AAR CORP. (AIR) Q1 2026 Financial Results Summary

# AAR CORP. (AIR) Q1 2026 Financial Results Summary

AAR CORP. (NYSE: AIR) reported its financial results for the first quarter of fiscal year 2026 on September 23, 2025. Here’s a summary of the key highlights and financial metrics compared with the same period last year.

## Financial Highlights

– **Sales**:
– **$740 million**, representing a **12% increase** from **$661.7 million** in Q1 FY 2025.

– **Net Income**:
– Reported net income of **$34 million** (or **$0.95 per diluted share**) compared to **$18 million** (or **$0.50 per diluted share**) in Q1 FY 2025.

– **Adjusted Diluted EPS**:
– Increased to **$1.08**, up **27%** from **$0.85** a year ago.

– **Adjusted EBITDA**:
– Reached **$87 million**, an **18% increase** from **$73.7 million** in the prior year, with an adjusted EBITDA margin of **11.7%**, up from **11.3%** in Q1 FY 2025.

– **Sales Growth**:
– Adjusted sales grew **17% organically**, primarily fueled by a **27% rise** in Parts Supply.

– **Operating Margins**:
– Operating margins improved to **8.8%**, compared to **6.6%** in Q1 FY 2025.
– Adjusted operating margin increased to **9.7%**, up from **9.1%** in the prior year.

– **Cash Flow**:
– Cash flow from operating activities was negative at **($44.9 million)**, compared to **($18.6 million)** in the prior year.

– **Net Debt**:
– As of August 31, 2025, net debt stood at **$950 million**, with a net leverage ratio of **2.82x**.

## Segment Performance

– **Parts Supply**:
– Sales increased to **$317.8 million**, up from **$249.7 million**.

– **Repair & Engineering**:
– Sales slightly decreased from **$217.6 million** to **$214.6 million**.

– **Integrated Solutions**:
– Increased from **$168.9 million** to **$185 million**.

– **Expeditionary Services**:
– Decreased from **$25.5 million** to **$22.2 million**.

## Notable Recent Activities

– **Acquisitions**:
– Acquired **Aerostrat**, a long-range maintenance planning software company, for **$15 million** plus potential contingent consideration of up to **$5 million**.

– **New Agreements**:
– Expanded the agreement with **JetBlue Airways** to include eMobility and its cloud hosting solution.
– Secured a multi-year exclusive defense agreement with **AmSafe Bridport** for military platforms.
– Awarded a contract with the **Defense Logistics Agency** for up to **$85 million**.

## Expenses

– **Selling, General, and Administrative Expenses**:
– Reduced to **$71.2 million** from **$75.9 million** in Q1 FY 2025.

– **Interest Expense**:
– Slightly increased to **$18.5 million** compared to **$18.3 million** in the prior year.

## Concluding Remarks

AAR CORP. displayed strong performance with solid growth in sales and profitability across its segments in the first quarter of fiscal year 2026. The acquisition strategy continues to be a key part of its growth as the company focuses on expanding its capabilities in the Parts Supply segment while maintaining cost discipline.

### Dividend and Share Repurchase
Information regarding a declared quarterly dividend or share repurchase was not included in the report.