AAR FY26 sales rise 26% to $928 million, led by parts supply

AAR reported financial results for the fourth quarter and fiscal year 2026 ended May 31, 2026, with sales increasing 26% to $928 million for the quarter and 20% to $3.3 billion for the full year. The company's adjusted diluted earnings per share increased 32% year-over-year to $1.53 for the quarter and 29% to $5.05 for the fiscal year, driven by growth across its parts, repair, and software platform activities.

Financial Performance

The company's revenue growth was driven by a significant year-over-year increase in sales, primarily within the Parts Supply segment which grew 39% in the quarter. Adjusted EBITDA increased 27% in the quarter to $116 million and 24% for the full year to $401 million. The adjusted EBITDA margin for the quarter was 12.5%, up from 12.4% in the prior year. Excluding the Legacy Commercial Programs segment, the adjusted EBITDA margin was 13% for the quarter and 12.7% for the full year.

Metric	Q4 FY26	Q4 FY25	FY26	FY25
Sales	$928.0 million	$754.5 million	$3,308.0 million	$2,780.5 million
Adj. EPS	$1.53	$1.16	$5.05	$3.91
Adj. EBITDA	$116 million	$91 million	$401 million	$324 million
GAAP Net Income	$51 million	$34 million	$188 million	$12.5 million

Operational Highlights

Growth was driven by each of the company's key segments, led by the Parts Supply segment. New parts distribution activity organic growth was 19%. Commercial distribution grew 28% organically, while government distribution grew 7% organically. The Repair, Engineering, and Software segment reported 35% sales growth driven by increased Component MRO activities, higher volumes in Airframe MRO facilities, and the HAECO Americas acquisition. The integration of HAECO Americas is ahead of schedule and is expected to reach margins consistent with other airframe MRO sites in the second half of fiscal 2027.

The company announced a new reporting structure consisting of four operating segments and its intention to wind down the Legacy Commercial Programs business over the next three to four years. Strategic initiatives included signing a distribution agreement with Woodward for LEAP, GEnx, and CF34 engine parts, launching the AI-driven procurement solution AirVoyant, and expanding airframe MRO facilities in Oklahoma City and Miami.

Outlook

The company provided guidance for the first quarter of fiscal 2027, projecting sales growth of 21% to 23% and an adjusted EBITDA margin of 12.25% to 12.75%, excluding the Legacy Commercial Programs segment. For the full year fiscal 2027, the company expects sales growth in the low double digits to low teens, excluding the Legacy Commercial Programs segment. The company continues to expect double-digit sales growth and further margin expansion as it executes on its plan.