AAR Corp. (NYSE:AIR) reported its Q2 results, with EPS of $0.69 coming in better than the Street estimate of $0.68. Revenue was $470 million, beating the Street estimate of $461.73 million.

The company continued to deliver steady margin improvement, with gross margins of 18.8% (compared to 16.7% in Q2/22) and adjusted operating margins of 7.6% (compared to 6.1% in Q2/22).

According to the analysts at RBC Capital, free cash flow was soft in the quarter, but they continue to believe in the organic growth outlook. The analysts said they can appreciate the investments in working capital to support organic growth, but the potential free cash flow upside remains a focus for investors.