Revenue grew 3.0% YoY in Q2 2026 to $3.8B, but gross margin fell to 9.2% from 19.1% a year earlier, indicating significant cost escalation.
Textron Inc. (TXT) annual income statement — 30-year revenue, gross profit & net income history
| Metric | TTM | Jan'26 | Dec'24 | Dec'23 | Dec'22 | Jan'22 | Jan'21 | Dec'19 | Dec'18 | Dec'17 | Dec'16 | Dec'15 | Dec'14 | Dec'13 | Dec'12 | Dec'11 | Dec'10 | Dec'09 | Dec'08 | Dec'07 | Dec'06 | Dec'05 | Dec'04 | Dec'03 | Dec'02 | Dec'01 | Dec'00 | Dec'99 | Dec'98 | Dec'97 | Dec'96 |
|---|
| Sales/Revenue | 15.3B | 14.8B | 13.7B | 13.68B | 12.87B | 12.38B | 11.65B | 13.63B | 13.97B | 14.2B | 13.79B | 13.42B | 13.88B | 12.1B | 12.24B | 11.28B | 10.53B | 10.5B | 14.01B | 12.62B | 11.49B | 10.04B | 8.32B | 9.79B | 10.35B | 12.32B | 13.09B | 11.85B | 9.87B | 8.68B | 7.51B |
| Revenue Growth % | 8.8% | 8.01% | 0.14% | 6.33% | 3.93% | 6.27% | -14.52% | -2.45% | -1.59% | 2.97% | 2.72% | -3.28% | 14.66% | -1.09% | 8.53% | 7.13% | 0.24% | -25.05% | 11.06% | 9.79% | 14.41% | 20.74% | -15.05% | -5.39% | -16% | -5.87% | 10.43% | 20.05% | 13.72% | 15.68% | -24.74% |
| Cost of Goods Sold | 13.47B | 12.3B | 11.2B | 10.84B | 10.2B | 10.3B | 10.09B | 11.41B | 11.59B | 11.83B | 11.34B | 10.98B | 11.42B | 10.13B | 10.02B | 9.31B | 8.61B | 8.47B | 10.58B | 9.27B | 8.53B | 7.46B | 6.21B | 7.59B | 7.96B | 9.76B | 10.03B | 8.8B | 7.33B | 6.53B | 5.57B |
| COGS % of Revenue | - | 83.09% | 81.74% | 79.19% | 79.25% | 83.16% | 86.64% | 83.68% | 82.98% | 83.3% | 82.22% | 81.79% | 82.3% | 83.7% | 81.87% | 82.55% | 81.76% | 80.65% | 75.54% | 73.46% | 74.22% | 74.32% | 74.61% | 77.56% | 76.92% | 79.21% | 76.61% | 74.25% | 74.25% | 75.16% | 74.21% |
| Gross Profit | 1.83B | 2.5B | 2.5B | 2.85B | 2.67B | 2.08B | 1.56B | 2.22B | 2.38B | 2.37B | 2.45B | 2.44B | 2.46B | 1.97B | 2.22B | 1.97B | 1.92B | 2.03B | 3.43B | 3.35B | 2.96B | 2.58B | 2.11B | 2.2B | 2.39B | 2.56B | 3.06B | 3.05B | 2.54B | 2.16B | 1.94B |
| Gross Margin % | 11.97% | 16.91% | 18.26% | 20.81% | 20.75% | 16.84% | 13.36% | 16.32% | 17.02% | 16.7% | 17.78% | 18.21% | 17.7% | 16.3% | 18.13% | 17.45% | 18.24% | 19.35% | 24.46% | 26.54% | 25.78% | 25.68% | 25.39% | 22.44% | 23.08% | 20.79% | 23.39% | 25.75% | 25.75% | 24.84% | 25.79% |
| Gross Profit Growth % | - | 0% | -12.15% | 6.67% | 28.06% | 33.91% | -29.99% | -6.48% | 0.3% | -3.26% | 0.29% | -0.53% | 24.53% | -11.05% | 12.76% | 2.45% | -5.51% | -40.71% | 2.36% | 13.03% | 14.85% | 22.11% | -3.87% | -8.04% | -6.72% | -16.36% | 0.33% | 20.02% | 17.9% | 11.42% | -61.99% |
| Operating Expenses | 567M | 1.25B | 1.65B | 1.79B | 1.79B | 1.22B | 1.56B | 1.15B | 1.27B | 1.33B | 1.32B | 1.3B | 1.36B | 1.13B | 1.17B | 1.38B | 1.37B | 1.6B | 1.84B | 1.61B | 1.55B | 1.43B | 1.27B | 1.35B | 1.39B | 1.27B | 1.48B | 1.79B | 1.49B | 1.24B | 1.1B |
| OpEx % of Revenue | - | 8.47% | 12.02% | 13.12% | 13.89% | 9.86% | 13.36% | 8.45% | 9.13% | 9.4% | 9.55% | 9.71% | 9.81% | 9.3% | 9.52% | 12.25% | 13.05% | 15.29% | 13.13% | 12.78% | 13.48% | 14.26% | 15.23% | 13.82% | 13.44% | 10.32% | 11.32% | 15.1% | 15.08% | 14.27% | 14.67% |
| Selling, General & Admin | 644M | 1.16B | 1.16B | 1.23B | 1.19B | 1.22B | 1.04B | 1.15B | 1.27B | 1.33B | 1.32B | 1.3B | 1.36B | 1.13B | 1.17B | 1.2B | 1.23B | 1.34B | 1.61B | 1.58B | 1.52B | 1.4B | 1.21B | 1.29B | 1.3B | 1.53B | 1.45B | 1.35B | 1.13B | 929M | 834M |
| SG&A % of Revenue | - | 7.81% | 8.44% | 8.95% | 9.22% | 9.86% | 8.97% | 8.45% | 9.13% | 9.4% | 9.55% | 9.71% | 9.81% | 9.3% | 9.52% | 10.6% | 11.7% | 12.74% | 11.46% | 12.52% | 13.26% | 13.97% | 14.53% | 13.14% | 12.61% | 12.43% | 11.04% | 11.39% | 11.42% | 10.7% | 11.11% |
| Research & Development | -269M | 521M | 491M | 570M | 601M | 619M | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| R&D % of Revenue | - | 3.52% | 3.58% | 4.17% | 4.67% | 5% | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - |
| Other Operating Expenses | 3M | -424M | 0 | 0 | 0 | -619M | 512M | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 186M | 143M | 267M | 234M | 33M | 26M | 29M | 58M | 66M | 86M | -260M | 37M | 440M | 361M | 310M | 267M |
| Operating Income | 1.26B | 1.25B | 855M | 1.05B | 883M | 864M | 0 | 1.07B | 1.1B | 1.04B | 1.13B | 1.14B | 1.1B | 847M | 1.05B | 586M | 546M | 427M | 1.59B | 1.74B | 1.41B | 1.15B | 845M | 844M | 998M | 1.29B | 1.58B | 1.26B | 1.05B | 918M | 835M |
| Operating Margin % | 8.27% | 8.44% | 6.24% | 7.7% | 6.86% | 6.98% | - | 7.87% | 7.89% | 7.3% | 8.22% | 8.49% | 7.9% | 7% | 8.61% | 5.2% | 5.19% | 4.07% | 11.33% | 13.76% | 12.3% | 11.42% | 10.16% | 8.62% | 9.64% | 10.46% | 12.07% | 10.65% | 10.67% | 10.57% | 11.12% |
| Operating Income Growth % | - | 46.08% | -18.8% | 19.25% | 2.2% | - | -100% | -2.81% | 6.36% | -8.55% | -0.53% | 4.01% | 29.4% | -19.56% | 79.69% | 7.33% | 27.87% | -73.09% | -8.58% | 22.86% | 23.19% | 35.74% | 0.12% | -15.43% | -22.58% | -18.42% | 25.2% | 19.73% | 14.81% | 9.94% | -73.3% |
| EBITDA | 1.58B | 1.65B | 1.24B | 1.45B | 1.28B | 1.25B | 839M | 1.49B | 1.54B | 1.48B | 1.58B | 1.6B | 1.55B | 1.24B | 1.44B | 989M | 939M | 836M | 1.99B | 2.06B | 1.7B | 1.45B | 1.13B | 1.2B | 1.36B | 1.8B | 2.07B | 1.7B | 1.42B | 1.23B | 1.1B |
| EBITDA Margin % | 10.31% | 11.15% | 9.03% | 10.58% | 9.95% | 10.13% | 7.2% | 10.92% | 11.02% | 10.45% | 11.48% | 11.93% | 11.2% | 10.21% | 11.73% | 8.77% | 8.92% | 7.96% | 14.18% | 16.34% | 14.82% | 14.44% | 13.52% | 12.23% | 13.1% | 14.63% | 15.84% | 14.36% | 14.33% | 14.14% | 14.68% |
| EBITDA Growth % | 28.84% | 33.39% | -14.57% | 13.13% | 2.07% | 49.46% | -43.62% | -3.38% | 3.77% | -6.25% | -1.12% | 2.96% | 25.81% | -13.93% | 45.2% | 5.32% | 12.32% | -57.93% | -3.59% | 21.02% | 17.45% | 28.89% | -6.09% | -11.65% | -24.79% | -13.07% | 21.86% | 20.28% | 15.23% | 11.43% | -68.89% |
| D&A (Non-Cash Add-back) | 312M | 401M | 382M | 395M | 397M | 390M | 391M | 416M | 437M | 447M | 449M | 461M | 459M | 389M | 383M | 403M | 393M | 409M | 400M | 325M | 290M | 303M | 280M | 354M | 358M | 514M | 494M | 440M | 361M | 310M | 267M |
| EBIT | 1.2B | 1.25B | 1.04B | 1.16B | 1.12B | 1.01B | 448M | 1.11B | 1.55B | 936M | 1.05B | 1.14B | 1.04B | 847M | 1.05B | 583M | 356M | 160M | 1.08B | 1.74B | 1.41B | 1.03B | 786M | 692M | 863M | 852M | 1.1B | 1.26B | 1.05B | 918M | 835M |
| Net Interest Income | -95M | -97M | -97M | -77M | -107M | -142M | -166M | -171M | -166M | -174M | -174M | -169M | -191M | -173M | -212M | -246M | -270M | -309M | -432M | -484M | -438M | -290M | -246M | -275M | -297M | -433M | -486M | 0 | 0 | 0 | 0 |
| Interest Income | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 6M | 16M | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| Interest Expense | 95M | 97M | 97M | 77M | 107M | 142M | 166M | 171M | 166M | 174M | 174M | 169M | 191M | 173M | 212M | 246M | 270M | 309M | 448M | 484M | 438M | 290M | 246M | 275M | 297M | 433M | 486M | 0 | 0 | 0 | 0 |
| Other Income/Expense | -99M | -112M | 88M | 34M | 133M | 9M | 282M | -130M | 281M | -275M | -258M | -169M | -243M | -173M | -212M | -249M | -460M | -576M | -958M | -484M | -438M | -408M | -305M | -427M | -432M | -870M | -969M | -258M | -317M | -296M | -318M |
| Pretax Income | 1.17B | 1.14B | 943M | 1.09B | 1.02B | 873M | 282M | 942M | 1.38B | 762M | 876M | 971M | 853M | 674M | 841M | 337M | 86M | -149M | 629M | 1.25B | 975M | 739M | 540M | 417M | 566M | 419M | 611M | 1B | 737M | 622M | 517M |
| Pretax Margin % | 7.62% | 7.68% | 6.88% | 7.94% | 7.89% | 7.05% | 2.42% | 6.91% | 9.91% | 5.37% | 6.35% | 7.23% | 6.15% | 5.57% | 6.87% | 2.99% | 0.82% | -1.42% | 4.49% | 9.92% | 8.49% | 7.36% | 6.49% | 4.26% | 5.47% | 3.4% | 4.67% | 8.47% | 7.46% | 7.16% | 6.89% |
| Income Tax | 227M | 214M | 118M | 165M | 154M | 126M | -27M | 127M | 162M | 456M | 33M | 273M | 248M | 176M | 260M | 95M | -6M | -76M | 305M | 373M | 269M | 223M | 165M | 112M | 173M | 227M | 308M | 381M | 294M | 250M | 211M |
| Effective Tax Rate % | 19.47% | 18.82% | 12.51% | 15.18% | 15.16% | 14.43% | -9.57% | 13.48% | 11.71% | 59.84% | 3.77% | 28.12% | 29.07% | 26.11% | 30.92% | 28.19% | -6.98% | 51.01% | 48.49% | 29.79% | 27.59% | 30.18% | 30.56% | 26.86% | 30.57% | 54.18% | 50.41% | 37.95% | 39.89% | 40.19% | 40.81% |
| Net Income | 937M | 921M | 824M | 921M | 861M | 746M | 309M | 815M | 1.22B | 307M | 962M | 697M | 600M | 498M | 589M | 242M | 86M | -31M | 486M | 917M | 601M | 203M | 365M | 259M | -124M | 166M | 218M | 2.23B | 608M | 558M | 253M |
| Net Margin % | 6.12% | 6.22% | 6.01% | 6.73% | 6.69% | 6.02% | 2.65% | 5.98% | 8.75% | 2.16% | 6.98% | 5.19% | 4.32% | 4.11% | 4.81% | 2.15% | 0.82% | -0.3% | 3.47% | 7.27% | 5.23% | 2.02% | 4.39% | 2.65% | -1.2% | 1.35% | 1.67% | 18.78% | 6.16% | 6.43% | 3.37% |
| Net Income Growth % | 14.83% | 11.77% | -10.53% | 6.97% | 15.42% | 141.42% | -62.09% | -33.31% | 298.05% | -68.09% | 38.02% | 16.17% | 20.48% | -15.45% | 143.39% | 181.4% | 377.42% | -106.38% | -47% | 52.58% | 196.06% | -44.38% | 40.93% | 308.87% | -174.7% | -23.85% | -90.21% | 266.12% | 8.96% | 120.55% | -47.18% |
| Net Income (Continuing) | 939M | 923M | 825M | 922M | 862M | 747M | 309M | 815M | 1.22B | 306M | 843M | 698M | 605M | 498M | 581M | 242M | 92M | -73M | 324M | 879M | 706M | 516M | 375M | 292M | 367M | 166M | 277M | 623M | 443M | 372M | 306M |
| Discontinued Operations | -2M | -2M | -1M | -1M | -1M | -1M | 0 | 0 | 0 | 1M | 119M | -1M | -5M | 0 | 8M | 0 | -6M | 42M | 162M | 38M | -105M | -313M | -10M | -33M | -3M | 0 | 0 | 1.65B | 165M | 186M | -53M |
| Minority Interest | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 512M | 512M | 483M | 0 | 0 |
| EPS (Diluted) | 5.35 | 5.11 | 4.33 | 4.56 | 4.01 | 3.30 | 1.35 | 3.50 | 4.83 | 1.14 | 3.53 | 2.50 | 2.13 | 1.75 | 2.00 | 0.79 | 0.28 | -0.12 | 1.94 | 3.60 | 2.31 | 0.75 | 1.31 | 0.95 | -0.45 | 0.58 | 0.75 | 1.91 | 1.37 | 1.65 | 0.74 |
| EPS Growth % | 19.91% | 18.01% | -5.04% | 13.72% | 21.52% | 144.44% | -61.43% | -27.54% | 323.68% | -67.71% | 41.2% | 17.37% | 21.71% | -12.5% | 153.16% | 182.14% | 333.33% | -106.19% | -46.11% | 55.84% | 208% | -42.75% | 37.89% | 311.11% | -177.59% | -22.67% | -60.73% | 39.42% | -16.97% | 122.97% | -46.38% |
| EPS (Basic) | - | 5.11 | 4.38 | 4.62 | 4.05 | 3.33 | 1.35 | 3.52 | 4.83 | 1.17 | 3.56 | 2.55 | 2.17 | 1.77 | 2.17 | 0.87 | 0.31 | -0.12 | 1.97 | 3.67 | 2.35 | 0.76 | 1.33 | 0.96 | -0.45 | 0.59 | 0.76 | 1.91 | 1.37 | 1.69 | 0.76 |
| Diluted Shares Outstanding | 175.01M | 180.26M | 190.31M | 201.77M | 214.97M | 216.9M | 226.4M | 228M | 253.24M | 268.75M | 272.37M | 278.73M | 281.79M | 284.43M | 294.66M | 307.25M | 302.56M | 262.92M | 250.34M | 254.83M | 260.44M | 272.89M | 280.34M | 274.43M | 280.5M | 285.87M | 292.3M | 309.16M | 334.33M | 338.6M | 342.86M |
| Basic Shares Outstanding | 175.01M | 180.26M | 189.86M | 201.53M | 212.81M | 216.9M | 226.4M | 228M | 253.24M | 261.5M | 270.29M | 274.23M | 276.6M | 282.1M | 271.3M | 278.9M | 274.45M | 262.92M | 246.21M | 249.79M | 255.1M | 267.06M | 274.67M | 271.75M | 277.49M | 282.1M | 287.85M | 302.01M | 325.82M | 329.59M | 333.77M |
| Dividend Payout Ratio | - | 2.06% | 1.94% | 1.74% | 2.09% | 2.41% | 5.83% | 2.45% | 1.72% | 7.17% | 2.29% | 4.02% | 3.67% | 3.41% | 3.74% | 9.09% | 24.42% | - | 31.69% | 26.61% | 31.45% | 93.1% | 36.99% | 85.71% | - | 110.84% | 86.7% | 8.63% | 23.52% | 36.2% | 58.5% |
Quick answers to the most common questions about buying TXT stock.
For fiscal year 2025, Textron Inc. (TXT) reported total revenue of $14.80B. This represents a 97.2% increase compared to $7.51B in 1996.
Textron Inc. (TXT) is profitable, generating $921.0M in net income for the fiscal year ending 2025 with a net profit margin of 6.2%.
Textron Inc. (TXT) reported an operating income of $1.25B, resulting in an operating profit margin of 8.4%. This margin reflects the operational efficiency of the business before interest and taxes.
Textron Inc. (TXT) generated $2.50B in gross profit for the year, representing a gross profit margin of 16.9%. This demonstrates the company's core pricing power and production efficiency.
Key Metrics
Top Statement Risk
Defense program execution risk
Metrics are mathematically derived from official filings.
Aviation Momentum Offsets Mixed Growth
Revenue grew 3.0% year-over-year in Q2 2026 to $3.8B, per recent filings, with management citing strong order activity at Textron Aviation, suggesting the business jet upcycle remains intact.
The 3.0% growth in Q2 2026 is a deceleration from the 11.8% seen in Q1 2026, but the maintained full-year guidance implies management expects the pace to hold. The Aviation segment appears to be the primary driver, with CEO commentary highlighting robust order intake, while the Industrial segment likely remains a drag given its cyclical exposure. Investors should monitor whether the Ascend program's ramp-up can sustain growth as it scales.
Gross Margin Compression Raises Concerns
Gross margin fell to 9.2% in Q2 2026 from 19.1% a year earlier, as reported in financial statements, a steep decline that appears driven by segment mix and cost pressures.
The dramatic drop in gross margin from 19.1% in Q2 2025 to 9.2% in Q2 2026 is alarming, though it may be distorted by one-time items or accounting adjustments. The reported COGS of $3.5B on revenue of $3.8B implies a significant cost increase, possibly tied to supply chain inflation or unfavorable product mix. This trend, if sustained, could pressure overall profitability, but the sequential improvement from 8.7% in Q1 2026 suggests some stabilization.
Operating Leverage Shows Signs of Strain
Operating income rose 16.4% year-over-year in Q2 2026 to $263M, but operating margin contracted to 6.9% from 7.2%, indicating that revenue growth is not translating into proportional profit expansion.
Despite a 3.0% revenue increase, operating margin fell 30 basis points year-over-year, suggesting that fixed costs are not being absorbed efficiently. SG&A expenses dropped to $42M in Q2 2026 from $303M in Q2 2025, a massive reduction that may reflect cost-cutting or reclassification, but the gross margin compression overwhelmed any SG&A savings. This implies that the company's high fixed-cost structure is vulnerable to volume fluctuations, and operating leverage may be negative in the current environment.
Earnings Quality Clouded by One-Time Items
Net income of $248M in Q2 2026 includes a $42M SG&A expense, but the absence of R&D and SBC data suggests potential distortions, as reported in the income statement.
The reported net income of $248M appears solid, but the lack of R&D and stock-based compensation figures raises questions about the completeness of the data. The Q4 2025 quarter showed a negative R&D expense of -$387M, which is unusual and may indicate a reversal or reclassification, potentially inflating operating income. Investors should scrutinize the quality of earnings, as the volatility in expense lines suggests that reported figures may not fully reflect underlying operational performance.
Cost Structure Shows Unusual Volatility
COGS as a percentage of revenue jumped to 90.8% in Q2 2026 from 80.9% a year earlier, per the income statement, indicating a significant cost escalation that warrants investigation.
The sharp increase in COGS relative to revenue is a red flag, as it suggests either input cost inflation, production inefficiencies, or a shift toward lower-margin products. SG&A expenses also swung dramatically, from $303M in Q2 2025 to $42M in Q2 2026, which may indicate a reclassification of costs or a one-time benefit. The R&D line is equally erratic, with zeros in some quarters and large figures in others, making it difficult to assess the company's true investment in future growth.
Q4 2025 Marks a Turning Point
Q4 2025 saw revenue surge 15.6% year-over-year to $4.2B, but net income fell to $235M due to a $387M R&D charge, as reported in financial statements, signaling a strategic pivot.
The Q4 2025 quarter appears to be an inflection point, with revenue growth accelerating to 15.6% but profitability hampered by a massive R&D expense, likely related to the FLRAA program or other defense initiatives. This suggests management is investing heavily in future growth, which may depress near-term margins but could position the company for long-term gains. The subsequent quarters show a return to more normal R&D levels, but the impact of this investment on future revenue and margins remains to be seen.
Margin Compression Threatens Narrative
Despite the Q2 2026 earnings beat, gross margin of 9.2% is less than half the 19.1% reported a year ago, per SEC filings, suggesting the beat may be driven by one-time items.
Short-sellers would likely focus on the dramatic gross margin compression, which could indicate structural issues such as pricing pressure or cost inflation that are not being offset. The maintained guidance, despite the beat, may signal that management is cautious about the sustainability of current profitability. Additionally, the reliance on defense contracts, which carry execution risk, and the customer concentration with the US government (~27% of revenue) could expose the company to budget cuts or program delays. Investors should monitor whether the margin recovery is real or if the company is masking underlying deterioration.