AAR Corp. Earnings Summary — Q3 FY2026

• AAR Corp. reported record Q4 revenue of $928 million, up 23% year-over-year, supported by a 31% increase in commercial segment sales.
• The Parts Supply segment was a primary growth engine, expanding 39% in the quarter with organic new part distribution growth of 19%.
• Net income rose to $50.7 million ($1.27 EPS), while adjusted EBITDA grew 27% to $116 million as margins expanded slightly to 12.5%.
• The company announced a segment realignment and the strategic wind-down of its Legacy Commercial Programs to focus on higher-margin services.
• Net debt was reduced to $816 million, bringing net leverage to 2.03x, which sits comfortably within the company's 2.0x-2.5x target range.
• Recent acquisitions, including HAECO Americas and ADI, contributed significantly to the inorganic growth profile during the quarter.
• Operating cash flow remained stable at $55.3 million for the quarter, supporting the company's deleveraging and growth funding strategy.

Management expects Q1 FY2027 sales growth (excluding Legacy Commercial Programs) of 21-23% and Adjusted EBITDA margins of 12.25-12.75%. Full-year FY2027 sales growth is projected in the low double-digits to low teens.

Improving

The transition toward a higher-margin aftermarket pure-play is gaining traction, with organic growth and acquisition synergies offsetting short-term integration dilution.

The company is positioned for continued margin expansion as it shifts its mix to higher-margin offerings, completes the HAECO Americas integration, and cycles out of low-margin legacy programs.