StandardAero, Inc. (SARO): Results of Operations and Financial Condition
StandardAero, Inc. (SARO) filed an SEC Form 8-K — Results of Operations and Financial Condition. Exhibit 99.1 StandardAero Announces Second Quarter 2026 Results Margin Expansion Leads To Double-digit Earnings Growth And Drives Guidance Increase SCOTTSDALE, Arizona, August 6, 2026 (BUSINESS WIRE)-- StandardAero (NYSE: SARO) announced results today for the three months ended J
How this was made
The 30-second read
Why it matters
The key tradable update is the raised full-year 2026 guidance alongside reported margin expansion and a Free Cash Flow inflow, which can shift earnings and cash-flow expectations for the aftermarket engine services business.
Market read
Raised FY26 guidance plus record Adjusted EBITDA margins and positive Free Cash Flow in Q2 are likely to drive re-rating and near-term positioning.
What to watch
The filing notes lower military sales and negative mix in Component Repair Services EBITDA; traders may focus on segment-level durability rather than consolidated margin expansion.
Margin Expansion Leads To Double-digit Earnings Growth And Drives Guidance Increase
Revenue increased 4.6% year-over-year, net income increased 43.7%, Adjusted EBITDA increased 12.3%, and the company increased full-year 2026 revenue, Adjusted EBITDA and Adjusted Diluted EPS guidance.
Key metrics
as reported| Metric | Value | q/q | y/y |
|---|---|---|---|
| RevenueGAAP | $1,599.7 million | – | 4.6% |
| Net IncomeGAAP | $97.3 million | – | 43.7% |
| Net Income MarginGAAP | 6.1% | – | – |
| Diluted GAAP EPSGAAP | $0.29 | – | – |
| Adjusted Diluted EPSnon-GAAP | $0.40 | – | 24% |
| Adjusted EBITDAnon-GAAP | $229.9 million | – | 12.3% |
| Adjusted EBITDA Marginnon-GAAP | 14.4% | – | 100 basis points |
| Cash Flow used in OperationsGAAP | $72.3 million | – | – |
| Free Cash Flownon-GAAP | an inflow of $50.2 million | – | – |
| Commercial Aerospace end market growthother | 5.7% | – | 5.7% |
| Business Aviation end market growthother | 5.6% | – | 5.6% |
| Military and Helicopter end market growthother | decreased 2.6% | – | decreased 2.6% |
| Engine Services Segment Adjusted EBITDAnon-GAAP | $204.2 million | – | 14.4% |
| Engine Services Segment Adjusted EBITDA Marginnon-GAAP | 14.5% | – | 130 basis points |
| Component Repair Services Segment Adjusted EBITDAnon-GAAP | $51.2 million | – | decrease of 0.9% |
| Component Repair Services Segment Adjusted EBITDA Marginnon-GAAP | 26.3% | – | decreased 270 basis points |
Segments
| Segment | Revenue | q/q | y/y |
|---|---|---|---|
| Engine ServicesContinued year-over-year growth across all three major end markets, offset by the elimination of low-to-no margin material pass-through revenues on restructured contracts. | $1,405.1 million | – | 4.0% |
| Component Repair ServicesStrong demand on commercial aerospace products and aeroderivative platforms, partially offset by lower revenues on certain military platforms due to input delays. | $194.6 million | – | 9.2% |
Full Year 2026 outlook
- Revenue$6,375 to $6,500
- NoteRevenue (increase)
- NoteEngine Services $5,600 to $5,700
- NoteComponent Repair Services $775 to $800
- NoteAdjusted EBITDA (increase) $885 to $910
- NoteEngine Services Segment (increase) $770 to $785
- NoteComponent Repair Services Segment $220 to $230
- NoteAdjusted Free Cash Flow (revised) $270 to $300
- NoteAdjusted Diluted Earnings Per Share (revised) $1.50 to $1.57
- NoteCommercial Aerospace Low-Double Digit to Mid-Teens YoY Growth
- NoteMilitary & Helicopter Low-Double Digit YoY Growth
- NoteBusiness Aviation High-Single Digit to Low-Double Digit YoY Growth
- NoteRevenue includes effect from the elimination of $300 to $400 million in material pass-through revenue.
- NoteEnd Market Revenue Growth Assumptions exclude effect from the elimination of $300 to $400 million in material pass-through revenue.
- NoteAdjusted Free Cash Flow is defined as Free Cash Flow excluding the purchase of intangible assets.
- NoteEffective Q2 2026, the Company updated its definition of Adjusted Diluted EPS to exclude the non-cash amortization of all intangible assets, including intangible assets associated with licenses.
Capital returns
- Continued to execute on our share repurchase program.
What drove it
- Continued strong demand in commercial aerospace and business aviation businesses.
- Revenue growth reflected continued growth in volume and pricing, as well as productivity improvements.
- Adjusted EBITDA margin expansion reflected productivity improvements and the elimination of material pass-through revenue.
- Engine Services adjusted EBITDA growth was driven by volume, productivity gains, and mix.
- The company reached profitability on its LEAP and CFM56 DFW programs during the quarter.
- The company signed a license agreement with a key OEM partner that significantly expands its relationship and provides improved economics across multiple platforms.
- The acquisition of Unified Turbines further builds out Component Repair Services capabilities.
Concerns
- The previously announced elimination of low-to-no margin material pass-through revenue on restructured contracts reduced reported revenue.
- Military and Helicopter end market revenue decreased 2.6% compared to the prior year period.
- Component Repair Services had lower revenues on certain military platforms due to input delays.
- Component Repair Services Adjusted EBITDA decreased 0.9% and its Adjusted EBITDA Margin decreased 270 basis points, driven primarily by negative mix.
- The continued ramp in the LEAP and CFM56 DFW programs partially offset Engine Services margin drivers.
What to watch
- Execution against full-year 2026 revenue guidance of $6,375 to $6,500.
- Execution against full-year 2026 Adjusted EBITDA guidance of $885 to $910.
- Execution against full-year 2026 Adjusted Free Cash Flow guidance of $270 to $300.
- Execution against full-year 2026 Adjusted Diluted Earnings Per Share guidance of $1.50 to $1.57.
- Commercial Aerospace growth assumption of Low-Double Digit to Mid-Teens YoY Growth, excluding the effect from the elimination of $300 to $400 million in material pass-through revenue.
- Recovery in certain military platforms affected by input delays and Component Repair Services mix.
- Realization of supply chain initiatives and economics from the OEM partner agreement.
Balance sheet and cash flow
- Cash Flow used in Operations was $72.3 million.
- Free Cash Flow for the quarter was an inflow of $50.2 million.
- Closed the acquisition of Unified Turbines.
Analysis
StandardAero reported a strong Second Quarter 2026, with revenue increasing 4.6% year-over-year to $1,599.7 million and net income increasing 43.7% to $97.3 million. Diluted GAAP EPS was $0.29, while Adjusted Diluted EPS was $0.40, up 24% from $0.32 in the prior year’s quarter. The earnings growth rate exceeded revenue growth, reflecting a material improvement in profitability.
Management, verbatim
StandardAero delivered strong second quarter results with continued operational momentum.
Russell Ford, StandardAero’s Chairman and Chief Executive Officer
Amid the higher fuel price environment, we continue to see robust demand across the commercial aerospace platforms we serve, which translated into 12.3% Adjusted EBITDA growth year-over-year.
Russell Ford, StandardAero’s Chairman and Chief Executive Officer
Given our strong first-half performance and continued clear visible demand signals, we are raising our full-year 2026 guidance for revenue, Adjusted EBITDA, and Adjusted Diluted EPS, and remain confident in our ability to deliver another year of double-digit earnings growth.
Russell Ford, StandardAero’s Chairman and Chief Executive Officer
Not in the filing
stated, not guessed- Gross profit and gross margin
- Operating income and operating margin
- Prior-year Diluted GAAP EPS
- Prior-quarter comparisons for revenue, earnings, margins, EPS, cash flow, and segment metrics
- Prior-year Cash Flow used in Operations
- Prior-year Free Cash Flow
- Cash balance
- Debt balance
- Capital expenditure
- Share repurchase amount, share count, and average repurchase price
- Dividend amount or dividend declaration
- Prior full-year 2026 guidance ranges needed to compare actual results with prior guidance
- Full-year 2026 gross-margin, operating-expense, and tax-rate guidance
- GAAP reconciliations for full-year 2026 Adjusted EBITDA, Adjusted Free Cash Flow, and Adjusted Diluted EPS guidance
AlphaAI analysis generated from the company’s SEC earnings filing (Form 8-K Item 2.02, or Form 6-K for a foreign private issuer). Every figure was cross-checked against the filing text; consensus estimates, price targets and share-price reactions are not shown because they are not in the filing. AI-generated research, not investment advice.
Background
This is an SEC 8-K (Item 2.02) with Exhibit 99.1 covering StandardAero’s Q2 2026 operating results, segment performance, and updated FY26 guidance.
Ticker impact
StandardAero reported Q2 2026 results and raised FY26 guidance for revenue, Adjusted EBITDA, and Adjusted Diluted EPS.
Likely near-term positive bias as traders reprice FY26 earnings and cash-flow expectations; follow-through depends on whether guidance is viewed as credible versus prior contract restructuring impacts.
The filing includes specific Q2 operating metrics (Adjusted EBITDA margin 14.4%, Free Cash Flow inflow $50.2M) and explicit revised FY26 ranges, which are direct inputs to valuation and positioning.
Market effects
Signals improving profitability in commercial aerospace maintenance/repair services, potentially supporting sentiment for engine services peers with similar margin drivers.
Primarily US-listed aerospace services sentiment; limited direct regional spillover beyond equity positioning.
Affects global aerospace aftermarket expectations tied to LEAP/CFM56 DFW program ramp and OEM licensing economics.
Counterpoint
Guidance increase may be sensitive to assumptions around end-market growth and the pace of supply-chain initiatives; margin gains could partially reverse if mix or pass-through elimination effects differ from expectations.
Key entities
- issuerStandardAero, Inc.
Reported Q2 2026 results and increased FY26 guidance for revenue, Adjusted EBITDA, and Adjusted Diluted EPS.
- acquisitionUnified Turbines
StandardAero closed the acquisition during the quarter, expanding Component Repair Services capabilities.
- commercial agreementKey OEM partner
StandardAero signed a license agreement that expands the relationship and improves economics across multiple platforms.
