StandardAero (NYSE: SARO) raises guidance and lines up a $350 million buyback

Posted by Amy Steele on Nov 6th, 2026

What happened

StandardAero, Inc. (NYSE: SARO) raised its 2026 outlook and said it intends to spend $350 million on an accelerated share repurchase with Morgan Stanley. Third-quarter earnings grew far faster than revenue.

Revenue for the three months ended Sept. 30 was $1.56 billion, up 4.0% from $1.50 billion a year earlier. Net income rose 36.2% to $92.8 million from $68.1 million, or $0.28 per diluted share. Adjusted EBITDA rose 15.0% to $224.9 million from $195.6 million.

Management raised its full-year guidance for revenue, adjusted EBITDA and adjusted diluted earnings per share. It now expects adjusted EBITDA of $905 million to $920 million and adjusted diluted EPS of $1.57 to $1.62. The revenue range includes the effect of eliminating material pass-through revenue.

Key numbers

Metric	Latest	Change	Source
Third-quarter revenue	$1.56 billion	from $1.50 billion, +4.0%	SEC 8-K, Exhibit 99.1
Net income	$92.8 million	from $68.1 million, +36.2%	SEC 8-K, Exhibit 99.1
Adjusted EBITDA	$224.9 million	from $195.6 million, +15.0%	SEC 8-K, Exhibit 99.1
Adjusted EBITDA margin	14.4%	from 13.1%, +130 basis points	SEC 8-K, Exhibit 99.1
Engine Services adjusted EBITDA	$205.1 million	from $165.4 million, +24.0%	SEC 8-K, Exhibit 99.1
Planned accelerated share repurchase	$350 million		SEC 8-K, Exhibit 99.1

Where the earnings growth came from

Engine Services drove the gain. Segment revenue rose 3.5% to $1.37 billion from $1.32 billion, mainly on volume, partly offset by the end of pass-through revenue. Segment adjusted EBITDA rose 24.0% to $205.1 million from $165.4 million, and the segment margin widened to 15.0% from 12.5%. The filing credits volume, mix, productivity gains and more used serviceable material.

Company-wide, the adjusted EBITDA margin gained 130 basis points from 13.1% a year earlier. The filing credits mainly volume, mix, productivity and the end of pass-through revenue.

Component Repair Services went the other way. Revenue rose 7.3% to $188.7 million from $175.8 million on volume. Segment adjusted EBITDA fell 9.9% to $48.6 million from $54.0 million, mainly on productivity and mix. The margin dropped to 25.8% from 30.7%.

All three end markets grew. Business aviation rose 7.4%, military and helicopter 7.2% and commercial aerospace 1.3% from a year earlier. Chief Executive Paul McElhinney said the results came despite high fuel prices and geopolitical uncertainty.

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Why it matters

OptimistFi has argued that StandardAero only works if engine-shop demand keeps turning into higher margins and cash faster than the valuation already expects. The quarter supports the margin half of that view, because Engine Services earnings grew much faster than its revenue.

Cash is the half still to prove. Operating cash flow was $128.9 million in the quarter and adjusted free cash flow was $99.2 million. Over nine months, operating cash flow was $81.7 million, against $6.3 million used a year earlier. In the same nine months the company paid $180.6 million for intangible assets, up from $30.0 million.

Adjusted free cash flow leaves out those intangible purchases. The company says it will guide on that measure going forward, and it guides to $270 million to $300 million for 2026.

The accelerated repurchase alone is larger than that full-year range. OptimistFi calculates that it equals 41.2% of the $850 million left under the program, which the board raised by $560 million to $1.0 billion on Oct. 28. The company has bought back about $160.1 million so far, including $50.1 million in the third quarter.

The balance sheet moved the same way. Cash was $191.3 million at Sept. 30, down from $289.7 million at Dec. 31, 2025. Long-term debt, excluding the current portion, was $2.45 billion, up from $2.19 billion.

What could limit the picture

The guidance and the adjusted figures are non-GAAP. The company says it cannot reconcile its adjusted EBITDA, adjusted free cash flow and adjusted EPS guidance to GAAP because the information is not available. It also warns that actual results may differ materially.

The accounting basis has shifted too. Adjusted diluted EPS now excludes the amortization of all intangible assets, including those tied to licenses, a change made in the second quarter. Adjusted free cash flow is new as a guidance measure.

The accelerated repurchase is an intention, not a signed agreement. Component Repair Services, the segment with the higher margin, saw both earnings and margin fall.

What's next

Management hosts a call at 5:00 PM ET on Nov. 5. A webcast replay is available until 11:59 PM ET on Nov. 19.

The company intends to enter the accelerated repurchase agreement. Once it completes, about $500 million will remain under the program. A signed agreement would firm up the buyback.

Engine Services margins slipping back toward last year's level would weaken the case. So would cash conversion falling short of the guided range. The next quarterly report is the next full test of both.