StandardAero Q2 Earnings Call Highlights

StandardAero NYSE: SARO reported second-quarter 2026 revenue growth, record adjusted EBITDA margins and positive free cash flow, while raising its full-year revenue, adjusted EBITDA and adjusted earnings-per-share outlook. Revenue for the quarter ended June 30 rose 4.6% year over year to $1.6 billion. Adjusted EBITDA increased 12.3% to $230 million, and adjusted EBITDA margin expanded 100 basis points to a record 14.4%. Net income rose 43.7% to $97 million, while adjusted EPS increased 24% to $0.40. Free cash flow was a positive $50 million during the quarter.

Chairman and Chief Executive Officer Russell Ford said the results reflected strong demand, productivity improvements and pricing in commercial aerospace and business aviation. He also cited profitability reached during the quarter at the company’s LEAP and CFM56 Dallas/Fort Worth programs, along with the benefit from eliminating low- or no-margin material pass-through revenue under contracts restructured last year.

Commercial Aerospace revenue increased 6% year over year. Excluding the effect of the eliminated pass-through revenue, management said commercial aerospace growth would have been in the mid-teens. Ford said industry MRO capacity remains constrained and StandardAero’s commercial backlog continued to grow during the quarter. Business aviation revenue also rose 6%, supported by activity on midsize and super-midsize platforms. Ford said global business-jet flight activity increased and fleet utilization continued to generate engine-maintenance demand. Military and helicopter revenue declined 3% because of input delays on certain military platforms. However, the company maintained its outlook for low-double-digit military and helicopter growth for the full year, with growth weighted toward the second half.

Ford said the company has not seen a demand reduction tied to higher jet fuel prices. Management tracks shop-visit bookings, engine inductions, parts orders and asset-trading activity, which Ford said remained consistent with the strength seen entering the year. He noted that nearly 40% of the company’s business serves end markets not sensitive to jet fuel prices, including military applications.

Engine Services revenue rose 4% to $1.405 billion, while segment adjusted EBITDA increased 14.4% to $204 million. Segment adjusted EBITDA margin expanded 130 basis points to 14.5%. Chief Financial Officer Dan Satterfield said the segment benefited from volume, pricing, productivity gains, progress along the learning curve on the LEAP and CFM56 Dallas/Fort Worth programs, and the margin impact of removing low-margin pass-through revenue. Component Repair Services revenue increased 9.2% to $195 million, driven by commercial aerospace activity on CFM56, GTF and C...