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- **17% Organic Growth**: Part supply up 27%, 20+ new distribution agreements.
- **Trax Software Expansion**: 15% airline market share, Aerostrat integration.
- **2026 Outlook**: 10%+ growth, 6% margin expansion, $1.08 EPS.
- **Risk**: USM supply tightening, cross-sell execution.

**【CEO Summary Section】**
- Q1 2026 revenue grew 17% organically, driven by 27% part supply growth and 15% commercial sales expansion.
- Secured 20+ new distribution agreements, including exclusive AmSafe deal, driving 20%+ parts distribution growth.
- Trax software now serves 15% of global airlines, with Aerostrat acquisition adding 100+ customers.
- 2026 outlook: 10%+ organic growth, 6% margin expansion, $1.08 EPS vs. $0.85 prior year.

**【CFO Financial Commentary】
- GAAP net $420M, Non-GAAP EPS $1.08 (vs. $0.85), 15% margin expansion.
- Part supply EBITDA $43.8M (13.8% margin), repair $24.9M (12.1% margin).
- Q2 guidance: 7-10% sales growth, 6% margin expansion.

**【Q&A Highlights】
- Part supply pipeline: 20+ new distribution wins, 15%+ growth in 2026.
- Cross-selling: 15% component repair volume shifted, 2026 targets 20%+ cross-sell.
- USM margins: 14%+ if supply loosens, 2026 USM sales $200M+.
- Aerostrat earn-out: 3-year retention plan for 100+ key employees.
- Engine aftermarket: 80% part supply, 20% repair exposure to engines.
- Trax e-commerce: 15%+ parts cross-sell via digital platform.


AAR Corp. (AIR) Q1 2026 Earnings Call Transcript

Revenue

Sales and Services Revenue

Financing Services Revenue

Other Revenue

Cost of Revenue

Cost of Goods and Services

Cost of Financing Services

Other Cost

Gross Profit

Other Operating Income

Operating Expenses

Selling, General and Administrative Expenses

Selling and Marketing Expenses

General and Administrative Expenses

Research and Development Expenses

Loss on Bad Debts

Loss on Impairment of Other Assets

Loss on Disposal of Assets

Other Operating Expenses

Operating Income

Non-Operating Income (Loss)

Income (Loss) from Affiliates

Income (Loss) from Associates

Income (Loss) from Joint ventures

Gain (Loss) on Other Investment

Gain (Loss) on Change in Fair Value

Gain (Loss) on Foreign Currency Exchange

Other Non-Operating Income (Loss)

Net Interest Expense

Interest Expense

Interest Income

Pretax Income From Continuing Operations

Income Tax Expense

Current Income Tax

Deferred Income Tax

Income Tax Adjustments

Net Income from Continuing Operations

Income from Discontinued Operations

Other Items Before Net Income

Net Income

Net Income Attributable to Minority Interests

Net Income Attributable to Owners of the Company

Preferred Stock Dividends

Other Adjustments

Net Income Attributable to Common Stockholders

Other Comprehensive Income

Total Comprehensive Income

Total Comprehensive Income Attributable to Minority Interests

Total Comprehensive Income Attributable to Owners of the Company

Basic EPS

Basic EPS from Continuing Operations

Basic EPS from Discontinued Operations

Diluted EPS

Diluted EPS from Continuing Operations

Diluted EPS from Discontinued Operations

AIR

AIR fundamentals

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