StandardAero Reports Mixed Q4 Results, Shares Dip on Margin Pressure and Cautious Outlook
Aerospace aftermarket services provider STANDARDAERO INC (NYSE:SARO) announced its financial results for the fourth quarter and full year ended December 31, 2025. The company delivered revenue that modestly exceeded analyst expectations but fell short on the bottom line, leading to a negative after-hours market reaction.
Earnings and Revenue Versus Estimates
The company's performance presented a mixed picture against Wall Street forecasts. Revenue growth remained robust, but profitability metrics and forward guidance appear to be the focal points for investor concern.
- Q4 2025 Revenue: $1.60 billion, slightly above the analyst consensus estimate of approximately $1.59 billion. This represents a 13.5% increase year-over-year.
- Q4 2025 EPS (GAAP): $0.24 per diluted share. The company's reported non-GAAP adjusted diluted EPS for the quarter was not specified in the summary data against a $0.2499 estimate, but the GAAP result indicates performance around or slightly below expectations.
- Market Reaction: Following the release, the stock traded down approximately 2.7% in after-market activity, suggesting investor disappointment centered on margins and future outlook rather than the top-line beat.
Full-Year Performance and Segment Highlights
The full-year 2025 results underscored a year of significant growth for StandardAero, which went public in October 2024. Revenue increased 15.8% to $6.06 billion. Adjusted EBITDA grew 17.0% to $808.2 million, though the margin expanded only slightly by 10 basis points to 13.3%.
The company's two segments showed divergent margin trajectories:
- Engine Services: Revenue grew 15.3% to $5.35 billion. Segment Adjusted EBITDA margin remained flat at 13.2% as volume growth was offset by investments in new growth platforms like the LEAP engine program.
- Component Repair Services: This was the standout performer, with revenue jumping 19.6% to $708.6 million. More impressively, its Segment Adjusted EBITDA margin expanded by 250 basis points to 28.6%, driven by synergies from the Aero Turbine acquisition and operational improvements.
2026 Guidance Compared to Analyst Expectations
Management provided initial guidance for the full year 2026, which is a key driver of the current market sentiment. A comparison with existing analyst estimates reveals a cautious outlook.
- Revenue Guidance: StandardAero forecasts 2026 revenue between $6.275 billion and $6.425 billion. This range is below the analyst sales estimate of $6.46 billion for the year, indicating the company's expectations are more conservative than the street's.
- EPS Guidance: The company expects Adjusted EPS in the range of $1.35 to $1.45. This guidance sits below the analyst revenue estimate of $1.2128718, but a direct comparison is complicated as the analyst figure appears to be a revenue estimate in billions, not EPS. The provided analyst EPS estimate for 2026 is unclear from the data. The company's guidance also calls for Adjusted EBITDA of $870-$905 million and Free Cash Flow of $270-$300 million.
- Q1 2026 Outlook: While not explicitly detailed in the press release, analyst estimates for Q1 2026 project sales of $1.54 billion and revenue of $0.255 billion. The company's quarterly progression will be watched closely to see if it tracks to meet its full-year goals.
Conclusion and Market Takeaway
StandardAero's Q4 results capped a strong year of growth, particularly in its high-margin Component Repair segment. However, the market's negative reaction points to concerns beyond the quarterly numbers. The flat margin in the core Engine Services segment, increased corporate costs associated with being a public company, and a full-year 2026 revenue guidance range that starts below analyst consensus have likely contributed to the stock's decline. Investors are weighing the company's continued double-digit growth prospects against these margin and guidance headwinds. The focus will now shift to execution on its strategic investments and its ability to convert robust commercial aerospace demand into expanding profitability.
For a detailed look at future earnings estimates and historical performance, you can review StandardAero's earnings data here.
Disclaimer: This article is for informational purposes only and does not constitute financial advice, an endorsement, or a recommendation to buy, sell, or hold any security. Investing involves risk, including the potential loss of principal.
