Earnings Recap — Q2 FY2026
CY Q3 2026 · Reported August 6, 2026 · Beat 7 of last 7 quarters
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Howmet's gas turbine revenue growth of 38% and the completion of negotiations with all 7 major IGT customers underscore the critical role of natural gas power generation in supporting AI data center buildout. The company's capacity expansions and elevated CapEx plans signal sustained demand for turbine components, directly tied to AI infrastructure electricity needs.
Howmet delivered a strong Q2 with revenue up 24% YoY (21% organic), EBITDA up 39%, and EPS up 46% to $1.33, all exceeding guidance. Engine Products led with revenue up 32% and EBITDA margin up 470 bps to 37.7%, while Fastening Systems grew 37% (including CAM and Brunner) with margins up 90 bps. Spares revenue across commercial aero, defense, and gas turbines grew 37% to ~$460M, now ~22% of total revenue. The company completed the CAM acquisition on April 6, repurchased $300M of stock in Q2 plus $200M in July, and retired $186M of debt.
Management raised full-year 2026 guidance across the board: revenue to $10.05B (+/- $50M), EBITDA to $3.23B (+/- $20M), EPS to $5.27 (+/- $0.04), and FCF to $1.9B (+/- $50M). They expect Q3 revenue of $2.575B, EBITDA of $830M, and EPS of $1.35. The IGT demand picture remains extraordinary, with all 7 major customers now under contract and some already seeking to expand volumes; management expects growth to continue through 2028-2030 as new capacity comes online. CapEx will exceed $500M in 2026 and step up further in 2027, supporting both IGT and commercial aerospace expansions. They expect to provide initial 2027 revenue guidance in November, with revenue expected to increase over 2026. Leverage is expected to return to ~1x net debt-to-EBITDA by year-end, and management signaled continued buybacks and a willingness to pursue further bolt-on M&A.
“Howmet has a market share in excess of 50% globally for turbine blades in the IGT market. And therefore, the growth of that market is dependent upon our willingness to invest, which we're doing.”
on IGT market leadership
“We have completed negotiations with the last of our 7 major customers, though the overall picture continues to expand with some customers already wanting to revisit and add to their demand outlooks.”
on Gas turbine demand
“So I think we're looking at really sometime in the 2040s or maybe in 2050s to consider this as a likely outcome.”
on Space-based data centers
What are you seeing in the competitive dynamics in the IGT market in terms of technology advantage and scale, and how are you thinking about your ability to support these ramps as peers also seek new business?
John Plant highlighted Howmet's >50% global share in IGT turbine blades, making market growth dependent on their investment. He detailed expansions in Japan, Europe, and Virginia, and noted new applications and product introductions that could increase share. He also downplayed space-based data centers as a near-term threat, citing technical hurdles and a 2040s-2050s timeline.
How quickly can you respond to IGT demand given the extraordinary growth, and is it possible to respond to this kind of growth as the leading blade player?
John Plant explained that 2026 growth has exceeded expectations through yield improvements and some new capacity. New commitments made now would deliver earliest in August 2028, with further growth into 2029-2030. He noted they are booking machine tool capacity ahead of demand to ensure responsiveness.
Can you give an update on what you're seeing on aerospace OEM and wide-body market rates, and whether Howmet has enough capacity for targeted rates?
John Plant said equipment is flexible across narrow-body and wide-body, so it's about aggregate demand. He expects wide-body increases at Boeing 787 to Rate 10 and beyond, and Airbus A350 moving from Rate 5-6 to 8-9. He mentioned a new plant committed last week to support further expansion.