AAR Corp. Soars to Record Heights: Strong Financial Performance and Strategic Execution Drive Growth
July 16, 2025 - AAR Corp., a leading provider of aviation and defense solutions, has just released its Q4 2025 earnings report, showcasing a record year of financial performance and strategic execution.
The company's Chairman, President and CEO, John Holmes, proudly declared on the conference call that AAR delivered outstanding financial performance in both the quarter and the full year. With a 14% organic sales growth - excluding Landing Gear - AAR achieved impressive results. This success can be attributed to the company's continued efforts to refine and optimize its portfolio through strategic acquisitions and divestitures.
As highlighted by Holmes, AAR has substantially completed the integration of the Product Support acquisition and successfully divested its Landing Gear Overhaul business. These moves demonstrate the company's focus on maximizing shareholder value and positioning itself for future growth. The strong financial performance is also evident in the record full-year results of $2.8 billion, up 20% over the prior year.
Adjusted EBITDA margin increased by a significant 140 basis points to 11.8% in fiscal 2025, reflecting strong growth across AAR's core segments. The company generated record adjusted diluted earnings per share of $3.91 compared to $3.33 last year. These results underscore AAR's commitment to delivering value to its shareholders.
Furthermore, the company has been successful in driving above-market growth in its new parts distribution activities and capturing new business wins through its Trax software solution. The latter is also delivering impressive results, solidifying its position as a key player in the market. AAR's continued reduction of net leverage, with a current ratio of 2.7x, positions it well to meet its target of 2.0-2.5x.
Looking ahead, Holmes emphasized that AAR is executing across its strategic objectives to drive growth through market share capture and new business wins. The company expects this momentum to continue in 2026, with several key initiatives underway. These include the expansion of its Parts Supply segment through a multiyear agreement with FTAI and the establishment of a supply chain alliance with the U.S. Defense Logistics Agency.
Additionally, AAR has entered into a joint venture with KIRA to provide comprehensive new parts distribution services to meet the needs of the DoA. The company is also making progress on its Oklahoma City and Miami MRO expansions, which will add 15% capacity to its network in calendar 2026.
AAR Corp.'s record-breaking performance and strategic execution have firmly established it as a leader in the aviation and defense solutions space. As the company continues to drive growth through market share capture and new business wins, investors can expect AAR to remain a compelling investment opportunity in the future.
