AAR Corp.: Beat — EPS $1.49, Revenue $918M
AIRAAR Corp.•Q2 2027•Sep 29, 2026, 6:53 AM EDT
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Earnings Report· 2026-09-29
AIR
Q2 · 2027Pre-MarketAAR Corp.
@trystockwhiz
EARNING PER SHARE
Actual ($)
1.49
38.00% YoY
Expected
1.33
Beat
+12.03%
REVENUE
Actual ($)
918.00M
24.12% YoY
Expected
886.90M
Beat
+3.51%
Earning Report
| Metric | Q1 FY2027 | Q1 FY2026 | YoY Change % |
|---|---|---|---|
| Sales | $918.00M | $739.60M | +24.1% |
| └─Parts Supply | $414.80M | $317.80M | +30.5% |
| └─Repair, Engineering, and Software | $297.50M | $226.40M | +31.4% |
| └─Government Solutions | $138.80M | $133.90M | +3.7% |
| └─Legacy Commercial Programs | $66.90M | $61.50M | +8.8% |
| GAAP Basic EPS | $1.01 | $0.96 | +5.2% |
| GAAP Diluted EPS | $1.00 | $0.95 | +5.3% |
| Adjusted diluted earnings per share | $1.49 | $1.08 | +38.0% |
| Net income | $40.10M | $34.40M | +16.6% |
Financial Outlook / Guidance
| Metric | Q2 FY2027 Outlook | FY2027 Outlook |
|---|---|---|
| Sales growth (ex. LCP) | 14% - 16% | Low teens (prev. Low double-digits to low teens) |
| Adjusted EBITDA margin (ex. LCP) | 13.0% - 13.4% | — |
Business Highlights
- ➤Entered a definitive agreement to acquire a 65% controlling interest in MRO Holdings.
- ➤MRO Holdings acquisition is intended to add scale in heavy maintenance.
- ➤Transaction partners AAR with a team experienced in a strategically important region.
- ➤AAR continued reshaping its portfolio into an integrated Parts, Repair, and Software platform.
- ➤Commercial Distribution experienced strength across Commercial and Government end markets.
- ➤RE&S activity was driven by Airframe MRO, Component MRO, and software.
- ➤Government Solutions benefited from strength in Mobility Systems.
- ➤AAR supports commercial and government customers through operations in over 20 countries.
Management Commentary
John M. Holmes, Chairman, President and CEO
“This was a very strong start to our fiscal year. Our airline customers continue to experience strong demand for air travel, which in turn is driving strong demand for our services, as evidenced by our results this quarter. Total sales were up 24%, and we saw growth across all three core segments. In our Parts Supply segment, total growth of 31% was led by 23% organic growth in new parts Distribution on strength in both Commercial and Government end markets. Our Repair, Engineering & Software (RE&S) segment reported 31% sales growth, driven by our Airframe MRO, Component MRO, and software activities. Government Solutions was up 4% driven by strength in Mobility Systems.”
John M. Holmes, Chairman, President and CEO
“Our sales growth resulted in an adjusted EBITDA increase of 34% in the quarter and adjusted EBITDA margins of 12.7%, up 100 basis points year over year. Total adjusted EBITDA margin from the Parts Supply, RE&S, and Government Solutions segments was 13.3%.”
John M. Holmes, Chairman, President and CEO
“Cash from operations in the quarter was $56 million, helping to further reduce net leverage to 1.81x.”
John M. Holmes, Chairman, President and CEO
“Along with our strong fiscal first quarter earnings, we also announced an agreement to acquire a 65% controlling interest in MRO Holdings. Over the last several years, AAR has taken important steps to reshape our portfolio into an integrated Parts, Repair, and Software aviation aftermarket platform. Through the acquisition of MRO Holdings, AAR will achieve scale that significantly accelerates our strategy as heavy maintenance helps drive revenue to all other areas of the company. Further, the transaction structure allows us to partner with a proven team that brings decades of experience in a strategically important region while also providing the financial flexibility to continue to pursue AAR's broader strategy. This acquisition is highly strategic for AAR and marks a significant step in our long-term growth plan.”
John M. Holmes, Chairman, President and CEO
“Our strategy has been successful over the last several years as we have delivered above-market growth and consistent margin expansion. The acquisition of MRO Holdings will further propel this growth and drive a meaningful step-up in our margin profile. The strategy, portfolio, and combination add to the strength and resilience of our aftermarket platform. Given our solid first quarter results and continued demand for our solutions, we remain confident in our ability to deliver another year of strong performance in fiscal 2027.”