AAR (AIR) Investor Day 2026 summary

Strategic transformation and business realignment

• Business re-segmented into four reporting segments, winding down Legacy Commercial Programs to focus on growth, margin expansion, and cash flow generation.

• Portfolio repositioned through divestitures and $1.2 billion in acquisitions, deepening expertise in core areas and shifting to a high-quality aviation aftermarket platform.

• Strategic realignment combined Government Programs and Mobility into Government Solutions, and moved software into Repair, Engineering & Software.

• Focused strategy on Parts, Repair, and Software, with increased connectivity across business units and digital innovation to drive higher margins and growth.

• New structure and targets effective from FY 2026, with disciplined organic and inorganic investments and wind-down of low-return Legacy Commercial Programs.

Financial performance and guidance

• Adjusted sales grew at a 15% CAGR and adjusted EBITDA at 26% CAGR since FY 2022, with margin expansion of ~90 bps/year.

• Updated three-year targets: 8%-12% organic growth, 13%-14%+ adjusted EBITDA margin, 15%+ adjusted EPS CAGR, and 30%+ EBITDA-to-operating cash conversion.

• FY2026 outlook: ~19% total adjusted sales growth, ~12% organic growth, and 10.2-10.5% adjusted operating margin.

• Strong balance sheet with net leverage at 2.17x and over $800 million in liquidity as of Q3 FY26.

• Capital allocation prioritizes organic growth, disciplined M&A, and opportunistic share repurchases, with M&A focused on parts, repair, and software.

Market trends and growth drivers

• Global air travel and aircraft fleet growth remain resilient, with the fleet expected to grow from 29,000 to 42,000 by 2035 and average fleet age rising.

• Aftermarket demand is supported by constrained new aircraft deliveries and low retirements, driving a durable $80 billion parts and repair market.

• Software market for maintenance and engineering is a $3 billion fragmented opportunity, with further multi-billion potential in planning and procurement.

• Government sector growth is underpinned by 7%-9% annual budget increases and a shift from acquisition to sustainment, with international defense spending also rising.

• Less than 4% market share in addressable markets signals significant runway for expansion.