AAR 2026 Q1 Earnings Strong Performance as Net Income Surges 91%

AAR reported fiscal 2026 Q1 earnings on Sep 23rd, 2025, delivering robust results that exceeded expectations. Revenue rose 11.8% year-over-year to $739.60 million, driven by strong performance across segments, while net income surged 91.1% to $34.40 million. The company also raised full-year organic sales growth guidance to "approaching 10%."

Revenue
AAR’s total revenue increased by 11.8% to $739.60 million in 2026 Q1, up from $661.70 million in the prior year. This growth was broad-based, with particularly strong performance in the Parts Supply and Integrated Solutions segments. The Parts Supply segment led the charge, achieving $317.80 million in revenue, a 27% increase year-over-year, driven by new parts distribution and a pickup in USM sales. The Repair & Engineering segment generated $214.60 million, while the Integrated Solutions segment reached $185 million, reflecting growth in government customer sales. Expeditionary Services contributed $22.20 million, and the Corporate and other segment reported no revenue.

Earnings/Net Income
AAR’s earnings surged with net income jumping 91.1% to $34.40 million in 2026 Q1, compared to $18 million in the prior year. Earnings per share (EPS) also rose sharply, climbing 92.0% to $0.96 from $0.50. This impressive growth in profitability was driven by strong performance in the Parts Supply segment and improved margins across the business. The earnings results reflect AAR’s ability to maintain and enhance its competitive position, with a focus on cost discipline and operational efficiency.

Price Action
The stock price of AAR has edged up 1.54% during the latest trading day, climbed 3.43% during the most recent full trading week, and has jumped 9.23% month-to-date. These gains reflect investor confidence in the company’s strong earnings performance and positive guidance.

Post Earnings Price Action Review
John Holmes, Chairman, President & CEO, emphasized that the company delivered a strong start to the year with 17% organic adjusted sales growth. The Parts Supply segment saw particular strength, supported by the exclusive distribution model and strategic partnerships such as the AmSafe Bridport agreement. AAR is also making progress in expanding MRO capacity in Oklahoma City and Miami, which will add 15% network capacity in 2026. The company is enhancing software capabilities through the acquisition of AeroStrat and is focused on optimizing operations via the Paperless Hangar initiative. Holmes expressed optimism about leveraging cross-selling opportunities and scaling the Trax software platform as an e-commerce solution.

Guidance
AAR updated its Q2 guidance, expecting sales growth of 7% to 10% excluding the impact of the Landing Gear business and an adjusted operating margin of 6% to 10%. For the full fiscal year, the company raised its organic sales growth expectation to "approaching 10%", up from the previously cited 9%. This optimistic outlook is driven by continued strength in parts distribution and ongoing margin expansion through operational efficiencies and strategic investments.

Additional News
The most-discussed non-earnings related news for AAR in the three weeks following the earnings report included the $15 million acquisition of AeroStrat, a maintenance planning software provider. This acquisition enhances AAR’s software capabilities and deepens integration with current customers, offering growth opportunities through expanded offerings and synergies. Another key development was the execution of a multiyear exclusive contract with AmSafe Bridport for KC-46 and C-40 parts in the global defense aftermarket, reinforcing AAR’s leadership in parts distribution. AAR also announced significant progress in the Paperless Hangar Initiative, which has completed 60% of its rollout, driving increased throughput and efficiency gains. These strategic moves underscore AAR’s commitment to innovation and growth, positioning it for long-term success in the aviation aftermarket.