Third Quarter 2026
Filed Nov 5, 2026Engine Services earnings growth drives full-year 2026 guidance raise; company announces $350.0 million accelerated share repurchase.
Third-quarter revenue increased 4.0%, net income increased 36.2%, Adjusted EBITDA increased 15.0%, and Adjusted Diluted EPS increased 30.0%. Margin expansion was led by Engine Services, while the company raised full-year revenue, Adjusted EBITDA and Adjusted Diluted EPS guidance and expanded its share-repurchase authorization.
Key metrics
shortened, hover for the filing’s print| Metric | Value | q/q | y/y |
|---|---|---|---|
| Revenue, three months ended September 30, 2026GAAP | $1.56B | – | 4.0% |
| Cost of revenue, three months ended September 30, 2026GAAP | $1.30B | – | – |
| Selling, general and administrative expense, three months ended September 30, 2026GAAP | $75.87M | – | – |
| Amortization of intangible assets, three months ended September 30, 2026GAAP | $24.97M | – | – |
| Operating income, three months ended September 30, 2026GAAP | $161.1M | – | – |
| Interest expense, three months ended September 30, 2026GAAP | $40.50M | – | – |
| Income before income taxes, three months ended September 30, 2026GAAP | $120.6M | – | – |
| Income tax expense, three months ended September 30, 2026GAAP | $27.76M | – | – |
| Net income, three months ended September 30, 2026GAAP | $92.80M | – | 36.2% |
| Net income margin, three months ended September 30, 2026GAAP | 6.0% | – | – |
| Diluted earnings per share, three months ended September 30, 2026GAAP | $ 0.28 | – | – |
| Adjusted EBITDA, three months ended September 30, 2026non-GAAP | $224.9M | – | 15.0% |
| Adjusted EBITDA Margin, three months ended September 30, 2026non-GAAP | 14.4% | – | 130 basis point increase |
| Adjusted Net Income, three months ended September 30, 2026non-GAAP | $129.8M | – | – |
| Adjusted Diluted EPS, three months ended September 30, 2026non-GAAP | $ 0.39 | – | 30.0% |
| Cash Flow from Operations, three months ended September 30, 2026GAAP | $128.9M | – | – |
| Free cash flow, three months ended September 30, 2026non-GAAP | −$80.95M | – | – |
| Adjusted free cash flow, three months ended September 30, 2026non-GAAP | $99.17M | – | – |
| Revenue, nine months ended September 30, 2026GAAP | $4.78B | – | – |
| Operating income, nine months ended September 30, 2026GAAP | $472.6M | – | – |
| Net income, nine months ended September 30, 2026GAAP | $270.0M | – | – |
| Diluted earnings per share, nine months ended September 30, 2026GAAP | $ 0.81 | – | – |
| Adjusted EBITDA, nine months ended September 30, 2026non-GAAP | $658.0M | – | – |
| Adjusted EBITDA Margin, nine months ended September 30, 2026non-GAAP | 13.8% | – | – |
| Adjusted Diluted EPS, nine months ended September 30, 2026non-GAAP | $ 1.14 | – | – |
| Cash Flow from Operations, nine months ended September 30, 2026GAAP | $81.67M | – | – |
| Free cash flow, nine months ended September 30, 2026non-GAAP | −$164.5M | – | – |
| Adjusted free cash flow, nine months ended September 30, 2026non-GAAP | $16.13M | – | – |
| Net Debt, September 30, 2026non-GAAP | $2.31B | – | – |
| Net Debt to Adjusted EBITDA, September 30, 2026non-GAAP | 2.7x | – | – |
Segments
| Segment | Revenue | q/q | y/y |
|---|---|---|---|
| Engine Services, three months ended September 30, 2026The change was driven primarily by volume, partially offset by the elimination of pass-through revenue. Segment Adjusted EBITDA was $ 205,063 (in thousands), versus $ 165,376 (in thousands), and Segment Adjusted EBITDA Margin was 15.0%, compared to 12.5%. | $1.37B | – | 3.5% |
| Component Repair Services, three months ended September 30, 2026The change was driven by volume. Segment Adjusted EBITDA was $ 48,639 (in thousands), versus $ 53,975 (in thousands), and Segment Adjusted EBITDA Margin was 25.8%, compared to 30.7%. | $188.7M | – | 7.3% |
Full Year 2026 outlook
- Revenue$6,525 to $6,645 million
- NoteEngine Services revenue: $5,770 to $5,870 million
- NoteComponent Repair Services revenue: $755 to $775 million
- NoteAdjusted EBITDA: $905 to $920 million
- NoteEngine Services Segment Adjusted EBITDA: $810 to $820 million
- NoteComponent Repair Services Segment Adjusted EBITDA: $205 to $210 million
- NoteAdjusted Free Cash Flow: $270 to $300 million
- NoteAdjusted Diluted Earnings Per Share: $1.57 to $1.62
- 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 approximately $300 million in material pass-through revenue.
- NoteCommercial Aerospace end-market growth assumption excludes effect from the elimination of approximately $300 million in material pass-through revenue.
Capital returns
- 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.
- The Company repurchased approximately $160.1 million of its common shares to date, including $50.1 million during the third quarter of 2026.
- The Company has $850.0 million remaining under the share repurchase program.
- The Company intends to enter into an accelerated share repurchase agreement 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.
What drove it
- Revenue growth was driven by growth across all three major end markets.
- Business aviation grew 7.4%, military and helicopter grew 7.2%, and commercial aerospace grew 1.3% compared to the prior-year period.
- Consolidated Adjusted EBITDA Margin improved primarily due to volume, mix, productivity improvements and the elimination of pass-through revenue.
- Engine Services Adjusted EBITDA growth was driven by volume, mix, productivity gains, and increase in used serviceable material.
- Component Repair Services revenue growth was driven by volume.
Concerns
- Component Repair Services Segment Adjusted EBITDA was $ 48,639 (in thousands), a variance of $ (5.3) million, or (9.9%), from $ 54.0 million; Segment Adjusted EBITDA Margin was 25.8%, a variance of -490 basis points compared to 30.7%.
- Free cash flow was $ (80,952) (in thousands) in the third quarter and $ (164,468) (in thousands) for the nine months ended September 30, 2026.
- Payments for purchase of intangible assets were $ (180,119) (in thousands) in the third quarter and $ (180,595) (in thousands) for the nine months ended September 30, 2026.
- The company cited elevated fuel prices and geopolitical uncertainty.
- The company identified risks related to substantial indebtedness, supply-chain disruptions, inflationary costs, end-market conditions, and internal-control material weaknesses in its forward-looking statements.
What to watch
- Execution against full-year 2026 revenue guidance of $6,525 to $6,645 million and Adjusted EBITDA guidance of $905 to $920 million.
- Whether Engine Services sustains volume, mix, productivity gains and increased used serviceable material contribution.
- Component Repair Services margin performance following the third-quarter decline to 25.8%.
- Delivery of Adjusted Free Cash Flow guidance of $270 to $300 million amid intangible-asset purchases.
- Completion, size and timing of the intended $350.0 million accelerated share repurchase agreement.
- Progress in deleveraging, with Net Debt to Adjusted EBITDA reported at 2.7x.
Balance sheet and cash flow
- Cash was $ 191,329 (in thousands) as of September 30, 2026, compared with $ 289,717 (in thousands) as of December 31, 2025.
- Long-term debt was $ 2,447,513 (in thousands) and long-term debt, current portion was $ 23,320 (in thousands) as of September 30, 2026.
- Debt was $ 2,499.2 million, less cash of $ 191.3 million, resulting in Net Debt of $ 2,307.9 million as of September 30, 2026.
- Net cash provided by operating activities for the nine months ended September 30, 2026 was $ 81,671 (in thousands), compared with net cash used in operating activities of $ (6,304) (in thousands).
- Purchase of property, plant and equipment was $ (67,343) (in thousands) and payments for purchase of intangible assets were $ (180,595) (in thousands) for the nine months ended September 30, 2026.
- Repurchase of common stock was $ (150,131) (in thousands) for the nine months ended September 30, 2026.
Analysis
StandardAero reported third-quarter revenue of $1,557.4 million, up 4.0% from the prior-year quarter, with growth across business aviation, military and helicopter, and commercial aerospace. Net income rose 36.2% to $92.8 million and diluted GAAP EPS was $0.28. The revenue result was supported by 7.4% business-aviation growth, 7.2% military-and-helicopter growth and 1.3% commercial-aerospace growth.
Profitability expanded faster than revenue. Adjusted EBITDA increased 15.0% to $224.9 million and Adjusted EBITDA Margin rose 130 basis points to 14.4%, which the company attributed primarily to volume, mix, productivity improvements and the elimination of pass-through revenue. Net Income Margin increased to 6.0% from 4.5%. Adjusted Diluted EPS increased 30.0% to $0.39 from $0.30.
Engine Services remained the principal earnings driver. Segment revenue increased 3.5% to $1,368.8 million, while Segment Adjusted EBITDA increased 24.0% to $205.1 million and margin expanded 250 basis points to 15.0%. By contrast, Component Repair Services revenue increased 7.3% to $188.7 million, but Segment Adjusted EBITDA declined 9.9% to $48.6 million and margin declined 490 basis points to 25.8%, with productivity and mix cited as drivers.
Cash generation improved from the prior-year quarter, with Cash Flow from Operations of $128.9 million and Adjusted Free Cash Flow of $99.2 million. However, reported free cash flow was $80.952 million negative, reflecting $180.119 million of payments for purchase of intangible assets. For the nine months ended September 30, 2026, Cash Flow from Operations was $81.671 million, Adjusted Free Cash Flow was $16.127 million, and Net Debt to Adjusted EBITDA was 2.7x.
Management raised full-year 2026 guidance to revenue of $6,525 to $6,645 million, Adjusted EBITDA of $905 to $920 million, Adjusted Free Cash Flow of $270 to $300 million and Adjusted Diluted EPS of $1.57 to $1.62. The company also expanded the repurchase authorization to $1.0 billion, with $850.0 million remaining available, and intends to execute a $350.0 million accelerated share repurchase. The release notes that the revenue guidance includes the effect of eliminating approximately $300 million in material pass-through revenue.
Management, verbatim
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.
Paul McElhinney, Chief Executive Officer
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.
Paul McElhinney, Chief Executive Officer
Not in the filing
stated, not guessed- Prior-quarter comparisons for reported third-quarter financial metrics were not provided.
- Gross margin was not reported.
- Full-year 2026 gross-margin, operating-expense and tax-rate guidance were not provided.
- Prior full-year guidance was not provided, so actual performance versus prior guidance cannot be assessed.
- A named CFO commentary section was not provided.
- Dividend activity was not reported.
Written by an AI language model from the company’s SEC earnings filing (Form 8-K Item 2.02, or Form 6-K for a foreign private issuer). Every figure is checked against the filing text, and a metric the filing does not print, or whose value, prior period and change do not add up, is dropped from the metrics. The model can still misread a table, in the metrics or in the text, so check a number in the filing before you rely on it. Consensus estimates, price targets and share-price reactions are not shown because they are not in the filing. AI-generated research, not investment advice.