Q2 FY2026
Filed Jul 29, 2026Hexcel reports Q2 2026 sales growth of 8.0%, adjusted diluted EPS of $0.66, and increases FY 2026 sales and adjusted EPS guidance.
Commercial Aerospace demand drove double-digit segment growth, consolidated sales rose 8.0%, gross margin expanded, adjusted operating margin improved, adjusted diluted EPS increased 32.0%, and the company raised sales and adjusted EPS guidance.
Key metrics
shortened, hover for the filing’s print| Metric | Value | q/q | y/y |
|---|---|---|---|
| Net Sales, Q2 2026GAAP | $529.3M | – | 8.0% |
| Net sales change in constant currency, Q2 2026other | 8.1% | – | – |
| Operating Income, Q2 2026GAAP | $72.6M | – | 142.0% |
| Net Income, Q2 2026GAAP | $49.3M | – | 265.2% |
| Diluted net income per common share, Q2 2026GAAP | $0.64 | – | 276.5% |
| Adjusted Operating Income, Q2 2026non-GAAP | $73.6M | – | 35.8% |
| Adjusted operating income as a % of sales, Q2 2026non-GAAP | 13.9% | – | – |
| Adjusted Net Income, Q2 2026non-GAAP | $50.2M | – | 24.3% |
| Adjusted diluted net income per share, Q2 2026non-GAAP | $0.66 | – | 32.0% |
| Gross margin, Q2 2026GAAP | 26.1% | – | – |
| Selling, general and administrative expenses as a percentage of sales, Q2 2026GAAP | 8.9% | – | – |
| R&D expenses as a percentage of sales, Q2 2026GAAP | 3.3 % | – | – |
| Restructuring charges, Q2 2026GAAP | $1M | – | – |
| Sales, first six months of 2026GAAP | $1.03B | – | 8.9% |
| Net sales change in constant currency, first six months of 2026other | 8.5% | – | – |
| Operating Income, first six months of 2026GAAP | $130.2M | – | 75.5% |
| Net Income, first six months of 2026GAAP | $86.5M | – | 104.0% |
| Diluted net income per common share, first six months of 2026GAAP | $1.13 | – | 117.3% |
| Adjusted Operating Income, first six months of 2026non-GAAP | $141.1M | – | 41.8% |
| Adjusted operating income as a % of sales, first six months of 2026non-GAAP | 13.7% | – | – |
| Adjusted Net Income, first six months of 2026non-GAAP | $95.7M | – | 35.7% |
| Adjusted diluted net income per share, first six months of 2026non-GAAP | $1.25 | – | 43.7% |
| Gross margin, first six months of 2026GAAP | 26.5% | – | – |
| Selling, general and administrative expenses as a percentage of sales, first six months of 2026GAAP | 9.4% | – | – |
| R&D expenses as a percentage of sales, first six months of 2026GAAP | 3.4% | – | – |
| Net cash provided by operating activities, first six months of 2026GAAP | $96.7M | – | – |
| Working capital cash use, first six months of 2026other | $72.2M | – | – |
| Capital expenditures on a cash basis, first six months of 2026other | $44.9M | – | – |
| Free cash flow, first six months of 2026non-GAAP | $51.8M | – | – |
| Capital expenditures on an accrual basis, first six months of 2026other | $37.2M | – | – |
Segments
| Segment | Revenue | q/q | y/y |
|---|---|---|---|
| Commercial Aerospace, Q2 2026Sales growth was led by the Airbus A350 and Boeing 787 widebodies. Narrowbody sales also increased year over year including the Boeing 737 MAX, Airbus A320neo and Airbus A220. | $346.6M | – | 18.3% |
| Defense, Space & Other, Q2 2026The sales decrease reflected the September 30, 2025 divestment of the Austrian-based industrial business. | $182.7M | – | decreased 7.2% |
| Commercial Aerospace, first six months of 2026Growth in all four of the major platforms including the Airbus A350 and A320neo and the Boeing 787 and 737 MAX. | $679.3M | – | 18.5% |
| Defense, Space & Other, first six months of 2026The sales decrease reflected the September 30, 2025 divestment of the Austrian-based industrial business. | $351.5M | – | decreased 5.8% |
FY 2026 outlook
- RevenueSales of $2.025 billion to $2.125 billion
- NoteAdjusted diluted earnings per share of $2.30 to $2.40
- NoteFree cash flow of greater than $195 million
- NoteCapital expenditures less than $100 million
Capital returns
- During the second quarter of 2026, the Company did not repurchase shares.
- The aggregate remaining authorization under the share repurchase program as of June 30, 2026 was approximately $380.6 million.
- The Board of Directors declared a quarterly dividend of $0.18 per share payable to stockholders of record as of August 10, 2026, with a payment date of August 17, 2026.
What drove it
- Commercial Aerospace sales increased 18.3% (18.8% in constant currency) in Q2 2026.
- Sales growth was particularly strong for the Airbus A350 and Boeing 787 programs.
- Gross margin benefited from higher sales leverage in Q2 2026.
- First-half gross margin benefited from higher sales leverage and mix.
- Other Commercial Aerospace sales increased 3.7% in Q2 2026 from growth in regional jets.
- Other Commercial Aerospace increased 9.2% in the first six months of 2026 with sales increasing for both regional and business jets.
Concerns
- Defense, Space & Other sales decreased 7.2% (7.7% in constant currency) in Q2 2026.
- The Defense, Space & Other sales decrease reflected the September 30, 2025 divestment of the Austrian-based industrial business.
- The impact of exchange rates on operating income as a percent of sales was unfavorable by approximately 90 basis points in Q2 2026 compared to Q2 2025.
- R&D expenses as a percentage of sales were 3.3 % in Q2 2026 compared to 2.9% in Q2 2025.
- The company is adding headcount and accelerating the restart of previously idle assets.
What to watch
- Execution on adding headcount and accelerating the restart of previously idle assets.
- Commercial Aerospace demand signals and build rates for the Airbus A350, Boeing 787, Boeing 737 MAX, Airbus A320neo and Airbus A220.
- Defense, Space & Other sales following the divestment of the Austrian-based industrial business.
- Progress toward free cash flow of greater than $195 million and capital expenditures less than $100 million.
- Debt paydown following the borrowing for the accelerated share repurchase executed in late 2025.
Balance sheet and cash flow
- Net cash provided by operating activities in the first six months of 2026 was $96.7 million, compared to net cash used of $5.2 million for the first six months of 2025.
- Working capital was a cash use of $72.2 million for the first six months of 2026 and a use of $124.5 million for the comparable period in 2025.
- Free cash flow was $51.8 million in the first six months of 2026 compared to ($46.6) million in the first six months of 2025.
- During the second quarter of 2026, the Company issued $400 million of 4.9% unsecured senior notes due in May 2031, using the proceeds to redeem the $400 million of 3.95% unsecured senior notes that were due in February 2027.
Analysis
Hexcel delivered a strong second quarter, with net sales of $529.3 million, up 8.0% from $489.9 million. Commercial Aerospace was the primary growth engine, with sales of $346.6 million up 18.3%, led by Airbus A350 and Boeing 787 widebody demand. Narrowbody sales also increased across the Boeing 737 MAX, Airbus A320neo and Airbus A220 programs. Defense, Space & Other sales of $182.7 million decreased 7.2%, reflecting the divestment of the Austrian-based industrial business.
Profitability improved materially. Q2 gross margin was 26.1% compared with 22.8%, benefiting from higher sales leverage. GAAP operating income rose to $72.6 million from $30.0 million, while adjusted operating income increased to $73.6 million from $54.2 million and adjusted operating margin improved to 13.9% from 11.1%. Adjusted diluted net income per share increased to $0.66 from $0.50. Exchange rates reduced operating income as a percent of sales by approximately 90 basis points compared with the prior-year quarter.
First-half operating and cash flow results also improved. Sales for the first six months were $1,030.8 million, up 8.9%, while adjusted operating income was $141.1 million, or 13.7% of sales, compared with $99.5 million, or 10.5% of sales. Net cash provided by operating activities was $96.7 million, compared with net cash used of $5.2 million, and free cash flow was $51.8 million compared with ($46.6) million. Working capital remained a cash use, although the stated use was lower than in the comparable period.
The company raised FY 2026 sales guidance to $2.025 billion to $2.125 billion from $2.0 billion to $2.1 billion and increased adjusted diluted EPS guidance to $2.30 to $2.40 from $2.10 to $2.30. Free cash flow guidance of greater than $195 million and capital expenditure guidance of less than $100 million were unchanged. During the quarter, Hexcel refinanced $400 million of notes due in February 2027 with $400 million of 4.9% unsecured senior notes due in May 2031. The company did not repurchase shares and stated that it will continue to pay down debt as it generates cash.
Management, verbatim
Rising build rates at our commercial aerospace customers drove strong sales growth this quarter. Sales growth was particularly strong for both the Airbus A350 and Boeing 787 programs, with quarterly sales for these two platforms reaching their highest levels since before the pandemic. The increase in total sales generated meaningful operating leverage that contributed to solid earnings for the quarter with adjusted EPS of $0.66 per share.
Tom Gentile, Chairman, CEO and President
Last year, we intentionally lagged adding headcount as we sought greater certainty around customer demand. With the commercial aerospace recovery taking hold and improving visibility to future rates, we are now adding headcount and accelerating the restart of previously idle assets. Our focus remains on execution as we position Hexcel to benefit from a multi-year growth cycle under existing contracts and from the growing adoption of advanced, lightweight composites across aerospace platforms. Given the strengthening demand signals from our customers, we are increasing our 2026 sales and adjusted EPS guidance. As we generate cash this year, we will continue to pay down debt following the borrowing for the accelerated share repurchase executed in late 2025.
Tom Gentile, Chairman, CEO and President
Not in the filing
stated, not guessed- Prior-quarter comparisons for reported Q2 metrics.
- Q2 operating cash flow, free cash flow, working capital, and capital expenditures.
- Cash balance as of June 30, 2026.
- Total debt balance as of June 30, 2026.
- Gross profit amounts.
- Tax rate.
- GAAP operating margin.
- Share count.
- A separately provided previous outlook section for comparison with actual results.
AlphAI analysis generated from the company’s SEC earnings filing (Form 8-K Item 2.02, or Form 6-K for a foreign private issuer). Every figure was cross-checked against the filing text; consensus estimates, price targets and share-price reactions are not shown because they are not in the filing. AI-generated research, not investment advice.