Q4 2025 Earnings Summary
| Metric | YoY Change | Reason |
|---|---|---|
Sales Growth | Mid-single digit growth | **Expected sales growth is driven by the ongoing revenue momentum, with the core business showing improvement when the Landing Gear divestiture is excluded—which previously suppressed the high growth potential. ** |
Operating Margin | 9.7% to 9.9% | **The operating margin improvement reflects cost efficiencies and product mix optimization achieved in earlier periods, now materializing in Q4 FY25 due to portfolio adjustments and enhanced operational management. ** |
Net Interest Expense | Stable at $18 million | **The net interest expense remaining at $18 million indicates consistent financing costs and stable debt structure, which mirrors the performance in Q3 FY25, showing effective financial management across periods. ** |
Effective Tax Rate | 30% | **The effective tax rate is projected to stay around 30%, continuing the trend from previous periods as a result of steady tax planning and unchanged legislative conditions. ** |
Divestiture Impact | $51 million gain | **The anticipated sale of the Landing Gear Overhaul business for $51 million represents a strategic portfolio optimization, distinguishing this period from previous ones where the unit underperformed or constrained growth. ** |
| Metric | Period | Previous Guidance | Current Guidance | Change |
|---|---|---|---|---|
Q4 FY ’25 Sales Growth | Q4 FY ’25 | mid‑single digits; additionally, “closer to high single digits” when excluding the Landing Gear divestiture [N/A] | no current guidance [N/A] | no current guidance |
Q4 FY ’25 Adjusted Operating Margin | Q4 FY ’25 | 9.7% to 9.9% [N/A] | no current guidance [N/A] | no current guidance |
Net Interest Expense | Q4 FY ’25 | $18 million [N/A] | no current guidance [N/A] | no current guidance |
Effective Tax Rate | Q4 FY ’25 | Approximately 30% [N/A] | no current guidance [N/A] | no current guidance |
Revenue Growth | Q1 2026 | no prior guidance [N/A] | Anticipated growth in the USM business despite constrained asset availability. Continued strong performance and growth in the Parts Supply segment | no prior guidance |
Capacity Expansion | Q1 2026 | no prior guidance [N/A] | Oklahoma City airframe MRO expansion to come online, adding 15% capacity | no prior guidance |
Growth and Margin Expansion | FY 2026 | Expected to continue through FY ’26 [N/A] | no current guidance [N/A] | no current guidance |
Trax Platform | CY 2025 | Investments to scale the Trax platform with broader activity to be discussed later in calendar year 2025 [N/A] | no current guidance [N/A] | no current guidance |
Margin Improvement | FY 2026 | no prior guidance [N/A] | Incremental margin improvement expected in the Repair and Engineering segment for FY 2026, driven by $10 million in synergies | no prior guidance |
Net Leverage | FY 2026 | no prior guidance [N/A] | Target net leverage of 2.0 to 2.5x | no prior guidance |
Research analysts covering AAR.