StandardAero, Inc.

Second-quarter revenue was $1.6 billion, up 4.6% year over year. Adjusted EBITDA was $230 million, up 12.3% year over year, and adjusted EBITDA margin expanded 100 basis points to a record 14.4%. Net income was $97 million, up 43.7% year over year, and adjusted EPS was $0.40, up 24%. Free cash flow was an inflow of $50 million. For 2026, management raised revenue guidance to $6.375 billion to $6.5 billion, adjusted EBITDA guidance to $885 million to $910 million, and adjusted EPS guidance to $1.50 to $1.57; adjusted free cash flow guidance is $270 million to $300 million, and CapEx guidance remains $100 million to $110 million. They also reiterated that military and helicopter growth should be in the low double digits, weighted to the back half, and said commercial aerospace should grow in the low double digits to mid-teens once pass-through revenue is normalized.

Russell Ford’s tone was confident and upbeat, emphasizing that the quarter showed the company’s “earnings and margin inflection” with operating leverage starting to come through. He highlighted strong demand, price and productivity gains, and milestone progress on LEAP and CFM56, both of which reached profitability in the quarter. He also stressed that the portfolio is resilient to fuel prices and supply-chain issues, and pointed to the $180 million license expansion and Unified Turbines acquisition as high-return capital deployment.

Dan Satterfield focused on the mechanics behind the quarter’s outperformance: higher volumes, pricing, productivity, and the benefit from eliminating $300 million to $400 million of low- to no-margin pass-through revenue in 2026. He cited Engine Services revenue of $1.405 billion, segment adjusted EBITDA of $204 million with a 14.5% margin, and CRS revenue of $195 million with adjusted EBITDA of $51 million and a 26.3% margin. He said free cash flow was helped by better materials management even as working capital used $56 million of cash, and noted net debt to adjusted EBITDA improved to 2.6x from 3.0x a year ago. He also quantified the license expansion as expected to generate $25 million in annual adjusted EBITDA at full run rate, with $10 million in 2027, $20 million in 2028, and $25 million in 2029 and beyond.

Analysts pressed management on supply-chain conditions, especially after peers cited rising delinquencies, and management said its guidance assumes no OEM supply-chain recovery. They said any improvement would be upside, but they are not relying on it and can work around disruptions through Component Repair and materials management. Questions also focused on the license expansion, LEAP’s long-term revenue path, CRS margin pressure, and whether military growth can reach low double digits in the second half; management said CRS pressure is timing-related, the license expansion is mainly about new applications and better economics, and military demand should strengthen as increased flight hours eventually convert into maintenance events. Management also said the LEAP mix should shift toward heavier work scopes over time, but they do not guide to a specific volume mix.