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Feb 28
AAR Corp Q3 2025 Earnings Report
AAR Corp reported solid Q3 2025 performance with 20% revenue growth and improved margins, though GAAP EPS was impacted by a divestiture-related charge.
Key Takeaways
In Q3 FY2025, AAR Corp achieved $678.2 million in sales, a 20% year-over-year increase, driven by strong growth across its segments. Despite a GAAP net loss due to a divestiture charge, adjusted EPS rose 16% to $0.99, and margins improved significantly, reflecting operational efficiencies and contributions from recent acquisitions.
Sales increased 20% year-over-year to $678.2 million.
Adjusted EPS rose 16% to $0.99, while GAAP EPS was -$0.25 due to divestiture charges.
Operating income more than doubled to $71.1 million.
Cash used in operations was $18.7 million, largely due to a $56 million FCPA settlement payment.
AAR Corp
AAR Corp
AAR Corp Revenue by Segment
AAR Corp Revenue by Geographic Location
Revenue by Segment
Parts Supply Revenue
CapyFin.comRepair & Engineering Revenue
CapyFin.comIntegrated Solutions Revenue
CapyFin.comExpeditionary Services Revenue
CapyFin.comRevenue by Geographic Location
Government customers Revenue
CapyFin.com Forward Guidance
AAR expects continued sales and margin expansion into Q4 and FY2026, supported by strong demand, new wins, and integration synergies.
Positive Outlook
- Sales growth driven by strength in parts distribution and MRO.
- Adjusted operating margin rose to 9.7% from 8.3% YoY.
- Backlog boosted by new multi-year distribution agreements.
- Product Support acquisition synergies enhancing margins.
- Expected deleveraging in Q4 and FY2026.
Challenges Ahead
- GAAP net loss due to divestiture charge of $63.7 million.
- Cash flow impacted by $56 million FCPA settlement.
- Integrated Solutions revenue slightly declined YoY.
- Increased debt levels raised interest expense to $18.1 million.
- No full-year guidance range provided for FY2026.
Revenue & Expenses
Visualization of income flow from segment revenue to net income