Aerospace and defense company AerSale (NASDAQ: ASLE) fell short of the market’s revenue expectations in Q2 CY2026, with sales falling 33.9% year on year to $70.93 million. Its non-GAAP loss of $0.09 per share was 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 put up a good quarter or two, but the best consistently grow over the long haul. Unfortunately, AerSale’s 3.4% annualized revenue growth over the last five years was sluggish. This fell short of our benchmark for the industrials sector and is a poor baseline for our analysis.

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 performance shows it grew in the past but relinquished its gains over the last two years, as its revenue fell by 7.5% annually.

We can better understand the company’s revenue dynamics by analyzing its most important segments, Products and Services, which are 52.3% and 47.7% of revenue. Over the last two years, AerSale’s Products revenue averaged 8.6% year-on-year declines while its Services revenue was flat.

This quarter, AerSale missed Wall Street’s estimates and reported a rather uninspiring 33.9% year-on-year revenue decline, generating $70.93 million of revenue.

Looking ahead, sell-side analysts expect revenue to grow 20% 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 fuel 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 4.8% was weak for an industrials business.

Analyzing the trend in its profitability, AerSale’s operating margin decreased by 16.2 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.

This quarter, AerSale generated an operating margin profit margin of negative 6.7%, down 18.4 percentage points year on year. This contraction shows it was less efficient because its expenses increased relative to its revenue.

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 18.1% annually over the last five years while its revenue grew by 3.4%. 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 declined by 16.2 percentage points over the last five years. Its share count also grew by 7%, 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 shorter period to see if we are missing a change in the business.

For AerSale, its two-year annual EPS growth of 104% was higher than its five-year trend. This acceleration made it one of the faster-growing industrials companies in recent history.

In Q2, AerSale reported adjusted EPS of $0.09, down from $0.20 in the same quarter last year. Despite falling year on year, this print easily cleared analysts’ estimates. Over the next 12 months, Wall Street expects AerSale’s full-year EPS to grow 77.6% from $0.29 to $0.52.

Key Takeaways from AerSale’s Q2 Results

AerSale missed analysts’ EPS expectations this quarter. Its revenue missed and its EBITDA fell short of Wall Street’s estimates. Overall, this was a weaker quarter. The stock traded down 5.8% to $5.93 immediately following the results.

AerSale underperformed this quarter, but does that create an opportunity to invest right now? 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).