StandardAero (SARO) Posts Q2 Revenue of $1.6B, Beats Estimates; Reaffirms Full-Year Guidance
Why It MattersThe results highlight continued growth in engine MRO demand tied to expanding CFM56 and LEAP engine fleets, even as military-related and pass-through work softens.
StandardAero (NYSE: SARO) reported second-quarter revenue of $1.6 billion, up 4.6% year-over-year from $1.53 billion in Q2 2025, beating top- and bottom-line estimates. Adjusted EBITDA margin reached a record 14.4%, with adjusted EBITDA rising 12.3% despite the modest revenue growth. Engine Services accounted for 87.8% of Q2 2026 revenue, while Component Repair Services contributed the remaining 12.2%; revenue declined slightly on a sequential basis, which management attributed to the deliberate elimination of $300–400 million in low-to-no-margin pass-through sales and weak demand in the military end market.
Free cash flow for Q2 was $50.2 million, though first-half free cash flow remained negative at $83.5 million due to higher receivables and lower cash conversion. Management expects stronger second-half cash generation, with adjusted free cash flow projected at $353–383 million, bringing full-year adjusted FCF guidance to $270–300 million. Management reaffirmed full-year guidance of $5.60–$5.70 billion in revenue and $775–$800 million in adjusted EBITDA.
StandardAero held approximately $179 million in cash as of June 30, 2026, against gross debt of approximately $2.35 billion, with net leverage at approximately 2.6x LTM adjusted EBITDA, down from 3.0x earlier in the year. The company acquired Unified Turbines to strengthen hot-section component repair capabilities, and has invested more than $100 million in a new center of excellence in the Dallas–Fort Worth area for CFM56 engine repair and a similar amount near San Antonio for LEAP engine capabilities. Over 19,000 CFM56 engines are currently in service on Boeing 737 and Airbus A320 family aircraft, while more than 10,000 LEAP engines have entered service since 2016 and are beginning to arrive at MRO facilities for scheduled maintenance. SARO shares traded at $25.06, with a market capitalization of $8.29 billion.
