Hexcel (HXL) Q2 2026 earnings summary

Executive summary

• Q2 2026 sales rose 8% year-over-year to $529.3 million, with adjusted EPS up 32% to $0.66 and GAAP EPS at $0.64; net income increased 265% to $49.3 million.

• Growth was driven by strong commercial aerospace demand, especially for Airbus A350 and Boeing 787, while defense, space, and other sales declined due to portfolio pruning and divestitures.

• Gross margin improved to 26.1% from 22.8% year-over-year, reflecting operating leverage and cost absorption.

• Raised full-year 2026 sales guidance to $2.025–$2.125 billion and adjusted EPS to $2.30–$2.40.

• Leading provider of aerospace composites with 18 manufacturing plants and 5,563 employees as of December 31, 2025.

Financial highlights

• Adjusted operating margin rose to 13.9% from 11.1% in Q2 2025; operating margin increased to 13.7% from 6.1% year-over-year.

• Adjusted EBITDA for the first six months was $216 million (21% margin), up 25% year-over-year; LTM adjusted EBITDA was $382 million.

• Free cash flow for the first half was $52 million, compared to a use of $47 million in the prior year; LTM free cash flow was $346 million.

• Net cash from operations was $97 million for the first six months, versus a use of $5 million last year.

• Cash on hand at June 30, 2026 was $62.2 million; total debt was $959.4 million, down from $993.0 million at year-end 2025.

Outlook and guidance

• Full-year 2026 sales guidance raised to $2.025–$2.125 billion; adjusted EPS to $2.30–$2.40.

• Free cash flow guidance unchanged at >$195 million; CapEx to remain below $100 million.

• Multi-year period of strong cash generation anticipated, supported by increasing production rates and existing capacity.

• Path to 18% adjusted operating margin by decade's end as OEM and defense primes reach target production rates.

• Seasonality expected in Q3, with higher hiring and startup costs impacting margins in the second half.