Aircraft maintenance service specialist AAR Corp. (NYSE:AIR) reported fiscal 2025 fourth-quarter earnings on Wednesday, July 16, that highlighted its record full-year revenue of $2.8 billion (up 20%). It also reported a 32% increase in Q4 adjusted EPS to $1.16 (from $0.88 a year ago). Management confirmed 14% organic sales growth in Q4 and net leverage improved to 2.7x in Q4, further aligning with long-term deleveraging targets and ongoing portfolio optimization.

The following insights delve into material business developments impacting AAR's growth outlook, operational leverage, and competitive positioning.

Record Margin Expansion and Deleveraging Signal Strategic Execution for AAR

Adjusted EBITDA margin expanded by 140 basis points to 11.8% in fiscal 2025, and the reduction in net leverage from 3.06x to 2.72x in Q4 was fueled by $51 million in Q4 operational cash flow and $48 million from the landing gear divestiture. Furthermore, AAR repurchased $10 million of shares in Q4 at an average cost of $52.37 per share.

"We delivered record full-year results of $2.8 billion, up 20% over the prior year. Adjusted EBITDA margin increased 140 basis points to 11.8% in fiscal 2025, which reflects strong growth across our core segments. We generated record adjusted diluted earnings per share of $3.91 compared to $3.33 last year. We continue to reduce our net leverage, and our strong balance sheet, along with our disciplined capital allocation strategy, has us well-positioned for investments that will drive continued growth."
— John Holmes, Chairman, President and Chief Executive Officer

The combination of improved profitability and a strengthened balance sheet increases AAR's operational flexibility and potential for both organic and inorganic scale.

Trax Acquisition and Digital Strategy Deliver Accelerated, High-Quality Revenue Growth

Trax secured a multi-year contract with Delta Air Lines and is positioned to benefit from both new wins and legacy client upgrades that can quadruple or quintuple average license values. Management highlighted that digital and IP-enabled offerings -- led by Trax's eMRO and eMobility solutions -- represent a differentiated, high-margin growth vector within AAR's evolving portfolio.

"Our goal is to, again, double the revenue of Trax. And we are excited about all those opportunities."
— John Holmes, Chairman, President and Chief Executive Officer

Management expects that customer upgrades will unlock further margin expansion, structurally increasing recurring, software-driven revenue streams less exposed to cyclical aviation maintenance spending.

Parts Supply and Distribution Outperformance Underscores AAR Market Share Gains

Parts Supply segment sales in Q4 surged 17% year over year to $306 million, powered by over 20% organic growth in new parts distribution. Distribution now anchors AAR as the foremost independent provider globally, positioning the business for continued partnership opportunities with OEMs (original equipment manufacturers).

"Distribution led the way this quarter with another quarter of 20% plus growth we mentioned, we saw that throughout the year. So distribution has really been the driver there. ... within distribution, you have had a relatively even split in terms of growth in the commercial market and the government market."
— John Holmes, Chairman, President and Chief Executive Officer

Sustained above-market parts distribution growth of over 20% signals structural share gains and reinforces AAR's ability to drive consistent, outsized returns in both expansionary and constrained industry environments

Looking Ahead

For fiscal 2026, AAR guides to organic sales growth approaching 9%, based on its FY2025 adjusted sales base of $2.68 billion, with Q1 expected to deliver 6%–11% sales growth and adjusted operating margins between 9.6%–10%. The company is positioned to realize the full $10 million in annual cost synergies from the Product Support acquisition, and the continued rollout of digital and capacity investments is expected to drive further operating margin improvement. Management confirmed that additional M&A remains a strategic focus, with repurchases prioritized over dividend reinstatement, should leverage fall comfortably within the 2.0x–2.5x range.

Where to invest $1,000 right now

When our analyst team has a stock tip, it can pay to listen. After all, Stock Advisor’s total average return is 1,058%* — a market-crushing outperformance compared to 179% for the S&P 500.

They just revealed what they believe are the 10 best stocks for investors to buy right now, available when you join Stock Advisor.

See the stocks »

*Stock Advisor returns as of July 14, 2025

JesterAI is a Foolish AI, based on a variety of Large Language Models (LLMs) and proprietary Motley Fool systems. All articles published by JesterAI are reviewed by our editorial team, and The Motley Fool takes ultimate responsibility for the content of this article. JesterAI cannot own stocks and so it has no positions in any stocks mentioned. The Motley Fool recommends Delta Air Lines. The Motley Fool has a disclosure policy.

For more than two decades, Danny Boyle has been plagued by one question: What would happen after a zombie apocalypse?

The famed director's 2002 movie "28 Days Later" broke conventions of the zombie genre and helped launch a digital video moviemaking revolution in the early 2000s. But as years and then decades passed — and Boyle went on to earn a best director Oscar for "Slumdog Millionaire," do a Steve Jobs movie, and make a "Trainspotting" sequel — he could never crack a continuation of his original "28 Days."

Boyle and screenwriter Alex Garland missed out on the sequel, 2007's "28 Weeks Later," because they had already committed to making the sci-fi thriller "Sunshine." And pitching their own continuation around Hollywood never got any traction. Maybe it would be one of those things that would never come to fruition.

It wasn't until the British Film Institute invited him to do a Q&A at a "28 Days Later" 20th anniversary screening in 2022 that Boyle realized just how much audiences appreciated the film.

"I showed up and it was a packed theater," Boyle told Business Insider during a recent trip to New York City. "I was shocked. You could feel the audience's energy watching it. I texted Alex after, and I told him there's still an appetite for this. So he then came up with an idea."

Garland's idea would become "28 Years Later," which opens in theaters June 20. The film focuses in on a small island community in England that's learned to survive in relative isolation 28 years after the country was ravaged by the Rage Virus. But when Jamie (Aaron Taylor-Johnson) and his 12-year-old son Spike (Alfie Williams) venture to the mainland, they discover new mutations of the virus and survivors with their own fearsome methods for staying alive.

Though the "28 Years Later" cast is entirely new — and there are no glimpses of original "28 Days" star Cillian Murphy, despite the rumors — Boyle is just getting started. He's also a producer on a sequel set for release in January, "28 Years Later: The Bone Temple," which was shot by director Nia DaCosta ("Candyman") right after "28 Years" wrapped. And Boyle will return to direct a third movie, which will indeed star "28 Days Later" star Cillian Murphy. That is, if Sony will greenlight it.

So how did Boyle crack the code to continuing his zombie franchise? His trick is to think limited, not expansive. Though he has big aspirations for a trilogy, it all came about by keeping "28 Years Later" as grounded as possible.

"I love limitations, because I can bash against it and that gives energy and inventiveness," Boyle said with a wide smile. "So the third movie is in many ways an original film."

For the latest edition of Business Insider's Director's Chair series, Boyle discusses returning to the zombie genre, how he used Cillian Murphy as leverage to pursue his other creative ideas, and if he'd ever take on another James Bond movie.

Business Insider: Take me back to that "28 Days Later" 20th anniversary BFI screening. Where was your head at then about doing a third movie?

Danny Boyle: By that point, Alex had developed one script, which we decided not to do: weaponizing the virus, a traditional type of sequel. It was a good script, but we just didn't get any traction. After the BFI screening, he came up with the idea of confining the story to an island, and that was a really good decision.

How much of the COVID pandemic influenced how you wanted the characters to navigate the Rage Virus 28 years later?

It would be that people would become accustomed. You can take risks and know when the back off them. There's a kid in this movie who has no knowledge of the virus — it has been passed on to him; he's never seen any of it. This is his first trip to the mainland. He's heard stories.

You can see that the kids draw pictures of the stories they've been told. They have mythologized the virus. So we talked about all that. And then we delve into the culture before the apocalypse, and it's distorted. How reliable is it? We don't know. But that's an element that goes into the second film, "The Bone Temple."

The visuals have always been a hallmark of your filmography, but especially this franchise. "28 Days Later" ushered digital cameras into the mainstream. Now with this movie, you're shooting with iPhones. It's been done a lot on the indie side with filmmakers like Sean Baker and Steven Soderbergh, but I believe this is the first time camera phones have been used at the studio level. Why did you want to do that?

I felt an obligation to take the spirit of the first movie, but be aware that the technology has moved on so much. Phones now shoot at 4K, which is what a lot of cameras shoot at anyway. And the advantage of using the phones is we were able to be very lightweight.

Also, some of the locations we were shooting hadn't been disturbed for many years. It's an area of England called Northumberland, its sister county is Yorkshire, which is agriculture and manicured. In order to go there with a crew, you have to be light, so having iPhone cameras was good for that. We used a lot of drones, which had different camera lenses; we used a specific Panasonic camera for the night vision footage.

But the iPhone gave us a light touch and allowed us to use these rigs, which I'd been trying to use for a while. It's a poor man's bullet time. But you don't have to go to it, you can carry it. 

So now, instead of laying down dolly track and having all this gear in these very preserved locations, all you need to retrace are footsteps. 

That's right. 

How did you sell Sony on all of this?

[Laughs.] Um. I can't remember. 

Come on.

I will do and say anything to get the film made. There is a terrible side to directors where you will promise [studios] stuff and you don't mean it. They are nervous. They're a corporation. And you have to massage the vision. 

So what was the promise you gave that you weren't going to fulfill?

Cillian Murphy. 

What better promise could you make? That's quite a deflection of any technical concerns; they soon forget. Yeah, we nakedly used that to get our own way. But Sony knew what they were inheriting.

Did Nia DaCosta shoot "The Bone Temple" right after you wrapped on "28 Years"?

Pretty much. She visited the "28 Years" set a couple of times, but yeah, she was prepping her own film, she had her own cinematographer, and though she inherited the sets and some of the characters, she also had her own cast for a substantial part of it.

And she gets a bit of Cillian at the end. All I can say is you have to wait for Cillian, but hopefully he will help us get the third film financed. 

So where are things with the third movie?

We still need the money. I mean, we'll see how we do with "28 Years Later." It's so close to release that nobody wants to say anything; they just don't know what it's going to do. And I respect that. It's a lot of money, so we'll see. 

If there is a third movie, would you want to direct it?

Oh, yes. That's the idea. 

You famously walked off the last James Bond movie. Would you ever give Bond another try now that the regime has changed and Amazon is fully controlling it?

That ship has sailed. The thing I regret about that is the script was really good. John Hodge is a wonderful writer, and I don't think they appreciated how good that script was, and because they didn't, we moved on, and that's the way it should be. Whatever happens with Bond going forward now is what it will be. 

As someone who has done a Beatles movie with "Yesterday," what's your take on Sony's ambitious plan for four Beatles movies?

[Sony chairman] Tom Rothman — who I fight with a lot, and who I love very dearly — I do tip my hat to him, because that is backing a visionary filmmaker in Sam Mendes with a hard, big investment. That's a lot of vision to say, here ya go, there's four films. And they are all going to get released around the same time. 

All in one month! Just from the perspective of a director, would that scare you?

Sam clearly has an appetite to handle it all. I don't know what his vision is, but he's got terrific actors. I worked with Harris Dickinson, who is a wonderful actor, so he's got himself a very special cast. 90% of anything is casting; if you get it right, you're almost there. So I admire it. 

Now, one of the things we found, and they will have this issue, is that people don't know The Beatles' music. We just did a workshop on "Yesterday" and its long-term plans — like, should there be a stage production one day? We did a workshop with a bunch of actors, and lots of them just didn't know the songs. They are in their 20s or 30s, so why would they? They all can recite from memory something from Taylor Swift or Harry Styles, but The Beatles? So, we'll see.

This interview has been condensed and edited for length and clarity.

"28 Years Later" opens in theaters June 20.

Apple is planning to split the launch of its iPhone 18 range, expected in 2026, by about half a year, The Information reported, citing supply chain sources. The company is planning to release the Pro versions of the iPhone 18 in fall 2026, and push the release of the less expensive iPhone 18, along with […]

Michael B. Jordan's next movie hits theaters in 2027.