AAR Corp
Q2 2026 Earnings
Market Reaction
S&P 500 over the same 30 days: +0.63%.
Did AIR Beat Earnings? Q2 2026 Results
AAR Corp kicked off fiscal 2026 on a confident note, reporting a blowout second quarter that cleared Wall Street's bar on both the top and bottom lines. Adjusted diluted EPS of $1.18 beat the $1.04 consensus by 13.65%, while revenue of $795.30 million topped estimates by 4.49% and climbed 15.9% year-over-year, fueled by 12% organic growth and contributions from the quarter's two strategic acquisitions. The standout driver was the Parts Supply segment, where a 32% surge in organic new parts distribution helped push segment sales up 29% to $353.60 million. Adjusted EBITDA margin expanded to 12.1% from 11.4%, and GAAP net income rebounded to $34.60 million after the prior-year quarter had been weighed down by $57.10 million in after-tax FCPA settlement charges, a contrast that underscores how <a href="https://247wallst.com/investing/2025/12/10/aerovironment-posts-record-revenue-but-swings-to-67-million-loss-on-integration-costs/">one-time charges can distort</a> underlying performance. Looking ahead, AAR raised its full-year organic sales growth guidance to approaching 11% and now targets total sales growth approaching 17%, with Q3 total sales growth guided at 20-22%.
- 32% organic sales growth in new parts Distribution capturing market share through exclusive Distribution model
- Sales to government customers increased 23% over same period last year
- Adjusted EBITDA margin expanded from 11.4% to 12.1% driven by operating leverage
- ADI acquisition performed above expectations in first quarter of ownership
- Favorable mix and key program milestones in Integrated Solutions drove 82% adjusted EBITDA growth
“AAR delivered another outstanding quarter, achieving solid results throughout all segments of our business and advancing our strategic objectives through our recent acquisitions. Total sales were up 16%, including organic growth of 12%, led by our Parts Supply business with sales up 29%. Within Parts Supply, new parts Distribution had another exceptional quarter with organic sales growth of 32% as we continue to capture market share through our exclusive Distribution model.”
AAR CEO, on the earnings call
Forward Guidance & Outlook
AAR raised its full-year FY2026 organic sales growth guidance to approaching 11% (from approaching 10%) and now expects total sales growth approaching 17%. For Q3 FY2026, the company guides total sales growth of 20-22%, organic sales growth of 8-11%, adjusted operating margin of 9.8-10.1%, and an estimated tax rate of 28%. Management expects margins to continue improving through operational efficiencies, acquisition synergies, and a shift in sales mix toward higher-margin offerings such as new parts Distribution and Trax. HAECO Americas integration and synergy realization actions are expected to drive margin improvements over the next 12-18 months. Material supply constraints are expected to persist through FY26, with additional USM capacity coming online in 2H FY26 and FY27.
AIR YoY Financials
AIR Revenue by Segment
Figures from SEC filings and company reports. Not investment advice.