AAR CORP. has reported its financial results for the second quarter of fiscal year 2026, ending 30 November 2025, reflecting growth across its core business segments and continued progress on its strategic priorities.

 

The company recorded second-quarter sales of US$795 million, representing a 16% increase compared with the same period in the prior year. GAAP net income for the quarter was US$35 million, translating to diluted earnings per share of US$0.90. On an adjusted basis, diluted earnings per share rose to US$1.18, an increase of 31% year-on-year. Adjusted EBITDA reached US$97 million, up 23%, with the adjusted EBITDA margin improving to 12.1% from 11.4%.

 

AAR reported growth across all segments, with Parts Supply leading performance. Sales in this segment increased by 29%, supported by strong momentum in new parts Distribution, which achieved organic sales growth of 32%. The Repair & Engineering segment also delivered growth, driven by increased efficiency in hangar operations and higher volumes at component repair facilities. Sales to government customers increased by 23% during the quarter.

 

Operating margins improved to 8.4%, compared with a negative margin in the prior-year quarter, while adjusted operating margin increased to 10.2%, primarily reflecting higher volumes and profitability in new parts Distribution. Net interest expense remained broadly stable at US$18.6 million. As of 30 November 2025, net debt stood at US$884.4 million, with net leverage of 2.49x.

 

During the quarter, AAR completed two strategic acquisitions. The acquisition of ADI strengthened the company’s position in new parts Distribution, adding production-facing distribution capabilities, new OEM relationships and an expanded product portfolio. AAR also acquired HAECO Americas, expanding its airframe heavy maintenance footprint in North America. In conjunction with this acquisition, the company secured approximately US$850 million in long-term airframe heavy maintenance agreements, effectively filling the acquired capacity for several years.

 

Additional business developments included new and renewed agreements across the portfolio. AAR’s subsidiary Airinmar secured a multi-year contract with Malaysia Airlines for aircraft warranty management and value engineering services. The company also signed an agreement with Eaton to become an authorised service centre for commercial aerospace customers across Europe, the Middle East and Africa. Trax expanded its integration capabilities through an agreement with Aeroxchange and, subsequent to quarter-end, was selected by Thai Airways to provide its eMRO enterprise resource planning system, mobility applications and cloud hosting solution. Exclusive new parts Distribution contracts with Collins Aerospace and Arkwin Industries were also renewed after the quarter closed.

 

Looking ahead, AAR has provided guidance for the third quarter and full fiscal year 2026. For the third quarter, total sales growth is expected to be between 20% and 22%, with organic sales growth of 8% to 11% and an adjusted operating margin of 9.8% to 10.1%. For the full year, total sales growth is expected to approach 17%, with organic sales growth approaching 11%.

 

AAR continues to position itself as a leading independent provider of aviation aftermarket parts, repairs and software, supported by a diversified value chain spanning Parts Supply, Repair & Engineering, Integrated Solutions and Expeditionary Services, with operations in more than 20 countries worldwide.