Aerospace and defense company AerSale (NASDAQ: ASLE) fell short of the market’s revenue expectations in Q1 CY2026, but sales rose 7.4% year on year to $70.61 million. Its non-GAAP loss of $0 per share was $0.03 below analysts’ consensus estimates.

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Company Overview

Providing a one-stop shop that integrates multiple services and product offerings, AerSale (NASDAQ: ASLE) delivers full-service support to mid-life commercial aircraft.

Revenue Growth

Examining a company’s long-term performance can provide clues about its quality. Any business can have short-term success, but a top-tier one grows for years. Over the last five years, AerSale grew its sales at a solid 10.1% compounded annual growth rate. Its growth beat the average industrials company and shows its offerings resonate with customers.

Long-term growth is the most important, but within industrials, a half-decade historical view may miss new industry trends or demand cycles. AerSale’s recent performance shows its demand has slowed as its revenue was flat over the last two years.

We can better understand the company’s revenue dynamics by analyzing its most important segments, Products and Services, which are 50% and 33.2% of revenue. Over the last two years, AerSale’s Products revenue averaged 1.6% year-on-year declines while its Services revenue averaged 6.3% declines.

This quarter, AerSale’s revenue grew by 7.4% year on year to $70.61 million, missing Wall Street’s estimates.

Looking ahead, sell-side analysts expect revenue to grow 36.8% over the next 12 months, an improvement versus the last two years. This projection is eye-popping and suggests its newer products and services will spur better top-line performance.

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Operating Margin

AerSale was profitable over the last five years but held back by its large cost base. Its average operating margin of 6.2% was weak for an industrials business.

Analyzing the trend in its profitability, AerSale’s operating margin decreased by 10.9 percentage points over the last five years. This raises questions about the company’s expense base because its revenue growth should have given it leverage on its fixed costs, resulting in better economies of scale and profitability. AerSale’s performance was poor no matter how you look at it - it shows that costs were rising and it couldn’t pass them onto its customers.

In Q1, AerSale generated an operating margin profit margin of negative 4.7%, up 5.4 percentage points year on year. This increase was a welcome development and shows it was more efficient.

Earnings Per Share

We track the long-term change in earnings per share (EPS) for the same reason as long-term revenue growth. Compared to revenue, however, EPS highlights whether a company’s growth is profitable.

Sadly for AerSale, its EPS declined by 4.9% annually over the last five years while its revenue grew by 10.1%. This tells us the company became less profitable on a per-share basis as it expanded.

Diving into the nuances of AerSale’s earnings can give us a better understanding of its performance. As we mentioned earlier, AerSale’s operating margin expanded this quarter but declined by 10.9 percentage points over the last five years. Its share count also grew by 6.9%, meaning the company not only became less efficient with its operating expenses but also diluted its shareholders.

Like with revenue, we analyze EPS over a more recent period because it can provide insight into an emerging theme or development for the business.

For AerSale, its two-year annual EPS growth of 82.6% was higher than its five-year trend. This acceleration made it one of the faster-growing industrials companies in recent history.

In Q1, AerSale reported adjusted EPS of $0, up from negative $0.05 in the same quarter last year. Despite growing year on year, this print missed analysts’ estimates. We also like to analyze expected EPS growth based on Wall Street analysts’ consensus projections, but there is insufficient data.

Key Takeaways from AerSale’s Q1 Results

It was encouraging to see AerSale beat analysts’ EBITDA expectations this quarter. On the other hand, its revenue missed and its adjusted operating income fell short of Wall Street’s estimates. Overall, this was a softer quarter. The stock traded down 9.4% to $6.65 immediately following the results.

AerSale’s latest earnings report disappointed. One quarter doesn’t define a company’s quality, so let’s explore whether the stock is a buy at the current price. What happened in the latest quarter matters, but not as much as longer-term business quality and valuation, when deciding whether to invest in this stock. We cover that in our actionable full research report which you can read here (it’s free).