RECORD YEAR DELIVERED ACROSS PARTS, REPAIR AND SOFTWARE BUSINESSES

AAR Corp (NYSE: AIR) has reported its fourth quarter and full fiscal year 2026 results for the period ended 31 May 2026, recording full-year consolidated sales of USD 3.3 billion — a 19% increase over fiscal year 2025 — and adjusted diluted earnings per share of USD 5.05, up 29% year-on-year. Adjusted EBITDA for the full year reached USD 401 million, a 24% increase, with the adjusted EBITDA margin expanding from 11.8% to 12.1%. Over the last five years, AAR has grown adjusted EBITDA at a 37% compound annual growth rate while expanding adjusted EBITDA margins by an average of 100 basis points annually.

John M. Holmes, AAR’s Chairman, President and CEO, said the record fiscal year 2026 performance demonstrated that the strategic and operational changes made were creating a more durable, higher-growth, and higher-margin aviation aftermarket services platform, with industry-leading turnaround times in hangars, significant market share gains in distribution and innovative new software products. He said the disciplined growth strategy had AAR well positioned to continue creating long-term value for employees, customers and shareholders.

FOURTH QUARTER HIGHLIGHTS: 23% GROWTH, PARTS SUPPLY UP 39%

Fourth quarter consolidated sales increased 23% to USD 928 million. Growth was led by the Parts Supply segment, which grew 39%, with new parts distribution activity delivering 19% organic growth. The Repair, Engineering and Software segment reported 35% sales growth, driven by increased Component MRO activity, higher Airframe MRO volumes and growth in recurring revenue at Trax, AAR’s aviation software platform. Adjusted EBITDA in the quarter increased 27% to USD 116 million, with the adjusted EBITDA margin improving from 12.4% to 12.5%.

AIRVOYANT AI PLATFORM, SEGMENT REALIGNMENT AND KEY CONTRACT WINS

Among the most strategically significant developments of the quarter was the launch of Airvoyant, an AI-powered aviation procurement solution designed to connect buyers directly to suppliers — a platform-level product that strengthens AAR’s software and data revenue stream. The company also announced a segment realignment into four operating units — Parts Supply; Repair, Engineering and Software; Government Solutions; and Legacy Commercial Programs — alongside an intention to wind down the Legacy Commercial Programs business, maintaining focus on higher-margin growth activities.

Key contract and customer milestones included a USD 305 million follow-on contract for contractor logistics support for the US Navy and Marine Corps C-40A fleet, a multi-year commercial distribution agreement with Woodward for high-demand consumable parts for the CFM LEAP, GEnx and CF34 engines, and the completion of the Aircraft Reconfig Technologies acquisition, which added FAA Organization Designation Authorization capability to AAR’s Engineering Services division. The Component MRO facility in Wellington, Kansas, received the Collins Aerospace Supplier of the Year Award.

FY2027 GUIDANCE AND BALANCE SHEET

Net leverage stood at 2.03 times adjusted EBITDA at 31 May 2026 — within the stated target range of 2.0 to 2.5 times. For the first quarter of fiscal year 2027, AAR guides sales growth (excluding Legacy Commercial Programs) of 21% to 23% and adjusted EBITDA margin of 12.25% to 12.75%. Full-year fiscal 2027 guidance projects sales growth in the low double-digits to low teens, reflecting continued confidence in structural demand for aviation aftermarket services driven by global fleet growth and sustained high utilisation rates.