AAR Corp (AIR) Q3 2025 Earnings Report

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AAR Corp

AIR

$82.70 -1.30%

Exchange: NYSE | Sector: Industrials | Industry: Aerospace Defense

Q3 2025

Published: Mar 28, 2025

Earnings Highlights

Revenue of $678.20M up 19.6% year-over-year
EPS of $-0.25 decreased by 162.5% from previous year
Gross margin of 19.4%
Net income of -8.90M
"*"...we reduced our net debt leverage to 3.06 times from 3.17 times in the prior quarter. Our strong balance sheet has us well positioned for investments that will continue to drive growth."*" - John Holmes

AIR

AAR Corp

Period Q3 2025

Currency USD

Report Type Quarterly Earnings

Generated Dec 7, 2025

Executive Summary

In Q3 2025, AAR Corp reported a record revenue of $678 million and an impressive year-over-year growth of 20%, driven by robust demand in both commercial and government sectors. Adjusted EBITDA surged by 39% to reach $81.2 million, reflecting successful margin improvements from enhanced operational efficiency and strategic acquisitions. However, net income remains in the negative, at $8.9 million, primarily due to increased interest expenses and temporary declines in specific business lines. Management remains optimistic about continued demand growth into FY 2026 and is strategically focusing on operational efficiencies to sustain margin expansion.

Key Performance Indicators

Revenue

Increasing

678.20M

QoQ: -1.15% | YoY: 19.55%

Gross Profit

Increasing

131.70M

19.42% margin

QoQ: 2.41% | YoY: 19.40%

Operating Income

Increasing

71.10M

QoQ: 3 191.30% | YoY: 115.45%

Net Income

Decreasing

-8.90M

QoQ: 70.92% | YoY: -163.57%

EPS

Decreasing

-0.25

QoQ: 50.98% | YoY: -162.50%

Revenue Trend

Margin Analysis

Financial Highlights

- Revenue: $678 million, +20% YoY, -1% QoQ
- Gross Profit: $131.7 million, 19.4% margin
- Adjusted EBITDA: $81.2 million, 12% margin, +39% YoY
- Net Income: -$8.9 million, -$11 million YoY
- EPS: -$0.25
- Net Debt Leverage: 3.06x, down from 3.17x.

The solid results highlight AAR Corpâ€™s effective growth strategies in Parts Supply and Repair & Engineering, yet the net loss raises flags regarding sustainability amid rising costs.

Income Statement

Metric	Value	YoY Change	QoQ Change
Revenue	678.20M	19.55%	-1.15%
Gross Profit	131.70M	19.40%	2.41%
Operating Income	71.10M	115.45%	3 191.30%
Net Income	-8.90M	-163.57%	70.92%
EPS	-0.25	-162.50%	50.98%

Key Financial Ratios

Gross Profit Margin

Weak

19.40%

Gross profit margin is below industry norms, profitability concerns

Operating Profit Margin

Fair

10.50%

Operating margin is moderate, room for improvement in cost management

Net Profit Margin

Weak

-0.01%

Net profit margin is below industry norms, profitability concerns

Return on Assets

Weak

0.00%

Return on assets suggests inefficient capital allocation

Return on Equity

Weak

-0.01%

Return on equity suggests inefficient capital allocation

Current Ratio

Strong

2.82

Current ratio indicates excellent liquidity and financial flexibility

Debt to Equity

Elevated

0.92

Debt-to-equity shows significant leverage, monitor debt levels

P/E Ratio

Negative

-64.65x

Negative earnings make P/E ratio not meaningful

Price to Book

Fair Value

1.95x

Price-to-book ratio reasonable for profitable companies

Historical Earnings Comparison

Period	Revenue ($M)	EPS ($)	YoY Growth	Report
Q1 2026	739.60	0.95	+12.7%	View
Q3 2025	678.20	-0.25	+19.6%	View
Q2 2025	686.10	-0.51	+25.8%	View
Q1 2025	661.70	0.50	+20.4%	View
Q4 2024	656.50	0.25	+18.7%	View

AAR Corp (AIR) Q3 2025 Earnings Report

Earnings Highlights

Executive Summary

Key Performance Indicators

Revenue Trend

Margin Analysis

Financial Highlights

Income Statement

Key Financial Ratios

Management Insights Available for Members

Peer Comparison Available for Members

Investment Outlook & SWOT Available for Members

Historical Earnings Comparison

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