StandardAero — Third Quarter 2026 Earnings Summary

Financial Performance:

• Revenue for the three months ended September 30, 2026, was $1,557.4 million, a 4.0% increase from $1,498.0 million in the prior year period.
• Net income was $92.8 million, a 36.2% increase from $68.1 million in the prior year period; Net Income Margin was 6.0% compared to 4.5% in the prior year.
• Diluted GAAP EPS was $0.28, compared to $0.20 in the prior year.
• Adjusted Diluted EPS was $0.39, a 30.0% increase from $0.30 in the prior year.
• Adjusted EBITDA was $224.9 million, a 15.0% increase from $195.6 million in the prior year.
• Adjusted EBITDA margin was 14.4%, a 130 basis point increase from 13.1% in the prior year.
• Cash flow provided by operations was $128.9 million.
• Adjusted Free Cash Flow for the quarter was $99.2 million.
• Total debt was $2,499.2 million as of September 30, 2026, compared to $2,362.8 million as of September 30, 2025.
• Net Debt was $2,307.9 million as of September 30, 2026, compared to $2,265.3 million in the prior year period.
• Net Debt to Adjusted EBITDA (LTM) was 2.7x as of September 30, 2026, compared to 2.9x in the prior year.

Guidance and Future Outlook:

• Full Year 2026 Revenue guidance was raised to $6,525 to $6,645 million (previously implied lower).
• Full Year 2026 Adjusted EBITDA guidance was raised to $905 to $920 million.
• Full Year 2026 Adjusted Free Cash Flow guidance is $270 to $300 million.
• Full Year 2026 Adjusted Diluted EPS guidance is $1.57 to $1.62.
• Segment guidance for Engine Services is $5,770 to $5,870 million revenue and $810 to $820 million Adjusted EBITDA.
• Segment guidance for Component Repair Services is $755 to $775 million revenue and $205 to $210 million Adjusted EBITDA.
• End market revenue growth assumptions for 2026: 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).
• Management cited a healthy backlog, long-term visibility, and continued progress in deleveraging as drivers for the guidance raise.

Business Segments and Product Lines:

• Engine Services segment revenue was $1,368.8 million, a 3.5% increase from $1,322.2 million in the prior year, driven by volume and partially offset by the elimination of pass-through revenue.
• Engine Services segment Adjusted EBITDA was $205.1 million, a 24.0% increase from $165.4 million in the prior year, driven by volume, mix, productivity gains, and increased used serviceable material.
• Engine Services segment Adjusted EBITDA margin was 15.0%, a 250 basis point increase from 12.5% in the prior year.
• Component Repair Services segment revenue was $188.7 million, a 7.3% increase from $175.8 million in the prior year, driven by volume.
• Component Repair Services segment Adjusted EBITDA was $48.6 million, a 9.9% decrease from $54.0 million in the prior year, driven by productivity and mix.
• Component Repair Services segment Adjusted EBITDA margin was 25.8%, a 490 basis point decrease from 30.7% in the prior year.
• Revenue growth was driven across all three major end markets: Business Aviation (7.4%), Military and Helicopter (7.2%), and Commercial Aerospace (1.3%).

Market and Competitive Landscape:

• The company operates in commercial, military, and business aviation end markets, all of which showed growth in the quarter.
• Management noted elevated fuel prices and geopolitical uncertainty as external factors during the quarter.
• The company serves as a leading independent pure-play provider of aerospace engine aftermarket services for fixed and rotary wing aircraft.

Risks and Challenges:

• Forward-looking statements are subject to risks including conditions affecting commercial and business aviation industries, decreases in military budget or spending, supply chain disruptions, increased labor and material costs due to inflation, and infectious disease outbreaks.
• Risks include competition, loss of OEM authorization or license, reliance on a small number of customers, and material weaknesses in internal control over financial reporting.
• Risks related to substantial indebtedness, data security incidents, regulatory compliance, and operations outside North America are noted.
• Carlyle owns a significant amount of voting power, which is a risk factor regarding stock ownership.

Management Commentary and Tone:

• Paul McElhinney, CEO, stated that results demonstrate the resilience of the diversified portfolio despite elevated fuel prices and geopolitical uncertainty.
• Management expressed confidence in the long-term outlook, citing a healthy backlog and continued progress in deleveraging.
• The company emphasized a commitment to disciplined capital allocation and long-term shareholder value creation.
• Adjusted Diluted EPS grew 30% and Adjusted EBITDA grew 15% year-over-year, with Engine Services showing record 24% Adjusted EBITDA growth.

Other Key Points:

• The Board approved a $560.0 million increase to the share repurchase program, bringing the total authorization to $1.0 billion, with $850.0 million remaining available.
• The Company intends to enter into a $350.0 million accelerated share repurchase agreement (ASR) with Morgan Stanley.
• Approximately $160.1 million of common shares were repurchased to date under the program, including $50.1 million during the third quarter 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.
• The company is providing guidance for Adjusted Free Cash Flow going forward, defined as Free Cash Flow excluding the purchase of intangible assets.
• Business transformation costs related to LEAP and CFM engine lines were $0 for the quarter, compared to $3.3 million in the prior year.
• Integration costs and severance were $0.1 million for the quarter, compared to $1.9 million in the prior year.