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FY2025 Q4
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Honeywell International Inc. earnings call
Buzzberg read
Record backlog of $37B drives 2026 growth conviction
Honeywell reported a strong Q4 2025 beat and provided 2026 guidance of 3-6% organic sales growth and 6-9% EPS growth, driven by record backlog and price execution. The company is advancing its spin-off plans with aerospace expected to separate in Q3 2026 and automation businesses being streamlined. Key cross-company signals include partnerships with NVIDIA and major financial institutions in quantum computing, and improved aerospace supply chain performance. Q4 2025 adjusted EPS $2.59 (up 17% YoY) and FCF $2.5B (up 48%), both above guidance.
Buzzberg read Record backlog of $37B drives 2026 growth conviction Honeywell reported a strong Q4 2025 beat and provided 2026 guidance of 3-6% organic sales growth and 6-9% EPS growth, driven by record backlog and price execution. The company is advancing its spin-off plans with aerospace expected to separate in Q3 2026 and automation businesses being streamlined. Key cross-company signals include partnerships with NVIDIA and major financial institutions in quantum computing, and improved aerospace supply chain performance. Q4 2025 adjusted EPS $2.59 (up 17% YoY) and FCF $2.5B (up 48%), both above guidance. Read full analysisCollapse analysis
Honeywell reported a strong Q4 2025 beat and provided 2026 guidance of 3-6% organic sales growth and 6-9% EPS growth, driven by record backlog and price execution. The company is advancing its spin-off plans with aerospace expected to separate in Q3 2026 and automation businesses being streamlined. Key cross-company signals include partnerships with NVIDIA and major financial institutions in quantum computing, and improved aerospace supply chain performance. Q4 2025 adjusted EPS $2.59 (up 17% YoY) and FCF $2.5B (up 48%), both above guidance.
- FY2026 guidance: Sales $38.8-39.8B (org 3-6%), EPS $10.35-10.65 (+6-9%), FCF $5.3-5.6B.
- Aerospace spin expected in Q3 2026; advanced materials spin completed in Oct 2025.
- Record backlog of $37B+ with orders up 23% in Q4, driven by long-cycle aerospace and energy.
Revenue$6.86B-34% QoQ
EPS$5.18Reported
Gross margin36.06%Reported
Operating margin10.41%Reported
6 grounded callouts
What matters now
The highest-signal changes from the call.
Portfolio
Aerospace spin expected in Q3 2026, ahead of plan
AI
Quantinium raises $840M at $10B valuation, launches Helios
Show 3 more callouts
Portfolio
PSS and warehouse businesses to be sold in H1 2026
Pricing
Pricing expected ~3.5% in 2026, above historical levels
Margins
Stranded costs from spins to be eliminated in 12-18 months
Reported period
Actuals
| Metric | Reported | Change |
|---|---|---|
| Revenue | $6.86B | -34% QoQ |
| EPS | $5.18 | Reported |
| Gross margin | 36.06% | Reported |
| Operating margin | 10.41% | Reported |
| Free cash flow | $1.117B | Reported |
| Capex | $0.058B | Reported |
Forward-looking
Forward guidance
| Metric | Period | Range | Midpoint | Status |
|---|---|---|---|---|
| EPS | FY2026 | $10.35–$10.65 | $10.50 | Initiated |
| Free cash flow | FY2026 | $5.3B–$5.6B | $5.45B | Initiated |
| Operating margin | FY2026 | 22.7%–23.1% | 22.9% | Initiated |
| Operating margin | FY2026 Q1 | 22.4%–22.6% | 22.5% | Initiated |
| Revenue | FY2026 | $38.8B–$39.8B | $39.3B | Initiated |
AI, capex & demand read
Management read
Confident
Management expressed strong conviction in delivering 2026 guidance, highlighted record backlog, robust order growth, and progress on portfolio simplification, while acknowledging specific headwinds but framing them as manageable.
Management AI read
Management discussed Quantinium's progress in quantum computing, including a $840 million raise at a $10 billion valuation, the launch of Helios, the world's most accurate commercial quantum computer, and a partnership with NVIDIA to integrate quantum with AI. They are investing more R&D to maintain leadership and plan an eventual IPO or strategic investment.
Investment and capacity
Management expects capital expenditures to increase by roughly $250 million in 2026 to support growth investments tied to orders already in backlog, with a large share going to aerospace supply chain expansion. This increase will be funded by improvements in working capital efficiency, particularly focused on aerospace inventory.
all 12 named companies below
Companiesreturns since call
Customers
BBD.B
Customers
Mike Stepniak
The Bombardier agreement was a one-time boost in 2024; its exclusion shows underlying organic growth is lower, indicating no sustained demand from Bombardier beyond that.
Evidence
“Sales grew 11% organically, or 6% excluding the impact of the 2024 Bombardier Agreement”
Partners
Partners
Vimal Kapur
NVIDIA's partnership with Quantinium positions both companies at the forefront of quantum-AI convergence, potentially driving demand for NVIDIA's hardware in quantum computing applications.
Evidence
“Continuum also announced a partnership to integrate Helios with Nvidia's AI supercomputing technology to create powerful new architecture that can solve the world's most pressing challenges.”
Partners
Vimal Kapur
JPMorgan is leveraging Quantinium's quantum technology for cybersecurity and encryption, signaling increasing institutional adoption of quantum computing.
Evidence
“Close collaborative with shareholders such as Quanta, NVIDIA, JP Morgan, Amgen, and Mitsui have led to new commercial partnerships that are supporting the development of critical applications for improving drug discovery, cybersecurity,”
Supply chain
Supply chain
Mike Stepniak
Honeywell is pursuing acquisition of Johnson Matthey's Catalyst Technologies business, which would strengthen its position in catalyst and process technology.
Evidence
“does not incorporate the pending acquisition on Johnson & Matty's Catalyst Technologies business”
Supply chain
Vimal Kapur
Aerospace supply chain constraints are largely resolved; Honeywell is 'close to PO now, hardly with any past due' indicating capacity has improved and volume can scale. — Improved delivery performance means aerospace OEMs and aftermarket can expect fewer delays, potentially boosting their own production rates and margins.
Evidence
“we are close to PO now, hardly with any past due, which shows that we have ability to meet their needs of the volume they are looking for.”
Supply chain
Mike Stepniak
Catalyst shipments in petrochemicals have been delayed due to overcapacity, but 'can only be deferred for a period of time' suggesting pent-up demand that will eventually materialize. — If deferrals reverse, Honeywell's UOP business (energy and sustainability) could see a sharp uptick in catalyst orders, benefiting suppliers to the petrochemical industry.
Evidence
“Catalyst shipments can be temporarily delayed in the short term, but are ultimately necessary for our customers to maintain yields. And those can only be deferred for a period of time.”
Supply chain
Vimal Kapur
Data center exposure in building automation is becoming material, now exceeding 5% of revenue, up from near zero a couple years ago. — Honeywell's growing data center revenue indicates strong demand for BMS, fire safety, and security in hyperscale facilities, which is a positive read for other data-center-infrastructure suppliers.
Evidence
“data center overall position of Honeywell in building automation is becoming slowly material. We are inching towards that becoming greater than 5% of our revenue. Think about it, that number was zero a couple of years back.”
External signals
Supply-chain alpha · 4returns since call
Aerospace supply chain constraints are largely resolved; Honeywell is 'close to PO now, hardly with any past due' indicating capacity has improved and volume can scale.
Catalyst shipments in petrochemicals have been delayed due to overcapacity, but 'can only be deferred for a period of time' suggesting pent-up demand that will eventually materialize.
Data center exposure in building automation is becoming material, now exceeding 5% of revenue, up from near zero a couple years ago.
Honeywell has 'already neutralized the advanced materials stranded costs in 2026', implying the Solstice spin-off is no longer a drag and margins should improve without that headwind.
Methodology & coverage
Management-only analysis. All 12 validated company mentions are shown. Reported actuals and forward guidance are kept separate. Public evidence is limited to eight short attributed quotes. AI-generated analysis can be incomplete or wrong; verify important claims against the original source.