AAR Corp. reported second-quarter fiscal 2026 GAAP diluted EPS of $0.90 and adjusted diluted EPS of $1.18, exceeding consensus estimates by 16%. Revenue rose 16% year over year to $795 million, driven by a 29% surge in Parts Supply sales. Organic growth in new parts Distribution reached 32%, reflecting successful market share capture through exclusive distribution agreements. Sales to government customers climbed 23%, while commercial sales accounted for 71% of total revenue, up from 73% a year earlier.

Adjusted EBITDA increased 23% to $97 million, boosting the adjusted EBITDA margin to 12.1% from 11.4% in the prior-year quarter. Adjusted operating margin improved to 10.2%, up 100 basis points, supported by volume gains in high-margin new parts Distribution and ongoing efficiency initiatives in Repair & Engineering. SG&A expenses declined to $88.7 million, benefiting from the absence of prior-year one-time charges. Net leverage stood at 2.49x, and the current ratio was 2.84, underscoring ample liquidity for both organic investments and acquisitions.

During the quarter, AAR closed acquisitions of ADI for $138 million and HAECO Americas for $77 million, strengthening capabilities in new parts Distribution and airframe heavy maintenance. Post-acquisition, the company secured $850 million in multi-year airframe maintenance contracts, effectively selling out the acquired capacity. Additional agreements included a multi-year Aircraft Warranty Management contract with Malaysia Airlines and an Eaton service center partnership for EMEA markets. Subsequent to quarter end, exclusive parts distribution renewals with Collins Aerospace and Arkwin Industries, and a Trax ERP selection by Thai Airways, further bolster the company’s growth runway.