10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the Quarterly Period Ended September 30, 2026

☐ Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

For the transition period from to

Commission File Number 1-8472

Hexcel Corporation

(Exact name of registrant as specified in its charter)


Delaware		94-1109521
(State or Other Jurisdiction of Incorporation or Organization)		(I.R.S. Employer Identification No.)

Two Stamford Plaza

281 Tresser Boulevard

Stamford, Connecticut 06901-3238

(Address of principal executive offices and zip code)

Registrant’s telephone number, including area code: (203) 969-0666

Securities registered pursuant to Section 12(b) of the Act:

     Title of each class

     Trading
Symbol(s)

     Name of each exchange on which registered

     Common Stock, par value $0.01

     HXL

     New York Stock Exchange

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes  No 

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes  No 

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.


Large accelerated filer 		Accelerated filer 
Non-accelerated filer 		Smaller reporting company ☐
		Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. 

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No 

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.


Class		Outstanding at October 19, 2026
COMMON STOCK		75,701,918

HEXCEL CORPORATION AND SUBSIDIARIES

INDEX


			Page
PART I.	FINANCIAL INFORMATION		3

ITEM 1.	Condensed Consolidated Financial Statements (Unaudited)		3

	•	Condensed Consolidated Balance Sheets — September 30, 2026 and December 31, 2025	3

	•	Condensed Consolidated Statements of Operations — The quarters and nine months ended September 30, 2026 and 2025	4

	•	Condensed Consolidated Statements of Comprehensive Income — The quarters and nine months ended September 30, 2026 and 2025	4

	•	Condensed Consolidated Statements of Cash Flows — The nine months ended September 30, 2026 and 2025	5

	•	Condensed Consolidated Statements of Stockholders’ Equity — The quarters and nine months ended September 30, 2026 and 2025	6

	•	Notes to Condensed Consolidated Financial Statements	7

ITEM 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations		18

ITEM 3.	Quantitative and Qualitative Disclosures About Market Risk		23

ITEM 4.	Controls and Procedures		23

PART II.	OTHER INFORMATION		23

ITEM 1.	Legal Proceedings		23

ITEM 1A.	Risk Factors		23

ITEM 5.	Other Information		24

ITEM 6.	Exhibits		25

	SIGNATURE		26

PART I. FINANCIAL INFORMATION

ITEM 1. Condensed Consolidated Financial Statements

Hexcel Corporation and Subsidiaries

Condensed Consolidated Balance Sheets


	(Unaudited)
	September 30,			December 31,
(In millions)	2026			2025
Assets
Current assets:
Cash and cash equivalents	$	77.8		$	71.0
Accounts receivable, net		271.6			249.3
Inventories, net		357.4			328.8
Contract assets		41.7			35.9
Prepaid expenses and other current assets		49.5			45.7
Total current assets		798.0			730.7

Property, plant and equipment		3,344.5			3,322.4
Less accumulated depreciation		(1,769.5	)		(1,710.9	)
Net property, plant and equipment		1,575.0			1,611.5

Goodwill and other intangible assets, net		233.9			239.8
Investments in affiliated companies		5.0			5.0
Other assets		117.3			117.0
Total assets	$	2,729.2		$	2,704.0

Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable	$	139.4		$	146.6
Accrued compensation and benefits		79.6			79.0
Financial instruments		4.9			3.8
Accrued liabilities		86.8			93.3
Total current liabilities		310.7			322.7

Long-term debt		934.9			993.0
Retirement obligations		28.6			28.4
Deferred income taxes		102.7			86.7
Other non-current liabilities		27.9			22.5
Total liabilities		1,404.8			1,453.3
Stockholders' equity:
Common stock, $0.01 par value, 200.0 shares authorized, 113.0 shares and 112.1 shares issued at September 30, 2026 and December 31, 2025, respectively		1.1			1.1
Additional paid-in capital		1,009.7			994.9
Retained earnings		2,391.1			2,307.0
Accumulated other comprehensive loss		(49.9	)		(12.9	)
		3,352.0			3,290.1
Less – Treasury stock, at cost, 37.3 shares at September 30, 2026 and 36.4 shares at December 31, 2025		(2,027.6	)		(2,039.4	)
Total stockholders' equity		1,324.4			1,250.7
Total liabilities and stockholders' equity	$	2,729.2		$	2,704.0

The accompanying notes are an integral part of these condensed consolidated financial statements.


Hexcel Corporation and Subsidiaries
Condensed Consolidated Statements of Operations

	(Unaudited)					(Unaudited)
	Quarters Ended September 30,					Nine Months Ended September 30,
(In millions, except per share data)	2026			2025		2026		2025
Net sales	$	496.4		$	456.2	$	1,527.2	$	1,402.6
Cost of sales		380.9			356.3		1,138.9		1,088.8
Gross margin		115.5			99.9		388.3		313.8
Selling, general and administrative expenses		44.9			41.1		141.5		127.4
Research and technology expenses		16.2			14.0		51.3		42.1
Other operating expense		(0.4	)		8.8		10.5		34.1
Operating income		54.8			36.0		185.0		110.2
Interest expense, net		12.1			9.2		35.9		26.1
Other expense (income)		-			—		0.2		(0.5	)
Income before income taxes		42.7			26.8		148.9		84.6
Income tax expense		4.1			6.2		23.8		21.6
Net income	$	38.6		$	20.6	$	125.1	$	63.0
Basic net income per common share	$	0.51		$	0.26	$	1.65	$	0.78
Diluted net income per common share	$	0.50		$	0.26	$	1.63	$	0.78
Weighted-average common shares:
Basic		75.8			79.8		75.8		80.4
Diluted		76.7			80.3		76.6		80.9


Hexcel Corporation and Subsidiaries
Condensed Consolidated Statements of Comprehensive Income

	(Unaudited)						(Unaudited)
	Quarters Ended September 30,						Nine Months Ended September 30,
(In millions)	2026			2025			2026			2025
Net income	$	38.6		$	20.6		$	125.1		$	63.0
Currency translation adjustments		(4.3	)		10.2			(24.3	)		85.6
Net unrealized pension and other benefit actuarial losses and prior service credits (net of tax)		0.1			—			(0.1	)		(0.8	)
Net unrealized (losses) gains on financial instruments (net of tax)		(1.9	)		(7.8	)		(12.6	)		19.0
Total other comprehensive (loss) income		(6.1	)		2.4			(37.0	)		103.8
Comprehensive income	$	32.5		$	23.0		$	88.1		$	166.8

The accompanying notes are an integral part of these condensed consolidated financial statements.

Hexcel Corporation and Subsidiaries

Condensed Consolidated Statements of Cash Flows


	(Unaudited)
	Nine Months Ended September 30,
(In millions)	2026			2025
Cash flows from operating activities
Net income	$	125.1		$	63.0
Reconciliation to net cash provided by operating activities:
Depreciation and amortization		90.5			91.5
Amortization related to financing		1.1			0.1
Deferred income taxes		22.5			7.8
Stock-based compensation		18.4			13.4
Restructuring expenses, net of payments		0.3			10.7
Debt extinguishment costs		0.7			0.4
Loss on divestiture of assets		—			4.9
Changes in assets and liabilities:
Increase in accounts receivable		(23.9	)		(8.0	)
(Increase) decrease in inventories		(35.5	)		16.5
Increase in prepaid expenses and other current assets		(14.3	)		(16.8	)
Decrease in accounts payable/accrued liabilities		(4.4	)		(55.5	)
Other – net		(9.4	)		(23.0	)
Net cash provided by operating activities		171.1			105.0

Cash flows from investing activities
Capital expenditures		(68.6	)		(55.1	)
Payments on divestiture of assets		—			(2.7	)
Net cash used for investing activities		(68.6	)		(57.8	)

Cash flows from financing activities
Borrowing from senior unsecured credit facility - 2028		15.0			160.0
Repayment of senior unsecured credit facility - 2028		(310.0	)		(100.0	)
Borrowing from senior unsecured credit facility - 2031		580.0			—
Repayment of senior unsecured credit facility - 2031		(340.0	)		—
Redemption of 4.7% senior notes due 2025		—			(300.0	)
Proceeds from issuance of 5.875% senior notes due 2035		—			300.0
Redemption of 3.95% senior notes due 2027		(400.0	)		—
Proceeds from issuance of 4.9% senior notes due 2031		400.0			—
Repurchases of common stock		—			(100.9	)
Issuance costs related to senior unsecured credit facilities		(2.3	)		(4.1	)
Issuance costs related to senior notes		(4.6	)		—
Repayment of finance lease obligation and other debt, net		0.2			—
Dividends paid		(40.9	)		(41.0	)
Activity under stock plans		8.1			0.5
Net cash used for financing activities		(94.5	)		(85.5	)
Effect of exchange rate changes on cash and cash equivalents		(1.2	)		3.4
Net increase (decrease) in cash and cash equivalents		6.8			(34.9	)
Cash and cash equivalents at beginning of period		71.0			125.4
Cash and cash equivalents at end of period	$	77.8		$	90.5
Supplemental data:
Accrual basis additions to plant, property and equipment	$	61.2		$	49.9

The accompanying notes are an integral part of these condensed consolidated financial statements.

Hexcel Corporation and Subsidiaries

Condensed Consolidated Statements of Stockholders’ Equity (Unaudited)

For the Quarter and Nine Months ended September 30, 2026, and September 30, 2025


									Accumulated
			Additional						Other						Total
			Paid-In			Retained			Comprehensive			Treasury			Stockholders’
(In millions)	Par		Capital			Earnings			Loss			Stock			Equity
Balance, December 31, 2024	$	1.1	$	970.0		$	2,251.5		$	(115.0	)	$	(1,579.7	)	$	1,527.9
Net income	—		—				28.9		—			—				28.9
Dividends on common stock ($0.17 per share)	—		—				(13.8	)	—			—				(13.8	)
Repurchases of common stock	—		—			—			—				(50.4	)		(50.4	)
Change in other comprehensive loss– net of tax	—		—			—				33.7		—				33.7
Stock-based activity	—			11.0		—			—				(4.7	)		6.3
Balance, March 31, 2025	$	1.1	$	981.0		$	2,266.6		$	(81.3	)	$	(1,634.8	)	$	1,532.6
Net income	—		—				13.5		—			—				13.5
Dividends on common stock ($0.17 per share)	—		—				(13.7	)	—			—				(13.7	)
Repurchases of common stock	—		—			—			—				(50.5	)		(50.5	)
Change in other comprehensive loss– net of tax	—		—			—				67.7		—				67.7
Stock-based activity	—			4.4		—			—				(0.1	)		4.3
Balance, June 30, 2025	$	1.1	$	985.4		$	2,266.4		$	(13.6	)	$	(1,685.4	)	$	1,553.9
Net income	—		—				20.6		—			—				20.6
Dividends on common stock ($0.17 per share)	—		—				(13.5	)	—			—				(13.5	)
Repurchases of common stock	—		—			—			—				—			—
Change in other comprehensive loss– net of tax	—		—			—				2.4		—				2.4
Stock-based activity	—			3.4		—			—				(0.1	)		3.3
Balance, September 30, 2025	$	1.1	$	988.8		$	2,273.5		$	(11.2	)	$	(1,685.5	)	$	1,566.7

									Accumulated
			Additional						Other						Total
			Paid-In			Retained			Comprehensive			Treasury			Stockholders’
(In millions)	Par		Capital			Earnings			Loss			Stock			Equity
Balance, December 31, 2025	$	1.1	$	994.9		$	2,307.0		$	(12.9	)	$	(2,039.4	)	$	1,250.7
Net income	—		—				37.2		—			—				37.2
Dividends on common stock ($0.18 per share)	—		—				(13.7	)	—			—				(13.7	)
Repurchases of common stock	—			(16.4	)	—			—				16.4			—
Change in other comprehensive (loss) income– net of tax	—		—			—				(17.6	)	—				(17.6	)
Stock-based activity	—			14.0		—			—				(4.4	)		9.6
Balance, March 31, 2026	$	1.1	$	992.5		$	2,330.5		$	(30.5	)	$	(2,027.4	)	$	1,266.2
Net income	—		—				49.3		—			—				49.3
Dividends on common stock ($0.18 per share)	—		—				(13.6	)	—			—				(13.6	)
Change in other comprehensive loss– net of tax	—		—			—				(13.3	)	—				(13.3	)
Stock-based activity	—			9.8		—			—				(0.2	)		9.6
Balance, June 30, 2026	$	1.1	$	1,002.3		$	2,366.2		$	(43.8	)	$	(2,027.6	)	$	1,298.2
Net income	—		—				38.6		—			—				38.6
Dividends on common stock ($0.18 per share)	—		—				(13.7	)	—			—				(13.7	)
Change in other comprehensive loss– net of tax	—		—			—				(6.1	)	—				(6.1	)
Stock-based activity	—			7.4		—			—			—				7.4
Balance, September 30, 2026	$	1.1	$	1,009.7		$	2,391.1		$	(49.9	)	$	(2,027.6	)	$	1,324.4

The accompanying notes are an integral part of these condensed consolidated financial statements.

HEXCEL CORPORATION AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

Note 1 — Significant Accounting Policies

In these notes, the terms “Hexcel,” “the Company,” “we,” “us,” or “our” mean Hexcel Corporation and subsidiary companies. The accompanying condensed consolidated financial statements are those of Hexcel Corporation. Refer to Note 1 to the consolidated financial statements included in the Annual Report on Form 10-K for the year ended December 31, 2025 for a discussion of our significant accounting policies.

Basis of Presentation

The accompanying condensed consolidated financial statements have been prepared from the unaudited accounting records of Hexcel pursuant to rules and regulations of the Securities and Exchange Commission (“SEC”) and in accordance with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial information. Certain information and footnote disclosures normally included in financial statements have been omitted pursuant to rules and regulations of the SEC. In the opinion of management, the condensed consolidated financial statements include all normal recurring adjustments as well as any non-recurring adjustments necessary to present fairly the statement of financial position, results of operations, cash flows and statement of stockholders’ equity for the interim periods presented. The Condensed Consolidated Balance Sheet as of December 31, 2025 was derived from the audited 2025 consolidated balance sheet. Interim results are not necessarily indicative of results expected for any other interim period or for the full year. These consolidated financial statements should be read in conjunction with the consolidated financial statements and notes thereto included in our 2025 Annual Report on Form 10-K.

Commencing with the first quarter of 2026, we have renamed our Research and Technology ("R&T") function to Research and Development ("R&D").

Note 2 — Net Income Per Common Share


	Quarters Ended September 30,				Nine Months Ended September 30,
(In millions, except per share data)	2026		2025		2026		2025
Basic net income per common share:
Net income	$	38.6	$	20.6	$	125.1	$	63.0
Weighted average common shares outstanding		75.8		79.8		75.8		80.4

Basic net income per common share	$	0.51	$	0.26	$	1.65	$	0.78

Diluted net income per common share:
Net income	$	38.6	$	20.6		125.1		63.0

Weighted average common shares outstanding — Basic		75.8		79.8		75.8		80.4
Plus incremental shares from assumed conversions:
Restricted stock units		0.4		0.4		0.4		0.3
Stock options		0.4		0.2		0.4		0.2
Weighted average common shares outstanding — Dilutive		76.7		80.3		76.6		80.9

Diluted net income per common share	$	0.50	$	0.26	$	1.63	$	0.78

Total common stock equivalents of 0.1 million and 1.0 million were excluded from the computation of diluted net income per share for the quarters ended September 30, 2026 and 2025, respectively, because to include would have been anti-dilutive. Total common stock equivalents of 0.1 million and 1.1 million were excluded from the computation of diluted net income per share for the nine months ended September 30, 2026 and 2025, respectively, because to include would have been anti-dilutive.

Note 3 — Inventories



(In millions)	September 30, 2026		December 31, 2025
Raw materials	$	196.8	$	150.7
Work in progress		45.9		42.3
Finished goods		114.7		135.8
Total Inventory	$	357.4	$	328.8

Note 4 — Retirement and Other Postretirement Benefit Plans

We maintain qualified and nonqualified defined benefit retirement plans covering certain current and former U.S. and European employees, retirement savings plans covering eligible U.S. and U.K. employees and certain postretirement health care and life insurance benefit plans covering eligible U.S. retirees. We also participate in a union sponsored multi-employer pension plan covering certain U.S. employees with union affiliations.

Defined Benefit Retirement Plans

We have nonqualified defined benefit retirement plans covering certain current and former employees that are funded as benefits are incurred. Expense related to the defined benefit retirement plans for the quarters ended September 30, 2026 and 2025 was $0.4 million and $0.5 million, respectively. Expense related to the defined benefit retirement plans for the nine months ended September 30, 2026 and 2025 was $1.1 million and $1.5 million, respectively.

Postretirement Health Care and Life Insurance Benefit Plans

We provide certain postretirement health care and life insurance benefits to eligible retirees. Depending upon the plan, benefits are available to eligible employees who retire after meeting certain age and service requirements and were employed by Hexcel as of February 1996. Our funding policy for the postretirement health care and life insurance benefit plans is generally to pay covered expenses as they are incurred. Net periodic benefit costs of our postretirement health care and life insurance benefit plans for the quarters and nine months ended September 30, 2026 and 2025 were not material.

Note 5 –– Debt


(In millions)	September 30, 2026			December 31, 2025
Senior unsecured credit facility	$	240.0		$	295.0
3.95% senior notes --- due 2027		—			400.0
5.875% senior notes --- due 2035		300.0			300.0
4.9% senior notes --- due 2031		400.0			—
Senior notes --- original issue discount		(0.4	)		(0.2	)
Senior notes --- deferred financing costs		(6.8	)		(3.9	)
Non-current portion of finance lease and other debt		2.1			2.1
Long-term debt		934.9			993.0
Total debt	$	934.9		$	993.0

On March 31, 2026, the Company entered into a new credit agreement (the “Credit Agreement”) to refinance its senior unsecured credit facility (the “Facility”). Under the terms of the Credit Agreement the borrowing capacity remained at $750 million. The Facility matures on March 31, 2031. In connection with the refinancing, the Company incurred approximately $1.9 million in financing costs which were deferred and will be amortized over the term of the Facility. In addition, the Company incurred a charge of approximately $0.3 million for closing costs related to the refinancing which were recorded in Other expense on the Condensed Consolidated Statements of Operations for the nine months ended September 30, 2026.

Borrowings under the Facility bear interest, at Hexcel’s option, for SOFR rate borrowings at (i) an Adjusted Term SOFR rate (subject to a 0.00% floor), where such “Adjusted Term SOFR” rate is equal to the Term SOFR rate for the applicable interest period, plus the Applicable Margin or (ii) for base rate borrowings, the greatest of (a) the prime rate, (b) the federal funds rate plus 0.50% and (c) the Adjusted Term SOFR rate (subject to a 0.00% floor) for a one-month interest period plus 1.00%, in each case plus the

Applicable Margin. The “Applicable Margin” initially was 1.125% for SOFR rate borrowings and 0.125% for base rate borrowings. After the date the Agent received a compliance certificate for the fiscal quarter ended March 31, 2026, the Applicable Margin can fluctuate, determined by reference to the more favorable to Hexcel of its (x) public debt rating and (y) consolidated leverage ratio, as specified in the Credit Agreement. Up to $50 million of the Facility may be used for letters of credit. The Credit Agreement enables Hexcel, from time to time, to add term loans or to increase the revolving credit commitment in an aggregate amount not to exceed $500 million.

As of September 30, 2026, total borrowings under the Facility were $240.0 million, which approximated fair value. Outstanding letters of credit reduce the amount available for borrowing under the Facility. As of September 30, 2026, there were no issued letters of credit under the Facility, resulting in undrawn availability under the Facility of $510.0 million. The weighted average interest rate for the Facility as of September 30, 2026, over the six months since inception, was 4.79%. The Company was in compliance with all debt covenants as of September 30, 2026.

During the second quarter of 2026, the Company issued $400 million in aggregate principal amount of 4.9% Senior Unsecured Notes due in 2031. The interest rate on these senior notes may be increased by 0.25% each time a credit rating applicable to the notes is downgraded. The maximum rate is 6.9%. Interest on the notes will be payable semiannually in arrears on May 15 and November 15 of each year, beginning on November 15, 2026. The effective interest rate as of September 30, 2026, for the period since inception, was 5.1%. The issuance of these senior notes resulted in the Company incurring financing fees of $3.9 million that have been deferred and will be recognized over the term of the senior notes. Based on quoted prices, the fair value of the 4.9% Senior Unsecured Notes was $384.2 million at September 30, 2026.

In conjunction with the issuance of the 4.9% Senior Unsecured Notes, the Company redeemed the $400 million in aggregate principal amount of 3.95% Senior Unsecured Notes that were due in February 2027. The redemption of these senior notes resulted in debt extinguishment costs of $0.7 million which were recorded in Other expense on the Condensed Consolidated Statements of Operations for the nine months ended September 30, 2026.

During the first quarter of 2025, the Company issued $300 million in aggregate principal amount of 5.875% Senior Unsecured Notes due in 2035. The interest rate on these senior notes may be increased by 0.25% each time a credit rating applicable to the notes is downgraded. The maximum rate is 7.875%. Interest on the notes is payable semiannually in arrears on February 26 and August 26 of each year, beginning on August 26, 2025. The effective interest rate for the nine months ended September 30, 2026 was 6.0% inclusive of an approximately 0.10% benefit of treasury locks. The issuance of these senior notes resulted in the Company incurring financing fees of $3.9 million that have been deferred and will be recognized over the term of the senior notes. Based on quoted prices, the fair value of the 5.875% Senior Unsecured Notes was $289.8 million at September 30, 2026.

In conjunction with the issuance of the 5.875% Senior Unsecured Notes, the Company redeemed the $300 million in aggregate principal amount of 4.7% Senior Unsecured Notes that were due in August 2025. The redemption of these senior notes resulted in debt extinguishment costs of $0.4 million which were recorded in Other expense on the Condensed Consolidated Statements of Operations for the nine months ended September 30, 2025.

Note 6 — Derivative Financial Instruments

The Company entered into treasury lock agreements to protect against unfavorable movements in the benchmark treasury rate related to the issuance of our 5.875% Senior Unsecured Notes. These hedges were designated as cash flow hedges, thus any change in fair value was recorded as a component of other comprehensive income. As part of the issuance of our 5.875% Senior Unsecured Notes, we net settled these derivatives for $3.6 million in cash and the deferred gains recorded in other comprehensive income will be released to interest expense over the life of the senior notes. The remaining balance of deferred gains as of September 30, 2026 was approximately $3.0 million. The effect of the settled treasury locks reduces the effective interest rate of the senior notes by approximately 0.10%.

In conjunction with the redemption of the $400 million in aggregate principal amount of 3.95% Senior Unsecured Notes, the Company recognized a gain of $0.8 million which is recorded in Other (income) expense on the Condensed Consolidated Statements of Operations for the nine months ended September 30, 2026. This amount related to the accelerated recognition of previously deferred gains for treasury lock agreements which the Company entered into to protect against unfavorable movements in the benchmark treasury rate related to the issuance of our 3.95% Senior Unsecured Notes in 2017. The deferred gains were being amortized over the life of the 3.95% Senior Unsecured Notes and recognized as a reduction to interest expense.

Foreign Currency Forward Exchange Contracts

A number of our European subsidiaries are exposed to the impact of exchange rate volatility between the U.S. dollar and the subsidiaries’ functional currencies, being either the Euro or the British pound sterling. We have entered into contracts to exchange

U.S. dollars for Euros and British pound sterling through March 2029. The aggregate notional amount of these contracts was $406.9 million and $403.4 million at September 30, 2026 and December 31, 2025, respectively. The purpose of these contracts is to hedge a portion of the forecasted transactions of our European subsidiaries under long-term sales contracts with certain customers. These contracts are expected to provide us with a more balanced matching of future cash receipts and expenditures by currency, thereby reducing our exposure to fluctuations in currency exchange rates. The effective portion of the hedges, losses of $2.9 million and $12.1 million for the quarter and nine months ended September 30, 2026, respectively, and losses of $5.6 million and gains of $34.3 million for the quarter and nine months ended September 30, 2025, respectively, were recorded in other comprehensive income. We recognized gains of $1.3 million and $7.5 million in gross margin during the quarter and nine months ended September 30, 2026, respectively, and gains of $4.5 million and $6.3 million in gross margin during the quarter and nine months ended September 30, 2025, respectively.

In addition, we enter into foreign exchange forward contracts which are not designated as hedges. These are used to provide an offset to transactional gains or losses arising from the remeasurement of non-functional monetary assets and liabilities such as accounts receivable. The change in the fair value of the derivatives is recorded in the statement of operations. There are no credit contingency features in these derivatives. During the quarter and nine months ended September 30, 2026, we recognized net foreign exchange gains of $0.6 million and $0.7 million, respectively, in the Condensed Consolidated Statements of Operations. During the quarter and nine months ended September 30, 2025, we recognized net foreign exchange losses of $0.9 million and $1.2 million, respectively. The net foreign exchange impact recognized from these contracts offsets the translation exposure of these transactions.

The change in fair value of our foreign currency forward exchange contracts under hedge designations recorded net of tax within accumulated other comprehensive income (loss) for the quarters and nine months ended September 30, 2026 and September 30, 2025 was as follows:


	Quarters Ended September 30,						Nine Months Ended September 30,
(In millions)	2026			2025			2026			2025
Unrealized gains (losses) at beginning of period, net of tax	$	(0.8	)	$	20.2		$	10.5		$	(7.9	)
(Gains) losses reclassified to net sales		(1.2	)		(3.3	)		(6.3	)		(4.7	)
Increase (decrease) in fair value		(1.9	)		(4.1	)		(8.1	)		25.4
Unrealized (losses) gains at end of period, net of tax	$	(3.9	)	$	12.8		$	(3.9	)	$	12.8

Unrealized losses of $2.2 million recorded in accumulated other comprehensive loss, less taxes of $0.6 million, as of September 30, 2026, are expected to be reclassified into earnings over the next twelve months as the hedged sales are recorded.

Commodity Swap Agreements

We use commodity swap agreements to hedge against price fluctuations of raw materials, including propylene (the principal component of acrylonitrile). As of September 30, 2026, we had commodity swap agreements with a notional value of $19.5 million. The swaps mature monthly through September 2028. The swaps are accounted for as a cash flow hedge of our forward raw material purchases. To ensure the swaps are highly effective, all of the critical terms of the swap matched the terms of the hedged items.

The fair values of outstanding derivative financial instruments as of September 30, 2026 and December 31, 2025 were as follows:


	Prepaid and Other Current Assets				Other Assets				Current Liabilities				Non-Current Liabilities
(In millions)	September 30, 2026		December 31, 2025		September 30, 2026		December 31, 2025		September 30, 2026		December 31, 2025		September 30, 2026		December 31, 2025
Derivative Products
Foreign currency forward exchange contracts	$	2.4	$	10.7	$	0.1	$	4.0	$	3.7	$	0.2	$	3.0	$	0.3
Undesignated hedges		—		—		—		—		—		—		—		—
Commodity swaps		1.5		—		—		—		1.2		3.6		0.4		0.5
Total Derivative Products	$	3.9	$	10.7	$	0.1	$	4.0	$	4.9	$	3.8	$	3.4	$	0.8

Note 7 — Fair Value Measurements

The authoritative guidance for fair value measurements establishes a hierarchy for observable and unobservable inputs used to measure fair value, into three broad levels, which are described below:

•

Level 1: Quoted prices (unadjusted) in active markets that are accessible at the measurement date for assets or liabilities. The fair value hierarchy gives the highest priority to Level 1 inputs.

•

Level 2: Observable prices that are based on inputs not quoted on active markets but corroborated by market data.

•

Level 3: Unobservable inputs are used when little or no market data is available. The fair value hierarchy gives the lowest priority to Level 3 inputs.

In determining fair value, we utilize valuation techniques that maximize the use of observable inputs and minimize the use of unobservable inputs to the extent possible as well as consider our own and counterparty credit risk in our assessment of fair value.

We have no assets or liabilities that utilize Level 3 inputs.

For derivative assets and liabilities that utilize Level 2 inputs, we prepare estimates of future cash flows of our derivatives, which are discounted to a net present value. The estimated cash flows and the discount factors used in the valuation model are based on observable inputs and incorporate non-performance risk (the credit standing of the counterparty when the derivative is in a net asset position, and the credit standing of Hexcel when the derivative is in a net liability position). For further information on the fair value of our derivative financial instruments see Note 6, Derivative Financial Instruments. In addition, the fair value of these derivative contracts, which are subject to a master netting arrangement under certain circumstances, is presented on a gross basis in the Condensed Consolidated Balance Sheets.

Below is a summary of valuation techniques for all Level 2 financial assets and liabilities:

•

Foreign exchange derivative assets and liabilities — valued using quoted forward foreign exchange prices at the reporting date.

•

Commodity swap agreements — valued using quoted forward commodity prices at the reporting date.

Counterparties to the above contracts are highly rated financial institutions, none of which experienced any significant downgrades in the quarter ended September 30, 2026 that would reduce the receivable amount owed, if any, to the Company.

Note 8 — Revenue

Our revenue is primarily derived from the sale of inventory under long-term contracts with our customers. We have determined that individual purchase orders (“PO”), the terms and conditions of which are taken with a master agreement, create the ASC 606 contracts, which are generally short-term in nature. For those sales that are not tied to a long-term agreement, we generate a PO that is subject to our standard terms and conditions. In instances where our customers acquire our goods related to government contracts, the contracts are typically subject to terms similar, or equal to, the Federal Acquisition Regulation Part 52.249-2. This regulation contains a termination for convenience clause (“T for C”), which requires that the customer pay for the cost of both the finished and unfinished goods at the time of cancellation plus a reasonable profit.

We recognize revenue over time for those agreements that have T for C, and where the products being produced have no alternative use. As our production cycle is typically nine months or less, it is expected that goods related to the revenue recognized over time will be shipped and billed within the next twelve months. Less than half of our agreements contain provisions which would require revenue to be recognized over time. All other revenue is recognized at a point in time.

The following table details our revenue by market for the quarters and nine months ended September 30, 2026 and 2025:


	Quarters Ended September 30,				Nine Months Ended September 30,
(In millions)	2026		2025		2026		2025
Consolidated Net Sales	$	496.4	$	456.2	$	1,527.2	$	1,402.6
Commercial Aerospace		330.3		274.2		1,009.6		847.4
Defense, Space & Other		166.1		182.0		517.6		555.2

Revenue recognized over time gives rise to contract assets, which represent revenue recognized but unbilled. Contract assets are included in our Condensed Consolidated Balance Sheets as a component of current assets. The activity related to contract assets for the nine months ended September 30, 2026 was as follows:


(In millions)	Composite Material			Engineered Products			Total
Balance at December 31, 2025	$	11.4		$	24.5		$	35.9
Net revenue billed		1.2			3.3			4.5
Balance at March 31, 2026		12.6			27.8			40.4
Net revenue billed		2.0			(0.8	)		1.2
Balance at June 30, 2026		14.6			27.0			41.6
Net revenue billed		(1.7	)		1.8			0.1
Balance at September 30, 2026	$	12.9		$	28.8		$	41.7

Accounts receivable, net, includes amounts billed to customers where the right to payment is unconditional.

Note 9 — Segment Information

The financial results for our operating segments are prepared using a management approach, which is consistent with the basis and manner in which we internally segregate financial information for the purpose of assisting in making internal operating decisions. We evaluate the performance of our operating segments based on operating income, and generally account for intersegment sales based on arm’s length prices. Corporate and certain other expenses are not allocated to the operating segments, except to the extent that the expense can be directly attributable to the business segment.

We have two reportable segments: Composite Materials and Engineered Products. The Composite Materials segment is comprised of our carbon fiber, specialty reinforcements, resin systems, prepregs and other fiber-reinforced matrix materials, and honeycomb core product lines and pultruded profiles. The Engineered Products segment is comprised of lightweight high strength composite structures, radio frequency/electromagnetic interference (“RF/EMI”) and microwave absorbing materials, engineered core and specialty machined honeycomb products with added functionality.

Financial information for our operating segments for the quarters and nine months ended September, 2026 and 2025 were as follows:



	Composite			Engineered		Corporate &
(In millions)	Materials			Products		Other (a)			Total
Quarter Ended September 30, 2026
Net sales to external customers	$	390.3		$	106.1	$	—		$	496.4
Intersegment sales		26.5			1.6		(28.1	)		—
Total sales		416.8			107.7		(28.1	)		496.4
Cost of sales		315.3			89.7		(24.1	)		380.9
Gross margin		101.5			18.0		(4.0	)		115.5
Selling, general and administrative expenses		26.1			3.8		15.0			44.9
Research and development expenses		14.7			1.4		0.1			16.2
Other operating expense		(0.4	)		—		—			(0.4	)
Operating income (loss)		61.1			12.7		(19.0	)		54.8
Depreciation and amortization		26.9			3.1		—			30.0
Stock-based compensation		1.0			0.4		2.5			3.9
Accrual basis additions to capital expenditures		22.3			1.7		—			24.0

Quarter Ended September 30, 2025
Net sales to external customers	$	363.2		$	93.0	$	—		$	456.2
Intersegment sales		18.9			1.4		(20.3	)		—
Total sales		382.1			94.4		(20.3	)		456.2
Cost of sales		300.1			75.2		(19.0	)		356.3
Gross margin		81.9			19.3		(1.3	)		99.9
Selling, general and administrative expenses		27.1			3.8		10.2			41.1
Research and development expenses		12.1			1.0		0.9			14.0
Other operating expense		2.8			1.0		5.0			8.8
Operating income (loss)		39.9			13.6		(17.5	)		36.0
Depreciation and amortization		27.7			3.2		—			30.9
Stock-based compensation		0.6			0.2		0.2			1.0
Accrual basis additions to capital expenditures		16.7			1.4		—			18.1

Nine Months Ended September 30, 2026
Net sales to external customers	$	1,210.6		$	316.6	$	—		$	1,527.2
Intersegment sales		82.1			4.7		(86.8	)		—
Total sales		1,292.7			321.3		(86.8	)		1,527.2
Cost of sales		960.4			261.0		(82.5	)		1,138.9
Gross margin		332.3			60.3		(4.3	)		388.3
Selling, general and administrative expenses		74.3			11.6		55.6			141.5
Research and development expenses		46.7			4.3		0.3			51.3
Other operating expense		6.3			—		4.2			10.5
Operating income (loss)		205.0			44.3		(64.3	)		185.0
Depreciation and amortization		81.1			9.4		—			90.5
Stock-based compensation		5.6			1.5		11.3			18.4
Accrual basis additions to capital expenditures		55.2			6.0		—			61.2

Nine Months Ended September 30, 2025
Net sales to external customers	$	1,121.7		$	280.9	$	—		$	1,402.6
Intersegment sales		58.4			2.1		(60.5	)		—
Total sales		1,180.1			283.0		(60.5	)		1,402.6
Cost of sales		909.3			236.6		(57.1	)		1,088.8
Gross margin		270.7			46.5		(3.4	)		313.8
Selling, general and administrative expenses		78.9			12.1		36.4			127.4
Research and development expenses		36.2			3.1		2.8			42.1
Other operating expense		2.8			26.3		5.0			34.1
Operating income (loss)		152.8			5.1		(47.7	)		110.2
Depreciation and amortization		81.8			9.7		—			91.5
Stock-based compensation		4.5			1.2		7.7			13.4
Accrual basis additions to capital expenditures		45.3			4.6		—			49.9

(a)

We do not allocate corporate expenses to the operating segments.


Goodwill and Intangible Assets	Composite			Engineered
(In millions)	Materials			Products			Total
Balance at December 31, 2025	$	89.9		$	149.9		$	239.8
Amortization expense		(1.2	)		(3.1	)		(4.3	)
Currency translation adjustments		(1.7	)		0.1			(1.6	)
Balance at September 30, 2026	$	87.0		$	146.9		$	233.9

At September 30, 2026, the balance of goodwill and intangible assets was $190.1 million and $43.8 million, respectively.


	Composite		Engineered		Corporate &
(In millions)	Materials		Products		Other		Total
Segment assets
September 30, 2026	$	2,066.6	$	640.2	$	22.4	$	2,729.2
December 31, 2025		2,066.7		596.2		41.1		2,704.0

Note 10 — Accumulated Other Comprehensive Loss

Comprehensive loss represents net loss and other gains and losses affecting stockholders’ equity that are not reflected in the Condensed Consolidated Statements of Operations. The components of accumulated other comprehensive loss as of September 30, 2026 and December 31, 2025 were as follows:


(In millions)	Unrecognized Net Defined Benefit and Postretirement Plan Costs			Change in Fair Value of Derivatives Products (1)			Foreign Currency Translation			Total
Balance at December 31, 2025	$	(1.1	)	$	11.1		$	(22.9	)	$	(12.9	)
Other comprehensive loss before reclassifications		(0.1	)		(6.4	)		(24.3	)		(30.8	)
Amounts reclassified from accumulated other comprehensive loss		—			(6.2	)		—			(6.2	)
Other comprehensive loss		(0.1	)		(12.6	)		(24.3	)		(37.0	)
Balance at September 30, 2026	$	(1.2	)	$	(1.5	)	$	(47.2	)	$	(49.9	)

(1)

Includes forward foreign exchange contracts, interest rate derivatives and commodity swaps.

The amount of net (gains) losses reclassified to earnings from the unrecognized net defined benefit and postretirement plan costs and derivative products components of accumulated other comprehensive loss for the quarters and nine months ended September 30, 2026 and 2025 were as follows:


	Quarter Ended September 30, 2026						Quarter Ended September 30, 2025						Nine Months Ended September 30, 2026						Nine Months Ended September 30, 2025
(In millions)	Pre-tax loss (gain)			Net of tax loss (gain)			Pre-tax (gain) loss			Net of tax (gain) loss			Pre-tax loss (gain)			Net of tax loss (gain)			Pre-tax (gain) loss			Net of tax (gain) loss
Defined Benefit and Postretirement Plan Costs	$	—		$	—		$	—		$	—		$	—		$	—		$	0.9		$	0.7

Derivative Products
Foreign currency forward exchange contracts	$	(1.3	)	$	(1.2	)	$	(4.5	)	$	(3.3	)	$	(7.5	)	$	(6.3	)	$	(6.3	)	$	(4.7	)
Commodity swaps		—			—			(1.3	)		(1.0	)		0.2			0.1			(1.7	)		(1.3	)
Interest rate swaps		—			—			(0.8	)		(0.7	)		—			—			8.2			6.3
Total Derivative Products	$	(1.3	)	$	(1.2	)	$	(6.6	)	$	(5.0	)	$	(7.3	)	$	(6.2	)	$	0.2		$	0.3

Note 11 — Commitments and Contingencies

We are involved in litigation, investigations and claims arising out of the normal conduct of our business, including those relating to commercial transactions, environmental, employment and health and safety matters. While it is impossible to predict the ultimate resolution of litigation, investigations and claims asserted against us, we believe, based upon our examination of currently available information, our experience to date, and advice from legal counsel, that, after taking into account our existing insurance coverage and amounts already provided for, the currently pending legal proceedings against us will not have a material adverse impact on our consolidated results of operations, financial position or cash flows.

Environmental Matters

We have been named as a potentially responsible party (“PRP”) with respect to the below and other hazardous waste disposal sites that we do not own or possess, which are included on, or proposed to be included on, the Superfund National Priority List of the U.S. Environmental Protection Agency (“EPA”) or on equivalent lists of various state governments. Because the Federal Comprehensive Environmental Response, Compensation and Liability Act (“CERCLA” or “Superfund”) allows for joint and several liability in certain circumstances, we could be responsible for all remediation costs at such sites, even if we are one of many PRPs. We believe, based on the amount and nature of the hazardous waste at issue, and the number of other financially viable PRPs at each site, that our liability in connection with such environmental matters will not be material.

Lower Passaic River Study Area

Hexcel, together with approximately 48 other PRPs that comprise the Lower Passaic Cooperating Parties Group (the “CPG”), are subject to a May 2007 Administrative Order on Consent (“AOC”) with the EPA requiring the CPG to perform a Remedial Investigation/Feasibility Study of environmental conditions of a 17-mile stretch of the Passaic River in New Jersey (the “Lower Passaic River”). We were included in the CPG based on our operations at our former manufacturing site in Lodi, New Jersey.

In March 2016, the EPA issued a Record of Decision (“ROD”) setting forth the EPA’s selected remedy for the lower eight miles of the Lower Passaic River at an expected cost ranging from $0.97 billion to $2.07 billion. In August 2017, the EPA appointed an independent third-party allocation expert to make recommendations on the relative liability of approximately 120 identified non-government PRPs for the lower eight miles of the Lower Passaic River. In December 2020, the allocator issued its non-binding report on PRP liability (including Hexcel’s) to the EPA. In October 2021, the EPA released a ROD selecting an interim remedy for the upper nine miles of the Lower Passaic River at an expected additional cost ranging from $308.7 million to $661.5 million.

In October 2016, pursuant to a settlement agreement with the EPA, Occidental Chemical Corporation (“OCC”), one of the PRPs, commenced performance of the remedial design required by the ROD for the lower eight miles of the Lower Passaic River, reserving its right of cost contribution from all other PRPs. In June 2018, OCC filed suit against approximately 120 parties, including Hexcel, in the U.S. District Court of the District of New Jersey seeking cost recovery and contribution under CERCLA related to the Lower Passaic River. In July 2019, the court granted in part and denied in part the defendants’ motion to dismiss. In August 2020, the court granted defendants’ motion for summary judgment for certain claims. Discovery for the remaining claims has been stayed indefinitely based on agreement of the parties. On February 24, 2021, Hexcel and certain other defendants filed a third-party complaint against the Passaic Valley Sewerage Commission and certain New Jersey municipalities seeking recovery of Passaic-related cleanup costs incurred by defendants, as well as contribution for any cleanup costs incurred by OCC for which the court deems the defendants liable. In March 2023, the EPA issued a Unilateral Administrative Order (“UAO”) to OCC ordering OCC to commence remedial design work for the interim remedy for the cleanup of the upper nine miles of the Lower Passaic River. On March 24, 2023, OCC filed suit against Hexcel and approximately 38 other parties claiming cost recovery under CERCLA for future costs related to its compliance with the UAO. On January 5, 2024, the U.S. District Court stayed the foregoing claim initiated by OCC until the completion of the Passaic-related Consent Decree process.

On December 16, 2022, the EPA lodged a Consent Decree with the U.S. District Court for the District of New Jersey requesting court approval of a $150 million settlement of the EPA’s CERCLA claims against Hexcel and 83 other PRPs for costs related to alleged contamination of the upper and lower portions of the Lower Passaic River. The 84 PRPs have collectively placed $150 million in escrow, pending District Court approval of the Consent Decree. In December 2024, the District Court granted the issuance of the Consent Decree, however, this decision has been appealed. Briefing on the appeal was completed in January 2026.

Summary of Environmental Reserves

Our estimate of liability as a PRP and our remaining costs associated with our responsibility to remediate the Lower Passaic River and other sites are accrued in the Consolidated Balance Sheets. As of September 30, 2026 and December 31, 2025, our aggregate environmental related accruals were not material.

These accruals can change significantly from period to period due to such factors as additional information on the nature or extent of contamination, the methods of remediation required, changes in the apportionment of costs among responsible parties and other actions by governmental agencies or private parties, or the impact, if any, of being named in a new matter.

Product Warranty

We provide standard assurance-type warranties for our products, which cannot be purchased separately and do not meet the criteria to be considered a performance obligation. Warranty expense for the nine months ended September 30, 2026, and accrued warranty cost, included in “accrued liabilities” in the Condensed Consolidated Balance Sheets at September 30, 2026 and December 31, 2025, were as follows:


	Product
(In millions)	Warranties
Balance as of December 31, 2025	$	3.0
Warranty expense		1.1
Deductions and other		(1.1	)
Balance as of March 31, 2026	$	3.0
Warranty expense		0.8
Deductions and other		(0.4	)
Balance as of June 30, 2026	$	3.4
Warranty expense		2.4
Deductions and other		(2.2	)
Balance as of September 30, 2026	$	3.6

Note 12 — Restructuring

We recognized restructuring charges of $6.1 million for the nine months ended September 30, 2026. The quarter ended September 30, 2026 included an adjustment for settlement of prior period accruals. Anticipated future cash payments as of September 30, 2026 were $3.4 million.


			Activity for the Quarter Ended September 30, 2026
	June 30,		Restructuring						Cash						September 30,
(In Millions)	2026		Charge			FX Impact			Paid			Non-Cash			2026
Employee termination	$	0.4	$	—		$	(0.1	)	$	(1.3	)	$	—		$	(1.0	)
Impairment and other		4.8		(0.4	)		—			—			—			4.4
Total	$	5.2	$	(0.4	)	$	(0.1	)	$	(1.3	)	$	—		$	3.4


			Activity for the Nine Months Ended September 30, 2026
	December 31,		Restructuring						Cash						September 30,
(In Millions)	2025		Charge			FX Impact			Paid			Non-Cash			2026
Employee termination	$	2.5	$	2.4		$	(0.2	)	$	(5.7	)	$	—		$	(1.0	)
Impairment and other		3.0		3.7			—			—			(2.3	)		4.4
Total	$	5.5	$	6.1		$	(0.2	)	$	(5.7	)	$	(2.3	)	$	3.4

Note 13 — Capital Stock

On February 19, 2024, the Board of Directors of the Company (the "Board") approved a $300 million share repurchase plan (the “2024 Share Repurchase Plan”). As of December 31, 2025, the 2024 Share Repurchase Plan was fully utilized. The repurchases of the Company’s common stock under the 2024 Share Repurchase Plan were made in open market transactions, block transactions, privately negotiated purchase transactions or other purchase techniques at the discretion of management based upon consideration of market, business, legal, accounting, and other factors.

On October 22, 2025, the Board approved an additional $600 million share repurchase plan (the "2025 Share Repurchase Plan"), and, as part of the 2025 Share Repurchase Plan, the Company entered into accelerated share repurchase agreements (the "ASR") to purchase an aggregate of $350 million of the Company's common stock. On October 24, 2025, the Company paid Bank of America, N.A. (“Bank of America”) and Goldman Sachs & Co. LLC (together with Bank of America, the “Counterparties”) an aggregate amount of $350 million and received an initial delivery of approximately 3.95 million shares of the Company's common stock, representing 80% of the shares expected to be repurchased under the ASR agreement, at a price of $70.95 per share, which was the closing price of our common stock on October 24, 2025.

The final settlement under the ASR program with Bank of America occurred on February 27, 2026 and with Goldman Sachs & Co. LLC on March 3, 2026, at which time we received additional shares of approximately 0.57 million. In total, we received 4.52 million shares under the ASR agreement. The total shares received were calculated based on a price per share of $77.38 per share which was based on the average of the daily volume-weighted average prices of the Company’s common stock during the term of the ASR Agreements, less a discount and subject to adjustments pursuant to the terms and conditions of the ASR Agreements.

The Company did not repurchase shares during the three months ended September 30, 2026. As of September 30, 2026, the Company had approximately $380.6 million available for additional repurchases under the 2025 Share Repurchase Plan.

On October 21, 2026, the Board approved an increase to the share repurchase authorization under the 2025 Share Repurchase Plan from the previous remaining authorized amount of $380.6 to $750 million.

ITEM 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

Business Overview

Hexcel Corporation is a global leader in advanced lightweight composites technology. We provide innovative, high-performance material solutions that are lighter, stronger, and tougher, shaping a world that moves farther, smarter, and more efficiently. Our broad and unrivaled product range includes carbon fiber, specialty reinforcements, prepregs and other fiber-reinforced matrix materials, honeycomb, resins, engineered core, and composite structures for use in commercial aerospace, defense and space, and industrial applications.

We serve international markets through manufacturing facilities, sales offices and representatives located in the Americas, Europe, Asia Pacific, India, and Africa.

We are a manufacturer of products within a single industry: Advanced Composites. We have two reportable segments: Composite Materials and Engineered Products. The Composite Materials segment is comprised of our carbon fiber, specialty reinforcements, resin systems, prepregs and other fiber-reinforced matrix materials, and honeycomb core product lines and pultruded profiles. The Engineered Products segment is comprised of lightweight high strength composite structures, radio frequency/electromagnetic interference (“RF/EMI”) and microwave absorbing materials, engineered core and specialty machined honeycomb products with added functionality.

Recent growth in aircraft build rates has favorably impacted our business. We have, however, in the last several years been impacted by delays in aircraft production rates, related to, among other factors, global logistics, supply chain destocking and other supply chain constraints. Hexcel has also been negatively impacted by macroeconomic and geopolitical conditions, including inflationary pressures, tariffs, and global conflicts. While these challenges have had and may continue to have further negative impacts on our operations and financial results, we see indicators for a long-term positive outlook in commercial aircraft production and strong demand in the defense and space market as global defense budgets continue to increase as a result of an uncertain geopolitical environment and the development of new platforms. As a result of the Middle East conflict, we are actively monitoring the markets and are taking actions to mitigate near-term impact to our cost base. Currently, we have limited direct exposure, but a prolonged conflict is likely to precipitate cost and logistic pressures as well as inventory challenges.

Financial Overview

Results of Operations


	Quarters Ended September 30,									Nine Months Ended September 30,
(In millions, except per share data)	2026			2025			% Change			2026			2025			% Change
Net sales	$	496.4		$	456.2			8.8	%	$	1,527.2		$	1,402.6			8.9	%
Operating income	$	54.8		$	36.0			52.2	%	$	185.0		$	110.2			67.9	%
As a percentage of net sales		11.0	%		7.9	%					12.1	%		7.9	%
Net income	$	38.6		$	20.6			87.4	%	$	125.1		$	63.0			98.6	%
Diluted net income per common share	$	0.50		$	0.26			92.3	%	$	1.63		$	0.78			109.0	%

Net Sales

The following table summarizes net sales to third-party customers by segment and end market for the quarters and nine months ended September 30, 2026 and 2025:


	Quarters Ended September 30,							Nine Months Ended September 30,
(In millions)	2026		2025		% Change			2026		2025		% Change
Consolidated Net Sales	$	496.4	$	456.2		8.8	%	$	1,527.2	$	1,402.6		8.9	%
Commercial Aerospace		330.3		274.2		20.5	%		1,009.6		847.4		19.1	%
Defense, Space & Other		166.1		182.0		(8.7	)%		517.6		555.2		(6.8	)%

Composite Materials	$	390.3	$	363.2		7.4	%	$	1,210.6	$	1,121.7		7.9	%
Commercial Aerospace		275.1		230.6		19.3	%		845.5		722.3		17.1	%
Defense, Space & Other		115.2		132.6		(13.1	)%		365.1		399.4		(8.6	)%

Engineered Products	$	106.1	$	93.0		14.1	%	$	316.6	$	280.9		12.7	%
Commercial Aerospace		55.2		43.6		26.5	%		164.1		125.1		31.2	%
Defense, Space & Other		50.9		49.4		3.0	%		152.5		155.8		(2.1	)%

Sales by Segment

Composite Materials: Net sales of $390.3 million in the third quarter of 2026 increased by $27.1 million or 7.4% from the prior year quarter. Commercial Aerospace sales increased $44.5 million or 19.3% in the third quarter of 2026 as compared to the same quarter in the prior year. Defense, Space & Other net sales in the third quarter of 2026 decreased $17.4 million or 13.1% versus the prior year period. Net sales of $1,210.6 million for the first nine months of 2026 increased 7.9% compared to the same period last year led by higher Commercial Aerospace sales. The decrease in Defense, Space & Other net sales for both the third quarter and nine months of 2026 reflected the September 30, 2025 divestment of the Austrian-based industrial business and the closure of a non-core industrial business in Leicester, UK earlier this year.

Engineered Products: For the third quarter of 2026, net sales of $106.1 million increased $13.1 million or 14.1% as compared to the prior year quarter. Net sales of $316.6 million for the first nine months of 2026 increased 12.7% compared to the same period last year. The increase for both the third quarter and nine months ended September 30, 2026 over the respective periods in the prior year was driven by strong Commercial Aerospace sales.

Sales by Market

For the third quarter of 2026, Commercial Aerospace sales of $330.3 million increased 20.5% compared to the third quarter of 2025. Both widebodies, including the Airbus A350 and Boeing 787, and narrowbodies, including the Airbus A320 and Boeing MAX, grew year over year. Other Commercial Aerospace sales for the third quarter of 2026 increased 1.3% compared to the third quarter of 2025. Sales of $1,009.6 million increased 19.1% for the first nine months of 2026 compared to the first nine months of 2025, with growth led by the A350, 787 and MAX platforms. Other Commercial Aerospace increased 6.4% for the first nine months of 2026 compared to the same period in 2025 from higher regional jet sales.

Defense, Space & Other sales of $166.1 million in the third quarter of 2026 decreased 8.7% as compared to the third quarter of 2025. Sales of $517.6 million decreased 6.8% for the first nine months of 2026 as compared to the first nine months of 2025. The sales decrease for both the quarter and nine months ended September 30, 2026 reflected the September 30, 2025 divestment of the Austrian-based industrial business as well as softness in launchers and rocket motors.

Gross Margin


	Quarters Ended September 30,									Nine Months Ended September 30,
(In millions)	2026			2025			% Change			2026			2025			% Change
Gross margin	$	115.5		$	99.9			15.6	%	$	388.3		$	313.8			23.7	%
Percentage of sales		23.3	%		21.9	%					25.4	%		22.4	%

Gross margin for the third quarter of 2026 was 23.3% compared to 21.9% in the third quarter of 2025 and 25.4% and 22.4% for the first nine months of 2026 and 2025, respectively. The higher margins for both the third quarter and nine months of 2026 compared to the prior year periods was primarily due to higher sales leverage.

Operating Expenses


	Quarters Ended September 30,									Nine Months Ended September 30,
(In millions)	2026			2025			% Change			2026			2025			% Change
SG&A expense	$	44.9		$	41.1			9.2	%	$	141.5		$	127.4			11.1	%
Percentage of sales		9.0	%		9.0	%					9.3	%		9.1	%

R&D expense	$	16.2		$	14.0			15.7	%	$	51.3		$	42.1			21.9	%
Percentage of sales		3.3	%		3.1	%					3.4	%		3.0	%

Other operating (income) expense	$	(0.4	)	$	8.8			(104.5	)%	$	10.5		$	34.1			(69.2	)%

Selling, general and administrative expenses were higher for both the third quarter and the first nine months of 2026 as compared to the respective periods in 2025. The increase in selling, general and administrative expenses compared to the prior year periods was primarily driven by higher employee-related costs. Research and development expenses for the third quarter and first nine months of 2026 were higher than the comparable periods in 2025, primarily due to higher employee-related expenses and production qualification material costs.

Other operating income for the quarter ended September 30, 2026 reflected an adjustment to restructuring expenses related to the shutdown of industrial-oriented manufacturing at the Leicester, UK facility. For the third quarter of 2025, other operating expenses included a loss related to the divestiture of our Neumarkt, Austria plant, a non-income tax charge related to the net value of a foreign entity and restructuring charges primarily related to the previously announced closure of our facility in Belgium. Other operating expenses for the nine months ended September 30, 2026, included restructuring expenses related to the shutdown of industrial-oriented manufacturing at the Leicester, UK facility and non-recurring professional fees. The nine months ended September 30, 2025 also included restructuring charges related to the closure of the facility in Belgium and a loss for the divestiture of the Hartford, Connecticut business.

Operating Income


	Quarters Ended September 30,									Nine Months Ended September 30,
(In millions)	2026			2025			% Change			2026			2025			% Change
Consolidated operating income	$	54.8		$	36.0			52.2	%	$	185.0		$	110.2			67.9	%
Operating margin		11.0	%		7.9	%					12.1	%		7.9	%
Composite Materials	$	61.1		$	39.9			53.1	%	$	205.0		$	152.8			34.2	%
Operating margin		14.7	%		10.4	%					15.9	%		12.9	%
Engineered Products	$	12.7		$	13.6			(6.6	)%	$	44.3		$	5.1			768.6	%
Operating margin		11.8	%		14.4	%					13.8	%		1.8	%
Corporate & Other	$	(19.0	)	$	(17.5	)	N/M			$	(64.3	)	$	(47.7	)	N/M

Operating income for the third quarters of 2026 and 2025 was $54.8 million and $36.0 million, respectively. Operating income for the first nine months of 2026 was $185.0 million compared to $110.2 million for the same period last year. Overall, operating income for both the third quarter and nine months of 2026 was favorably impacted by higher sales and improved margins as compared to prior year periods.

Interest Expense, Net


	Quarters Ended September 30,							Nine Months Ended September 30,
(In millions)	2026		2025		% Change			2026		2025		% Change
Interest expense, net	$	12.1	$	9.2		31.5	%	$	35.9	$	26.1		37.5	%

Interest expense for both the quarter and nine months ended September 30, 2026 was higher compared to the respective prior year periods as a result of higher average borrowings for the first nine months of 2026.

Provision for Income Taxes


	Quarters Ended September 30,						Nine Months Ended September 30,
(In millions)	2026			2025			2026			2025
Income tax expense	$	4.1		$	6.2		$	23.8		$	21.6
Effective tax rate		9.7	%		23.2	%		16.0	%		25.6	%

Tax expense for the quarter ended September 30, 2026 was $4.1 million as compared to $6.2 million for the quarter ended September 30, 2025. Tax expense for the nine months ended September 30, 2026 was $23.8 million compared to $21.6 million for the comparative period in 2025. The nine months ended September 30, 2025 included discrete tax charges for valuation allowance related to the closure of our facility in Belgium.

Financial Condition

Liquidity: Cash on hand at September 30, 2026 was $77.8 million as compared to $71.0 million at December 31, 2025. As of September 30, 2026, total debt was $934.9 million as compared to $993.0 million at December 31, 2025.

Under the Facility, total borrowings at September 30, 2026 were $240.0 million, which approximated fair value. The Credit Agreement permits us to issue letters of credit up to an aggregate amount of $50.0 million. As of September 30, 2026, there were no issued letters of credit under the Facility, resulting in undrawn availability under the Facility of $510.0 million. The weighted average interest rate for the Facility was 4.79% for the six months from entering into the Credit Agreement for the Facility in March 2026 through September 30, 2026.

Short-term liquidity requirements consist primarily of normal recurring operating expenses and working capital needs, capital expenditures, dividend payments, debt obligations and debt service requirements. We expect to meet our short-term liquidity requirements (including capital expenditures) through net cash from operating activities, cash on hand and the Facility. As of September 30, 2026, long-term liquidity requirements consisted primarily of obligations under our long-term debt obligations. We do not have any significant required debt repayments until March 2031 when the Facility matures. For further information regarding debt, including our Facility, see Note 5, Debt, to the accompanying condensed consolidated financial statements of this Form 10-Q.

There were no repurchases of shares during the third quarter of 2026. The remaining authorization under the 2025 Share Repurchase Plan at September 30, 2026 was $380.6 million. On October 21, 2026, the Board approved an increase to the share repurchase authorization under the 2025 Share Repurchase Plan from the remaining $380.6 million to $750 million and additionally, declared a quarterly dividend of $0.18 per share payable to stockholders of record as of November 2, 2026, with a payment date of November 9, 2026.

Operating Activities: Net cash provided by operating activities for the first nine months of 2026 was $171.1 million compared to $105.0 million for the same period last year. Working capital was a cash use of $78.1 million for the first nine months of 2026 as compared to a use of $63.8 million in the same period in 2025 with the variance primarily attributable to higher accounts receivable and inventory balances, partially offset by higher payables and accruals.

Investing Activities: Net cash used for investing activities was $68.6 million and $57.8 million in the first nine months of 2026 and 2025, respectively. Capital expenditures for the first nine months of 2026 were $68.6 million as compared to $55.1 million for the same period last year. Payments related to the divestiture of the Neumarkt and Hartford facilities were $2.7 million in the first nine months of 2025.

Financing Activities: Net cash used for financing activities was $94.5 million for first nine months of 2026 compared to a net cash use of $85.5 million in the same period in 2025. Borrowings under the credit facility during the first nine months of 2026 and 2025 were $595.0 million and $160.0 million, respectively. Repayments were $650.0 million during the first nine months of 2026 compared to $100.0 million in the prior year period. Quarterly dividend payments to shareholders were $40.9 million during the first nine months of 2026 compared to $41.0 million in the prior year period. During the nine months ended September 30, 2025, repurchases of common stock totaled $100.9 million.

Financial Obligations and Commitments: The next significant scheduled debt maturity will not occur until 2031, when both the Facility and the 4.9% Senior Unsecured Notes mature. Certain sales and administrative offices, data processing equipment and manufacturing facilities are leased under operating leases.

Critical Accounting Estimates

Our Condensed Consolidated Financial Statements are prepared in accordance with U.S. GAAP. In connection with the preparation of our financial statements, we are required to make assumptions and estimates about future events, and apply judgments that affect reported amounts of assets, liabilities, revenues, expenses and related disclosures. We base our assumptions, estimates and judgments on historical experience, current trends and other factors management believes to be relevant at the time our Condensed Consolidated Financial Statements are prepared. On a regular basis, management reviews accounting policies, assumptions, estimates and judgments to ensure our financial statements are presented fairly and in accordance with U.S. GAAP. However, because future events and their effects cannot be determined with certainty, actual results may differ from our assumptions and estimates, and such differences could be material.

We describe our significant accounting policies and critical accounting estimates in our Annual Report on Form 10-K for the fiscal year ended December 31, 2025.

Forward-Looking Statements

This report contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These statements relate to analyses and other information that are based on forecasts of future results and estimates of amounts not yet determinable. These statements also relate to future prospects, developments and business strategies. These forward-looking statements are identified by their use of terms and phrases such as “anticipate,” “believe,” “continue,” “could,” “estimate,” “expect,” “intend,” “may,” “plan,” “potential,” “predict,” “project,” “should,” “seek,” “target,” “would,” “will” and similar terms and phrases, including references to assumptions. Such statements are based on current expectations, are inherently uncertain and are subject to changing assumptions.

Such forward-looking statements include, but are not limited to: (a) the estimates and expectations based on aircraft production rates provided by Airbus, Boeing and others and the revenues we may generate from an aircraft model or program; (b) expectations with regard to the impact of regulatory activity related to the Boeing 737 MAX on our revenues; (c) expectations with regard to raw material cost and availability, including any impact associated with quotas, duties, tariffs, taxes or other similar restrictions upon the import or export of materials or the Middle East conflict; (d) expectations of composite content on new commercial aircraft programs and our share of those requirements; (e) expectations regarding revenues from defense and space applications, including whether certain programs might be curtailed or discontinued, and government funding opportunities; (f) expectations regarding sales for industrial applications; (g) expectations regarding cash generation, working capital trends, and inventory levels; (h) expectations as to the level of research and development investment, capital expenditures, capacity, including the timing of completion of capacity expansions, and qualification of new products; (i) expectations regarding our ability to improve or maintain margins; (j) expectations regarding our ability to attract, motivate, and retain the workforce necessary to execute our business strategy; (k) projections regarding our tax rate or restructuring or alignment activities; (l) expectations with regard to the continued impact of macroeconomic factors or geopolitical issues or conflicts, including the Middle East conflict; (m) expectations regarding our strategic initiatives, including our sustainability goals and restructuring or alignment activities; (n) expectations with regard to the effectiveness of cybersecurity measures; (o) expectations regarding the outcome of legal matters or the impact of changes in laws or regulations; (p) expectations relating to our share repurchase program and dividends; and (q) our expectations of financial results for 2026 and beyond.

Such forward-looking statements involve known and unknown risks, uncertainties and other factors, some of which are beyond our control, that may cause actual results to be materially different. Such factors include, but are not limited to, the following: the extent of the impact of macroeconomic factors or geopolitical issues or conflicts, including U.S. trade policy and retaliatory actions taken in response and the Middle East conflict; reductions in sales to any significant customers, particularly Airbus or Boeing, including related to regulatory activity or public scrutiny impacting the Boeing 737 MAX; our ability to effectively adjust production and inventory levels to align with customer demand; our ability to effectively motivate, retain and hire the necessary workforce; the availability and cost of raw materials, including the impact of supply disruptions, inflation, tariffs and the Middle East conflict; our ability to successfully implement or realize our strategic initiatives, including our sustainability goals and any restructuring or alignment activities in which we may engage; changes in sales mix; changes in current pricing due to cost levels; changes in aerospace build or delivery rates; any impact from a prolonged shutdown of the U.S. federal government; changes in government defense procurement or investment budgets; timely new product development or introduction; our ability to install, staff and qualify necessary capacity or complete capacity expansions to meet customer demand; our ability to execute future share repurchases or dividends and the source of funds used for such repurchases or dividends; cybersecurity-related risks, including the potential impact of breaches or intrusions; currency exchange rate fluctuations; uncertainty related to governmental actions and changes in political, social and economic conditions, including the effect of change in global trade policies, tariff rates, economic sanctions and embargoes; work stoppages or other labor disruptions; our ability to successfully complete any strategic acquisitions, investments or dispositions; compliance with environmental, health, safety and other related laws and regulations, including those related to climate change; the

effects of natural disasters or other severe weather events, which may be worsened by the impact of climate change, and other severe catastrophic events, including any public health crisis; and the unexpected outcome of legal matters or impact of changes in laws or regulations.

Although we believe that these forward-looking statements are based on reasonable assumptions, you should be aware that many factors could affect our actual results of operations and could cause actual results to differ materially from those expressed in the forward-looking statements. As a result, the foregoing factors should not be construed as exhaustive and should be read together with other cautionary statements included in this and other reports we file with the SEC. For additional information regarding certain factors that may cause our actual results to differ from those expected or anticipated, see the information under the caption “Risk Factors,” which is located in Item 1A of Part I of our Annual Report on Form 10-K for the fiscal year ended December 31, 2025. We caution you not to place undue reliance upon these forward-looking statements, which speak only as of the date they are made. We do not undertake any obligation to update our forward-looking statements or risk factors to reflect future events or circumstances, except as otherwise required by law.

ITEM 3. Quantitative and Qualitative Disclosures about Market Risk

There have been no material changes in our market risk from the information provided in the Company’s Annual Report on Form 10-K for the year ended December 31, 2025.

ITEM 4. Controls and Procedures

Evaluation of Disclosure Controls and Procedures

Our Chief Executive Officer and Chief Financial Officer have evaluated our disclosure controls and procedures as of September 30, 2026, and with the participation of the Company's management have concluded that these disclosure controls and procedures were effective to ensure that information required to be disclosed by us in the reports that we file or submit under the Securities Exchange Act of 1934, as amended, is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms. These disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by us in the reports we file or submit is accumulated and communicated to management, including the Chief Executive Officer and Chief Financial Officer, as appropriate to allow timely decisions regarding required disclosure.

Changes in Internal Control over Financial Reporting

Our Chief Executive Officer and Chief Financial Officer have concluded that there have not been any changes in our internal control over financial reporting during the quarter ended September 30, 2026 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

PART II. OTHER INFORMATION

ITEM 1. Legal Proceedings

The information required by Item 1 is contained within Note 11 on pages 15 through 16 of this Form 10-Q and is incorporated herein by reference.

ITEM 1A. Risk Factors

In addition to the other information set forth in this report, you should carefully consider the factors discussed in Part I, “Item 1A. Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2025, which could materially affect our business, financial condition or future results. There have been no material changes in the Company's risk factors from the aforementioned Form 10-K.

ITEMS 2, 3 and 4 are not applicable, and therefore have been omitted.

ITEM 5. Other Information

On August 11, 2026, Gina Fitzsimons, the Company’s Executive Vice President, Chief Human Resources Officer and Communications Officer entered into a trading plan pursuant to Rule 10b5-1 of the Exchange Act intended to satisfy the affirmative defense of Rule 10b5–1(c) of the Exchange Act. The trading plan provides for the sale of up to 2,536 shares of common stock of the Company beginning on January 27, 2027 and terminates on July 23, 2027.

On October 21, 2026, the Board approved an increase to the share repurchase authorization under the Company's existing share repurchase plan approved on October 22, 2025 from the remaining authorized amount of $380.6 million to $750 million.

ITEM 6. Exhibits

EXHIBIT INDEX


Exhibit No.		Description
31.1		Certification of Chief Executive Officer, Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2		Certification of Chief Financial Officer, Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32		Certification of Chief Executive Officer and Chief Financial Officer Pursuant to 18 U.S.C Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (furnished herewith)
101		The following financial statements from the Company’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2026, formatted in Inline XBRL: (i) Condensed Consolidated Balance Sheets, (ii) Condensed Consolidated Statements of Operations, (iii) Condensed Consolidated Statements of Comprehensive Income (Loss), (iv) Condensed Consolidated Statements of Cash Flows, (v) Condensed Consolidated Statements of Stockholders’ Equity, and (vi) Notes to Condensed Consolidated Financial Statements.
104		Cover Page Interactive Data File: the cover page XBRL tags are embedded within the Inline XBRL document and are contained within Exhibit 101.

Signature

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.