AAR Corp (AIR) Q2 2026 Earnings Report

Executive Summary:
- QQ2 2026 showcased a solid top-line performance and margin improvement across AAR's three core platforms. Total sales rose 16% year over year to $795.3 million, with organic growth of 12%. Parts Supply led the charge, increasing 29% YoY (32% organic in new parts distribution), underscoring the durability of the firm’s two-way exclusive distribution model and the strength of OEM relationships.
- The quarter was mark‑ed by meaningful portfolio expansion via three strategic acquisitions (ADI in electronic components distribution; HAYCO Americas for airframe heavy maintenance; ART for interior reconfigurations). Management emphasized ongoing integration discipline and productivity gains, with targeted capacity additions expected to lift revenue and margins over the next 12–18 months. Trax software and Arrow Exchange collaboration further digitalize the ecosystem and improve customer access to parts, repairs, and logistics.
- Financial momentum extended to profitability and leverage: adjusted EBITDA reached $96.5 million (margin 12.1%), adjusted operating income $81.2 million (margin 10.2%), and adjusted diluted EPS up 31% YoY to $1.18. Net debt leverage declined to 2.49x, squarely within the company’s target range of 2.0–2.5x, aided by double-digit earnings growth and balance-sheet discipline.
- Outlook remains constructive: Q3 revenue growth guided at 20–22% (organic 8–11%), with Q3 adjusted operating margin forecast at 9.8–10.1%. Full-year guidance contemplates roughly 17% total sales growth and ~11% organic growth, supported by two sales-rich acquisitions and ongoing capacity expansions (OKC and Miami) that will come online in 2026 and contribute meaningfully in FY27. Near-term margin dilution from HAYCO is expected to be followed by margin expansion as integration completes.
- Investment thesis: AAR’s diversified aftermarket platform—parts distribution, airframe maintenance, component repair, and software/IP—positioned to capitalize on a growing global fleet and increasing maintenance demand. The combination of high‑quality acquisitions, a scalable distribution model, and software-enabled offerings provides a sustainable growth and margin expansion trajectory, though investors should monitor integration risk and the pace of realized synergies.