Revenue growth has accelerated to 24.6% in 2026Q3, yet structural limitations in the service-heavy model keep gross margins confined within a narrow 18.3% to 19.9% range.
| Metric | TTM | 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 | May'96 |
|---|
| Sales/Revenue | 3.13B | 2.78B | 2.32B | 1.99B | 1.82B | 1.65B | 2.07B | 2.05B | 1.75B | 1.77B | 1.66B | 1.59B | 2.04B | 2.14B | 2.06B | 1.78B | 1.35B | 1.42B | 1.38B | 1.06B | 897.28M | 747.85M | 651.96M | 606.34M | 638.75M | 874.25M | 1.02B | 918.04M | 782.12M | 589.33M | 504.99M |
| Revenue Growth % | 16.85% | 19.91% | 16.5% | 9.37% | 10.15% | -20.26% | 0.98% | 17.36% | -1.09% | 6.32% | 4.28% | -21.66% | -4.79% | 3.5% | 16.29% | 31.33% | -5.04% | 2.82% | 30.51% | 18.26% | 19.98% | 14.71% | 7.52% | -5.08% | -26.94% | -14.65% | 11.58% | 17.38% | 32.71% | 16.7% | 11.87% |
| Cost of Goods Sold | 2.54B | 2.25B | 1.88B | 1.62B | 1.51B | 1.38B | 1.8B | 1.72B | 1.45B | 1.49B | 1.43B | 1.44B | 1.69B | 1.82B | 1.75B | 1.47B | 1.11B | 1.18B | 1.12B | 877.02M | 733.3M | 627.02M | 551.25M | 523.92M | 624.87M | 737.79M | 851.48M | 744.78M | 633.72M | 480.79M | 414.23M |
| COGS % of Revenue | - | 81.02% | 80.93% | 81.41% | 82.79% | 83.3% | 87.01% | 83.94% | 83.15% | 84.36% | 85.75% | 90.01% | 83.28% | 85.3% | 84.57% | 82.93% | 81.99% | 83.03% | 80.93% | 82.65% | 81.72% | 83.84% | 84.55% | 86.41% | 97.83% | 84.39% | 83.13% | 81.13% | 81.03% | 81.58% | 82.03% |
| Gross Profit | 595.5M | 527.7M | 442.3M | 370.1M | 313.2M | 275.9M | 269.2M | 329.5M | 294.6M | 276.5M | 236.9M | 159.3M | 340.2M | 314.2M | 318.56M | 303.06M | 243.52M | 241.62M | 264.07M | 184.15M | 163.98M | 120.83M | 100.71M | 82.42M | 13.88M | 136.47M | 172.85M | 173.26M | 148.41M | 108.54M | 90.77M |
| Gross Margin % | 19% | 18.98% | 19.07% | 18.59% | 17.21% | 16.7% | 12.99% | 16.06% | 16.85% | 15.64% | 14.25% | 9.99% | 16.72% | 14.7% | 15.43% | 17.07% | 18.01% | 16.97% | 19.07% | 17.35% | 18.28% | 16.16% | 15.45% | 13.59% | 2.17% | 15.61% | 16.87% | 18.87% | 18.97% | 18.42% | 17.97% |
| Gross Profit Growth % | - | 19.31% | 19.51% | 18.17% | 13.52% | 2.49% | -18.3% | 11.85% | 6.55% | 16.72% | 48.71% | -53.17% | 8.28% | -1.37% | 5.11% | 24.45% | 0.79% | -8.5% | 43.4% | 12.3% | 35.72% | 19.98% | 22.19% | 493.75% | -89.83% | -21.05% | -0.23% | 16.75% | 36.73% | 19.58% | 16.56% |
| Operating Expenses | 326.9M | 342.5M | 313.1M | 236.2M | 206.3M | 190.9M | 227.9M | 231.2M | 208.6M | 196.7M | 170.8M | 171.4M | 197.6M | 198.4M | 187.85M | 170.25M | 153.3M | 155.72M | 129.55M | 88.78M | 99.82M | 87.33M | 81.93M | 84.2M | 95.17M | 96.08M | 102.19M | 95.88M | 83.69M | 65.65M | 58.32M |
| OpEx % of Revenue | - | 12.32% | 13.5% | 11.87% | 11.34% | 11.55% | 11% | 11.27% | 11.93% | 11.13% | 10.27% | 10.75% | 9.71% | 9.28% | 9.1% | 9.59% | 11.34% | 10.94% | 9.35% | 8.37% | 11.13% | 11.68% | 12.57% | 13.89% | 14.9% | 10.99% | 9.98% | 10.44% | 10.7% | 11.14% | 11.55% |
| Selling, General & Admin | 327.1M | 347.7M | 280.2M | 230.4M | 202.2M | 182.4M | 220.6M | 215.4M | 208.6M | 196.7M | 170.8M | 171.4M | 197.6M | 198.4M | 189.4M | 173.6M | 153.3M | 147.22M | 135.5M | 105.09M | 101.33M | 87.9M | 81.93M | 84.2M | 85.04M | 96.08M | 102.19M | 95.88M | 83.69M | 65.65M | 58.32M |
| SG&A % of Revenue | - | 12.5% | 12.08% | 11.58% | 11.11% | 11.04% | 10.65% | 10.5% | 11.93% | 11.13% | 10.27% | 10.75% | 9.71% | 9.28% | 9.17% | 9.78% | 11.34% | 10.34% | 9.78% | 9.9% | 11.29% | 11.75% | 12.57% | 13.89% | 13.31% | 10.99% | 9.98% | 10.44% | 10.7% | 11.14% | 11.55% |
| Research & Development | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| R&D % of Revenue | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - |
| Other Operating Expenses | -200K | -5.2M | 32.9M | 5.8M | 4.1M | 8.5M | 7.3M | 15.8M | -900K | 0 | 0 | 0 | 0 | 0 | -1.54M | -8.7M | 0 | 0 | -5.95M | -16.31M | -1.5M | -568K | 0 | 0 | 10.13M | 0 | 0 | 0 | 0 | 0 | 0 |
| Operating Income | 270.7M | 185.2M | 129.2M | 133.9M | 106.9M | 85.2M | 41.3M | 98.3M | 86M | 79.6M | 65.8M | -11.9M | 145.7M | 122.6M | 130.7M | 138.73M | 90.33M | 102.89M | 134.52M | 95.37M | 64.16M | 33.49M | 18.78M | -1.79M | -81.29M | 40.39M | 70.66M | 77.38M | 64.72M | 42.89M | 32.44M |
| Operating Margin % | 8.64% | 6.66% | 5.57% | 6.73% | 5.87% | 5.16% | 1.99% | 4.79% | 4.92% | 4.5% | 3.96% | -0.75% | 7.16% | 5.74% | 6.33% | 7.81% | 6.68% | 7.23% | 9.71% | 8.99% | 7.15% | 4.48% | 2.88% | -0.29% | -12.73% | 4.62% | 6.9% | 8.43% | 8.27% | 7.28% | 6.42% |
| Operating Income Growth % | - | 43.34% | -3.51% | 25.26% | 25.47% | 106.3% | -57.99% | 14.3% | 8.04% | 20.97% | 652.94% | -108.17% | 18.84% | -6.2% | -5.78% | 53.57% | -12.21% | -23.51% | 41.05% | 48.64% | 91.56% | 78.36% | 1150.81% | 97.8% | -301.26% | -42.84% | -8.69% | 19.57% | 50.89% | 32.21% | 32.75% |
| EBITDA | 285M | 240.4M | 170.4M | 161.8M | 140M | 121.5M | 85M | 141.1M | 126.5M | 115.3M | 116.9M | 112M | 259.1M | 231.2M | 211.03M | 198.02M | 129.26M | 143.44M | 174.47M | 127.56M | 93.38M | 61.44M | 45.46M | 25.39M | -58.79M | 58.97M | 89.03M | 94.44M | 79M | 55.18M | 42.56M |
| EBITDA Margin % | 9.09% | 8.65% | 7.35% | 8.13% | 7.69% | 7.35% | 4.1% | 6.88% | 7.24% | 6.52% | 7.03% | 7.03% | 12.73% | 10.82% | 10.22% | 11.15% | 9.56% | 10.07% | 12.6% | 12.02% | 10.41% | 8.22% | 6.97% | 4.19% | -9.2% | 6.74% | 8.69% | 10.29% | 10.1% | 9.36% | 8.43% |
| EBITDA Growth % | 41.37% | 41.08% | 5.32% | 15.57% | 15.23% | 42.94% | -39.76% | 11.54% | 9.71% | -1.37% | 4.38% | -56.77% | 12.07% | 9.56% | 6.57% | 53.2% | -9.89% | -17.78% | 36.77% | 36.61% | 51.98% | 35.16% | 79.07% | 143.18% | -199.7% | -33.77% | -5.73% | 19.55% | 43.17% | 29.65% | 22.41% |
| D&A (Non-Cash Add-back) | 14.3M | 55.2M | 41.2M | 27.9M | 33.1M | 36.3M | 43.7M | 42.8M | 40.5M | 35.7M | 51.1M | 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 | 10.12M |
| EBIT | 199.4M | 114.3M | 101.5M | 133.4M | 111.1M | 36.8M | 43.7M | 99.6M | 85.5M | 82.3M | 64.3M | -86M | 127.1M | 103.3M | 131.28M | 139.17M | 94.46M | 138.28M | 136.67M | 95.37M | 65.17M | 33.49M | 20.28M | 908K | -81.29M | 40.39M | 70.66M | -55.2M | -9.8M | 42.89M | 32.44M |
| Net Interest Income | -55.5M | -73.6M | -41M | -11.2M | -2.3M | -4.8M | -8.8M | -8.5M | -7.9M | -5.2M | -6.2M | -26.9M | -26.8M | -27.7M | -36.5M | -30.3M | -25.89M | -29.95M | -27.67M | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| Interest Income | 400K | 1.8M | 2.2M | 1M | 100K | 200K | 500K | 1M | 100K | 100K | 200K | 300K | 1.5M | 1.5M | 1.24M | 349K | 945K | 1.47M | 1.82M | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| Interest Expense | -35.4M | 75.4M | 43.2M | 12.2M | 2.4M | 5M | 9.3M | 9.5M | 8M | 5.3M | 6.4M | 27.2M | 28.3M | 41.6M | 37.77M | 30.67M | 26.83M | 18.37M | 29.49M | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| Other Income/Expense | -34.9M | -146.3M | -70.9M | -12.7M | -1.8M | -20.7M | -10.9M | -9.3M | -8.8M | -5.2M | -16.2M | -41.6M | -26.8M | -40.4M | -37.19M | -25.1M | -29.58M | 17.02M | -18.43M | -7.95M | -18.66M | -11.85M | -15.44M | -17.58M | -16.94M | -20.17M | -21.13M | 114.99M | 60.96M | -9.91M | -9.66M |
| Pretax Income | 235.8M | 38.9M | 58.3M | 121.2M | 105.1M | 64.5M | 30.4M | 89M | 77.2M | 74.3M | 59.3M | -83M | 105.3M | 82.2M | 93.51M | 108.5M | 64.19M | 119.91M | 116.09M | 87.42M | 45.5M | 21.64M | 1.71M | -19.49M | -98.23M | 20.22M | 49.53M | 59.79M | 51.16M | 32.98M | 22.78M |
| Pretax Margin % | 7.52% | 1.4% | 2.51% | 6.09% | 5.77% | 3.9% | 1.47% | 4.34% | 4.42% | 4.2% | 3.57% | -5.21% | 5.17% | 3.85% | 4.53% | 6.11% | 4.75% | 8.42% | 8.38% | 8.24% | 5.07% | 2.89% | 0.26% | -3.21% | -15.38% | 2.31% | 4.83% | 6.51% | 6.54% | 5.6% | 4.51% |
| Income Tax | 64.8M | 26.4M | 12M | 31.4M | 26.6M | 18.2M | 5.6M | 4.9M | 3.5M | 24.1M | 18.8M | -28.5M | 32.1M | 26.7M | 25.48M | 35.36M | 20.99M | 39.31M | 40.34M | 27.97M | 10.33M | 3.07M | -1.8M | -7.08M | -39.29M | 1.69M | 14.36M | 18.11M | 15.5M | 9.95M | 6.77M |
| Effective Tax Rate % | 27.48% | 67.87% | 20.58% | 25.91% | 25.31% | 28.22% | 18.42% | 5.51% | 4.53% | 32.44% | 31.7% | 34.34% | 30.48% | 32.48% | 27.25% | 32.59% | 32.69% | 32.78% | 34.75% | 32% | 22.71% | 14.17% | -105.27% | 36.33% | 40% | 8.35% | 29% | 30.3% | 30.3% | 30.17% | 29.72% |
| Net Income | 171M | 12.5M | 46.3M | 90.2M | 78.7M | 35.8M | 24.8M | 7.5M | 15.6M | 56.5M | 47.7M | 10.2M | 72.9M | 55M | 67.72M | 69.83M | 44.63M | 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 | 16.01M |
| Net Margin % | 5.46% | 0.45% | 2% | 4.53% | 4.32% | 2.17% | 1.2% | 0.37% | 0.89% | 3.2% | 2.87% | 0.64% | 3.58% | 2.57% | 3.28% | 3.93% | 3.3% | 5.52% | 5.43% | 5.53% | 3.92% | 2.07% | 0.54% | -2.05% | -9.23% | 2.12% | 3.43% | 4.54% | 4.56% | 3.91% | 3.17% |
| Net Income Growth % | 1479.03% | -73% | -48.67% | 14.61% | 119.83% | 44.35% | 230.67% | -51.92% | -72.39% | 18.45% | 367.65% | -86.01% | 32.55% | -18.79% | -3.01% | 56.46% | -43.26% | 4.67% | 28.1% | 66.82% | 127.55% | 341.01% | 128.24% | 78.94% | -418.06% | -47.3% | -15.62% | 16.87% | 54.86% | 43.8% | 53.03% |
| Net Income (Continuing) | 34M | 12.5M | 46.3M | 89.8M | 78.5M | 46.3M | 24.8M | 84.1M | 73.7M | 52M | 45.5M | -54.5M | 67.2M | 48.8M | 68M | 69.8M | 43.2M | 80.6M | 75.75M | 59.45M | 35.82M | 18.57M | 4.57M | -10.58M | -58.94M | 18.53M | 35.16M | 41.7M | 35.7M | 23.02M | 16.01M |
| Discontinued Operations | 0 | 0 | 0 | 400K | 200K | -10.5M | 0 | 0 | 0 | 4.5M | 2.2M | 64.7M | 5.7M | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| Minority Interest | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 1.2M | 900K | 1.4M | -556K | -556K | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| EPS (Diluted) | 4.50 | 0.35 | 1.29 | 2.53 | 2.16 | 1.00 | 0.71 | 0.21 | 0.45 | 1.64 | 1.37 | 0.24 | 1.83 | 1.38 | 1.65 | 1.73 | 1.16 | 1.45 | 1.71 | 1.40 | 0.94 | 0.46 | 0.11 | -0.39 | -2.08 | 0.69 | 1.28 | 1.49 | 1.27 | 0.92 | 0.67 |
| EPS Growth % | 45600% | -72.87% | -49.01% | 17.13% | 116% | 40.85% | 238.1% | -53.33% | -72.56% | 19.71% | 470.83% | -86.89% | 32.61% | -16.36% | -4.62% | 49.14% | -20% | -15.2% | 22.14% | 48.94% | 104.35% | 318.18% | 128.21% | 81.25% | -401.45% | -46.09% | -14.09% | 17.32% | 38.04% | 37.31% | 52.27% |
| EPS (Basic) | - | 0.35 | 1.30 | 2.56 | 2.19 | 1.01 | 0.71 | 0.22 | 0.46 | 1.66 | 1.37 | 0.26 | 1.85 | 1.38 | 1.68 | 1.76 | 1.17 | 1.49 | 1.83 | 1.61 | 1.05 | 0.48 | 0.11 | -0.39 | -2.08 | 0.69 | 1.30 | 1.51 | 1.29 | 0.92 | 0.67 |
| Diluted Shares Outstanding | 38M | 35.8M | 35.4M | 35.1M | 36M | 35.3M | 35M | 34.9M | 34.6M | 34.3M | 34.6M | 39.4M | 39.1M | 40.6M | 43.1M | 43.6M | 43.09M | 42.81M | 43.74M | 41.9M | 37.41M | 33.59M | 31.85M | 31.82M | 28.34M | 26.86M | 26.86M | 27.99M | 28.11M | 25.03M | 24.02M |
| Basic Shares Outstanding | 37.8M | 35.6M | 35.1M | 34.7M | 35.6M | 35M | 34.8M | 34.5M | 34.2M | 33.9M | 34.4M | 39.1M | 38.6M | 38.3M | 38.8M | 38.4M | 38.18M | 38.06M | 37.19M | 36.43M | 33.49M | 32.19M | 31.85M | 31.82M | 28.34M | 26.86M | 26.86M | 27.62M | 27.67M | 25.03M | 24.02M |
| Dividend Payout Ratio | - | - | - | - | - | 0.28% | 43.15% | 140% | 66.03% | 18.05% | 21.8% | 122.55% | 16.19% | 23.27% | 17.84% | 4.27% | - | - | - | - | - | - | - | - | - | 49.41% | 26.22% | 22.5% | 25.52% | 34.64% | 47.94% |
Margin compression from labor
According to the latest quarterly data, AAR Corp. achieved a 24.6% year-over-year revenue increase in 2026Q3, signaling a sustained recovery in aviation aftermarket demand that appears to be outpacing the more modest growth rates observed in the earlier periods of the fiscal cycle.
The acceleration in revenue growth suggests that the company is successfully capturing increased flight hour activity and leveraging its expanded service footprint. Investors should monitor whether this trajectory is driven by sustainable contract wins or if it reflects a temporary surge in transactional parts demand that may normalize in future quarters.
As reported in financial statements, AAR Corp. maintains a gross margin profile hovering near 18.3% to 19.9%, which appears significantly lower than specialized aerospace peers, suggesting that the company's service-heavy business model faces inherent limitations in pricing power and structural margin expansion potential.
The persistent narrowness of these margins indicates that the company remains highly sensitive to input cost fluctuations, particularly regarding technical labor and parts procurement. Without a meaningful shift toward higher-margin proprietary component repairs, the current margin structure may continue to limit the company's ability to translate top-line growth into significant bottom-line earnings.
Based on the provided income statement data, operating income has shown volatility, with operating margins fluctuating between -0.3% and 10.5% over the last ten quarters, indicating that the company has yet to demonstrate consistent operating leverage as it scales its service and maintenance operations.
The lack of a clear, upward trend in operating margins suggests that SG&A expenses are scaling in tandem with revenue, potentially due to integration costs or ongoing investments in infrastructure. This warrants further investigation into whether management can achieve greater overhead efficiency as the business continues to expand its market share.
Analysis of the reported figures reveals significant quarterly swings in net income, including a notable net loss in 2025Q3, which suggests that non-operating items and potential one-time charges are creating noise that obscures the underlying profitability of the core aviation services business.
The discrepancy between operating income and net income in several periods implies that tax treatments, interest expenses, or acquisition-related integration costs are exerting a disproportionate impact on the bottom line. Investors should be cautious in relying on EPS as a pure indicator of operational health until these non-recurring items stabilize.
While revenue growth appears strong, the company's reliance on labor-intensive MRO services, as evidenced by the 2025Q2 operating loss, suggests that short-sellers may focus on the risk of persistent labor inflation and the potential for margin compression if demand for used serviceable materials softens.
The competitive landscape in the aerospace aftermarket is intensifying, and AAR Corp.'s thin net margins leave little room for error if technical labor costs continue to rise. If the company fails to successfully integrate its recent acquisitions into a higher-margin service model, the current valuation may face downward pressure.
Quick answers to the most common questions about buying AIR stock.
For fiscal year 2025, AAR Corp. (AIR) reported total revenue of $2.78B. This represents a 450.6% increase compared to $505.0M in 1996.
AAR Corp. (AIR) is profitable, generating $12.5M in net income for the fiscal year ending 2025 with a net profit margin of 0.4%.
AAR Corp. (AIR) reported an operating income of $185.2M, resulting in an operating profit margin of 6.7%. This margin reflects the operational efficiency of the business before interest and taxes.
AAR Corp. (AIR) generated $527.7M in gross profit for the year, representing a gross profit margin of 19.0%. This demonstrates the company's core pricing power and production efficiency.