StandardAero(SARO -1.78%) released results for the fiscal second quarter ended June 30, 2025, on August 13, 2025, revealing revenue grew 13.5% year-over-year to $1.53 billion, and adjusted EBITDA (non-GAAP) rose 20% to $205 million, driving an 80 basis point margin expansion to a 13.4% adjusted EBITDA margin (non-GAAP). Management raised full-year 2025 guidance, now expecting $5.875 billion to $6.025 billion in revenue and $790 million to $810 million in adjusted EBITDA (non-GAAP), citing robust end-market demand, productivity initiatives, and ongoing ramp in strategic engine programs. The following analysis highlights critical developments in demand visibility, segment margin differentiation, and execution on growth investments.

Robust demand and pipeline propel StandardAero’s LEAP growth

Bookings for LEAP engine maintenance, repair, and overhaul (MRO) services increased from approximately $1 billion at the end of last year to $1.5 billion as of the latest update, reflecting strengthening pipeline and win rates. The LEAP platform is projected to reach $1 billion in annual revenue by 2030, underpinned by high airline demand and long-term maintenance contracts, as airlines seek to secure capacity in a constrained global MRO environment.

"StandardAero, Inc.'s total LEAP bookings now exceed $1.5 billion, up from $1 billion we mentioned at the end of last year, supported by strong wins year to date. We continue to expect LEAP revenues to reach $1 billion annually by the end of the decade."
-- Russell Ford, Chairman and Chief Executive Officer

Escalating LEAP contract bookings, now exceeding $1.5 billion, signal sustained multi-year revenue visibility, bolstering StandardAero’s long-term earnings resilience.

Component Repair Services margin expansion outpaces expectations

Component Repair Services (CRS) delivered $178 million in revenue, up 31% year-over-year, with a record 29% adjusted EBITDA margin (+360 basis points), reflecting 50% adjusted EBITDA growth for the segment. The AeroTurbine acquisition, strong land and marine end-market growth, and favorable mix further enhanced the CRS margin mix, while commercial engine inputs are expected to accelerate further in the second half.

"In the quarter, Component Repair Services adjusted EBITDA grew 50% year on year. Was the result of our revenue growth and over 360 basis points year on year margin expansion to 29%. This is a record adjusted EBITDA margin quarter in CRS. This increase reflects strong volume, pricing, and favorable mix, as well as the impact of the AeroTurbine acquisition."
-- Daniel Satterfield, Chief Financial Officer

CRS margin expansion, driven by volume, pricing, and acquisition synergies, positions StandardAero for continued segment-level profitability improvements.

Disciplined execution sustains margin growth amid platform investments

Engine Services reported 11.5% revenue growth and a 16% increase in adjusted EBITDA, with Engine Services segment adjusted EBITDA margin reaching 13.2% (up 50 basis points), despite dilution from ramping LEAP and CFM56 programs, which are early-stage and margin-dilutive (as discussed in the context of non-GAAP adjusted EBITDA and margin performance). Notably, core platform momentum offset new program start-up costs, and margin accretion in Engine Services mirrors overall company expansion as LEAP and CFM56 transition toward profitability, as discussed in relation to non-GAAP adjusted EBITDA margin performance.

"So the company expanded margins 80 basis points in the quarter. That would have been significantly more excluding the ramp programs, which shows the underlying growth and margin accretion in our core programs. And I think you can kind of do the math there, it's a lot of the several basis points of multiple basis points higher than the 80 basis points. And all that's happening within ES. So those if you look at how those programs are developing in total, the losses on those programs, we add back to adjusted EBITDA that are within cash flow, are narrowing significantly. So it's really great to see that. So the same drivers of margin accretion on those programs are what we expected. Higher revenue to absorb the industrialization costs as well as the learning curve. So you're going to see those programs cracking into profitability sometime late this year or early next year."
-- Daniel Satterfield, Chief Financial Officer

This disciplined ramp of new high-growth platforms while containing margin pressure demonstrates management’s operational effectiveness, accelerating the path to profitable scale while protecting near-term returns.

Looking Ahead

Management raised 2025 guidance to $5.875 billion to $6.025 billion in revenue and $790 million to $810 million in adjusted EBITDA (non-GAAP), with company-wide adjusted EBITDA margin expected to reach 13.4% in 2025. Free cash flow (non-GAAP) for 2025 is reaffirmed at $155 million to $175 million, supported by an expected working capital reversal in the second half of the year. Segment-level adjusted EBITDA margin guidance was increased for both Engine Services (13.3%) and Component Repair Services (28.3%) in 2025, with double-digit top-line growth and adjusted EBITDA margin expansion also forecast; commercial aerospace growth is projected at a mid-teens percent year-over-year rate, while business aviation and military remain in the high single-digit range.