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StandardAero’s Q2 revenue beat the consensus by 1.50%, although both reported revenue and the estimate rounded to $1.6 billion. Adjusted earnings per share were $0.40, compared with the consensus estimate of $0.35.
Revenue rose from $1.5 billion a year earlier. The company attributed the increase to demand in commercial aerospace and business aviation, partly offset by the removal of low-to-no-margin material pass-through revenue on restructured contracts and lower military sales in component repairs. Its filing shows commercial aerospace revenue grew 5.7% and business aviation grew 5.6%, while military and helicopter revenue fell 2.6%.
Gross margin increased to 16.8% from 15.4%, and operating margin rose to 10.5% from 8.87%. The filing said lower material costs as a share of revenue partly reflected the contract changes. Diluted EPS rose to $0.29 from $0.20, while free cash flow was $50.2 million, compared with −$30.7 million a year earlier.
| Q2 FY2026 | Q2 FY2025 | Change | |
|---|---|---|---|
| Revenue | $1.6 billion | $1.5 billion | 4.63% |
| Diluted EPS | $0.29 | $0.20 | 45.0% |
| Gross margin | 16.8% | 15.4% | 1.4 percentage points |
| Operating margin | 10.5% | 8.87% | 1.7 percentage points |
| Free cash flow | $50.2 million | −$30.7 million | — |
| Against the consensus | Reported | Consensus | Result |
|---|---|---|---|
| Adjusted EPS | $0.40 | $0.35 | Beat by 14.3% |
| Revenue | $1.6 billion | $1.6 billion | Beat by 1.50% |
Adjusted EPS is the figure the consensus estimates, not the GAAP EPS above.
What management said on the call
CEO Russell Ford said commercial demand remained high, maintenance capacity was constrained and the commercial backlog grew during the quarter. He said StandardAero had not seen demand fall because of higher jet fuel prices. Ford attributed the quarter’s results in part to pricing and productivity improvements, as well as the removal of low-to-no-margin pass-through revenue.
Ford said the LEAP program and the CFM56 Dallas-Fort Worth operation reached profitability in the quarter as they progressed down their learning curves. He also said the CF34 Winnipeg expansion remained on track for completion in the third quarter, with capacity expected to scale throughout 2027.
CFO Dan Satterfield said component repair margins fell because of work moving between facilities, inefficiencies from training new employees and delays on military inputs. He expected pressure from the work migration and labor ramp to ease in the second half. Ford said StandardAero was using available back-shop capacity across its network to handle demand rather than relying solely on dedicated component repair facilities.
Ford said the company signed a $180 million license expansion covering multiple turbofan and turboprop platforms. He said it adds engine variants and component repair authorizations, while improving economics on existing work. He also said the completed Unified Turbines acquisition adds hot-section repair capabilities.
Asked about supply constraints, Ford said the company’s guidance assumed “no recovery in the supply chain from the OEMs.” Satterfield said constrained castings and forgings remained an industry issue, but improved materials management had reduced contract assets representing nearly complete engines in the shop. On fuel prices, Ford said airlines had other adjustments available before changing maintenance schedules. Satterfield said the company was not yet guiding to 2027.
Guidance
StandardAero raised its FY2026 revenue guidance to $6.375 billion to $6.5 billion, from $6.325 billion to $6.45 billion. It also raised adjusted EBITDA guidance to $885 million to $910 million, from $875 million to $905 million.
Satterfield said the company raised adjusted EPS guidance to $1.50 to $1.57. He said the measure now excludes tax-adjusted amortization of all intangible assets.
| Metric | For | Guide | Previous guide | Change |
|---|---|---|---|---|
| Revenue, Business Aviation | FY2026 | StandardAero assumes FY2026 Business Aviation revenue growth of high single digits to low double digits year over year. | — | — |
| Revenue, Military and Helicopter | FY2026 | StandardAero assumes FY2026 Military & Helicopter revenue growth of low double digits year over year. | StandardAero expects low double-digit military and helicopter end-market revenue growth in FY2026. | — |
| Revenue, Commercial Aerospace | FY2026 | StandardAero assumes FY2026 Commercial Aerospace revenue growth of low double digits to mid-teens year over year. | — | — |
| EPS, non-GAAP | FY2026 | $1.50–$1.57 | — | New |
| Revenue, Leap | FY2029 | $1.0 billion | — | New |
| EBITDA, License Expansion Non Gaap | FY2029 | $25.0 million | — | New |
| EBITDA, License Expansion Non Gaap | FY2028 | $20.0 million | — | New |
| EBITDA, License Expansion Non Gaap | FY2027 | $10.0 million | — | New |
| Capex growth, Maintenance | FY2026 | 1.30% | — | New |
| Capex | FY2026 | $100.0 million–$110.0 million | — | New |
| Free cash flow, non-GAAP | FY2026 | $270.0 million–$300.0 million | — | New |
| Tax rate, non-GAAP | FY2026 | 23.5%–25.5% | — | New |
| Operating expenses, Corporate | FY2026 | $105.0 million | — | New |
| EBITDA, Engine Services Non Gaap | FY2026 | $770.0 million–$785.0 million | — | New |
| EBITDA, non-GAAP | FY2026 | $885.0 million–$910.0 million | — | New |
| Revenue | FY2026 | $6.4 billion–$6.5 billion | — | New |
| Revenue, F110 | FY2026 | StandardAero expects strong F110 growth for FY2026. | — | — |
| Revenue, Ae1107 | FY2026 | StandardAero expects strong AE1107 revenue growth to continue through FY2026. | — | — |
| Revenue, Ae2100 | FY2026 | StandardAero expects strong AE2100 revenue growth to continue through FY2026. | — | — |
| Revenue, Engine Services Pass Through | FY2026 | $300.0 million–$400.0 million | — | New |