StandardAero, Inc. Q1 FY2026 earnings call

Standard Arrow delivered a solid start to 2026 with double-digit revenue growth across each of its three major end markets. Raised four-year revenue, adjusted EBITDA, and adjusted EPS guidance, repurchased $60 million of shares in the first quarter, and announced acquisition of Unified Turbines. Demand across end markets remains strong, growth platforms continue to scale, underlying earnings power improving. Commercial aerospace benefited from robust global aftermarket demand and tight MRO capacity. Business aviation supported by strong demand on key midsize and super midsize platforms. Military and helicopter business grew 10% year over year, driven by increasing defense spending and operational tempo globally. Strategic priorities include execution on LEAP and CFM56 DFW ramp, fully leveraging CF34 investments, component repair services as strategic engine for value creation, continuous improvement, and disciplined capital deployment

For the first quarter, revenue grew organically by 13.3% year-over-year. Adjusted EBITDA increased 2.5% year-over-year, and adjusted EPS grew 14%. Commercial aerospace grew 11% year over year, business aviation grew 20% year over year, military and helicopter grew 10% year over year. Engine services revenue increased 14.1% year-over-year to $1.45 billion. Component repair services revenue increased 7% year-over-year to $180 million. Engine services segment adjusted EBITDA increased 3% year-over-year to $179 million. Component repair services segment adjusted EBITDA increased 11% year-over-year to $52 million

Increasing full year 2026 guidance for revenue, adjusted EBITDA, and adjusted EPS. Now expect revenue of $6.325 billion to $6.45 billion, adjusted EBITDA of $875 million to $905 million, adjusted EPS of $1.40 to $1.50. Reiterating free cash flow guidance of $270 million to $300 million

Global environment complexity including impact of Iran situation, though not materially affecting business so far. Industry-wide constraints around parts availability and supplier delivery. Lag from oil price shock to MRO revenue impact measured in years

Q: David Strauss with Wells Fargo asked about cash flow and working capital.

A: Explained free cash flow used, movement in accounts receivable, inventory drop, increase in contract assets.

Q: Andre Madrid with BTIG asked about LEAP slots and 2027 outlook.

A: Stated over 70 LEAP engines inducted, pipeline robust, mix shift expected to take time.

Q: Christine Lewag with Morgan Stanley asked about MRO supply-demand buffer.

A: Discussed dynamics in aftermarket, airline reactions to fuel costs, Standard Aero's diversification benefits.

Q: Sheila Kayaoglu with Jefferies asked about business aviation and military growth drivers.

A: Highlighted strong growth in military programs like AE-2100 and AE-1107.

Q: Miles Walton with Wolf Research asked about Unified Engine acquisition and CFM 56 parts supply.

A: Stated acquisition's EBITDA impact, parts supply situation for CFM 56 and CF 34.

Q: Seth Seifman with JP Morgan asked about business transformation costs.

A: Stated RAMP programs looking great, business transformation costs in line.

Q: Ronald Epstein with Bank of America asked about engine usage.

A: Talked about strong performance in business aviation, driven by investments in Augusta facility.

Q: Gavin Parsons with UBS asked about CRS growth bottlenecks.

A: Stated insourcing activity changing the 90-10 repair split, growth not bottlenecked by labor so far