AAR (AIR) Q2 2026 earnings summary

Executive summary

• Achieved 16% year-over-year sales growth to $795.3 million in Q2 FY2026, with 12% organic growth, driven by strong demand in commercial and government markets and notable contributions from recent acquisitions.

• Adjusted diluted EPS rose 31% to $1.18; GAAP diluted EPS was $0.90, with net income reaching $34.6 million, reversing a prior-year net loss.

• Completed acquisitions of ADI for $138 million and HAECO Americas for $77 million, and announced agreement to acquire Aircraft Reconfig Technologies for $35 million, expanding distribution, maintenance, and engineering capabilities.

• Renewed key exclusive distribution agreements and expanded digital capabilities, including Trax software wins with Thai Airways and Delta Air Lines.

• Secured $850 million in multi-year airframe heavy maintenance contracts and completed a $273.9 million equity offering.

Financial highlights

• Total sales grew 16% year-over-year to $795.3 million, with 12% organic growth.

• Adjusted EBITDA increased 23% to $97 million, with margins rising to 12.1% from 11.4%.

• Adjusted operating income rose 28% to $81.2 million, with margins up 100 basis points to 10.2%.

• Net income for the quarter was $34.6 million, compared to a net loss of $30.6 million in the prior year.

• Diluted EPS for the quarter was $0.90, compared to a loss of $0.87 per share in the prior year.

Outlook and guidance

• Q3 FY2026 total sales growth expected at 20–22%, with organic growth of 8–11%.

• Full-year FY2026 sales growth expected to approach 17%, with organic growth near 11%.

• Adjusted operating margin guidance raised from approaching 10% to approaching 11%.

• New capacity from Oklahoma City and Miami expansions to have a more pronounced impact in FY27.

• Approximately 65% of the $755 million backlog is expected to be recognized as revenue over the next 12 months.