AAR (AIR) Investor Day 2026 summary

Strategic transformation and portfolio realignment

• Business realigned into Parts Supply, Repair, Engineering & Software, Government Solutions, and Legacy Commercial Programs, enhancing focus and transparency.

• Segment realignment combines Government Programs and Mobility into Government Solutions, and moves software into Repair, Engineering & Software.

• Portfolio repositioned from a broad, less-focused mix to a high-quality aviation aftermarket platform with improved margins and cash profile.

• Strategic acquisitions in Parts, Repair, and Software, and divestitures of low-return assets, have driven growth and efficiency.

• Wind-down of low-return Legacy Commercial Programs to further improve margins and ROIC.

Financial performance and guidance

• Adjusted sales grew at a 15% CAGR and adjusted EBITDA at 26% CAGR over the past four years, with margin expansion of ~90 bps/year.

• On track to achieve or exceed updated 3-5 year targets: 5-10% sales CAGR, 10.5-11.5%+ operating margin, and 10-15%+ EPS CAGR.

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

• Three-year targets (ex-Legacy Commercial): 8-12% sales CAGR, 13-14%+ EBITDA margin, ~15%+ EPS CAGR, and ~30%+ operating cash flow as % of EBITDA.

• Strong balance sheet with net leverage at 2.17x and $840M in available liquidity as of Q3 FY26.

Business segment highlights

• Parts Supply: $1.4B LTM sales (+30% YoY), 14.7% EBITDA margin, 100% renewal rate on exclusive OEM distribution contracts, and significant runway in a $25B market.

• Repair, Engineering & Software: $1.0B LTM sales (+8% YoY), 12.7% EBITDA margin, leading independent MRO with proprietary digital tools and next-gen component capabilities.

• Software: Trax and Aerostrat drive high-margin, recurring revenue; Airvoyant launched as an AI-enabled procurement platform; software revenue nearly doubled since 2023.

• Government Solutions: $514M LTM sales (+12% YoY), 10.9% EBITDA margin, $48B pipeline, and focus on commercial best practices for military customers.