Revenue growth accelerated to 23.0% in Q4 2026, but net margin remained constrained at 5.5% in the same period, suggesting that overhead costs are eroding operating leverage gains.
AAR Corp. (AIR) annual income statement — 30-year revenue, gross profit & net income history
| 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 |
|---|
| Sales/Revenue | 3.49B | 3.31B | 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 |
| Revenue Growth % | 21.97% | 18.97% | 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% |
| Cost of Goods Sold | 2.82B | 2.69B | 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 |
| COGS % of Revenue | - | 81.2% | 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% |
| Gross Profit | 664.6M | 622M | 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 |
| Gross Margin % | 19.06% | 18.8% | 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% |
| Gross Profit Growth % | - | 17.87% | 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% |
| Operating Expenses | 384.7M | 349.3M | 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 |
| OpEx % of Revenue | - | 10.56% | 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% |
| Selling, General & Admin | 385.3M | 349.3M | 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 |
| SG&A % of Revenue | - | 10.56% | 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% |
| 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 | 500K | 0 | -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 |
| Operating Income | 279.9M | 270.6M | 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 |
| Operating Margin % | 8.03% | 8.18% | 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% |
| Operating Income Growth % | - | 46.11% | 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% |
| EBITDA | 361M | 345.9M | 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 |
| EBITDA Margin % | 10.35% | 10.46% | 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% |
| EBITDA Growth % | 37.73% | 43.89% | 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% |
| D&A (Non-Cash Add-back) | 81.1M | 75.3M | 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 |
| EBIT | 324.4M | 270.6M | 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 |
| Net Interest Income | -68.2M | -70.5M | -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 |
| Interest Income | 900K | 0 | 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 |
| Interest Expense | 69.1M | 70.5M | 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 |
| Other Income/Expense | -25.6M | -24.7M | -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 |
| Pretax Income | 254.3M | 245.9M | 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 |
| Pretax Margin % | 7.29% | 7.43% | 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% |
| Income Tax | 60.9M | 58.2M | 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 |
| Effective Tax Rate % | 23.95% | 23.67% | 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% |
| Net Income | 193.4M | 187.7M | 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 |
| Net Margin % | 5.55% | 5.67% | 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% |
| Net Income Growth % | 569.2% | 1401.6% | -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% |
| Net Income (Continuing) | 193.4M | 187.7M | 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 |
| Discontinued Operations | 0 | 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 |
| Minority Interest | 0 | 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 |
| EPS (Diluted) | 4.85 | 4.89 | 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 |
| EPS Growth % | 322.41% | 1297.14% | -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% |
| EPS (Basic) | - | 4.88 | 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 |
| Diluted Shares Outstanding | 39.9M | 38.4M | 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 |
| Basic Shares Outstanding | 39.6M | 38.3M | 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 |
| 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% |
Quick answers to the most common questions about buying AIR stock.
For fiscal year 2026, AAR Corp. (AIR) reported total revenue of $3.31B. This represents a 461.3% increase compared to $589.3M in 1997.
AAR Corp. (AIR) is profitable, generating $187.7M in net income for the fiscal year ending 2026 with a net profit margin of 5.7%.
AAR Corp. (AIR) reported an operating income of $270.6M, resulting in an operating profit margin of 8.2%. This margin reflects the operational efficiency of the business before interest and taxes.
AAR Corp. (AIR) generated $622.0M in gross profit for the year, representing a gross profit margin of 18.8%. This demonstrates the company's core pricing power and production efficiency.
Key Metrics
Top Statement Risk
Margin Volatility from Labor Costs
Metrics are mathematically derived from official filings.
Revenue Growth Driven by Acquisition Integration
Based on the income statement data, AAR Corp.'s revenue growth accelerated to 23.0% in Q4 2026, building on the 24.6% increase in Q3, suggesting that strategic acquisitions are effectively fueling growth momentum in the aerospace services sector.
The revenue trajectory shows a clear acceleration from the 11.8% growth in Q1 2026 to the high teens and twenties in subsequent quarters, driven by both organic demand recovery and inorganic contributions from acquisitions. This pattern appears to reflect successful integration of acquired assets and a favorable recovery in global flight hours, though durability may depend on maintaining synergies and avoiding execution missteps.
Gross Margin Resilience Offset by Net Margin Erosion
Recent SEC filings indicate that AIR's gross margin stabilized at around 19% in late 2026, but net margin remained constrained at 5.5% in Q4, implying that overhead or non-operating costs are absorbing a significant portion of operating profits.
The structural gross margin of around 18-20% appears consistent with MRO industry norms, reflecting a blend of parts distribution and hangar labor. However, the volatility in net margins, from negative values in 2025 to modest positives recently, suggests that cost discipline in SG&A and effective tax management are critical for translating operating income into shareholder returns.
Operating Leverage Gains from Scalable Cost Base
As reported in the financial statements, operating income reached $75.4M in Q4 2026, representing an 8.1% margin, which suggests that the company is effectively scaling its operations to absorb fixed costs as revenue grows.
Comparing operating income growth to gross profit growth reveals that operating income has been expanding at a faster rate since early 2025, pointing to improved efficiency in SG&A relative to sales. This trend indicates that management's focus on cost containment during the integration phase is yielding benefits, though sustainability depends on continued revenue momentum.
EPS Volatility Linked to Non-Operating Factors
The reported EPS of $1.29 in Q4 2026, as per the income statement, contrasts sharply with negative EPS in prior periods, suggesting that earnings quality may be influenced by items such as stock-based compensation or tax adjustments, which require scrutiny.
The presence of stock-based compensation, which was $7.8M in the most recent quarter, dilutes earnings per share and reduces cash flow available for operations. Additionally, the wide swings in net margin suggest that one-time items or accounting adjustments could be masking the underlying earnings power, making it essential for investors to adjust for these factors when assessing profitability.
Sustainability of Growth Amid Margin Pressures
From a contrarian perspective, the income statement data reveals that despite 23% revenue growth, net margins remain below 6%, suggesting that cost escalation from labor inflation or integration hurdles could undermine margin expansion, posing a material risk to the investment thesis.
Short-sellers might highlight that the gross margin has not expanded despite revenue scale, indicating limited pricing power in a competitive MRO market. Furthermore, the absence of forward guidance adds uncertainty, implying that management may be cautious about sustaining current growth rates, which could lead to earnings disappointments if the recovery in flight hours slows.