AAR's New CTO Isn't Just a Hire — It's a Signal About Where the Company Goes Next

AAR Corp. announced on August 31 that Sanjay Sood had joined as Senior Vice President and Chief Digital & Technology Officer, reporting directly to CEO John Holmes. Sood comes from CDW, where he modernized enterprise platforms and managed the technical integration of multiple acquisitions, and he has a Ph.D. in computer science from Northwestern.

On the surface, this is a standard leadership hire at a mid-cap industrial company. But the role Sood will fill — overseeing enterprise systems, data analytics, cybersecurity, and AI implementation — sits at the center of a quiet shift happening inside AAR that changes how you think about what the company actually is.

AAR, for those who don't follow aviation, is one of the largest independent providers of aircraft parts, repair, and maintenance services. Founded in 1955 and based near Chicago, it operates in over 20 countries, supplying everything from engine components to overhaul services for airlines, manufacturers, and governments. It is not an aircraft builder. It is what keeps aircraft flying between repairs — the aftermarket.

That traditional business is performing well. For fiscal year 2026, which ended May 31, AAR reported $3.3 billion in revenue, up 19% year over year, with adjusted earnings per share of $5.05, a 29% increase. Adjusted EBITDA margins expanded 30 basis points to 12.1%. The stock has climbed roughly 73% over the past year and sits near its 52-week high of $154.

None of that explains the Sood hire. The explanation requires looking at what AAR has been building on top of the parts-and-repair engine.

In 2023, AAR acquired Trax USA, a Miami-based software company that makes maintenance management tools used by airlines operating roughly 5,000 aircraft globally. That was followed by acquisitions of Aerostrat (scheduling software) and the internal build-out of Airvoyant, an AI-powered procurement platform that connects buyers to more than 5,000 suppliers and was launched in April 2026 with Delta, Air Canada, JetBlue, and Virgin Atlantic as early launch partners.

Together, these products manage maintenance records, schedule repairs, automate parts purchasing, and analyze supplier pricing — all of the software that runs inside an airline's maintenance department. Today, more than 10,000 aircraft rely on AAR's software, and the company refers to itself in its latest press releases as "the leading parts, repair, and software platform in the aviation aftermarket".

That word — software — is the hinge on which this story turns.

Here is why it matters. Software revenue, particularly recurring software revenue, earns a different multiple than parts distribution and repair services. A parts supplier trades on volume and inventory turns. A software company trades on retention, expansion, and margin durability. When a hardware company successfully builds a software layer into its installed base, the market eventually re-rates the whole business — not because the hardware stops mattering, but because the software changes the predictability and durability of the cash flows.

AAR's Integrated Solutions segment, which houses Trax and the other software businesses, generated $167.8 million in revenue for the most recently reported quarter. That is about 18% of total revenue — small but growing. More importantly, the segment's margin expanded 160 basis points to 9.2%, driven specifically by Trax's recurring software revenue. The margin in that segment is still below the company's overall adjusted EBITDA margin of 12.1%, which makes sense — software is a small part of a larger bucket that includes lower-margin government contracts. But the direction is visible.

This is where Sood enters the picture. Acquiring software capability is one step. Building, scaling, and monetizing it internally is another, and it requires the kind of enterprise infrastructure, data architecture, and AI integration that Sood's resume is built around. His stated focus — "connecting information across the organization" and "advancing AAR's vast data resources" — points toward turning Trax's customer relationships and Airvoyant's AI capabilities into a cohesive platform, rather than letting them exist as separate acquisitions.

The question that separates this from a press-release exercise is whether the software layer is actually changing the economics of the business, or whether it remains a nice-to-have sidebar.

On the evidence available, the software layer has reached financial results, but it has not yet dominated them. Trax recurring revenue is driving margin expansion in Integrated Solutions. Airvoyant is live with major airline partners. AAR's overall revenue growth of 19% was primarily driven by Parts Supply, not software. The $3.3 billion in fiscal revenue was boosted by the HAECO Americas acquisition and a $305 million Navy follow-on contract, neither of which depends on software adoption. The core revenue engine — parts and repair — remains the gravitational center of the business.

What Sood's hire signals is that management intends for that gravity to shift, at least at the margin. The company is not trying to become a software company. It is trying to use software to make its existing aftermarket business stickier, more efficient, and more predictable. When an airline uses Trax to manage maintenance and Airvoyant to source parts, AAR sits in the middle of every transaction. That is customer lock-in, and it is the kind of structural advantage that compounds over years, not quarters.

The valuation question is harder. At a market cap of roughly $5.2 billion and a trailing P/E of 27.7 times, AAR is not cheap. The EV/EBITDA multiple of 17.6 times is above the median for aviation MRO peers, though well below what you'd pay for a pure software company. The stock's 56% gain year-to-date has clearly priced in the revenue acceleration and margin expansion — and some of the software story, too.

What has not been priced in is the execution risk. AAR is simultaneously integrating recent acquisitions, growing a software platform, managing $1.65 billion in total debt, and running a net leverage ratio of 2.03 times. The leverage is manageable within the company's stated target range of 2.0x to 2.5x, but it is not headroom. If the software layer scales as planned, the higher-margin recurring revenue helps pay down that debt faster. If Trax adoption stalls, Airvoyant fails to generate autonomous ordering, or the AI procurement features don't deliver the savings that airlines expect, the multiple contraction risk is real.

This is not a company you buy for the hiring announcement. You evaluate it on whether the software layer actually grows into something that changes the margin profile of the total business, and whether the stock's current price leaves enough return for the patience that transition requires. Sood's appointment tells you that management believes the transition is worth betting on. The financial evidence over the next few quarters will tell you whether the bet was right.