AAR Corp Q3 Revenue Surges 25% to $845.1M; Adjusted EPS Up 26%
AAR Corp reported Q3 revenue of $845.1 million, up 25% year-over-year, driven by 45% growth in its Parts Supply segment and 14% organic sales. GAAP net income swung to $68 million ($1.71 per share), while adjusted EPS rose 26% to $1.25 and adjusted EBITDA jumped to $102 million.
1. Third Quarter Financial Highlights
In the quarter ended February 28, AAR recorded consolidated sales of $845.1 million, a 25% increase from $678.2 million a year earlier. GAAP net income was $68.0 million, or $1.71 per diluted share, versus a prior-year loss; adjusted diluted EPS rose 26% to $1.25 and adjusted EBITDA climbed 26% to $102 million, with margins expanding to 12.1%.
2. Segment Growth and Operational Drivers
The Parts Supply segment led growth with a 45% increase, including 36% organic gains and 55% growth in new parts sales to government customers. Repair & Engineering volumes rose on higher hangar activity and component repairs, while the Trax software platform expanded through recurring contract renewals and new eMobility and cloud hosting agreements.
3. Strategic Initiatives and Leverage Position
Integration of HAECO Americas is ahead of schedule and the ADI acquisition is exceeding expectations, with A-R-T closing on track for Q4. Contracts awarded include up to $450 million for U.S. Air Force pallet work; cash from operations of $74.7 million reduced net leverage to 2.17x, within the 2.0x–2.5x target range for funding flexibility.