technology that would allow it to match or exceed the performance of existing technologies at a lower cost, or were to develop more efficient ways to produce their existing products that could cause our existing products or services to become less desirable or obsolete.
Further, we may decide to implement restructuring or alignment activities in the future, which may involve, among other things, closing plants, moving production lines, or making additions, reductions, or other changes to our management or workforce.
Further, we may decide to implement restructuring or alignment activities in the future, which may involve, among other things, closing plants, moving production lines, or making additions, reductions, or other changes to our management or workforce. These restructuring and/or alignment activities generally result in charges and expenditures that may adversely affect our financial results for one or more periods.
As of September 30, 2024, our total debt was $872,470, including $475,000 in unsecured notes denominated in U.S. dollars issued in private placements and $178,624 of unsecured notes denominated in Euros issued in private placements.
As of September 30, 2025, our total debt was $702,202, including $390,000 in unsecured notes denominated in U.S. dollars issued in private placements and $187,613 of unsecured notes denominated in Euros issued in private placements.
Further, due to the evolving nature of these security threats and the national security aspects of much of the data we protect, the full impact of any future security breach or incident cannot be predicted.
Due to the rapidly evolving threat environment and other factors, we cannot guarantee protection against all such attacks. Further, due to the evolving nature of these security threats and the national security aspects of much of the data in our possession, the full impact of any future security breach or incident cannot be predicted.
These restructuring and/or alignment activities generally result in charges and expenditures that may adversely affect our financial results for one or more periods. 18 Restructuring and/or alignment activities can also create unanticipated consequences, such as instability or distraction among our workforce, and we cannot be sure that any restructuring or alignment efforts that we undertake will be successful.
Restructuring and/or alignment activities can also create unanticipated consequences, such as instability or distraction among our workforce, and we cannot be sure that any restructuring or alignment efforts that we undertake will be successful.
From time to time, we have experienced cyberattacks on our IT infrastructure and systems. We may become the target of cyber-attacks by third parties, either directly or indirectly via our supply chain or third-party vendors, seeking unauthorized access to our data or our customers’ data or to disrupt our operations or our ability to provide services.
We and certain of our third-party providers have experienced cyberattacks on our IT infrastructure and systems. Given our industry, we expect continued targeting of cyberattacks, either directly against us or indirectly via our supply chain or third-party vendors, seeking unauthorized access to our data or our customers’ data or to disrupt our operations or our ability to provide services.
Commercial, Financial, and Regulatory Risks Suppliers may be unable to provide us with materials of sufficient quality or quantity to meet our production needs at favorable prices or at all which may adversely affect our revenue and margins.
Additionally, if GE Aerospace fails to win new content in the market space covered by the JV, Woodward may be prevented from expanding content on future commercial aircraft engines in those markets. 9 Commercial, Financial, and Regulatory Risks Suppliers may be unable to provide us with materials of sufficient quality or quantity to meet our production needs at favorable prices or at all which may adversely affect our revenue and margins.
Our profitability may suffer if we are unable to manage our expenses in connection with sales increases, sales decreases, or if we experience change in product mix. Some of our expenses are relatively fixed in relation to changes in sales volume and are difficult to adjust in the short term.
Some of our expenses are relatively fixed in relation to changes in sales volume and are difficult to adjust in the short term.
In addition, quality and sourcing issues that our suppliers may experience can also adversely affect the quality and effectiveness of our products and services and may result in liability or reputational harm to us. Any of these events could have a material adverse effect on our business, financial condition, results of operations, and cash flows.
In addition, quality and sourcing issues that our suppliers may experience can also adversely affect the quality and effectiveness of our products and services and may result in liability or reputational harm to us. Our customers rely on us to provide on-time delivery and have certain rights if our delivery standards are not maintained.
Also, a material disruption to the financial institutions with whom we transact business could have a material adverse effect on our international operations or on our business, financial condition, results of operations, and cash flows.
Any such impairment charges could have a material adverse effect on our business, financial condition, and results of operations.
Additionally, system and service disruptions, and cybersecurity breaches or incidents, may result from employee or contractor error, negligence, or malfeasance. Further, there have been and may continue to be cyberattacks on, and other attempts to compromise the security of, the supply chain.
Additionally, we are exposed to system and service disruptions, and cybersecurity breaches or incidents resulting from employee or contractor error, negligence, or malfeasance. Further, we expect continued cyberattacks directed at our supply chain. We face continued cybersecurity threats resulting from tools, services, or other third-party components and security vulnerabilities within, or introduced by, such tools, services, or components.
In addition, we have, among other things, endeavored to align our practices and procedures with recognized IT security frameworks and select recommended practices, and through corroboration of our policies and procedures with local and federal agencies. Nonetheless, our IT infrastructure, systems, networks, products, solutions, and services remain potentially vulnerable to numerous additional known or unknown threats.
We and our third-party partners have implemented various security measures, but our IT infrastructure, systems, networks, products, solutions, and services remain vulnerable to numerous additional known and unknown threats.
We periodically need to renegotiate our collective bargaining agreements, and any failure to negotiate new agreements or extensions in a timely manner could result in work stoppages or slowdowns.
We periodically need to renegotiate our collective bargaining agreements, and there can be no assurance that we will be able to timely agree to terms of future agreements or extensions without experiencing work stoppages, strikes, slowdowns, or other disruptions.
The implementation of tariffs could increase the cost of certain commodities and/or limit their supply. Over the longer term, tariffs could significantly increase our costs and our ability to pass such increased costs along to our customers may be limited, which could have a material adverse effect on our business, financial condition, results of operations, and cash flows.
Any deterioration in the relationship with our union members, or the failure to have effective collective bargaining agreements in place with our union members, could impair our ability to supply products or fulfill orders, and could otherwise have a material adverse effect on our business, our relationships with customers, and our financial condition, results of operations, and cash flows.
Removed
Additionally, if GE 9 Aerospace fails to win new content in the market space covered by the JV, Woodward may be prevented from expanding content on future commercial aircraft engines in those markets.
Added
Any of these events could have a material adverse effect on our business, financial condition, results of operations, and cash flows. Our profitability may suffer if we are unable to manage our expenses in connection with sales increases, sales decreases, or if we experience change in product mix.
Removed
We have experienced shortages of certain parts and raw materials due to challenges in our supply chain, although we have made strategic investments to simplify and strengthen our supply chain.
Added
GAAP; • changes in the projected realization of deferred tax assets and liabilities; • changes in management’s assessment of the amount of earnings indefinitely reinvested offshore; • changes in management’s intentions regarding the amount of earnings reinvested offshore; • the results of audits and examinations of previously filed tax returns and continuing assessments of our tax exposures; and • changes to global minimum taxes or other tax law changes 12 The Organization for Economic Cooperation and Development ("OECD") has passed Pillar Two, an inclusive framework on Base Erosion and Profit Sharing, which would enact a minimum 15% tax for large multinational companies.
Removed
Our customers rely on us to provide on-time delivery and have certain rights if our delivery standards are not maintained.
Added
Many countries are considering changes to their tax laws or proposing new tax laws to align with the recommendations that have been made by the OECD regarding Pillar Two. We are closely monitoring developments and evaluating the potential impacts of Pillar Two, which could adversely impact our effective tax rate, tax payments, results of operations, and cash flows.
Removed
Further increases in labor costs could significantly reduce our profit margins if we are unable to flow such costs through to our customers. Our operations and suppliers may be subject to physical and other risks that could disrupt our operations.
Added
The United States and other countries have levied tariffs and taxes on certain goods, including during our fiscal year 2025. Some of our products are included in these tariffs, and certain commodities, raw materials, and other manufacturing inputs that we require are also included.
Removed
We may experience security breaches or incidents resulting from tools, services, or other third-party components and security vulnerabilities within, or introduced by, such tools, services, or components. Due to the rapidly evolving threat environment and other factors, we may not be successful in defending against all such attacks.
Added
The imposition of new or increased tariffs, duties, border adjustment taxes, or other trade restrictions by the United States could also result in the adoption of new or increased tariffs or other trade restrictions by other countries.
Removed
We have implemented various measures, including technical security controls, employee training, comprehensive monitoring of our networks and systems, independent third party security assessments, maintenance of backup systems, and the use of disaster recovery sites.
Added
While we have so far experienced minimal levels of cost pressure as a result of the recently implemented tariffs, future tariffs could increase our cost of materials, which could pressure our profitability if we are unable to secure commensurate price increases from our customers, or if the price increases we secure are not sufficient to fully offset the impact of the tariffs.

… 18 more changes not shown on this page.

Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

13 edited+5 added−2 removed2 unchanged
Biggest changeWe maintain cyber risk and related insurance policies as a measure of added protection. We educate our members to raise awareness of cybersecurity threats. As part of our program, we maintain annual training for all members on cybersecurity standards and provide training on how to recognize and properly respond to 19 phishing, social engineering schemes, and certain other cyber threats.
Biggest changeAs part of our program, we maintain annual training for all members on cybersecurity standards and provide training on how to recognize and properly respond to phishing, social engineering schemes, and certain other cyber threats. We equip our members with a mechanism to easily report suspicious emails which are analyzed by our security systems and dedicated incident response team.
For more information about the cybersecurity risks we face, please refer to Item 1A, “Risk Factors,” in this annual report on Form 10-K, including the risk factor entitled “Our business and operations may be adversely affected by cybersecurity breaches or other information technology system or network interruptions or intrusions.” Cybersecurity Governance Our cybersecurity program is ultimately overseen by the Board of Directors.
For more information about the cybersecurity risks we face, please refer to Item 1A, “Risk Factors,” in this Form 10-K, including the risk factor entitled “Our business and operations may be adversely affected by cybersecurity breaches or other information technology system or network interruptions or intrusions.” Cybersecurity Governance Our cybersecurity program is ultimately overseen by the Board of Directors (the "Board").
Management provides quarterly data protection and cybersecurity reports to the Audit Committee, as well as periodic reports to the full Board of Directors, which include information about cyber risk management, the cybersecurity risk environment, and the status of ongoing efforts to strengthen cybersecurity effectiveness. 20 Item 2 Pr operties The following is a summary of our principal facilities as of September 30, 2024: Country Location Plants Owned/Leased Segment Purpose United States Fort Collins, CO 2 Owned Aerospace & Industrial Corporate Headquarters; Manufacturing and engineering United States Greenville, SC 1 Leased Industrial Manufacturing and engineering United States Loveland, CO 1 Leased Aerospace & Industrial Manufacturing and engineering United States Niles, IL 1 Owned Aerospace Manufacturing and engineering United States Rockford, IL 2 Owned Aerospace Manufacturing and engineering United States Santa Clarita, CA 1 Owned Aerospace Manufacturing and engineering United States Windsor, CO 1 Owned Aerospace & Industrial Manufacturing and engineering United States Zeeland, MI 1 Owned Aerospace Manufacturing and engineering Germany Aken 1 Leased Industrial Manufacturing and engineering Germany Glatten 1 Owned Industrial Manufacturing Germany Stuttgart 2 Owned/Leased Industrial Engineering Germany Wolfratshausen 1 Owned/Leased Industrial Manufacturing Poland Krakow 1 Owned Aerospace & Industrial Manufacturing and engineering China Suzhou 1 Leased Industrial Manufacturing China Tianjin 1 Leased Industrial Assembly United Kingdom Prestwick 1 Owned Aerospace Assembly Bulgaria Sofia 1 Leased Aerospace Manufacturing In addition to the principal plants listed above, we own or lease other facilities used primarily for sales, service activities, assembly, and/or engineering activities in Australia, Brazil, China, India, Japan, the Netherlands, the Republic of Korea, Saudi Arabia, Singapore, Germany, and the United States.
The senior management team, including the CISO and Vice President of IT, provides quarterly data protection and cybersecurity reports to the Audit Committee, as well as periodic reports to the full Board of Directors, which include information about cyber risk management, the cybersecurity risk environment, and the status of ongoing efforts to strengthen cybersecurity effectiveness. 21 Item 2 Pr operties The following is a summary of our principal facilities as of September 30, 2025: Country Location Plants Owned/Leased Segment Purpose United States Fort Collins, CO 2 Owned Aerospace & Industrial Corporate Headquarters; Manufacturing and engineering United States Greer, SC 1 Owned Aerospace Manufacturing and engineering United States Niles, IL 1 Owned Aerospace Manufacturing and engineering United States Rockford, IL 2 Owned Aerospace Manufacturing and engineering United States Santa Clarita, CA 1 Owned Aerospace Manufacturing and engineering United States Windsor, CO 1 Owned Aerospace & Industrial Manufacturing and engineering United States Zeeland, MI 1 Owned Aerospace Manufacturing and engineering Germany Aken 1 Owned Industrial Manufacturing and engineering Germany Glatten 1 Owned Industrial Manufacturing Germany Stuttgart 2 Owned/Leased Industrial Engineering Germany Wolfratshausen 1 Owned/Leased Industrial Manufacturing Poland Krakow 1 Owned Aerospace & Industrial Manufacturing and engineering China Suzhou 1 Leased Industrial Manufacturing China Tianjin 1 Leased Industrial Assembly United Kingdom Prestwick 1 Owned Aerospace Assembly Bulgaria Sofia 1 Leased Aerospace Manufacturing In addition to the principal plants listed above, we own or lease other facilities used primarily for sales, service activities, assembly, and/or engineering activities in Australia, Brazil, China, India, Japan, the Netherlands, the Republic of Korea, Saudi Arabia, Singapore, Germany, Indonesia, and the United States.
Item 1C. Cybersecurity Cybersecurity Risk Management and Strategy We maintain a cybersecurity risk management program based upon the National Institute of Standards and Technology Cybersecurity framework to assess, identify, and manage cybersecurity risks.
Item 1C. Cybersecurit y Cybersecurity Risk Management and Strategy We maintain a cybersecurity risk management program based on the National Institute of Standards and Technology Cybersecurity Framework to assess, identify, and manage cybersecurity risks.
This process includes a review of System and Organization Controls ("SOC") 1 and SOC 2 reports (as each such report is defined by the American Institute of Certified Public Accountants), ISO 27001 certifications, and Cybersecurity Maturity Model Certifications ("CMMC"), as well as reviewing penetration tests, conducting vulnerability tests, and administering security questionnaires and assessments.
This process includes, as applicable and appropriate based on risk profile and criticality, a review of System and Organization Controls ("SOC") 1 and SOC 2 reports (as each such report is defined by the American Institute of Certified Public Accountants), ISO 27001 certifications, and/or Cybersecurity Maturity Model Certifications, as well as reviewing penetration tests, conducting vulnerability tests, and administering security questionnaires and assessments.
We are not aware of having experienced risks from cybersecurity threats, including as a result of any previous cybersecurity incidents, that have materially affected or are reasonably likely to materially affect us, including our business strategy, results of operations or financial condition.
We have not identified risks from known cybersecurity threats, including as a result of any previous cybersecurity incidents, that have materially affected or are reasonably likely to materially affect us, including our business strategy, results of operations or financial conditi on.
This program is designed to protect business continuity and preserve the confidentiality, integrity, and continued availability of our IT systems and infrastructure used in our business as well as the information that we own or is in our care, and is integrated into our overall enterprise risk management program.
This program is designed to protect business continuity and preserve the confidentiality, integrity, and continued availability of our IT systems and infrastructure used in our business as well as the information that we own or is in our care and is integrated into our overall enterprise risk management program. 20 We have established processes to evaluate and address cybersecurity risks on an ongoing basis.
However, risks from cybersecurity threats, including but not limited to exploitation of vulnerabilities, ransomware, denial of service, supply chain attacks, or other similar threats may materially affect us, including our execution of business strategy, reputation, results of operations and/or financial condition.
However, risks from cybersecurity threats, including but not limited to exploitation of vulnerabilities, ransomware, denial of service, supply chain attacks, or other similar threats may materially affect us, including our execution of business strategy, reputation, results of operations and/or financial condition. Nonetheless, our IT infrastructure, systems, networks, products, solutions, and services remain vulnerable to numerous additional known or unknown threats.
Also, we have specific and regular training for our IT and finance members, as well as our system administrators. In addition, we maintain processes governing interconnections with third-party systems and we perform due diligence procedures before onboarding service providers with access to our systems or processing sensitive data on our behalf.
In addition, we maintain processes governing interconnections with third-party systems and we perform due diligence procedures before onboarding service providers with access to our systems or processing sensitive data on our behalf.
The team has decades of experience with varied certifications and is led by our Chief Information Officer ("CISO"), who has over 17 years of experience as an IT professional and in cybersecurity and reports to our Vice President of IT. The CISO makes regular reports to senior management regarding the cybersecurity program.
The team has decades of experience with varied certifications and is led by our Chief Information Security Officer ("CISO"), who reports to our Vice President of IT, has over 18 years of experience as an IT professional and in cybersecurity, including experience leading cybersecurity programs protecting high value assets and critical infrastructure, including in high-risk locations.
The Audit Committee has responsibility for the oversight of risk management activities related to cybersecurity and other information security and technology risks. Our cybersecurity program is implemented and administered by a dedicated team of internal and external cybersecurity professionals that conduct periodic control gap assessments, maturity assessments, and benchmarking against peers in the industry.
Our cybersecurity program is implemented and administered by a dedicated team of internal and external cybersecurity professionals that conduct periodic control gap assessments, maturity assessments, and benchmarking against peers in the industry, monitor various security tools deployed in the IT environment and review threat intelligence and other information from various public and private sources.
We have established processes to evaluate and address cybersecurity risks on an ongoing basis. As part of our risk management program, we engage with external third parties to measure the effectiveness of our cybersecurity program through penetration tests, control assessments, tabletop exercises, and other related activities.
As part of our risk management program, we engage with external third parties to measure the effectiveness of our cybersecurity program through penetration tests, control assessments, tabletop exercises, and other related activities. Further, we have implemented a defense-in-depth strategy in which we utilize real-time 24/7 monitoring to identify anomalies, potential threats, and alerts.
Further, we have implemented a defense-in-depth strategy in which we utilize real-time 24/7 monitoring to identify anomalies, potential threats, and alerts. This cybersecurity strategy incorporates frameworks, policies, and practices designed to protect the privacy and security of our sensitive information, backed by a suite of security technologies and tools to implement and automate select security protections.
This cybersecurity strategy incorporates frameworks, policies, and practices designed to protect the privacy and security of our sensitive information, backed by a suite of security technologies and tools to implement and automate select security protections. We maintain cyber risk and related insurance policies as a measure of added protection. We educate our members to raise awareness of cybersecurity threats.
Removed
We equip our members with a mechanism to easily report suspicious emails which are analyzed by our security systems and dedicated incident response team. “Test” phishing assessments are periodically sent to our members. Any failures trigger a retraining exercise if not properly reported.
Added
We periodically send “Test” phishing assessments to our members. Any failures trigger a retraining exercise. Also, we have specific and regular training for our IT and finance members, as well as our system administrators.
Removed
Nonetheless, our IT infrastructure, systems, networks, products, solutions, and services remain potentially vulnerable to numerous additional known or unknown threats.
Added
The Audit Committee has responsibility for the oversight of risk management activities related to cybersecurity and other information security and technology risks.
Added
Our Vice President of IT has been a key leader in our IT group for more than 25 years, including the last seven in his current role leading our IT function.
Added
He plays an integral role in cybersecurity risk assessment and mitigation in all corporate acquisitions, and he participated in the development and implementation of our initial cybersecurity program more than 20 years ago. Our CISO and Vice President of IT are primarily responsible for assessing and managing risks from cybersecurity threats to the Company.
Added
The CISO and Vice President of IT make regular reports to senior management regarding the cybersecurity program.

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

1 edited+0 added−0 removed2 unchanged
Biggest changeWhile the outcome of pending claims, legal and regulatory proceedings, and investigations cannot be predicted with certainty, management believes that any liabilities that may result from these claims, proceedings and investigations will not have a material effect on our liquidity, financial condition, or results of operations. Item 4. Mine Saf ety Disclosures Not applicable. 21 PART II
Biggest changeWhile the outcome of pending claims, legal and regulatory proceedings, and investigations cannot be predicted with certainty, management believes that any liabilities that may result from these claims, proceedings and investigations will not have a material effect on our liquidity, financial condition, or results of operations. Item 4. Mine Saf ety Disclosures Not applicable. 22 PART II

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

6 edited+1 added−0 removed1 unchanged
Biggest change(2) Under a trust established for the purposes of administering the Woodward Executive Benefit Plan (the "Executive Benefit Plan Trust"), 177 shares of common stock were acquired in July 2024, and 18 shares of common stock were acquired in August and September 2024, on the open market related to the deferral of compensation by certain eligible members of management who irrevocably elected to invest some or all of their deferred compensation in Woodward common stock.
Biggest change(2) Under a trust established for the purposes of administering the Woodward Executive Benefit Plan (the "Executive Benefit Plan Trust"), 100 shares of common stock were acquired in July 2025.
In addition, 76 shares of common stock were acquired in August 2024 on the open market related to the reinvestment of dividends for shares of treasury stock held for deferred compensation. Shares owned by the Executive Benefit Plan Trust, which is a separate legal entity, are included in "Treasury stock held for deferred compensation" in the Consolidated Balance Sheets.
In addition, 33 shares of common stock were acquired in August 2025 on the open market related to the reinvestment of dividends for shares of treasury stock held for deferred compensation. Shares owned by the Executive Benefit Plan Trust, which is a separate legal entity, are included in "Treasury stock held for deferred compensation" in the Consolidated Balance Sheets.
Item 5. Market for Registrant’s Common Equity, Related Sto ckholder Matters, and Issuer Purchases of Equity Securities Our common stock is listed on The NASDAQ Global Select Market and is traded under the symbol “WWD.” At November 25, 2024, there were approximately 600 holders of record.
Item 5. Market for Registrant’s Common Equity, Related Sto ckholder Matters and Issuer Purchases of Equity Securities Our common stock is listed on The NASDAQ Global Select Market and is traded under the symbol “WWD.” At November 24, 2025, there were approximately 600 holders of record.
The graph shows total stockholder return assuming an investment of $100 (with reinvestment of all dividends) was made on September 30, 2014 in our common stock and in each of the two indexes and tracks relative performance through September 30, 2024.
The graph shows total stockholder return assuming an investment of $100 (with reinvestment of all dividends) was made on September 30, 2015 in our common stock and in each of the two indexes and tracks relative performance through September 30, 2025.
Issuer Purchases of Equity Securities ( In thousands, except share amounts ) Total Number of Shares Purchased Weighted Average Price Paid Per Share Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs (1) Maximum Number (or Approximate Dollar Value) of Shares that may yet be Purchased under the Plans or Programs at Period End (1) July 1, 2024 - July 31, 2024 (2) 177 $ 155.99 — $ 295,189 August 1, 2024 - August 31, 2024 (2) 383,734 154.48 383,639 235,927 September 1, 2024 - September 30, 2024 (2) 161,157 165.98 161,139 209,181 (1) In January 2024, the Board of Directors terminated the prior share repurchase authorization, which was nearing expiration, and concurrently authorized a new program for the repurchase of up to $600,000 of Woodward’s outstanding shares of common stock on the open market or in privately negotiated transactions over a three-year period ending in January 2027 (the “2024 Authorization”).
Issuer Purchases of Equity Securities ( In thousands, except share amounts ) Total Number of Shares Purchased Average Price Paid Per Share Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs (1) Approximate Dollar Value of Shares that may yet be Purchased under the Plans or Programs (1) July 1, 2025 - July 31, 2025 (2) 61,500 $ 244.34 61,400 $ 69,878 August 1, 2025 - August 31, 2025 (2) 61,433 256.87 61,400 54,098 September 1, 2025 - September 30, 2025 46,468 244.86 46,468 42,720 (1) In January 2024, the Board authorized a program for the repurchase of up to $600,000 of Woodward’s outstanding shares of common stock on the open market or in privately negotiated transactions over a three-year period ending in January 2027 (the “2024 Authorization”).
We have used a period of 10 years as we believe that our stock performance should be reviewed over a period that is reflective of our long-term business cycle. 9/14 9/15 9/16 9/17 9/18 9/19 9/20 9/21 9/22 9/23 9/24 Woodward, Inc. $ 100.00 $ 86.13 $ 133.33 $ 166.82 $ 175.06 $ 234.96 $ 175.77 $ 249.43 $ 178.04 $ 277.81 $ 385.92 S&P Midcap 400 100.00 101.40 116.94 137.42 156.95 153.04 149.73 215.13 182.33 210.62 267.03 S&P Industrials 100.00 96.35 115.37 141.16 156.94 159.12 161.23 207.92 179.08 223.11 303.18 The stock price performance included in this graph is not necessarily indicative of future stock price performance 22 Sales of Unregistered Securities None.
We have used a period of 10 years as we believe that our stock performance should be reviewed over a period that is reflective of our long-term business cycle. 9/15 9/16 9/17 9/18 9/19 9/20 9/21 9/22 9/23 9/24 9/25 Woodward, Inc. $ 100.00 $ 154.80 $ 193.69 $ 203.25 $ 272.80 $ 204.07 $ 289.60 $ 206.71 $ 322.54 $ 448.06 $ 663.77 S&P Midcap 400 100.00 115.33 135.53 154.78 150.93 147.67 212.17 179.82 207.71 263.35 279.49 S&P Industrials 100.00 119.74 146.50 162.88 165.14 167.33 215.79 185.86 231.56 314.66 364.04 The stock price performance included in this graph is not necessarily indicative of future stock price performance. 23 Sales of Unregistered Securities None.
Added
While we have historically paid dividends to holders of our common shares on a quarterly basis, the declaration and payment of future dividends will depend on many factors, including but not limited to, our earnings, financial condition, business development needs and regulatory considerations, and are at the discretion of our board of directors.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

103 edited+42 added−35 removed49 unchanged
Biggest changeThe decrease in nonsegment expenses is primarily due to significant costs that occurred in fiscal year 2023 that did not reoccur in fiscal year 2024. 30 The significant costs that impacted nonsegment expense are as follows: Year Ended September 30, 2024 2023 Nonsegment expenses $ (119,745 ) $ (130,811 ) Non-recurring gain related to a previous acquisition (4,803 ) — Business development activities 5,902 — Non-recurring charge related to a previous acquisition 4,378 — Certain non-restructuring separation costs 2,666 2,208 Specific charge for excess and obsolete inventory — 11,995 Product rationalization — 10,504 Restructuring charges — 5,172 Non-recurring charge related to customer collections — 4,997 Nonsegment expenses excluding infrequent significant charges $ (111,602 ) $ (95,935 ) Excluding these charges in the above table, nonsegment expenses increased $15,667 in fiscal year 2024 as compared to the prior fiscal year, primarily due to increased annual variable incentive compensation costs.
Biggest changeThe significant items that impacted nonsegment expenses in the current fiscal year as compared to the prior fiscal year were: Year Ended September 30, 2025 2024 Nonsegment expenses $ (126,226 ) $ (119,745 ) Product rationalization (20,524 ) — Business development activities 7,310 5,902 Specific charge for excess and obsolete inventory 6,536 — Non-recurring gain related to a previous acquisition — (4,803 ) Non-recurring charge related to a previous acquisition — 4,378 Certain non-restructuring separation costs — 2,666 Nonsegment expenses excluding infrequent significant charges and gains $ (132,904 ) $ (111,602 ) Excluding these charges in the above table, nonsegment expenses increased $21,302 in fiscal year 2025 as compared to the prior fiscal year, primarily due to increased headcount and higher project-related costs.
All of these estimates reflect our best judgment about current, and for some estimates, future economic and market conditions, and their effects based on information available as of the date of these financial statements. As estimates are updated or actual amounts are known, our critical accounting estimates are revised, and operating results may be affected by the revised estimates.
All these estimates reflect our best judgment about current, and for some estimates, future economic and market conditions, and their effects based on information available as of the date of these financial statements. As estimates are updated or actual amounts are known, our critical accounting estimates are revised, and operating results may be affected by the revised estimates.
OVERVIEW We enhance the global quality of life and sustainability by optimizing energy use through improved efficiency and lower emissions. We are an independent designer, manufacturer, and service provider of control solutions for the aerospace and industrial markets. We design, produce, and service reliable, efficient, low-emission, and high-performance energy control products for diverse applications in challenging environments.
OVERVIEW We enhance the global quality of life and sustainability by optimizing energy use through improved efficiency and lower emissions. We are an independent designer, manufacturer, and services provider of control solutions for the aerospace and industrial markets. We design, produce, and service reliable, efficient, low-emission, and high-performance energy control products for diverse applications in challenging environments.
We believe free cash flow is a useful measure for investors because it portrays our ability to grow organically and generate cash from our businesses for purposes such as paying interest on our indebtedness, repaying maturing debt, funding business acquisitions, investing in research and 34 development, purchasing our common stock, and paying dividends.
We believe free cash flow is a useful measure for investors because it portrays our ability to grow organically and generate cash from our businesses for purposes such as paying interest on our indebtedness, repaying maturing debt, funding business acquisitions, investing in research and development, purchasing our common stock, and paying dividends.
Performance obligations are satisfied and revenue is recognized over time if: (i) the customer receives the benefits as we perform work, if the customer controls the asset as it is being enhanced, or if the product being produced for the customer has no alternative use to us; and (ii) we have an enforceable right to payment with a profit.
Performance obligations are satisfied and revenue is recognized over time if: (i) the customer receives the benefits as we perform work, (ii) if the customer controls the asset as it is being enhanced, or (iii) if the product being produced for the customer has no alternative use to us and we have an enforceable right to payment with a profit.
As these charges are infrequent or unusual items that can be variable from period to period and do not fluctuate with operating results, management believes that by removing 33 these gains and charges from EBIT and EBITDA it improves comparability of past, present, and future operating results and provides consistency when comparing EBIT and EBITDA between periods.
As these charges are infrequent or unusual items that can be variable from period to period and do not fluctuate with operating results, management believes that by removing these gains and charges from EBIT and EBITDA it improves comparability of past, present, and future operating results and provides consistency when comparing EBIT and EBITDA between periods.
When determining the transaction price of each contract, we consider contractual consideration payable by the customer and variable consideration that may affect the total transaction price. Variable consideration, consisting of early payment discounts, rebates, and other sources of price variability, are included in the estimated transaction price based on both customer-specific information as well as historical experience.
When determining the transaction price of each contract, we consider contractual consideration payable by the customer and variable consideration that may affect the total transaction price. Variable consideration, consisting of early 37 payment discounts, rebates, and other sources of price variability, are included in the estimated transaction price based on both customer-specific information as well as historical experience.
As part of our ongoing monitoring efforts to assess goodwill and the Woodward L’Orange trade name indefinite lived asset for possible indications of impairment, we will continue to consider a wide variety of factors, including but not limited to the global economic environment and its potential impact on our business.
As part of our ongoing monitoring efforts to assess the Woodward L’Orange trade name indefinite lived asset for possible indications of impairment, we will continue to consider a wide variety of factors, including but not limited to the global economic environment and its potential impact on our business.
Our provision for income taxes is subject to volatility and could be affected by earnings that are different than those anticipated in countries which have lower or higher tax rates; by transfer pricing adjustments; and/or changes in tax laws, regulations, and accounting principles, including accounting for uncertain tax positions, or interpretations thereof.
Our provision for income taxes is subject to volatility and could be affected by earnings that are different than those anticipated in countries that have lower or higher tax rates; by transfer pricing adjustments; and/or changes in tax laws, regulations, and accounting principles, including accounting for uncertain tax positions, or interpretations thereof.
We also provide aftermarket repair, maintenance, replacement, and other service support for our installed products. Our components and integrated systems optimize performance of commercial aircraft, defense aircraft, military ground vehicles and other equipment, gas and steam turbines, industrial diesel, gas, bio-diesel and dual-fuel reciprocating engines, and electrical power systems.
We also provide service repair, maintenance, replacement, and other service support for our installed products. Our components and integrated systems optimize performance of commercial aircraft, defense aircraft, military ground vehicles and other equipment, gas and steam turbines, industrial diesel, gas, bio-diesel and dual-fuel reciprocating engines, and electrical power systems.
The amount of such taxes and application of tax credits would be dependent on the income tax laws and other circumstances at the time these amounts are repatriated. Based on these variables, it is impractical to determine the income tax liability that might be incurred if these funds were to be repatriated.
The amount of such taxes and application of tax credits would be dependent on the income tax laws and other circumstances at the 32 time these amounts are repatriated. Based on these variables, it is impractical to determine the income tax liability that might be incurred if these funds were to be repatriated.
In addition, our products have been selected for new aerospace platforms and our content has increased across existing platforms, which drives increased aftermarket sales. With the entry into service of single aisle aircraft (Boeing 737 MAX and Airbus A320neo), we have seen a significant increase in initial provisioning sales to the operators of these new aircraft.
In addition, our products have been selected for new aerospace platforms, and our content has increased across existing platforms, which drives increased services sales. With the entry into service of single aisle aircraft (Boeing 737 MAX and Airbus A320neo), we have seen a significant increase in initial provisioning sales to the operators of these new aircraft.
Both commercial and defense marine customers continue to launch additional projects to support new programs or modernize fleets, including incorporating alternative fuels capability, which should drive expanded OEM and service opportunities, as multi-fuel engines contain more of our content.
Both commercial and defense marine customers continue to launch additional projects to support new programs or modernize fleets, including incorporating alternative fuels capability, which should drive expanded OEM and service opportunities because multi-fuel engines contain more of our content.
Free cash flow does not necessarily represent funds available for discretionary use and are not necessarily a measure of our ability to fund our cash needs. Our calculation of free cash flow may differ from similarly titled measures used by other companies, limiting their usefulness as a comparative measure.
Free cash flow does not necessarily represent funds available for discretionary use and is not necessarily a measure of our ability to fund our cash needs. Our calculation of free cash flow may differ from similarly titled measures used by other companies, limiting their usefulness as a comparative measure.
National Defense Authorization Act ("NDAA") for fiscal year 2024 resulted in higher levels of funding for procurement, research and development, and maintenance, which supported our growth for fiscal year 2024. We expect defense research and development, procurement, and maintenance to increase in future years, which would be beneficial for us for future opportunities in defense markets.
National Defense Authorization Act ("NDAA") for fiscal year 2025 resulted in higher levels of funding for procurement, research and development, and maintenance, which supported our growth for fiscal year 2025. We expect defense research and development, procurement, and maintenance to increase in future years, which would be beneficial for us for future opportunities in defense markets.
As adjusted net earnings, adjusted net earnings per share, adjusted effective tax rate, EBIT, adjusted EBIT, EBITDA, and adjusted EBITDA exclude certain financial information compared with net earnings, the most comparable U.S. GAAP financial measure, users of this financial information should consider the information that is excluded.
As adjusted net earnings, adjusted net earnings per share, adjusted income tax expense, adjusted effective tax rate, EBIT, adjusted EBIT, EBITDA, and adjusted EBITDA exclude certain financial information compared with net earnings, the most comparable U.S. GAAP financial measure, users of this financial information should consider the information that is excluded.
This creates unpredictable volatility in the effective tax rate because the additional expense or benefit recognized each quarter is based on the timing of the employee’s election to exercise any vested stock options outstanding, which is outside our control, and the market price of our shares at the time of exercise, which is subject to market volatility. 37 Our effective tax rates differ from the U.S. statutory rate primarily due to the tax impact of foreign operations, adjustments of valuation allowances, research tax credits, state taxes, and tax audit settlements.
This creates unpredictable volatility in the effective tax rate because the additional expense or benefit recognized each quarter is based on the timing of the member’s election to exercise any vested stock options outstanding, which is outside our control, and the market price of our shares at the time of exercise, which is subject to market volatility. 39 Our effective tax rates differ from the U.S. statutory rate primarily due to the tax impact of foreign operations, adjustments of valuation allowances, research tax credits, state taxes, and tax audit settlements.
Although we expect variability, which is generally attributable to the cycling of various maintenance and upgrade programs, as well as actual usage, our outlook for the defense aftermarket is strong.
Although we expect variability, which is generally attributable to the cycling of various maintenance and upgrade programs, as well as actual usage, our outlook for defense services is strong.
GAAP financial measures Management uses free cash flow, which is defined by the Company as net cash flows provided by operating activities less payments for property, plant, and equipment, in reviewing the financial performance of and cash generation by Woodward’s various business groups and evaluating cash levels.
GAAP financial measures Management uses free cash flow, which is defined as net cash flows provided by operating activities less payments for property, plant, and equipment, in reviewing the financial performance of and cash generation by the Company’s various business groups and evaluating cash levels.
Global conflicts and growing international demand for various other 25 military programs continue to drive demand for operations of defense aircraft, including fighter jets, transports and both utility and attack rotorcraft, which are all supported by our products and systems.
Global conflicts and growing international demand for various other military programs continue to drive demand for utilization of defense aircraft, including fighter jets, transports and both utility and attack rotorcraft, which are all supported by our products and systems.
As aircraft production levels increase to accommodate rising passenger demand and to mitigate higher operating costs driven largely by higher fuel costs on older and less fuel-efficient aircraft, we expect airlines will retire older generation aircraft as they reach certain age thresholds (typically between twenty and twenty-five years).
As aircraft production levels increase to accommodate rising passenger demand and to mitigate higher operating costs driven largely by higher fuel costs on older and less fuel-efficient aircraft, we expect airlines will retire older generation aircraft as they reach certain age thresholds (typically between 20 and 25 years).
If the carrying amount of the Woodward L’Orange trade name intangible asset exceeds its fair value, an impairment loss would be recognized to reduce the carrying amount to its fair value. We have not recorded any impairment charges associated with the indefinitely lived intangible asset.
If the carrying amount of the Woodward L’Orange trade name intangible asset exceeds its fair value, an impairment loss would be recognized to reduce the carrying amount to its fair value. We have not recorded any impairment charges associated with the indefinitely lived intangible asset since it was acquired.
GAAP adjustments to EBIT and EBITDA, in each case adjusted to exclude, as applicable, (i) a non-recurring gain related to a previous acquisition, (ii) costs related to business development activities, (iii) a non-recurring charge related to a previous acquisition, (iv) certain non-restructuring separation costs, (v) a specific charge for excess and obsolete inventory, (vi) product rationalization, (vii) a non-recurring charge related to customer collections, and (viii) restructuring charges.
GAAP adjustments to EBIT and EBITDA, in each case adjusted to exclude, as applicable, (i) product rationalization, (ii) costs related to business development activities, (iii) a specific charge for excess and obsolete inventory, (iv) a non-recurring gain related to a previous acquisition, (v) a non-recurring charge related to a previous acquisition, and (vi) certain non-restructuring separation costs.
For services that are not short-term in nature, manufacturing, repair, and overhaul (“MRO”), and sales of products that have no alternative use to us and an enforceable right to payment with a profit, we use an actual cost input measure to determine the extent of progress towards completion of the performance obligation.
For services that are not short-term in nature, MRO and sales of products that have no alternative use to us and an enforceable right to payment with a profit, we use an actual cost input measure to determine the extent of progress towards completion of the performance obligation.
The impairment test consists of comparing the fair value of the Woodward L’Orange trade name intangible asset, determined using discounted cash flows based on the relief from royalty method under the income approach, with its carrying amount.
The quantitative assessment consists of comparing the fair value of the Woodward L’Orange trade name intangible asset, determined using discounted cash flows based on the relief from royalty method under the income approach, with its carrying amount.
When inventory is written down below cost, such reduced amount is considered the cost for subsequent accounting purposes. Our recording of inventory at the lower of cost or net realizable value has not historically required material adjustments once initially established. The carrying value of inventory was $609,092 at September 30, 2024 and $517,843 at September 30, 2023.
When inventory is written down below cost, such reduced amount is considered the cost for subsequent accounting purposes. Our recording of inventory at the lower of cost or net realizable value has not historically required material adjustments once initially established. The carrying value of inventory was $654,608 at September 30, 2025 and $609,092 at September 30, 2024.
At September 30, 2024, we had total outstanding debt of $872,470 consisting of various series of unsecured notes due between 2025 and 2033, and amounts borrowed under our revolving credit facility, and our finance leases.
At September 30, 2025, we had total outstanding debt of $702,202 consisting of various series of unsecured notes due between 2025 and 2033, and amounts borrowed under our revolving credit facility, and our finance leases.
GAAP financial measures. A description of these measures as well as a reconciliation of these non-U.S. GAAP financial measures to the closest U.S. GAAP financial measures can be found under the caption “Non-U.S. GAAP Measures” in this Item 7 – Management’s Discussion and Analysis of Financial Conditions and Results of Operations.
GAAP financial measures. A description of these measures, as well as a reconciliation of these non-U.S. GAAP financial measures to the most directly comparable U.S. GAAP financial measures, can be found under the caption “Non-U.S. GAAP Financial Measures” in this Item 7 – Management’s Discussion and Analysis of Financial Condition and Results of Operations.
Our calculations of adjusted net earnings, adjusted net earnings per share, EBIT, adjusted EBIT, EBITDA, and adjusted EBITDA may differ from similarly titled measures used by other companies, limiting their usefulness as comparative measures. Cash flow-based non-U.S.
Our calculations of adjusted net earnings, adjusted earnings per share, adjusted income tax expense, adjusted effective tax rate, EBIT, adjusted EBIT, EBITDA, and adjusted EBITDA may differ from similarly titled measures used by other companies, limiting their usefulness as comparative measures. 36 Cash flow-based non-U.S.
Income taxes were provided at an effective rate on earnings before income taxes of 17.8% for fiscal year 2024, compared to 15.7% for fiscal year 2023.
Income taxes were provided at an effective rate on earnings before income taxes of 15.2% for fiscal year 2025, compared to 17.8% for fiscal year 2024.
For a discussion of the 2023 Results of Operations, including a discussion of the financial results for the fiscal year ended September 30, 2023 compared to the fiscal year ended September 30, 2022, refer to Part I, Item 7 of our Form 10-K filed with the SEC on November 17, 2023.
For a discussion of the 2024 Results of Operations, including a discussion of the financial results for the fiscal year ended September 30, 2024 compared to the fiscal year ended September 30, 2023, refer to Part I, Item 7 of our Annual Report on Form 10-K filed with the SEC on November 26, 2024.
During fiscal year 2024, we experienced significant growth in smart defense programs following multiple years of decline. We expect overall demand to increase in the near term for these weapons programs. Aftermarket – Our commercial aftermarket business increased significantly in fiscal year 2024, as global air traffic continued to grow and initial provisioning sales have increased.
During fiscal year 2025, we experienced significant growth in smart defense programs. We expect overall demand to increase in the near term for these weapons programs. Services – Our commercial services business increased significantly in fiscal year 2025, as global air traffic continued to grow and initial provisioning sales have increased.
The increase in net cash flows used in financing activities in fiscal year 2024 compared to fiscal year 2023 was attributable to the increase in repurchases of common stock partially offset by a change in net debt borrowings as compared to payments.
The increase in net cash flows used in financing activities in fiscal year 2025 compared to fiscal year 2024 was primarily attributable to the change from net debt borrowings to net debt payments, partially offset by decreases in repurchases of common stock.
GAAP financial measures Adjusted net earnings is defined by the Company as net earnings excluding, as applicable, (i) a non-recurring gain related to a previous acquisition, (ii) costs related to business development activities, (iii) a non-recurring charge related to 32 a previous acquisition, (iv) certain non-restructuring separation costs, (v) a specific charge for excess and obsolete inventory, (vi) product rationalization, (vii) a non-recurring charge related to customer collections, and (viii) restructuring charges.
GAAP financial measures Adjusted net earnings is defined by the Company as net earnings excluding, as applicable, (i) product rationalization, (ii) costs related to business development activities, (iii) a specific charge for excess and obsolete inventory, (iv) a non-recurring gain related to a previous acquisition, (v) a non-recurring charge related to a previous acquisition, (vi) certain non-restructuring separation costs, and (vii) the impact of a German corporate tax rate reduction.
At September 30, 2024, the carrying value of the Woodward L’Orange trade name intangible asset was $64,751, representing approximately 1% of our total assets.
At September 30, 2025, the carrying value of the Woodward L’Orange trade name intangible asset was $68,010, representing approximately 1% of our total assets.
We expect significant sales and earnings decreases in our China on-highway natural gas truck business in fiscal year 2025 as compared to fiscal year 2024 due to the deteriorating local Chinese economy, a narrower natural gas to diesel spread, and elevated customer inventory levels. Future demand remains uncertain due to the volatility of this business.
In fiscal year 2025, we experienced a material decline in demand for our on‑highway natural gas truck business in China compared to fiscal year 2024. This material decline was due to the deteriorating Chinese economy, a narrower natural gas to diesel price spread, and elevated customer inventory levels; future demand remains uncertain due to the volatility of this business.
GAAP adjustments 8,143 34,876 Adjusted EBITDA (Non-U.S. GAAP) $ 619,785 $ 475,534 The use of these non-U.S. GAAP financial measures is not intended to be considered in isolation of, or as a substitute for, the financial information prepared and presented in accordance with U.S. GAAP.
GAAP) $ 669,511 $ 619,785 The use of these non-U.S. GAAP financial measures is not intended to be considered in isolation of, or as a substitute for, the financial information prepared and presented in accordance with U.S. GAAP.
During fiscal year 2024, we made $390,819 of cash repurchases of common stock, compared to $126,380 of cash repurchases of common stock during fiscal year 2023. During fiscal year 2024, we had net debt borrowings in the amount of $141,183, compared to net debt payments in the amount of $67,579 in fiscal year 2023. Non-U.S.
During fiscal year 2025, we had net debt payments in the amount of $180,672, compared to net debt borrowings of $141,183 in fiscal year 2024. During fiscal year 2025, we made $172,857 of cash repurchases of common stock, compared to $390,819 of cash repurchases of common stock during fiscal year 2024. Non-U.S.
Research and development costs increased by $8,581, or 6.5%, to $140,676 for fiscal year 2024, as compared to $132,095 for fiscal year 2023. The increase in research and development costs on an absolute basis for fiscal year 2024 as compared to the prior fiscal year is primarily due to variability in the timing of projects and expenses.
Research and development costs increased by $6,892, or 4.9%, to $147,568 for fiscal year 2025, as compared to $140,676 for fiscal year 2024. The increase in research and development costs on an absolute basis for fiscal year 2025 as compared to the prior fiscal year is primarily due to variability in the timing of projects and expenses.
See Note 15, Credit facilities, short-term borrowings, and long-term debt in the Notes to the Consolidated Financial Statements in “Item 8 – Financial Statements and Supplemental Data,” for more information about our covenants.
We believe we were in compliance with all our debt covenants as of September 30, 2025. See Note 15, Credit facilities, short-term borrowings, and long-term debt in the Notes to the Consolidated Financial Statements in “Item 8 – Financial Statements and Supplemental Data,” for more information about our covenants.
Research and development costs as a percentage of net sales decreased to 4.2% for fiscal year 2024, as compared to 4.5% for fiscal year 2023.
Research and development costs as a percentage of net sales declined slightly to 4.1% for fiscal year 2025, as compared to 4.2% for fiscal year 2024.
The increase in selling, general, and administrative expenses on an 28 absolute basis for fiscal year 2024 as compared to prior fiscal year is primarily due to increased members, increased annual variable incentive compensation costs, and increased expenses relating to business development activities.
The increase in selling, general and administrative expenses on an absolute basis for fiscal year 2025 as compared to the prior fiscal year is primarily due to increased expenses relating to business development activities and higher project-related costs.
For fiscal year 2024, free cash flow was $342,809, compared to $232,043 for fiscal year 2023. We define free cash flow as net cash flows from operating activities less payments for property, plant, and equipment.
For fiscal year 2025, free cash flow was $340,366, compared to $342,809 for fiscal year 2024. We define free cash flow as net cash provided by operating activities less payments for property, plant, and equipment.
In fiscal year 2025, we expect a decline in demand in our on-highway natural gas trucks business in China as compared to fiscal year 2024, and future demand remains uncertain due to the volatility of this business.
We have experienced significant sales and earnings decreases in our China on-highway natural gas truck business in fiscal year 2025 as compared to fiscal year 2024. Future demand remains uncertain due to the volatility of this business.
The estimates and assumptions described below are those that we consider to be most critical to an understanding of our financial statements because they involve significant judgments and uncertainties.
Note 1, Operations and summary of significant accounting policies, to the Consolidated Financial Statements describes the significant accounting policies and methods used in the preparation of the Consolidated Financial Statements. The estimates and assumptions described below are those that we consider to be most critical to an understanding of our financial statements because they involve significant judgments and uncertainties.
The results of the annual impairment test performed as of July 31, 2024 indicated the estimated fair value of the Woodward L’Orange trade name intangible asset was in excess of its carrying value, and accordingly, no impairment existed.
The results of the annual impairment analysis performed as of July 31, 2025 indicated the estimated fair value of the Woodward L’Orange trade name intangible asset was in excess of its carrying value, and accordingly, no impairment existed. We test for impairment by performing a qualitative assessment or by using a quantitative assessment.
BUSINESS ENVIRONMENT AND TRENDS We serve the aerospace and industrial markets. Aerospace Markets Our aerospace products and systems are primarily used to provide propulsion, actuation, and motion control in both commercial and defense fixed-wing aircraft, rotorcraft, smart defense, and other defense systems.
Aerospace Markets Our aerospace products and systems are primarily used to provide propulsion, actuation, and motion control in both commercial and defense fixed-wing aircraft, rotorcraft, smart defense, and other defense systems. Commercial OEM – In the commercial aerospace markets, global air traffic remained strong.
The reconciliation of net earnings and earnings per share to adjusted net earnings and adjusted earnings per share, respectively, for the fiscal years ended and are shown in the table below: Year Ended September 30, 2024 2023 Net Earnings Earnings Per Share Net Earnings Earnings Per Share Net earnings (U.S. GAAP) $ 372,971 $ 6.01 $ 232,368 $ 3.78 Non-U.S.
The reconciliation of net earnings and earnings per share to adjusted net earnings and adjusted earnings per share, respectively, for the fiscal years ended 2025 and 2024 and are shown in the table below: Year Ended September 30, 2025 2024 Net Earnings Earnings Per Share Net Earnings Earnings Per Share Net earnings (U.S.
The non-recurring charge related to customer collections pertains to a discrete process issue that was identified and corrected. The Company believes that these excluded items are short-term in nature, not directly related to the ongoing operations of the business and therefore, the exclusion of them illustrates more clearly how the underlying business of Woodward is performing.
The Company believes that these excluded items are short-term in nature, not directly related to the ongoing operations of the business, and therefore, their exclusion illustrates more clearly how the underlying business of Woodward is performing.
Industrial Markets Our industrial products are used worldwide in various types of turbine and reciprocating engine-powered equipment, including electric power generation and distribution systems, ships, locomotives, compressors, pumps, and other mobile and industrial machines.
Industrial Markets Our industrial products are used worldwide in various types of turbine and reciprocating engine-powered equipment, including electric power generation and distribution systems, ships, locomotives, compressors, pumps, and other mobile and industrial machines. Power Generation – The demand for power generation, driven in part by rising data center requirements, remained robust in fiscal year 2025.
Our ability to service our long-term debt, to remain in compliance with the various restrictions and covenants contained in our debt agreements, and to fund working capital, capital expenditures, and product development efforts will depend on our ability to generate cash from operating activities, which in turn is subject to, among other things, future operating performance as well as general economic, financial, competitive, legislative, regulatory, and other conditions, some of which may be beyond our control.
Revolving credit facility and short-term borrowing activity during the fiscal year ended September 30, 2025 were as follows: Maximum daily balance during the period $ 359,100 Average daily balance during the period $ 264,546 Weighted average interest rate on average daily balance 5.41 % Our ability to service our long-term debt, to remain in compliance with the various restrictions and covenants contained in our debt agreements, and to fund working capital, capital expenditures, and product development efforts will depend on our ability to generate cash from operating activities, which in turn is subject to, among other things, future operating performance as well as general economic, financial, competitive, legislative, regulatory, and other conditions, some of which may be beyond our control.
The Woodward L’Orange trade name intangible asset is tested for impairment on an annual basis and more often if an event occurs or circumstances change that indicate the fair value of the Woodward L’Orange intangible asset may be below its carrying amount.
The Woodward L’Orange trade name intangible asset is analyzed for impairment on an annual basis and more often if an event occurs or circumstances change that indicate the fair value of the Woodward L’Orange intangible asset may be below its carrying amount. 38 During the fourth quarter, we completed the annual impairment analysis, for the fiscal year ended September 30, 2025, of the Woodward L’Orange trade name intangible asset as of July 31, 2025.
Gross margin (as measured by net sales less cost of goods sold, divided by net sales) was 26.4% for fiscal year 2024, compared to 23.2% for fiscal year 2023. The increase in gross margin for fiscal year 2024 is primarily attributable to price realization and higher sales volume, partially offset by net inflationary impacts on material and labor.
The increase in cost of goods sold on an absolute basis in fiscal year 2025 compared to fiscal year 2024 is primarily due to net inflationary impacts on material and labor costs. 29 Gross margin (as measured by net sales less cost of goods sold, divided by net sales) was 26.8% for fiscal year 2025, compared to 26.4% for fiscal year 2024.
We regularly review our estimates of variable consideration on the transaction price and recognize changes in estimates on a cumulative catch-up basis as if the most current estimate of the transaction price adjusted for variable consideration had been known as of the inception of the contract. 35 Point in time and over time revenue recognition Control of the products generally transfers to the customer at a point in time, if the customer does not control the products as they are produced.
We regularly review our estimates of variable consideration on the transaction price and recognize changes in estimates on a cumulative catch-up basis as if the most current estimate of the transaction price adjusted for variable consideration had been known as of the inception of the contract.
GAAP Financial Measures Adjusted net earnings, adjusted earnings per share, adjusted effective tax rate, EBIT, adjusted EBIT, EBITDA, adjusted EBITDA, and free cash flow, are financial measures not prepared and presented in accordance with U.S. GAAP. However, we believe these non-U.S. GAAP financial measures provide additional information that enables readers to evaluate our business from the perspective of management.
GAAP Financial Measures Adjusted net earnings, adjusted earnings per share, adjusted income tax expense, adjusted effective tax rate, EBIT, adjusted EBIT, EBITDA, adjusted EBITDA, and free cash flow are financial measures not prepared and presented in accordance with U.S. GAAP. However, we believe these non-U.S.
At September 30, 2024, we held $282,270 in cash and cash equivalents and had total outstanding debt of $872,470 with additional borrowing availability of $775,136, net of outstanding letters of credit, under our revolving credit agreement.
At September 30, 2025, we held $327,431 in cash and cash equivalents and had total outstanding debt of $702,202 with additional borrowing availability of $869,828, net of outstanding letters of credit, under our revolving credit agreement.
Defense – In recent years, the defense industry has been strong as budgetary allocations have generally increased since 2016. Ongoing global conflicts and preparation for near-peer threats are leading to higher global defense budgets. The U.S.
With that comes the A350 Trimmable Horizontal Stabilizer Actuator ("THSA") product. These new product offerings with Airbus strengthen Woodward’s position for future product wins. Defense – In recent years, the defense industry has been strong as budgetary allocations have generally increased since 2016. Ongoing global conflicts and preparation for near-peer threats are leading to higher global defense budgets. The U.S.
GAAP adjustments: Non-recurring gain related to a previous acquisition (4,803 ) — Business development activities 5,902 — Non-recurring charge related to a previous acquisition 4,378 — Certain non-restructuring separation costs 2,666 2,208 Specific charge for excess and obsolete inventory — 11,995 Product rationalization — 10,504 Non-recurring charge related to customer collections — 4,997 Restructuring charges — 5,172 Total non-U.S.
GAAP adjustments: Product rationalization (20,524 ) — Business development activities 7,310 5,902 Specific charge for excess and obsolete inventory 6,536 — Non-recurring gain related to a previous acquisition — (4,803 ) Non-recurring charge related to a previous acquisition — 4,378 Certain non-restructuring separation costs — 2,666 Total non-U.S. GAAP adjustments (6,678 ) 8,143 Adjusted EBIT (Non-U.S.
Liquidity Highlights Net cash provided by operating activities for fiscal year 2024 was $439,089, compared to $308,543 for fiscal year 2023. The increase in net cash provided by operating activities in fiscal year 2024 compared to fiscal year 2023 is primarily attributable to increased earnings and improved working capital.
Liquidity Highlights Net cash provided by operating activities for fiscal year 2025 was $471,294, compared to $439,089 for fiscal year 2024. The increase in net cash provided by operating activities in fiscal year 2025 compared to fiscal year 2024 was primarily attributable to increased earnings and the timing of certain tax payments, partially offset by working capital increases.
Our total cash and cash equivalents were $282,270 at September 30, 2024 and $137,447 at September 30, 2023, and our working capital was $820,101 at September 30, 2024 and $852,256 at September 30, 2023. Of the cash and cash equivalents held at September 30, 2024, $279,070 was held by our foreign locations.
Our total cash and cash equivalents were $327,431 at September 30, 2025 and $282,270 at September 30, 2024, and our working capital was $977,025 at September 30, 2025 and $820,101 at September 30, 2024. Of the cash and cash equivalents held at September 30, 2025, $324,617 was held by our foreign locations.
We attempt to maintain inventory quantities at levels considered necessary to fill firm and expected orders in a reasonable time frame, which we believe mitigates our exposure to future inventory carrying cost adjustments.
We attempt to maintain inventory quantities at levels considered necessary to fill firm and expected orders in a reasonable time frame, which we believe mitigates our exposure to future inventory carrying cost adjustments. Reviews for impairment of indefinite lived intangible assets We have one indefinitely lived intangible asset consisting of the Woodward L’Orange trade name.
At September 30, 2024, we also had additional borrowing capacity of $19,771 under various foreign lines of credit and foreign overdraft facilities. 27 Consolidated Statements of Earnings and Other Selected Financial Data The following table sets forth consolidated statements of earnings data as a percentage of net sales for each period indicated: Year Ended September 30, 2024 % of Net Sales 2023 % of Net Sales Net sales $ 3,324,249 100 % $ 2,914,566 100 % Costs and expenses: Cost of goods sold 2,447,770 73.6 2,236,983 76.8 Selling, general, and administrative expenses 307,499 9.3 269,692 9.3 Research and development costs 140,676 4.2 132,095 4.5 Restructuring charges — — 5,172 0.2 Interest expense 47,959 1.4 47,898 1.6 Interest income (6,458 ) (0.2 ) (2,751 ) (0.1 ) Other (income) expense, net (67,168 ) (2.0 ) (50,291 ) (1.7 ) Total costs and expenses 2,870,278 86.3 2,638,798 90.5 Earnings before income taxes 453,971 13.7 275,768 9.5 Income tax expense 81,000 2.4 43,400 1.5 Net earnings $ 372,971 11.2 $ 232,368 8.0 Other select financial data: September 30, 2024 September 30, 2023 Working capital $ 820,101 $ 852,256 Total debt 872,470 721,526 Total stockholders' equity 2,176,416 2,070,989 2024 RESULTS OF OPERATIONS 2024 Net Sales Compared to 2023 Consolidated net sales for fiscal year 2024 increased by $409,683, or 14.1%, compared to fiscal year 2023.
At September 30, 2025, we also had additional borrowing capacity of $24,176 under various lines of credit and foreign overdraft facilities. 28 Consolidated Statements of Earnings and Other Selected Financial Data The following table sets forth consolidated statements of earnings data as a percentage of net sales for each period indicated: Year Ended September 30, 2025 % of Net Sales 2024 % of Net Sales Net sales $ 3,567,064 100 % $ 3,324,249 100 % Costs and expenses: Cost of goods sold 2,610,772 73.2 2,447,770 73.6 Selling, general, and administrative expenses 329,823 9.2 307,499 9.3 Research and development costs 147,568 4.1 140,676 4.2 Interest expense 45,689 1.3 47,959 1.4 Interest income (4,189 ) (0.1 ) (6,458 ) (0.2 ) Other income, net (84,010 ) (2.4 ) (67,168 ) (2.0 ) Total costs and expenses 3,045,653 85.4 2,870,278 86.3 Earnings before income taxes 521,411 14.6 453,971 13.7 Income tax expense 79,300 2.2 81,000 2.4 Net earnings $ 442,111 12.4 $ 372,971 11.2 Other select financial data: September 30, 2025 September 30, 2024 Working capital $ 977,025 $ 820,101 Total debt 702,202 872,470 Total stockholders' equity 2,566,390 2,176,416 2025 RESULTS OF OPERATIONS 2025 Net Sales Compared to 2024 Consolidated net sales for fiscal year 2025 increased by $242,815, or 7.3%, compared to fiscal year 2024.
The increase in net cash provided by operating activities in fiscal year 2024 compared to fiscal year 2023 is primarily attributable to increased earnings and improved working capital. Net cash flows used in investing activities for fiscal year 2024 was $89,217, compared to $73,551 in fiscal year 2023.
The increase in net cash provided by operating activities in fiscal year 2025 compared to fiscal year 2024 was primarily attributable to increased earnings and the timing of certain tax payments, partially offset by working capital increases. Net cash used in investing activities for fiscal year 2025 was $119,553, compared to $89,217 in fiscal year 2024.
EBIT and adjusted EBIT reconciled to net earnings were as follows: Year Ended September 30, 2024 2023 Net earnings (U.S. GAAP) $ 372,971 $ 232,368 Income tax expense 81,000 43,400 Interest expense 47,959 47,898 Interest income (6,458 ) (2,751 ) EBIT (Non-U.S. GAAP) 495,472 320,915 Non-U.S.
EBIT and adjusted EBIT reconciled to net earnings were as follows: Year Ended September 30, 2025 2024 Net earnings (U.S. GAAP) $ 442,111 $ 372,971 Income tax expense 79,300 81,000 Interest expense 45,689 47,959 Interest income (4,189 ) (6,458 ) EBIT (Non-U.S. GAAP) 562,911 495,472 Non-U.S.
The net increase in Aerospace segment earnings for fiscal year 2024 was due to the following: Earnings for the period ended September 30, 2023 $ 290,104 Sales volume 49,469 Price, sales mix, inflation, and productivity 62,989 Other, net (17,202 ) Earnings for the period ended September 30, 2024 $ 385,360 Aerospace segment earnings as a percentage of segment net sales were 19.0% for fiscal year 2024 and 16.4% for fiscal year 2023.
The net increase in Aerospace segment earnings for fiscal year 2025 was due to the following: Earnings for the period ended September 30, 2024 $ 385,360 Sales volume and mix 17,464 Price, inflation, and productivity 138,887 Manufacturing expenses (40,953 ) Other, net 5,855 Earnings for the period ended September 30, 2025 $ 506,613 Aerospace segment earnings as a percentage of segment net sales were 21.9% for fiscal year 2025 and 19.0% for fiscal year 2024.
At September 30, 2024, we had additional borrowing availability of $775,136 under our revolving credit facility, net of outstanding letters of credit, and additional borrowing availability of $19,771 under various foreign credit facilities. 31 At September 30, 2024, we had $217,000 outstanding amount borrowed under our revolving credit facility.
At September 30, 2025, we had additional borrowing availability of $869,828 under our revolving credit facility, net of outstanding letters of credit, and additional borrowing availability of $24,176 under various foreign credit facilities. At September 30, 2025, we had $122,300 outstanding amount borrowed under our revolving credit facility.
GAAP adjustments: Non-recurring gain related to a previous acquisition (4,803 ) — Business development activities 5,902 — Non-recurring charge related to a previous acquisition 4,378 — Certain non-restructuring separation costs 2,666 2,208 Specific charge for excess and obsolete inventory — 11,995 Product rationalization — 10,504 Non-recurring charge related to customer collections — 4,997 Restructuring charges — 5,172 Total non-U.S.
GAAP) 676,189 611,642 Non-U.S. GAAP adjustments: Product rationalization (20,524 ) — Business development activities 7,310 5,902 Specific charge for excess and obsolete inventory 6,536 — Non-recurring gain related to a previous acquisition — (4,803 ) Non-recurring charge related to a previous acquisition — 4,378 Certain non-restructuring separation costs — 2,666 Total non-U.S. GAAP adjustments (6,678 ) 8,143 Adjusted EBITDA (Non-U.S.
Management uses adjusted net earnings to evaluate the Company’s performance excluding these infrequent or unusual period expenses that are not necessarily indicative of the Company’s operating performance for the period. Management defines adjusted earnings per share as adjusted net earnings, as defined above, divided by the weighted-average number of diluted shares of common stock outstanding for the period.
Management defines adjusted earnings per share as adjusted net earnings, as defined above, divided by the weighted-average number of diluted shares of common stock outstanding for the period.
This dynamic applies to commercial aftermarket related to repairs and spare parts for mature legacy programs with large in-service fleets, such as the Airbus A320 and the Boeing 777. Our defense aftermarket sales also increased significantly during fiscal year 2024 due to increased defense budgets resulting in operations and maintenance upgrades.
This dynamic applies to commercial services related to repairs and spare parts for mature legacy programs with large in-service fleets, 26 such as the Airbus A320 and the Boeing 777.
LIQUIDITY AND CAPITAL RESOURCES Historically, we have satisfied our working capital needs, as well as capital expenditures, product development and other liquidity requirements associated with our operations, with cash flow provided by operating activities and borrowings under our credit facilities. We have also issued debt to supplement our cash needs, repay our other indebtedness, or finance our acquisitions.
LIQUIDITY AND CAPITAL RESOURCES Historically, we have met working capital, capital expenditure, product development, and other liquidity needs through net cash provided by operating activities and borrowings under our credit facilities. We have supplemented liquidity by issuing debt as needed to fund acquisitions, refinance obligations, or repay other indebtedness.
Segment Results The following table presents sales by segment: Year Ended September 30, 2024 2023 Net sales: Aerospace $ 2,028,618 61.0% $ 1,768,103 60.7% Industrial 1,295,631 39.0% 1,146,463 39.3% Consolidated net sales $ 3,324,249 100% $ 2,914,566 100% The following table presents earnings by segment and reconciles segment earnings to consolidated net earnings: Year Ended September 30, 2024 2023 Aerospace $ 385,360 $ 290,104 Industrial 229,857 161,622 Nonsegment expenses (119,745 ) (130,811 ) Interest expense, net (41,501 ) (45,147 ) Consolidated earnings before income taxes 453,971 275,768 Income tax expense 81,000 43,400 Consolidated net earnings $ 372,971 $ 232,368 The following table presents segment earnings as a percent of segment net sales: Year Ended September 30, 2024 2023 Aerospace 19.0% 16.4% Industrial 17.7% 14.1% 29 2024 Segment Results Compared to 2023 Aerospace Aerospace segment net sales increased by $260,515, or 14.7% to $2,028,618 for fiscal year 2024, compared to $1,768,103 for fiscal year 2023.
Segment Results The following table presents sales by segment: Year Ended September 30, 2025 2024 Net sales: Aerospace $ 2,312,806 64.8% $ 2,028,618 61.0% Industrial 1,254,258 35.2% 1,295,631 39.0% Consolidated net sales $ 3,567,064 100% $ 3,324,249 100% The following table presents earnings by segment and reconciles segment earnings to consolidated net earnings: Year Ended September 30, 2025 2024 Aerospace $ 506,613 $ 385,360 Industrial 182,524 229,857 Nonsegment expenses (126,226 ) (119,745 ) Interest expense, net (41,500 ) (41,501 ) Consolidated earnings before income taxes 521,411 453,971 Income tax expense 79,300 81,000 Consolidated net earnings $ 442,111 $ 372,971 30 The following table presents segment earnings as a percent of segment net sales: Year Ended September 30, 2025 2024 Aerospace 21.9% 19.0% Industrial 14.6% 17.7% 2025 Segment Results Compared to 2024 Aerospace Aerospace segment net sales increased by $284,188, or 14.0% to $2,312,806 for fiscal year 2025, compared to $2,028,618 for fiscal year 2024.
Details of the changes in consolidated net sales are as follows: Consolidated net sales for the year ended September 30, 2023 $ 2,914,566 Aerospace volume 126,480 Industrial volume 71,521 Effects of changes in price 214,682 Effects of changes in foreign currency rates (3,000 ) Consolidated net sales for the year ended September 30, 2024 $ 3,324,249 In the Aerospace segment, the increase in net sales for fiscal year 2024 as compared to fiscal year 2023 was primarily attributable to price realization, as well as increases in both commercial and defense aftermarket due to higher aircraft utilization.
Details of the changes in consolidated net sales are as follows: Consolidated net sales for the year ended September 30, 2024 $ 3,324,249 Aerospace volume 82,858 Industrial volume (119,300 ) Effects of changes in price 266,731 Effects of changes in foreign currency rates 12,526 Consolidated net sales for the year ended September 30, 2025 $ 3,567,064 In the Aerospace segment, the increase in net sales for fiscal year 2025 as compared to fiscal year 2024 was primarily attributable to price realization and higher sales volumes.
GAAP adjustments 6,165 0.10 26,208 0.43 Adjusted net earnings (Non-U.S. GAAP) $ 379,136 $ 6.11 $ 258,576 $ 4.21 Management uses EBIT to evaluate our performance without financing and tax related considerations, as these elements may not fluctuate with operating results.
GAAP net income adjustments 11,880 1,978 Adjusted income tax expense (Non-U.S. GAAP) $ 91,180 $ 82,978 Adjusted effective tax rate (Non-U.S. GAAP) 17.7 % 18.0 % Management uses EBIT to evaluate our performance without financing and tax related considerations, as these elements may not fluctuate with operating results.
GAAP requires us to make judgments, assumptions, and estimates that affect the amounts reported in the Consolidated Financial Statements and accompanying notes. Note 1, Operations and summary of significant accounting policies, to the Consolidated Financial Statements describes the significant accounting policies and methods used in the preparation of the Consolidated Financial Statements.
GAAP) $ 340,366 $ 342,809 CRITICAL ACCOUNTING ESTIMATES The preparation of financial statements and related disclosures in conformity with U.S. GAAP requires us to make judgments, assumptions, and estimates that affect the amounts reported in the Consolidated Financial Statements and accompanying notes.
Demand in the widebody aviation market improved in fiscal year 2024 24 compared to recent years due to increasing production rates on the A350, A330neo, Boeing 787, and 777. We expect narrowbody deliveries to improve due to backlog associated with single aisle programs and planned production ramps in fiscal year 2025 as compared to fiscal year 2024.
Further, we also expect narrowbody deliveries to improve due to backlog associated with single aisle programs and planned production ramps in fiscal year 2026 as compared to fiscal year 2025. We have content on the Airbus A220, A320neo, A330neo, Bell 429, Boeing 737 MAX, 777, 787, and Comac C919.
GAAP adjustments, net of tax: Non-recurring gain related to a previous acquisition (3,433 ) (0.06 ) — — Business development activities 4,456 0.07 — — Non-recurring charge related to a previous acquisition 3,129 0.05 — — Certain non-restructuring separation costs 2,013 0.04 1,661 0.03 Specific charge for excess and obsolete inventory — — 9,016 0.15 Product rationalization — — 7,896 0.13 Non-recurring charge related to customer collections — — 3,761 0.06 Restructuring charges — — 3,874 0.06 Total non-U.S.
GAAP adjustments, net of tax: Product rationalization 1 (20,524 ) (0.33 ) — — Business development activities 2 7,310 0.12 5,902 0.10 Specific charge for excess and obsolete inventory 3 6,536 0.11 — — Non-recurring gain related to a previous acquisition 1 — — (4,803 ) (0.08 ) Non-recurring charge related to a previous acquisition 2 — — 4,378 0.07 Certain non-restructuring separation costs 2 — — 2,666 0.04 Tax effect of Non-U.S.
The increase in Industrial segment net sales in fiscal year 2024 as compared to the prior fiscal year was primarily attributable to growth in transportation, particularly in the on-highway natural gas truck business in China, price realization, and strong sales in power generation, partially offset by a decrease in oil and gas sales.
The decrease in Industrial segment earnings for fiscal year 2025 as compared to fiscal year 2024 was primarily a result of lower sales volume and unfavorable mix, partially offset by price realization. We have experienced significant sales and earnings decreases in our China on-highway natural gas truck business in fiscal year 2025 as compared to fiscal year 2024.
Cash Flows Year Ended September 30, 2024 2023 Net cash provided by operating activities $ 439,089 $ 308,543 Net cash used in investing activities (89,217 ) (73,551 ) Net cash used in financing activities (218,047 ) (196,473 ) Effect of exchange rate changes on cash and cash equivalents 12,998 (8,916 ) Net change in cash and cash equivalents 144,823 29,603 Cash and cash equivalents at beginning of year 137,447 107,844 Cash and cash equivalents at end of year $ 282,270 $ 137,447 2024 Cash Flows Compared to 2023 Net cash flows provided by operating activities for fiscal year 2024 was $439,089, compared to $308,543 for fiscal year 2023.
The site is expected to become operational in 2027 and will progressively scale production and hiring in subsequent years to meet market demand. 33 Cash Flows Year Ended September 30, 2025 2024 Net cash provided by operating activities $ 471,294 $ 439,089 Net cash used in investing activities (119,553 ) (89,217 ) Net cash used in financing activities (313,926 ) (218,047 ) Effect of exchange rate changes on cash and cash equivalents 7,346 12,998 Net change in cash and cash equivalents 45,161 144,823 Cash and cash equivalents at beginning of year 282,270 137,447 Cash and cash equivalents at end of year $ 327,431 $ 282,270 2025 Cash Flows Compared to 2024 Net cash provided by operating activities for fiscal year 2025 was $471,294, compared to $439,089 for fiscal year 2024.
Segment net sales increased for fiscal year 2024 as compared to fiscal year 2023 primarily due to price realization and increases in both commercial and defense aftermarket volumes due to higher aircraft utilization. Defense OEM sales increased in fiscal year 2024 compared to prior fiscal year, primarily driven by the increased demand for smart defense.
Segment net sales increased for fiscal year 2025 as compared to fiscal year 2024 primarily due to price realization and higher sales volumes.
The net increase in Industrial segment earnings for fiscal year 2024 was due to the following: Earnings for the period ended September 30, 2023 $ 161,622 Sales volume 17,281 Price, sales mix, inflation, and productivity 72,197 Other, net (21,243 ) Earnings for the period ended September 30, 2024 $ 229,857 Industrial segment earnings as a percentage of segment net sales were 17.7% for fiscal year 2024, compared to 14.1% for fiscal year 2023.
Industrial segment earnings decreased by $47,333, or 20.6%, to $182,524 for fiscal year 2025, compared to $229,857 for fiscal year 2024. 31 The net decrease in Industrial segment earnings for fiscal year 2025 was due to the following: Earnings for the period ended September 30, 2024 $ 229,857 Sales volume and mix (82,055 ) Price, inflation, and productivity 55,414 Effects of changes in foreign currency rates 8,339 Other, net (29,031 ) Earnings for the period ended September 30, 2025 $ 182,524 Industrial segment earnings as a percentage of segment net sales were 14.6% for fiscal year 2025, compared to 17.7% for fiscal year 2024.

… 100 more changes not shown on this page.

Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

5 edited+0 added−0 removed9 unchanged
Biggest changeThe percentages of our net sales denominated in a currency other than the USD were as follows: For the Year Ended September 30, 2024 2023 Functional currency: EUR 14.1 % 14.8 % RMB 8.7 % 6.3 % JPY 2.3 % 2.4 % GBP 2.0 % 2.1 % All other foreign currencies 2.7 % 2.9 % 29.8 % 28.5 % Currency exchange rates vary daily and often one currency strengthens against the USD while another currency weakens.
Biggest changeThe percentages of our net sales denominated in a currency other than the USD were as follows: For the Year Ended September 30, 2025 2024 Functional currency: EUR 16.0 % 14.1 % RMB 3.6 % 8.7 % JPY 2.3 % 2.3 % GBP 2.4 % 2.0 % All other foreign currencies 2.9 % 2.7 % 27.2 % 29.8 % Currency exchange rates vary daily and often one currency strengthens against the USD while another currency weakens.
Because of the complex interrelationship of our worldwide supply chains and distribution channels, it is difficult to quantify the impact of a particular change in exchange rates. We use derivative instruments as risk management tools that involve complexity and are not used for trading or speculative purposes.
Because of the complex interrelationship of our worldwide supply chains and distribution channels, it is difficult to quantify the impact of a particular change in exchange rates. We use derivative and/or hedging instruments as risk management tools that involve complexity and are not used for trading or speculative purposes.
Although these translation changes have no immediate cash impact, the translation changes may impact future borrowing capacity, debt covenants, and the overall value of our net assets.
Although these translation changes have no immediate cash impact, the translation changes may impact future borrowing capacity, debt covenants, and the overall value of our 40 net assets.
Foreign currency exchange rate risk is mitigated through several means, including the invoicing of customers in the same currency as the source of the products, and the prompt settlement of inter-company balances utilizing a global netting system. 39
Foreign currency exchange rate risk is mitigated through several means, including the invoicing of customers in the same currency as the source of the products, and the prompt settlement of inter-company balances utilizing a global netting system. 41
As of September 30, 2024 and 2023, we had no open foreign currency exchange rate contracts and all previous exchange rate derivative instruments were settled or terminated.
As of September 30, 2025 and 2024, we had no open foreign currency exchange rate contracts and all previous exchange rate derivative instruments were settled or terminated.

Other WWD 10-K year-over-year comparisons