Engine Services Earnings Growth Drives Guidance Raise and Company Announces $350 Million Accelerated Share Repurchase
SCOTTSDALE, Ariz.--(BUSINESS WIRE)--November 05, 2026--
StandardAero $(SARO)$ announced results today for the three months ended September 30, 2026 ("Third Quarter 2026").
Third Quarter 2026 Highlights
-- Revenue was $1,557.4 million, an increase of 4.0% from the prior year's
quarter
-- Net Income was $92.8 million, an increase of 36.2% from the prior
year's quarter; Diluted GAAP EPS was $0.28, Net Income Margin was 6.0%
-- Adjusted Diluted EPS was $0.39, an increase of 30.0% from $0.30 from
the prior year's quarter
-- Adjusted EBITDA was $224.9 million, an increase of 15.0% from $195.6
million from the prior year's quarter
-- Adjusted EBITDA margin was 14.4% versus 13.1% in the prior year's
quarter, a 130 basis point increase
-- Cash Flow provided by Operations was $128.9 million; Adjusted Free Cash
Flow for the quarter was $99.2 million
-- Announcing the Board approved a $560.0 million increase to the
Company's share repurchase program, bringing the total authorization to
$1.0 billion, with $850.0 million remaining available
-- Announcing intent to enter into a $350.0 million accelerated share
repurchase agreement pursuant to the share repurchase authorization
"Our third-quarter results demonstrate the resilience of our diversified portfolio. Despite elevated fuel prices and geopolitical uncertainty, Adjusted Diluted EPS grew 30% and Adjusted EBITDA grew 15.0% year-over-year, with record 24% Adjusted EBITDA growth in Engine Services supporting another increase to our full-year 2026 guidance," said Paul McElhinney, StandardAero's Chief Executive Officer.
Mr. McElhinney continued, "With a healthy backlog, long-term visibility and continued progress in deleveraging, we intend to enter into a $350 million accelerated share repurchase and the Board has increased our share repurchase authorization to $1.0 billion. These actions reflect our confidence in the long-term outlook for the company and commitment to disciplined capital allocation and long-term shareholder value creation."
Third Quarter 2026 Consolidated Results
Revenue for the Third Quarter 2026 was $1,557.4 million, a variance of $59.5 million, from $1,498.0 million for the prior year period. This was driven by growth across all three major end markets. The business aviation end market grew 7.4% compared to the prior year period, the military and helicopter end market grew 7.2%, compared to the prior year period and the commercial aerospace end market grew 1.3% compared to the prior year period.
Net income for the Third Quarter 2026 was $92.8 million, as compared to net income of $68.1 million for the prior year period, a change of 36.2% year-over-year. Net Income Margin was 6.0% in the quarter, compared to 4.5% in the prior year period.
Adjusted EBITDA for the Third Quarter 2026 was $224.9 million, a variance of $29.4 million, from $195.6 million for the prior year period, or 15% growth year-over-year. Adjusted EBITDA Margin was 14.4%, a variance of 130 basis points, compared to 13.1% in the prior year period, primarily due to volume, mix, productivity improvements and the elimination of pass-through revenue.
Third Quarter 2026 Segment Results
Engine Services Segment
Engine Services segment revenue for the Third Quarter 2026 was $1,368.8 million, a variance of $46.6 million, or 3.5%, from $1,322.2 million for the prior year period. The change was driven primarily by volume, partially offset by the elimination of pass-through revenue.
Engine Services Segment Adjusted EBITDA for the Third Quarter 2026 was $205.1 million, a variance of $39.7 million, or 24.0%, from $165.4 million for the prior year period. This was driven by volume, mix, productivity gains, and increase in used serviceable material. Segment Adjusted EBITDA Margin was 15.0%, a variance of 250 basis points compared to 12.5% in the prior year period.
Component Repair Services Segment
Component Repair Services segment revenue for the Third Quarter 2026 was $188.7 million, a variance of $12.9 million, or 7.3%, from $175.8 million for the prior year period. The change was driven by volume.
Component Repair Services Segment Adjusted EBITDA for the Third Quarter 2026 was $48.6 million, a variance of $(5.3) million, or (9.9%), from $54.0 million for the prior year period. This was driven primarily by productivity and mix. Segment Adjusted EBITDA Margin was 25.8%, a variance of -490 basis points compared to 30.7% in the prior year period.
Share Repurchase Activity and Accelerated Share Repurchase
On October 28, 2026, the Board approved a $560.0 million increase to the Company's share repurchase program, bringing the total authorization to $1.0 billion. Under the program, the Company has repurchased approximately $160.1 million of its common shares to date, including $50.1 million during the third quarter of 2026. As a result, the Company has $850.0 million remaining under the share repurchase program.
In connection with the increased authorization, the Company intends to enter into an accelerated share repurchase agreement (the "ASR") with Morgan Stanley to repurchase $350.0 million of its common shares. Following completion of the ASR, approximately $500.0 million will remain available under the share repurchase program.
Full Year 2026 Guidance
StandardAero is updating its full year 2026 guidance:
Full Year 2026 ($ in millions)
------------------------------------- ------------------------------------
Revenue(1) (increase) $6,525 to $6,645
Engine Services(1) $5,770 to $5,870
Component Repair Services $755 to $775
Adjusted EBITDA (increase) $905 to $920
Engine Services Segment $810 to $820
Component Repair Services Segment $205 to $210
Adjusted Free Cash Flow(2) $270 to $300
Adjusted Diluted Earnings Per Share(3) $1.57 to $1.62
(increase)
End Market Revenue Growth Assumptions
Commercial Aerospace(4) Low-Double Digit to Mid-Teens YoY
Growth
Military & Helicopter Low-Double Digit YoY Growth
Business Aviation High-Single Digit to Low-Double
Digit YoY Growth
(1) Includes effect from the elimination of approximately $300 million in
material pass-through revenue.
(2) Defined as Free Cash Flow excluding the purchase of intangible assets.
Although StandardAero has previously provided guidance for Free Cash Flow,
the Company has determined to provide guidance for Adjusted Free Cash Flow
going forward because management believes that excluding the purchase of all
intangible assets will provide investors with a more useful baseline for
evaluating the Company's core operating performance, as these cash
payments--whether arising from acquisition accounting or license-related
intangible investments--do not reflect StandardAero's ongoing operations.
(3) Effective Q2 2026, the Company updated its definition of Adjusted
Diluted EPS to broaden the existing exclusion of amortization of acquired
intangible assets to also exclude the non-cash amortization of all
intangible assets, including intangible assets associated with licenses.
Management believes that excluding this item provides investors with a more
useful baseline for evaluating core operating performance, as these non-cash
charges--whether arising from acquisition accounting or license-related
intangible investments--do not reflect the Company's ongoing operations and
facilitate more consistent comparison of results across periods regardless
of how the Company has chosen to deploy capital.
(4) Excludes effect from the elimination of approximately $300 million in
material pass-through revenue.
StandardAero has not reconciled its full year 2026 guidance related to Adjusted EBITDA, Adjusted Free Cash Flow or Adjusted Diluted EPS to its most directly comparable forward looking GAAP financial measure because such information is not available, and management cannot reliably predict all of the necessary components of such GAAP measure without unreasonable effort or expense.
Conference Call and Webcast Information
StandardAero management will host a conference call today, November 5, at 5:00 PM ET, to discuss its results in more detail. The conference call will be broadcast live via webcast, and the webcast and accompanying slide presentation can be accessed by visiting the Events section on StandardAero's investor relations website at https://ir.standardaero.com/news-events/events. The conference call may also be accessed by dialing (877) 407-9762 or (201) 689-8538 for telephone access to the live call. Please click here for international toll-free access numbers.
For those unable to listen to the live conference call, a replay will be available after the call through the archived webcast in the Events section of StandardAero's investor relations website or by dialing (877) 660-6853 or (201) 612-7415. The access code for the replay is 13763066. The replay will be available until 11:59 PM ET on November 19, 2026.
About StandardAero
StandardAero is a leading independent pure-play provider of aerospace engine aftermarket services for fixed and rotary wing aircraft, serving the commercial, military and business aviation end markets. StandardAero provides a comprehensive suite of critical, value-added aftermarket solutions, including engine maintenance, repair and overhaul, engine component repair, on-wing and field service support, asset management and engineering solutions. StandardAero is an NYSE-listed company under the ticker symbol SARO. For more information about StandardAero, please visit www.standardaero.com.
Forward-Looking Statements
This press release contains forward-looking statements that involve substantial risks and uncertainties. We intend such forward-looking statements to be covered by the safe harbor provisions for forward-looking statements contained in Section 21E of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), and Section 27A of the Securities Act of 1933, as amended (the "Securities Act"). In some cases, you can identify forward-looking statements by the words "anticipate," "assume," "believe," "continue," "could," "estimate," "expect," "foreseeable," "future," "intend," "may," "might," "objective, " "ongoing," "plan," "potential," "predict," "project," "seek," "should, " "will," or "would" and/or the negative of these terms, or other comparable terminology intended to identify statements about the future. They appear in a number of places throughout this press release and include statements regarding our intentions, beliefs or current expectations concerning, among other things, results of operations for the fiscal year ending December 31, 2026, our financial condition, liquidity, prospects, growth and strategies, the industry in which we operate, our share repurchase program, including the size and timing of repurchases under the anticipated accelerated share repurchase agreement, and other information that is not historical information. These statements involve known and unknown risks, uncertainties and other factors that may cause our actual results, levels of activity, performance or achievements to be materially different from the information expressed or implied by these forward-looking statements. Although we believe that we have a reasonable basis for each forward-looking statement contained in this press release, we cannot assure you that we will achieve or realize these plans, intentions or expectations. Forward-looking statements are inherently subject to risks, uncertainties and assumptions that are difficult to predict or quantify.
Generally, statements that are not historical facts, including statements concerning our possible or assumed future actions, business strategies, events or results of operations, are forward-looking statements. Factors that could cause actual results to differ materially from those forward-looking statements included in this press release include, among others: risks related to conditions that affect the commercial and business aviation industries; decreases in budget, spending or outsourcing by our military end-users; risks from any supply chain disruptions or loss of key suppliers; increased costs of labor, equipment, raw materials, freight and utilities due to inflation; future outbreaks and infectious diseases; risks related to competition in the market in which we participate; loss of an OEM authorization or license; risks related to a significant portion of our revenue being derived from a small number of customers; our ability to remediate effectively the material weaknesses identified in our internal control over financial reporting; our ability to respond to changes in GAAP; our or our third-party partners' failure to protect confidential information; data security incidents or disruptions to our IT systems and capabilities; our ability to comply with laws relating to the handling of information about individuals; changes to, and the impact of, United States tariff and import/export regulations; failure to maintain our regulatory approvals; risks relating to our operations outside of North America; failure to comply with government procurement laws and regulations; any work stoppage, hiring, retention or succession issues with our senior management team and employees; any strains on our resources due to the requirements of being a public company; risks related to our substantial indebtedness; risks related to the ownership of our common stock, including the fact that Carlyle owns a significant amount of our voting power; our success at managing the risks of the foregoing, and the other factors described in our Annual Report on Form 10-K for the year ended December 31, 2025 and our other filings with the SEC.
As a result of these factors, we cannot assure you that the forward-looking statements in this press release will prove to be accurate. You should understand that it is not possible to predict or identify all such factors. We operate in a competitive and rapidly changing environment. New factors emerge from time to time, and it is not possible to predict the impact of all of these factors on our business, financial condition or results of operations.
Furthermore, if our forward-looking statements prove to be inaccurate, the inaccuracy may be material. In light of the significant uncertainties in these forward-looking statements, you should not regard these statements as a representation or warranty by us or any other person that we will achieve our objectives, plans or cost savings in any specified time frame or at all. In addition, even if our results of operations, financial condition and liquidity, and the development of the industry in which we operate, are consistent with the forward-looking statements contained in this press release, those results or developments may not be indicative of results or developments in subsequent periods. We caution you not to place undue reliance on these forward-looking statements. All forward looking statements attributable to us or persons acting on our behalf are expressly qualified in their entirety by the foregoing cautionary statements. Forward-looking statements speak only as of the date of this press release. We do not undertake any obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law. Comparisons of results for current and any prior periods are not intended to express any future trends or indications of future performance, unless expressed as such, and should only be viewed as historical data.
Non-GAAP Financial Measures
This press release includes "non-GAAP financial measures," which are financial measures that either exclude or include amounts that are not excluded or included in the most directly comparable measures calculated and presented in accordance with accounting principles generally accepted in the United States ("GAAP"), including Adjusted EBITDA, Adjusted EBITDA Margin, Net Debt to Adjusted EBITDA, Adjusted Net Income, Adjusted Diluted Earnings Per Share ("Adjusted Diluted EPS"), Free Cash Flow and Adjusted Free Cash Flow. We use these non-GAAP financial measures to evaluate our business operations.
We believe that certain non-GAAP financial measures presented in this press release, including Adjusted EBITDA, Adjusted EBITDA Margin, Adjusted Net Income and Adjusted Diluted EPS, provide supplemental information that helps investors better understand our financial condition and operating results and assess our future prospects. We believe that presenting these non-GAAP financial measures, in addition to the corresponding GAAP financial measures, are important supplemental measures that exclude non-cash or other items that may not be indicative of or are unrelated to our core operating results and the overall health of our company. We believe that these non-GAAP financial measures provide investors greater transparency to the information used by management for its operational decision-making and allow investors to see our results "through the eyes of management." We further believe that providing this information assists our investors in understanding our operating performance and the methodology used by management to evaluate and measure such performance. We also present Net Debt to Adjusted EBITDA, Free Cash Flow, and Adjusted Free Cash Flow, which are liquidity measures. We believe these measures provide investors with useful supplemental information regarding our liquidity and cash flow, as these measures are also used by management to assess liquidity, evaluate operating cash flow and make resource allocation decisions. We believe it is important to measure the free cash flows we have generated from operations, after accounting for routine capital expenditures required to generate those cash flows. When read in conjunction with our GAAP results, these non-GAAP financial measures provide a baseline for analyzing trends in our underlying businesses and can be used by management as one basis for financial, operational and planning decisions. Finally, these measures are often used by analysts and other interested parties to evaluate companies in our industry.
We define Adjusted EBITDA as net income (loss) before interest expense, income tax expense (benefit), depreciation and amortization, further adjusted for certain non-cash items that we may record each period, as well as non-recurring items such as acquisition costs, integration and severance costs, refinance fees, business transformation costs and other discrete expenses, when applicable. We define Adjusted EBITDA Margin as Adjusted EBITDA divided by revenue. We define Adjusted Net Income as GAAP Net income, adjusted for certain one-time items that we may record in a period, as well as non-recurring items such as acquisition costs, integration and severance costs, refinance fees, business transformation costs and other discrete expenses, when applicable, and amortization of intangible assets, adjusted for the tax effect. We define Adjusted Diluted EPS as Adjusted Net Income divided by the Total Diluted Shares Outstanding. This Adjusted Diluted EPS definition was recast in Q2 2026 to exclude amortization of all intangible assets. We believe that Adjusted EBITDA, Adjusted EBITDA Margin, Adjusted Net Income and Adjusted Diluted EPS are important metrics for management and investors as they remove the impact of items that we do not believe are indicative of our core operating results or the overall health of our company and allows for consistent comparison of our operating results over time and relative to our peers. We define Net Debt to Adjusted EBITDA as long-term debt, less cash and cash equivalents divided by Adjusted EBITDA. We define Free Cash Flow as cash from operating activities less capital expenditures. We define Adjusted Free Cash Flow as Free Cash Flow excluding the purchase of intangible assets.
Management recognizes that these non-GAAP financial measures have limitations, including that they may be calculated differently by other companies or may be used under different circumstances or for different purposes, thereby affecting their comparability from company to company. In order to compensate for these and the other limitations discussed below, management does not consider these measures in isolation from or as alternatives to the comparable financial measures determined in accordance with GAAP. Readers should review the reconciliations of our non-GAAP financial measures to the corresponding GAAP measures included in this press release and should not rely on any single financial measure to evaluate our business.
We have presented forward-looking statements regarding Adjusted EBITDA, Adjusted Free Cash Flow and Adjusted Diluted EPS. These non-GAAP financial measures are derived by excluding certain amounts, expenses or income, from the corresponding financial measure determined in accordance with GAAP. The determination of the amounts that are excluded from each non-GAAP financial measure is a matter of management judgment and depends upon, among other factors, the nature of the underlying expense or income amounts recognized in a given period in reliance on the exception provided by item 10(e)(1)(i)(B) of Regulation S-K, we are unable to present a quantitative reconciliation of each forward-looking Adjusted EBITDA, Adjusted Free Cash Flow and Adjusted Diluted EPS measure to its most directly comparable forward looking GAAP financial measure because such information is not available, and management cannot reliably predict all of the necessary components of such GAAP measure without unreasonable effort or expense. In addition, we believe such reconciliations would imply a degree of precision that would be confusing or misleading to investors. The unavailable information could have a significant impact on the Company's future financial results. These non-GAAP financial measures are preliminary estimates and subject to risks and uncertainties, including, among others, changes in connection with quarter-end and year-end adjustments. Any variation between our actual results and the forward-looking non-GAAP financial data set forth above may be material.
STANDARDAERO, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(unaudited)
(In thousands, except share figures)
September 30, December 31,
2026 2025
---------- ----------
ASSETS
Current assets:
Cash $ 191,329 $ 289,717
Accounts receivable (less
allowance for expected credit
losses of $9,195 and $13,484,
respectively) 912,770 654,390
Contract assets, net 1,335,587 1,071,703
Inventories 752,715 827,691
Prepaid expenses and other
current assets 34,251 42,776
Income tax receivable 25,173 10,182
---------- ----------
Total current assets 3,251,825 2,896,459
---------- ----------
Property, plant and equipment, net 604,920 579,971
Operating lease right of use asset,
net 233,558 222,151
Customer relationships, net 862,900 920,432
Other intangible assets, net 386,621 244,877
Goodwill 1,710,684 1,684,255
Other assets 7,768 6,434
Deferred income tax assets 2,832 2,832
---------- ----------
Total assets $ 7,061,108 $ 6,557,411
========== ==========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 802,342 $ 679,772
Accrued expenses and other
current liabilities 97,470 91,499
Accrued employee costs 90,511 74,008
Operating lease liabilities,
current 30,499 22,308
Due to related parties -- 438
Contract liabilities 375,485 411,321
Income taxes payable, current 16,419 13,547
Long-term debt, current portion 23,320 23,444
---------- ----------
Total current liabilities 1,436,046 1,316,337
---------- ----------
Long-term debt 2,447,513 2,191,161
Operating lease liabilities,
non-current 216,600 212,365
Deferred income tax liabilities 147,020 157,206
Income taxes payable, non-current 6,915 5,770
Other non-current liabilities 5,851 7,261
---------- ----------
Total liabilities 4,259,945 3,890,100
---------- ----------
Commitments and contingencies (Note
11)
Stockholders' equity
Common stock ($0.01 par value,
3,500,000,000 shares authorized;
334,662,527 issued and
328,699,971 outstanding as of
September 30, 2026 and
334,461,630 issued and
334,294,245 outstanding as of
December 31, 2025) 3,287 3,345
Preferred stock ($0.01 par
value, 100,000,000 shares
authorized; no shares were
issued) -- --
Additional paid-in capital 3,973,892 3,958,039
Accumulated deficit (1,015,897) (1,285,904)
Accumulated other comprehensive
loss (8,598) (8,169)
Treasury stock (at cost,
5,962,556 and 176,019 shares as
of September 30, 2026 and
December 31, 2025) (151,521) --
---------- ----------
Total stockholders' equity 2,801,163 2,667,311
---------- ----------
Total liabilities and stockholders'
equity $ 7,061,108 $ 6,557,411
========== ==========
STANDARDAERO, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(unaudited)
(In thousands, except per share figures)
Three Months Ended Nine Months Ended
September 30, September 30,
---------------------- ------------------------
2026 2025 2026 2025
--------- --------- --------- ---------
Revenue $1,557,449 $1,497,962 $4,783,999 $4,462,493
Cost of revenue 1,295,543 1,274,803 4,013,943 3,785,429
Selling, general
and
administrative
expense 75,874 60,944 223,413 201,421
Amortization of
intangible
assets 24,968 24,873 73,998 73,808
--------- --------- --------- ---------
Operating income 161,064 137,342 472,645 401,835
Interest expense 40,503 44,566 119,933 132,192
--------- --------- --------- ---------
Income before
income taxes 120,561 92,776 352,712 269,643
Income tax expense 27,762 24,656 82,705 70,867
--------- --------- --------- ---------
Net income $ 92,799 $ 68,120 $ 270,007 $ 198,776
========= ========= ========= =========
Earnings per
share:
Basic $ 0.29 $ 0.21 $ 0.83 $ 0.61
Diluted $ 0.28 $ 0.20 $ 0.81 $ 0.59
Weighted-average
shares of common
stock
outstanding
Basic 324,960 328,453 326,151 328,446
Diluted 331,051 334,407 332,274 334,287
STANDARDAERO, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(unaudited)
(In thousands)
Nine Months Ended September 30,
---------------------------------------
2026 2025
------------- ------------
Operating activities
Net income $ 270,007 $ 198,776
Adjustments to reconcile
net income from operations
to net cash provided by
(used in) operating
activities:
Depreciation and
amortization 147,193 145,329
Amortization of
deferred finance
charges and discounts 4,869 4,912
Amortization of
interest cap premiums 5,245 8,287
Payment of interest
rate cap premiums (5,238) (8,332)
Stock compensation
expense 15,743 10,017
(Gain) loss from
disposals, net (728) 2,766
Non-cash lease expense 1,145 1,268
Deferred income taxes (9,806) (767)
Foreign exchange loss
(gain), net 1,328 (629)
Changes in operating
assets and liabilities,
net of effect of
acquisitions:
Accounts receivable,
net (257,237) (122,580)
Contract assets, net (263,884) (210,300)
Inventories, net 75,159 (109,713)
Prepaid expenses and
other current assets 4,756 (21,150)
Accounts payable,
accrued expenses and
other current
liabilities 140,367 92,353
Contract liabilities (35,836) 28,633
Due to/from related
parties (438) (475)
Income taxes payable
and receivable (10,974) (24,699)
------------- ------------
Net cash provided by (used in)
operating activities 81,671 (6,304)
------------- ------------
Investing activities
Acquisitions, net of cash
and other (33,142) 1,285
Purchase of property, plant
and equipment (67,343) (66,733)
Payments for purchase of
intangible assets (180,595) (30,000)
Proceeds from disposal of
property, plant and
equipment 1,799 4,341
------------- ------------
Net cash used in investing
activities (279,281) (91,107)
------------- ------------
Financing activities
Proceeds from long-term
debt 455,000 545,000
Repayment of long-term debt (202,613) (452,573)
Repurchase of common stock (150,131) --
Proceeds from the exercise
of stock options 110 --
Repayments of long-term
agreements (1,340) (1,503)
------------- ------------
Net cash provided by financing
activities 101,026 90,924
------------- ------------
Effect of exchange rate changes
on cash (1,804) 1,409
------------- ------------
Net decrease in cash (98,388) (5,078)
------------- ------------
Cash at beginning of the period 289,717 102,581
------------- ------------
Cash at end of the period $ 191,329 $ 97,503
============= ============
Supplemental cash flow
information:
Supplemental disclosure of
non-cash investing
activities:
Acquisition of property,
plant and equipment,
liability incurred, but
not paid $ 4,093 $ (1,185)
Acquisition of intangible 777 --
assets, liability
incurred, but not paid
Selected financial information for each segment is as follows:
Three months ended September 30, 2026
------------------------------------------------
Component
Engine Repair Total
Services Services Segments
----------------- -------------- -------------
(in thousands)
Revenue from
external
customers $ 1,389,482 $ 167,967 $ 1,557,449
Intersegment
revenue (20,725) 20,725 --
--- ----------- ---------- ----------
Total segment
revenue 1,368,757 188,692 1,557,449
Other segment
items (1) 1,163,694 140,053 1,303,747
--- ----------- ---------- ----------
Segment Adjusted
EBITDA $ 205,063 $ 48,639 $ 253,702
=== =========== ========== ==========
Corporate (2) 28,758
Depreciation and
amortization 53,689
Interest expense 40,503
Business
transformation
costs (LEAP and
CFM) (3) --
Non-cash stock
compensation
expense 6,018
Integration
costs and
severance (4) 114
Other (5) 4,059
----------
Income before
income taxes $ 120,561
==========
(1) Other segment items for each reportable segment primarily includes cost
of sales and other selling, general and administrative expenses.
(2) Corporate primarily consists of costs related to executive and staff
functions, including Information Technology, Human Resources, Legal,
Finance, Marketing, Supply Chain, Engineering and Quality, which
benefit the enterprise as a whole. These costs are primarily related to
the general management of these functions on a corporate level and the
design and development of programs, policies, and procedures that are
then implemented in the individual segments, with each segment bearing
its own cost of implementation. The Corporate function also includes
expenses associated with the Company's debt.
(3) Represents new product industrialization costs with the business
transformation of the LEAP 1A/1B engine line in San Antonio, Texas and
the expansion of the Company's CFM56 capabilities into Dallas, Texas.
(4) Represents integration costs incurred, including any facility or
platform consolidation associated with the integration of an
acquisition that does not meet capitalization criteria and severance
related to reduction in workforce or acquisitions. Examples of
integration costs may include lease breakage or run-off fees,
consulting costs, demolition costs or training costs.
(5) Represents professional fees related to business transformation,
secondary offering costs and quarterly management fees payable to
Carlyle Investment Management L.L.C. under consulting services
agreements, representation and warranty insurance costs associated with
acquisitions, that are the result of other, non-comparable events to
measure operating performance as these events arise outside of the
Company's ordinary course of continuing operations.
Nine months ended September 30, 2026
------------------------------------------------
Component
Engine Repair Total
Services Services Segments
---------------- -------------- --------------
(in thousands)
Revenue from
external
customers $ 4,280,739 $ 503,260 $ 4,783,999
Intersegment
revenue (59,754) 59,754 --
----------- ---------- -----------
Total segment
revenue 4,220,985 563,014 4,783,999
Other segment
items (1) 3,633,076 410,776 4,043,852
----------- ---------- -----------
Segment Adjusted
EBITDA $ 587,909 $ 152,238 $ 740,147
=========== ========== ===========
Corporate (2) 82,170
Depreciation and
amortization 147,193
Interest expense 119,933
Business
transformation
costs (LEAP and
CFM) (3) 10,320
Non-cash stock
compensation
expense 15,743
Integration
costs and
severance (4) 801
Other (5) 11,275
-----------
Income before
income taxes $ 352,712
===========
(1) Other segment items for each reportable segment primarily includes cost
of sales and other selling, general and administrative expenses.
(2) Corporate primarily consists of costs related to executive and staff
functions, including Information Technology, Human Resources, Legal,
Finance, Marketing, Supply Chain, Engineering and Quality, which
benefit the enterprise as a whole. These costs are primarily related to
the general management of these functions on a corporate level and the
design and development of programs, policies, and procedures that are
then implemented in the individual segments, with each segment bearing
its own cost of implementation. The Corporate function also includes
expenses associated with the Company's debt.
(3) Represents new product industrialization costs with the business
transformation of the LEAP 1A/1B engine line in San Antonio, Texas and
the expansion of the Company's CFM56 capabilities into Dallas, Texas.
(4) Represents integration costs incurred, including any facility or
platform consolidation associated with the integration of an
acquisition that does not meet capitalization criteria and severance
related to reduction in workforce or acquisitions. Examples of
integration costs may include lease breakage or run-off fees,
consulting costs, demolition costs or training costs.
(5) Represents professional fees related to business transformation,
secondary offering costs and quarterly management fees payable to
Carlyle Investment Management L.L.C. and Beamer Investment Inc. under
consulting services agreements, representation and warranty insurance
costs associated with acquisitions, that are the result of other,
non-comparable events to measure operating performance as these events
arise outside of the Company's ordinary course of continuing
operations.
Three months ended September 30, 2025
--------------------------------------------------
Component
Engine Repair Total
Services Services Segments
------------------ -------------- --------------
(in thousands)
Revenue from
external
customers $ 1,342,716 $ 155,246 $ 1,497,962
Intersegment
revenue (20,531) 20,531 --
---------- ---------- -----------
Total segment
revenue 1,322,185 175,777 1,497,962
Other segment
items (1) 1,156,809 121,802 1,278,611
---------- ---------- -----------
Segment Adjusted
EBITDA $ 165,376 $ 53,975 $ 219,351
========== ========== ===========
Corporate (2) 23,791
Depreciation and
amortization 48,106
Interest expense 44,566
Business
transformation
costs (LEAP and
CFM) (3) 3,252
Non-cash stock
compensation
expense 4,142
Integration
costs and
severance (4) 1,891
Other (5) 827
-----------
Income before
income taxes $ 92,776
===========
(1) Other segment items for each reportable segment primarily includes cost
of sales and other selling, general and administrative expenses.
(2) Corporate primarily consists of costs related to executive and staff
functions, including Information Technology, Human Resources, Legal,
Finance, Marketing, Supply Chain, Engineering and Quality, which
benefit the enterprise as a whole. These costs are primarily related to
the general management of these functions on a corporate level and the
design and development of programs, policies, and procedures that are
then implemented in the individual segments, with each segment bearing
its own cost of implementation. The Corporate function also includes
expenses associated with the Company's debt.
(3) Represents new product industrialization costs with the business
transformation of the LEAP 1A/1B engine line in San Antonio, Texas and
the expansion of the Company's CFM56 capabilities into Dallas, Texas.
(4) Represents integration costs incurred, including any facility or
platform consolidation associated with the integration of an
acquisition that does not meet capitalization criteria and severance
related to reduction in workforce or acquisitions. Examples of
integration costs may include lease breakage or run-off fees,
consulting costs, demolition costs or training costs.
(5) Represents professional fees related to business transformation,
secondary offering costs and quarterly management fees payable to
Carlyle Investment Management L.L.C. and Beamer Investment Inc. under
consulting services agreements, representation and warranty insurance
costs associated with acquisitions, that are the result of other,
non-comparable events to measure operating performance as these events
arise outside of the Company's ordinary course of continuing
operations.
Nine months ended September 30, 2025
------------------------------------------------
Component
Engine Repair Total
Services Services Segments
---------------- -------------- --------------
(in thousands)
Revenue from
external
customers $ 4,002,693 $ 459,800 $ 4,462,493
Intersegment
revenue (61,518) 61,518 --
----------- ---------- -----------
Total segment
revenue 3,941,175 521,318 4,462,493
Other segment
items (1) 3,423,281 368,342 3,791,623
----------- ---------- -----------
Segment Adjusted
EBITDA $ 517,894 $ 152,976 $ 670,870
=========== ========== ===========
Corporate (2) 72,446
Depreciation and
amortization 145,329
Interest expense 132,192
Business
transformation
costs (LEAP and
CFM) (3) 21,433
Non-cash stock
compensation
expense 10,017
Integration
costs and
severance (4) 4,631
Other (5) 15,179
-----------
Income before
income taxes $ 269,643
===========
(1) Other segment items for each reportable segment primarily includes cost
of sales and other selling, general and administrative expenses.
(2) Corporate primarily consists of costs related to executive and staff
functions, including Information Technology, Human Resources, Legal,
Finance, Marketing, Supply Chain, Engineering and Quality, which
benefit the enterprise as a whole. These costs are primarily related to
the general management of these functions on a corporate level and the
design and development of programs, policies, and procedures that are
then implemented in the individual segments, with each segment bearing
its own cost of implementation. The Corporate function also includes
expenses associated with the Company's debt.
(3) Represents new product industrialization costs with the business
transformation of the LEAP 1A/1B engine line in San Antonio, Texas and
the expansion of the Company's CFM56 capabilities into Dallas, Texas.
(4) Represents integration costs incurred, including any facility or
platform consolidation associated with the integration of an
acquisition that does not meet capitalization criteria and severance
related to reduction in workforce or acquisitions. Examples of
integration costs may include lease breakage or run-off fees,
consulting costs, demolition costs or training costs.
(5) Represents professional fees related to business transformation,
secondary offering costs, loss on disposals and quarterly management
fees payable to Carlyle Investment Management L.L.C. and Beamer
Investment Inc. under consulting services agreements, representation
and warranty insurance costs associated with acquisitions, that are the
result of other, non-comparable events to measure operating performance
as these events arise outside of the Company's ordinary course of
continuing operations.
The following table presents a reconciliation of net income and net income margin to
Adjusted EBITDA and Adjusted EBITDA Margin, respectively:
Three months ended September Nine months ended September
30, 30,
------------------------------ ------------------------------
2026 2025 2026 2025
--------- --------- --------- ---------
(in thousands, except percentages)
Net income $ 92,799 $ 68,120 $ 270,007 $ 198,776
Income tax
expense 27,762 24,656 82,705 70,867
Depreciation and
amortization 53,689 48,106 147,193 145,329
Interest expense 40,503 44,566 119,933 132,192
Business
transformation
costs (LEAP and
CFM) (1) -- 3,252 10,320 21,433
Non-cash stock
compensation
expense 6,018 4,142 15,743 10,017
Integration
costs and
severance (2) 114 1,891 801 4,631
Insurance
recovery -- (3,000) -- (3,000)
Loss on
disposals -- -- -- 2,764
Secondary
offering costs 112 570 1,462 4,430
Other (3) 3,947 3,257 9,813 10,985
--------- --------- --------- ---------
Adjusted EBITDA $ 224,944 $ 195,560 $ 657,977 $ 598,424
========= ========= ========= =========
Revenue $1,557,449 $1,497,962 $4,783,999 $4,462,493
Net income margin 6.0% 4.5% 5.6% 4.5%
Adjusted EBITDA
Margin 14.4% 13.1% 13.8% 13.4%
(1) Represents new product industrialization costs with the business
transformation of the LEAP 1A/1B engine line in San Antonio, Texas and
the expansion of the Company's CFM56 capabilities into Dallas, Texas.
(2) Represents integration costs incurred, including any facility or
platform consolidation associated with the integration of an
acquisition that does not meet capitalization criteria and severance
related to reduction in workforce or acquisitions. Examples of
integration costs may include lease breakage or run-off fees,
consulting costs, demolition costs or training costs.
(3) Represents other costs not recurring in the ordinary course of business
including professional fees related to business transformation and
quarterly management fees payable to Carlyle Investment Management
L.L.C. and Beamer Investment Inc. under consulting services agreements,
representation and warranty insurance costs associated with
acquisitions and other non-comparable events to measure operating
performance as these events arise outside of the Company's ordinary
course of continuing operations.
The following table presents a reconciliation of Debt to Net Debt and
Net Debt to Adjusted EBITDA:
September 30, September 30,
2026 2025
--- --------------- ------------
(in millions, except percentages)
2024 Term Loan Facilities $ 2,210.6 $ 2,233.1
2024 Revolving Credit
Facility 270.0 110.0
Finance leases 17.6 18.6
Other 1.0 1.1
--- --------------- ------------
Debt 2,499.2 2,362.8
Less Cash 191.3 97.5
--- --------------- ------------
Net Debt $ 2,307.9 $ 2,265.3
=== =============== ============
LTM Adjusted EBITDA $ 867.7 $ 784.6
Net Debt to Adjusted EBITDA 2.7 x 2.9 x
The following table presents revenue by segment, Segment Adjusted EBITDA and
Segment Adjusted EBITDA Margin:
Three months ended September Nine months ended September
30, 30,
------------------------------ ------------------------------
2026 2025 2026 2025
--------- --------- --------- ---------
(in thousands, except percentages)
Engine
Services
Segment
Revenue $1,368,757 $1,322,185 $4,220,985 $3,941,175
Segment
Adjusted
EBITDA $ 205,063 $ 165,376 $ 587,909 $ 517,894
Segment
Adjusted
EBITDA
Margin 15.0% 12.5% 13.9% 13.1%
Component
Repair
Services
Segment
Revenue $ 188,692 $ 175,777 $ 563,014 $ 521,318
Segment
Adjusted
EBITDA $ 48,639 $ 53,975 $ 152,238 $ 152,976
Segment
Adjusted
EBITDA
Margin 25.8% 30.7% 27.0% 29.3%
The following table presents a reconciliation of Cash Flow from
Operations to Adjusted Free Cash Flow:
Three months ended Nine months ended
September 30, September 30,
--------------------- -----------------------
2026 2025 2026 2025
-------- ------- -------- -------
(in thousands)
Cash Flow from
Operations $ 128,898 $ 14,799 $ 81,671 $ (6,304)
Purchase of
property,
plant and
equipment (30,702) (19,471) (67,343) (66,733)
Payments for
purchase of
intangible
assets (180,119) -- (180,595) (30,000)
Proceeds
from
disposal of
property,
plant and
equipment 971 704 1,799 4,341
-------- ------- -------- -------
Net cash used
for capital
expenditures
and intangible
assets (209,850) (18,767) (246,139) (92,392)
-------- ------- -------- -------
Free cash flow (80,952) (3,968) (164,468) (98,696)
======== ======= ======== =======
Payments for
purchase of
intangible
assets 180,119 -- 180,595 30,000
-------- ------- -------- -------
Adjusted free
cash flow $ 99,167 $ (3,968) $ 16,127 $(68,696)
======== ======= ======== =======
The following tables present a reconciliation of Net
income/Diluted EPS to Adjusted Net Income/Adjusted Diluted
EPS:
Three months ended Nine months ended
September 30, 2026 September 30, 2026
------------------- -------------------
$ EPS $ EPS
------- ---------- ------- ----------
(in millions, except per share data )
Net income/Diluted
EPS $ 92.8 $ 0.28 $270.0 $ 0.81
Business
transformation
costs (LEAP and
CFM) -- 0.00 10.3 0.03
Stock
compensation 6.0 0.02 15.7 0.05
Integration
costs and
severance 0.1 0.00 0.8 0.00
Secondary
offering costs 0.1 0.00 1.5 0.01
Professional
services fees
and other 3.9 0.01 9.8 0.03
----- ----- ----- -----
One-offs included in
adjusted EBITDA
add-back 10.1 0.03 38.1 0.12
Amortization of
intangible assets
(1) 38.0 0.11 102.8 0.31
Tax adjustment (11.1) (0.03) (33.2) (0.10)
----- ----- ----- -----
Adjusted Net
Income/Adjusted
Diluted EPS (1) $129.8 $ 0.39 $377.7 $ 1.14
===== ===== ===== =====
(1) Effective Q2 2026, the Company updated its definition of
Adjusted Diluted EPS to broaden the existing exclusion of
amortization of acquired intangible assets to also exclude the
non-cash amortization of all intangible assets, including
intangible assets associated with licenses. Management
believes that excluding this item provides investors with a
more useful baseline for evaluating core operating
performance, as these non-cash charges--whether arising from
acquisition accounting or license-related intangible
investments--do not reflect the Company's ongoing operations
and facilitate more consistent comparison of results across
periods regardless of how the Company has chosen to deploy
capital, and will provide further comparability to
StandardAero's peers.
Three months ended Nine months ended
September 30, 2025 September 30, 2025
------------------- -------------------
$ EPS $ EPS
------- ---------- ------- ----------
(in millions, except per share data )
Net income/Diluted
EPS $ 68.1 $ 0.20 $198.8 $ 0.59
Business
transformation
costs (LEAP and
CFM) 3.3 0.01 21.4 0.06
Stock
compensation 4.1 0.01 10.0 0.03
Integration
costs and
severance 1.9 0.01 4.6 0.01
Secondary
offering costs 0.6 0.00 4.4 0.01
Professional
services fees
and other 0.2 0.00 11.0 0.03
----- ----- ----- -----
One-offs included in
adjusted EBITDA
add-back 10.1 0.03 51.4 0.15
Amortization of
intangible assets
(1) 33.0 0.10 98.0 0.29
Tax adjustment (11.0) (0.03) (36.9) (0.11)
----- ----- ----- -----
Adjusted Net
Income/Adjusted
Diluted EPS (1) $100.2 $ 0.30 $311.3 $ 0.93
===== ===== ===== =====
(1) Effective Q2 2026, the Company updated its definition of
Adjusted Diluted EPS to broaden the existing exclusion of
amortization of acquired intangible assets to also exclude the
non-cash amortization of all intangible assets, including
intangible assets associated with licenses. Management
believes that excluding this item provides investors with a
more useful baseline for evaluating core operating
performance, as these non-cash charges--whether arising from
acquisition accounting or license-related intangible
investments--do not reflect the Company's ongoing operations
and facilitate more consistent comparison of results across
periods regardless of how the Company has chosen to deploy
capital, and will provide further comparability to
StandardAero's peers.
View source version on businesswire.com: https://www.businesswire.com/news/home/20261105512893/en/
CONTACT: Investor Relations Contact
Investors@StandardAero.com
Rama Bondada
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