StandardAero (SARO) Q2 2026 earnings summary

Executive summary

• Q2 2026 revenue grew 4.6% year-over-year to $1.6 billion, driven by strong demand in commercial aerospace and business aviation, partially offset by lower military sales and elimination of low-margin pass-through revenue.

• Adjusted EBITDA increased 12.3% to $229.9 million, with a record margin of 14.4%, and net income rose 43.7% to $97.3 million, supported by operational improvements and share repurchases.

• Free cash flow was $50 million, reflecting improved working capital efficiency and supply chain initiatives.

• Achieved profitability on LEAP and CFM56 DFW programs and eliminated low to no margin pass-through revenue, boosting margins.

• Completed a $180 million license expansion and acquired Unified Turbines, enhancing repair capabilities and future growth prospects.

Financial highlights

• Commercial Aerospace and Business Aviation revenues each grew about 6% year-over-year, while Military & Helicopter declined up to 3%.

• Engine Services revenue rose 4.0% to $1.405 billion; Adjusted EBITDA up 14.4% to $204 million, margin expanded to 14.5%.

• Component Repair Services revenue increased 9.2% to $195 million; segment Adjusted EBITDA was $51 million, down 0.9%, with margin at 26.3%, down 270 bps due to mix and ramp costs.

• Net leverage improved to 2.6x from 3.0x a year ago, with rating upgrades from Moody’s (Ba2) and S&P (BB).

• Free cash flow was $50 million, a significant improvement both sequentially and year-over-year.

Outlook and guidance

• FY26 revenue guidance raised to $6.375–$6.5 billion; Adjusted EBITDA to $885–$910 million; Adjusted EPS to $1.50–$1.57.

• Adjusted free cash flow guidance set at $270–$300 million; CapEx guidance at $100–$110 million.

• Commercial Aerospace expected to grow low double digits to mid-teens, Business Aviation high single to low double digits, Military/Helicopter low double digits.

• Engine Services expected to contribute $5.6–$5.7 billion in revenue, Component Repair Services $775–$800 million.

• Adjusted Diluted EPS definition updated to exclude all non-cash amortization of intangible assets.