StandardAero — Second Quarter 2026 Earnings Summary

Financial Performance

• Revenue increased 4.6% year-over-year to $1,599.7 million for the quarter ended June 30, 2026.
• Net income was $97.3 million, representing a 43.7% increase from $67.7 million in the prior year period; Net Income Margin was 6.1% compared to 4.4% in the prior year.
• Adjusted Diluted EPS was $0.40, up 24% from $0.32 in the prior year quarter.
• Adjusted EBITDA increased 12.3% year-over-year to $229.9 million; Adjusted EBITDA Margin was 14.4%, an increase of 100 basis points from 13.4% in the prior year.
• Cash used in operations was $72.3 million; Free Cash Flow for the quarter was an inflow of $50.2 million.
• Net Debt was $2,176.0 million as of June 30, 2026, down from $2,262.5 million in the prior year period; Net Debt to Adjusted EBITDA ratio was 2.6x compared to 3.0x in the prior year.
• Long-term debt increased to $2,301.8 million from $2,191.2 million as of December 31, 2025.

Guidance and Future Outlook

• Full Year 2026 Revenue guidance raised to $6,375 to $6,500 million.
• Full Year 2026 Adjusted EBITDA guidance raised to $885 to $910 million.
• Full Year 2026 Adjusted Diluted EPS guidance revised to $1.50 to $1.57.
• Full Year 2026 Adjusted Free Cash Flow guidance revised to $270 to $300 million.
• Segment guidance for Engine Services revenue raised to $5,600 to $5,700 million; Component Repair Services revenue guidance raised to $775 to $800 million.
• Segment guidance for Engine Services Adjusted EBITDA raised to $770 to $785 million; Component Repair Services Adjusted EBITDA guidance raised to $220 to $230 million.
• End market growth assumptions: Commercial Aerospace (Low-Double Digit to Mid-Teens YoY), Military & Helicopter (Low-Double Digit YoY), and Business Aviation (High-Single Digit to Low-Double Digit YoY).
• Guidance includes the effect of eliminating $300 to $400 million in material pass-through revenue.

Business Segments and Product Lines

• Engine Services Segment: Revenue increased 4.0% to $1,405.1 million; Adjusted EBITDA increased 14.4% to $204.2 million; Adjusted EBITDA Margin increased 130 basis points to 14.5%. Growth driven by volume, productivity gains, and mix, partially offset by the elimination of low-to-no margin material pass-through revenues.
• Component Repair Services Segment: Revenue increased 9.2% to $194.6 million; Adjusted EBITDA decreased 0.9% to $51.2 million; Adjusted EBITDA Margin decreased 270 basis points to 26.3% due to negative mix.
• Closed the acquisition of Unified Turbines to expand Component Repair Services capabilities.
• Signed a license agreement with a key OEM partner to expand relationships and improve economics across multiple platforms.
• Achieved profitability on LEAP and CFM56 DFW programs during the quarter.
• Commercial Aerospace end market grew 5.7% and Business Aviation end market grew 5.6% year-over-year; Military and Helicopter end market decreased 2.6%.

Market and Competitive Landscape

• Continued strong demand observed across commercial aerospace and business aviation platforms despite a higher fuel price environment.
• Robust demand signals cited as a reason for raising full-year guidance.
• Company serves commercial, military, and business aviation end markets as a leading independent pure-play provider of aerospace engine aftermarket services.

Risks and Challenges

• Revenue growth partially offset by the elimination of low-to-no margin material pass-through revenue on restructured contracts.
• Component Repair Services segment revenue impacted by lower revenues on certain military platforms due to input delays.
• Segment Adjusted EBITDA margin in Component Repair Services negatively impacted by negative mix.
• Forward-looking statements involve risks including supply chain disruptions, inflationary cost increases, regulatory changes, and potential loss of OEM authorizations.

Management Commentary and Tone

• Russell Ford, Chairman and CEO, described results as "strong" with "continued operational momentum."
• Management highlighted record Adjusted EBITDA Margins of 14.4% achieved through productivity improvements and contract restructuring.
• Management expressed confidence in delivering another year of double-digit earnings growth.
• CEO noted that supply chain initiatives are beginning to be realized, contributing to the $50.2 million Free Cash Flow inflow.

Other Key Points

• The Company continued to execute on its share repurchase program; $100.1 million was used to repurchase common stock in the first six months of 2026.
• Effective Q2 2026, the definition of Adjusted Diluted EPS was updated to exclude the non-cash amortization of all intangible assets, including those associated with licenses.
• Guidance for Adjusted Free Cash Flow is now provided instead of Free Cash Flow, excluding the purchase of intangible assets to better reflect core operating performance.
• The Company has not reconciled forward-looking Adjusted EBITDA, Adjusted Free Cash Flow, or Adjusted Diluted EPS to GAAP measures due to the inability to reliably predict necessary components without unreasonable effort.