Free cash flow has been highly unstable, ranging from negative $53.6M in Q1 2026 to positive $57.8M in Q4 2026, with working capital outflows of up to $95.7M per quarter demonstrating poor cash conversion relative to reported net income.
AAR Corp. (AIR) cash flow statement — 30-year operating, investing & financing cash flows
| Metric | TTM | May'26 | May'25 | May'24 | May'23 | May'22 | May'21 | May'20 | May'19 | May'18 | May'17 | May'16 | May'15 | May'14 | May'13 | May'12 | May'11 | May'10 | May'09 | May'08 | May'07 | May'06 | May'05 | May'04 | May'03 | May'02 | May'01 | May'00 | May'99 | May'98 | May'97 |
|---|
| Cash from Operations | 201.9M | 98.7M | 36.1M | 43.6M | 23.3M | 75.2M | 105.2M | -36.1M | 67.4M | 64.3M | 21.8M | 32.1M | -43M | 139.8M | 162.9M | 94.22M | 108.6M | 153.16M | 64.45M | 16.93M | -21.24M | -40.48M | 50.94M | 14.57M | 34.73M | -33.31M | 46.09M | 10.05M | 28.52M | 22.82M | 9.53M |
| Operating CF Margin % | - | 2.98% | 1.3% | 1.88% | 1.17% | 4.13% | 6.37% | -1.74% | 3.28% | 3.68% | 1.23% | 1.93% | -2.7% | 6.87% | 7.62% | 4.56% | 6.12% | 11.33% | 4.53% | 1.22% | -2% | -4.51% | 6.81% | 2.24% | 5.73% | -5.22% | 5.27% | 0.98% | 3.11% | 2.92% | 1.62% |
| Operating CF Growth % | 698.01% | 173.41% | -17.2% | 87.12% | -69.02% | -28.52% | 391.41% | -153.56% | 4.82% | 194.95% | -32.09% | 174.65% | -130.76% | -14.18% | 72.9% | -13.24% | -29.09% | 137.63% | 280.78% | 179.69% | 47.53% | -179.47% | 249.56% | -58.05% | 204.26% | -172.28% | 358.59% | -64.76% | 24.98% | 139.46% | -61.51% |
| Net Income | 193.4M | 187.7M | 12.5M | 46.3M | 89.8M | 78.5M | 46.3M | 24.8M | 84.1M | 73.7M | 50.2M | 40.5M | 10.4M | 73.2M | 55.5M | 68.03M | 69.83M | 43.2M | 78.65M | 75.14M | 58.66M | 35.16M | 15.45M | 3.5M | -12.41M | -58.94M | 18.53M | 35.16M | 41.67M | 35.66M | 23.02M |
| Depreciation & Amortization | 78.7M | 75.3M | 55.2M | 41.2M | 27.9M | 33.1M | 36.3M | 43.7M | 42.8M | 40.5M | 71M | 70.8M | 123.9M | 113.4M | 108.6M | 80.33M | 59.3M | 38.93M | 40.55M | 39.95M | 32.2M | 29.22M | 27.95M | 26.68M | 27.17M | 22.5M | 18.58M | 18.37M | 17.06M | 14.28M | 12.29M |
| Stock-Based Compensation | 15.8M | 17.8M | 19.9M | 15.3M | 13.5M | 8.2M | 9.2M | 7.3M | 13.5M | 15.3M | 11M | 6.7M | 7.8M | 8.7M | 11.1M | 12.55M | 12.31M | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| Deferred Taxes | 0 | 0 | -5.5M | -20.5M | -2.2M | 8.7M | 8.4M | 500K | -5M | -12.9M | 600K | 4.8M | -79.8M | 9.6M | 29.5M | 32.76M | 40.64M | -4.68M | 16.01M | 13.24M | 20.41M | 8.08M | 1.61M | -5.12M | -3.38M | -2.39M | -312K | 9.57M | 10.97M | -4.11M | 1.73M |
| Other Non-Cash Items | -22.9M | -40.3M | 66.3M | 27.4M | 5.3M | -16.1M | 28.3M | 27.3M | 27.7M | 8.5M | -5M | 2.1M | -66.8M | 2.2M | 3.1M | 15.23M | 8.05M | 10.31M | -10.05M | -4.45M | 3.31M | 0 | 2.32M | 0 | 3.48M | -1.58M | 3.3M | 0 | 0 | 0 | 0 |
| Working Capital Changes | -63.1M | -141.8M | -112.3M | -66.1M | -111M | -37.2M | -23.3M | -139.7M | -95.7M | -60.8M | -106M | -92.8M | -38.5M | -67.3M | -44.9M | -114.67M | -81.53M | 63.97M | -60.71M | -100.48M | -115.66M | -112.94M | 3.6M | -10.5M | 19.86M | -44.58M | 6M | -53.05M | -41.18M | -23M | -27.52M |
| Change in Receivables | -6.5M | 15.8M | -109.4M | -22.4M | -18.1M | -49M | -4.5M | 14.8M | -34.4M | 35.9M | -4M | -16.1M | -28.3M | 16.7M | 6M | 20.96M | -58.39M | 33.93M | -26.39M | 12.43M | -25.16M | -9.32M | -17.6M | -41.37M | 16.52M | 24.36M | 20.71M | 0 | 0 | 0 | 0 |
| Change in Inventory | -58.3M | -69M | -109.3M | -90.4M | -23.6M | -10.4M | 74.9M | -94.5M | -80.9M | -25.8M | -18.8M | -26.4M | -43.2M | -47.9M | 16.1M | -47.61M | -13.02M | 19.02M | -45.41M | -42.34M | -8.57M | -58.3M | -12.01M | 15.6M | 17.75M | -31.75M | 17.89M | -6.64M | -46.21M | -34.71M | -35.93M |
| Change in Payables | 16.1M | -28.3M | 70.5M | 59.4M | -48M | 29.4M | -62.6M | 4.1M | 17.5M | 1.8M | 14.1M | 19.4M | -4M | 20.1M | -50.7M | 18.33M | 48.7M | -1.47M | 2.65M | -26.08M | 6.47M | 19.73M | 19.24M | 6.64M | -2.84M | -25.26M | -35.03M | 0 | 0 | 0 | 0 |
| Cash from Investing | -310.5M | -308.7M | 10.7M | -758.5M | -138M | -16.5M | -500K | -24.8M | -19M | -42.9M | -30.1M | -16.9M | 689.2M | -40.9M | -32.8M | -390.23M | -118.73M | -222.34M | -24.23M | -141.97M | -39.13M | -32.63M | -17.58M | 5.63M | -6.68M | -24.98M | 2.14M | -23.21M | -22.89M | -99.13M | -31.97M |
| Capital Expenditures | -52.4M | 0 | -34.7M | -29.7M | -29.5M | -17.3M | -11.3M | -23.6M | -17.4M | -22M | -33.6M | -88.4M | -46.3M | -26.5M | -37.6M | -91.22M | -124.88M | -28.86M | -27.54M | -30.33M | -29.89M | -16.3M | -13.03M | -10.29M | -9.93M | -12.11M | -13.13M | -22.34M | -36.13M | -17.5M | -30.29M |
| CapEx % of Revenue | 1.5% | - | 1.25% | 1.28% | 1.48% | 0.95% | 0.68% | 1.14% | 0.85% | 1.26% | 1.9% | 5.32% | 2.9% | 1.3% | 1.76% | 4.42% | 7.03% | 2.13% | 1.93% | 2.19% | 2.82% | 1.82% | 1.74% | 1.58% | 1.64% | 1.9% | 1.5% | 2.18% | 3.94% | 2.24% | 5.14% |
| Acquisitions | -252.8M | -259.4M | 46.5M | -722.9M | -103.3M | -6.5M | 800K | 1.6M | -2.3M | -22.9M | -12.5M | 40.3M | 689.1M | -15.5M | -5.9M | -298.09M | 0 | -193.34M | 5.1M | -85.21M | -31.91M | 0 | 0 | 0 | 0 | -13.25M | -3.2M | 0 | -15.18M | -28.15M | 0 |
| Investments | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - |
| Other Investing | -5.3M | -49.3M | -1.1M | -5.9M | -5.2M | 7.3M | 10M | -2.8M | 700K | 2M | 16M | 71.5M | 46.4M | 1.1M | 10.7M | 3.3M | 7.73M | 2.89M | -2.51M | -1.28M | -933K | 388K | -4.55M | 15.91M | 3.25M | 386K | 18.48M | -865K | 28.41M | -53.49M | -1.68M |
| Cash from Financing | 130.1M | 208.6M | -33.7M | 729.2M | 137.7M | -59.8M | -469.5M | 444.5M | -48.7M | 10M | -12.1M | -38.4M | -678.1M | -85.9M | -123.7M | 306.84M | -11.83M | 36.17M | -36.17M | 151.02M | 21.97M | 144.66M | -24.04M | -8.37M | -33.35M | 78.89M | -35.62M | 6.03M | -14.6M | 41.7M | 40.65M |
| Debt Issued (Net) | -145M | -74M | -20M | 725M | 172M | -34.2M | -470M | 459.5M | -35M | 23.8M | 11M | -10.6M | -474.8M | -78.9M | -93M | 332.1M | -3.7M | 32.97M | -36.94M | 109.61M | 9.92M | 140.62M | -24M | -4.91M | -32.64M | 50.09M | -26.36M | 25.4M | 2.1M | 49.1M | -1.47M |
| Equity Issued (Net) | 282.8M | 0 | -10.1M | -5.1M | -50.1M | -42.4M | 600K | -4.1M | -10.3M | -13.1M | -19.8M | -18.8M | -151.5M | -1M | -14.6M | -642K | -518K | 0 | 0 | -9.53M | 8.58M | 9.4M | 0 | 0 | 0 | 34.13M | -95K | -10.15M | -7.3M | 1.6M | 50.1M |
| Dividends Paid | 0 | 0 | 0 | 0 | 0 | 0 | -100K | -10.7M | -10.5M | -10.3M | -10.2M | -10.4M | -12.5M | -11.8M | -12.8M | -12.08M | -2.98M | 0 | 0 | 0 | 0 | 0 | 0 | 0 | -797K | -4.43M | -9.16M | -9.22M | -9.38M | -9.12M | -7.98M |
| Share Repurchases | 0 | 0 | -10.1M | -5.1M | -50.1M | -42.4M | 0 | -4.1M | -10.3M | -13.1M | -19.8M | -18.8M | -151.5M | -1M | -14.6M | -3.7M | -2.5M | 0 | 0 | -9.53M | 0 | 0 | 0 | 0 | 0 | -205K | -211K | -10.53M | -7.6M | 0 | -8.08M |
| Other Financing | -7.7M | 282.6M | -3.6M | 9.3M | 15.8M | 16.8M | 0 | -200K | 7.1M | 9.6M | 6.9M | 1.4M | -39.3M | 5.8M | -3.3M | -12.53M | -4.63M | 3.2M | 770K | 50.94M | 3.48M | -5.37M | -32K | -3.46M | 90K | -897K | 0 | 0 | -27K | 100K | 0 |
| Net Change in Cash | 21.5M | -1.4M | 13.1M | 14.3M | 22.9M | -1.3M | -364.5M | 383.6M | -500K | 31.3M | -20.9M | -23.5M | -34.5M | 13.9M | 7.6M | 10.29M | -21.94M | -33.13M | 3.11M | 26.07M | -38.42M | 71.4M | 9.33M | 11.86M | -5.37M | 20.71M | 12.57M | -7.01M | -8.97M | -34.48M | 18.1M |
| Free Cash Flow | 149.7M | 98.7M | 1.4M | 13.9M | -6.2M | 57.9M | 93.9M | -59.7M | 50M | 42.3M | -11.8M | -56.3M | -89.3M | 113.3M | 125.3M | 3M | -16.28M | 124.3M | 36.92M | -13.41M | -51.13M | -56.78M | 37.91M | 4.29M | 24.8M | -45.43M | 32.96M | -12.29M | -7.61M | 5.33M | -20.76M |
| FCF Margin % | 4.29% | 2.98% | 0.05% | 0.6% | -0.31% | 3.18% | 5.68% | -2.88% | 2.44% | 2.42% | -0.67% | -3.39% | -5.6% | 5.57% | 5.86% | 0.15% | -0.92% | 9.19% | 2.59% | -0.97% | -4.82% | -6.33% | 5.07% | 0.66% | 4.09% | -7.11% | 3.77% | -1.2% | -0.83% | 0.68% | -3.52% |
| FCF Growth % | 1675.79% | 6950% | -89.93% | 324.19% | -110.71% | -38.34% | 257.29% | -219.4% | 18.2% | 458.47% | 79.04% | 36.95% | -178.82% | -9.58% | 4078.06% | 118.42% | -113.1% | 236.71% | 375.33% | 73.78% | 9.95% | -249.79% | 784.39% | -82.72% | 154.6% | -237.83% | 368.11% | -61.62% | -242.76% | 125.66% | -220.61% |
| FCF per Share | 3.75 | 2.57 | 0.04 | 0.39 | -0.18 | 1.61 | 2.66 | -1.71 | 1.43 | 1.22 | -0.34 | -1.63 | -2.27 | 2.90 | 3.09 | 0.07 | -0.37 | 2.88 | 0.86 | -0.31 | -1.22 | -1.52 | 1.13 | 0.13 | 0.78 | -1.60 | 1.23 | -0.46 | -0.27 | 0.19 | -0.83 |
| FCF Conversion (FCF/Net Income) | 0.77x | 0.53x | 2.89x | 0.94x | 0.26x | 0.96x | 2.94x | -1.46x | 8.99x | 4.12x | 0.39x | 0.67x | -4.22x | 1.92x | 2.96x | 1.39x | 1.56x | 3.43x | 0.82x | 0.23x | -0.36x | -1.15x | 3.30x | 4.16x | -2.80x | 0.57x | 2.49x | 0.29x | 0.68x | 0.64x | 0.41x |
| Interest Paid | 0 | 0 | 74.4M | 31.9M | 11.1M | 2.1M | 0 | 0 | 8.8M | 7.2M | 4.4M | 4.7M | 0 | 33.8M | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| Taxes Paid | 0 | 0 | 24.2M | 42.4M | 35.7M | 23.9M | 0 | 0 | 7M | 17M | 12.7M | 35.7M | 0 | 17.3M | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
Quick answers to the most common questions about buying AIR stock.
AAR Corp. (AIR) generated $98.7M in net cash from operating activities in 2026. This reflects the cash generated directly from core business operations.
AAR Corp. (AIR) generated $98.7M in free cash flow in 2026. Free cash flow is the cash left over after capital expenditures, which can be used to pay dividends, repurchase shares, or pay down debt.
AAR Corp. (AIR) spent $0.0M on capital expenditures in 2026. CapEx represents the cash invested in physical assets like property, plant, and equipment to maintain or grow the business.
Key Metrics
Top Statement Risk
Acquisition-driven cash burn sustainability
Metrics are mathematically derived from official filings.
Earnings-to-Cash Flow Volatility Worsens
The OCF/NI ratio has deteriorated significantly, plunging to 0.39 in Q2 2026, suggesting a material deterioration in cash conversion quality and raising concerns about the sustainability of reported profits.
This ratio has been highly erratic, swinging from 2.69 in Q4 2024 to negative levels and now to 0.39, indicating that the link between accounting profits and actual cash generation has broken down. The trend implies that recent earnings growth may be driven by non-cash items or accrual-based accounting that is not translating into operational cash, warranting scrutiny of revenue recognition and inventory policies.
FCF Trajectory Shows Severe Instability
Free cash flow has been wildly unstable, with negative FCF of $53.6M in Q1 2026 followed by positive FCF of $57.8M in Q4 2026, highlighting that reported net income is a poor predictor of cash generation in this business.
The volatile FCF margin, ranging from -7.2% to 6.2% over recent quarters, appears driven by large, erratic swings in working capital and acquisition-related cash outlays rather than consistent operating performance. This instability suggests that investors should discount any quarter's FCF as an indicator of sustainable free cash flow, as it is heavily influenced by lumpy balance sheet events.
Working Capital Swings Dominate Cash Flow
Massive working capital outflows, such as the $95.7M cash consumed in Q1 2026 and $92.3M in Q3 2025, are the primary drivers of operating cash flow volatility, overpowering underlying profit generation.
These large negative changes suggest significant inventory builds and/or receivables growth that are consuming cash, which may be tied to strategic inventory positioning for the parts business or integration of acquisitions. The pattern indicates that management's ability to control the cash conversion cycle is a critical, and currently unstable, factor for liquidity.
Cash Flow Masked by SBC and Acquisitions
The cash flow statement obscures the true economic cost of growth, as stock-based compensation averaging $4.8M per quarter and massive acquisition outlays, like the $209.7M in Q2 2026, are required to sustain operations and expansion.
Excluding SBC would inflate reported cash flows from operations, while the consistent use of cash for acquisitions ($36.5M in Q4 2026, $209.7M in Q2 2026) indicates the business model relies on external growth to maintain scale. This reliance raises the risk that future integration costs or poor acquisition execution could severely damage cash generation.