AAR Corp experienced massive 283% revenue growth but suffered a 73% decline in net income, indicating significant margin compression despite business expansion.
The dramatic revenue increase appears driven by acquisitions and portfolio optimization, but the company's inability to convert this growth into proportional profits raises serious concerns about operational efficiency and integration costs. The 254% spike in interest expense suggests heavy debt financing of growth, while declining operating cash flow amid expansion signals potential cash flow management issues.
AAR Corp's financials show a company in aggressive expansion mode with mixed results - revenue skyrocketed 283% to $1.7B while gross profit grew a modest 19%, indicating severe margin compression. Net income plummeted 73% to just $12.5M despite the massive top-line growth, as interest expense surged 254% and operating cash flow declined 17%. The combination of explosive revenue growth, collapsed profitability, and weakening cash generation suggests the company may be struggling to efficiently integrate acquisitions and manage the costs of rapid expansion.
Strong top-line growth of 283.1% — accelerating demand or successful expansion into new markets.
Interest expense surged 254.1% — significant debt increase or rising rates materially impacting earnings.
Share repurchases increased 98% — management returning capital, signals confidence in intrinsic value.
Net income declined 73% — review whether driven by operations, interest costs, or non-recurring items.
Gross profit expanding — improving pricing power or product mix shift toward higher-margin offerings.
Current liabilities rose 18.8% — increased short-term obligations, watch current ratio.
Operating cash flow softened — monitor whether temporary working capital timing or structural deterioration.
Receivables grew 15.9% — monitor days sales outstanding for collection efficiency.
Cash grew 12.5% — improving liquidity position supports investment and shareholder returns.
SG&A increased modestly — likely reflects growth-related hiring or sales expansion investment.
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