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AerSale Corp (ASLE)·Q2 2025 Earnings Summary

Executive Summary

  • Q2 2025 was a clear beat: Revenue $107.4M vs Wall Street consensus $85.5M*, and Primary EPS $0.20 vs $0.03*, supported by eight engine sales, strong USM demand, and tighter cost control . Values retrieved from S&P Global.*
  • Margin expansion and operating leverage were evident: Gross margin rose to 32.9% (from 28.2% YoY and 27.3% in Q1), with operating income improving to $12.5M vs a $1.9M loss in Q2’24 .
  • Segment performance mixed: Asset Management Solutions surged to $76.3M (ex-flight equipment +79.5% YoY to $42.9M), while TechOps fell 11.9% YoY to $31.1M amid heavy MRO transitions at Goodyear and Roswell .
  • Management signaled H2 improvement vs H1 and EBITDA growth outpacing revenue in FY25, aided by cost reductions ($5–$6M benefit in 2025), AirSafe backlog ($12.9M), and MRO capacity expansions; AerAware achieved TCCA validation and FAA demo milestones though initial revenue remains unlikely in 2025 .

What Went Well and What Went Wrong

What Went Well

  • Robust top-line and profitability: Revenue +39.3% YoY to $107.4M; Adjusted EBITDA $18.3M vs $3.2M in Q2’24, reflecting broad-based growth and cost control .
  • Asset Management strength: Segment revenue $76.3M (+83% YoY); ex-flight equipment +79.5% YoY to $42.9M on USM and leasing; eight engines sold with two Q1 deliveries slipping into Q2 .
  • Positive pipeline signals: AirSafe backlog $12.9M tied to a 2026 FAA AD; AerAware received TCCA validation and completed FAA test flight demo; management expects H2 to improve over H1 .
    • CEO: “We delivered encouraging results… adjusted EBITDA to $18.3 million from $3.2 million… ongoing commercial demand for USM parts” .

What Went Wrong

  • TechOps revenue contraction: -11.9% YoY to $31.1M as Goodyear’s large program ended and Roswell shifted from heavy maintenance to storage/decommission; partially offset by short-term work and other MRO/service lines .
  • Narrowbody engine feedstock remains challenging: Intense competition and unfavorable valuations constrained acquisitions; discipline maintained on narrowbody engines .
  • AerAware commercialization timing: Despite regulatory progress and customer demos, management indicated it’s improbable to deliver meaningful 2025 revenue; operators need operational experience and training .

Financial Results

MetricQ2 2024Q4 2024Q1 2025Q2 2025
Revenue ($USD Millions)$77.101 $94.741 $65.776 $107.382
Gross Margin %28.2% 31.4% 27.3% 32.9%
Operating Income ($USD Millions)$(1.852) $4.937 $(6.647) $12.514
GAAP Diluted EPS ($)$(0.07) $0.05 $(0.10) $0.18
Adjusted Diluted EPS ($)$(0.05) $0.09 $(0.05) $0.20
Adjusted EBITDA ($USD Millions)$3.176 $13.000 $3.174 $18.271

Segment breakdown

Segment MetricQ2 2024Q4 2024Q1 2025Q2 2025
Asset Management Solutions Revenue ($USD Millions)$41.8 $64.0 $39.2 $76.3
Flight Equipment Sales ($USD Millions)$17.9 $31.0 $1.8 $33.4
Asset Mgmt ex-Flight Equipment ($USD Millions)$23.9 $63.7 $37.5 $42.9
TechOps Revenue ($USD Millions)$35.3 $30.7 $26.6 $31.1

KPIs

KPIQ4 2024Q1 2025Q2 2025
Engines sold (#)6 1 8
Feedstock acquisitions ($USD Millions)$18.4 $43.4 $27.1
Inventory / Flight Equipment Inventory ($USD Millions)$355.8 (Flight Equipment) $449.0 (Available Inventory) $388.3 (Available Inventory)
Liquidity ($USD Millions)$142.8 $48.9 $68.8
Cash from Operations ($USD Millions)n/a$(45.221) $19.8

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Sales vs EBITDA trajectoryFY 2025None disclosedExpect full-year sales growth; EBITDA growth to outpace revenue; margin expansion Initiated qualitative outlook
H2 vs H1 performanceH2 2025 vs H1 2025None disclosedExpect incremental financial improvement in H2 relative to H1 Initiated qualitative outlook
Cost reduction benefitFY 2025Not quantified~$5–$6M total 2025 benefit; ~200 bps margin improvement anticipated, with better fixed-cost absorption as heavy MRO mix stabilizes Quantified/maintained
AirSafe deliveries/backlogFY 2025–2026Prior backlog not specifiedBacklog $12.9M; deliveries to rise steadily as the 2026 AD compliance deadline approaches Backlog disclosed; momentum rising
Component MRO expansionsNear-termProjects underwayAerostructures facility completed; accessory shop nearing readiness; management expects incremental revenue “soon” Capacity added; near-term ramp
AerAware commercializationFY 2025Ongoing developmentTCCA validation; FAA demo flight; initial customer revenue in 2025 improbable; focus on operational trials with airlines Reduced near-term revenue expectations; regulatory progress

Earnings Call Themes & Trends

TopicPrevious Mentions (Q4 2024, Q1 2025)Current Period (Q2 2025)Trend
Feedstock availability & USMQ4: improved feedstock and lease pool; ex-whole asset sales +91.7% . Q1: $43.4M feedstock; ex-flight equip revenue +81.7% .$27.1M feedstock; widebody engines/airframes niche; buyers diminished; strong USM volume .Improving/incremental
Flight equipment sales volatilityQ4: $31.0M flight equipment . Q1: $1.8M; expected Q1 engines shifted to Q2 .$33.4M flight equipment; eight engines sold; two Q1 slips to Q2 .Lumpy but monetization strong
TechOps heavy MRO restructuringQ4: Millington online; TechOps +3.1% . Q1: Goodyear program ended; Roswell pivot .TechOps -11.9% YoY; Goodyear refilled with shorter contracts; Roswell focused on storage/part-out; Goodyear 7/8 bays full; Millington next .Transitioning; improving utilization
AerSafe regulatory/demandQ4: strong demand . Q1: continued demand .Backlog $12.9M; deliveries expected to increase quarterly into 2026 .Rising
AerAware development/regulatoryLimited prior detailTCCA validation; FAA demo; ADS‑B IN integration with partner; 2025 revenue improbable; focus on trial ops .Technical progress; revenue timing extended
Leasing pool growthQ4: nine engines + one 757 on lease . Q1: expanding lease pool .Lease pool expanding; 11 engines marketed + 11 in repair .Growing
Cost reductions/efficiencyQ4: SG&A down YoY . Q1: SG&A $24.6M .SG&A $22.8M; ~$5–$6M 2025 benefit; ~200 bps margin improvement expected .Improving margins

Management Commentary

  • “Excluding flight equipment sales, the balance of our business grew 25% to $74,000,000 again driven by greater ready to sell inventory in our USM business and higher leasing revenue, partially offset by lower tech ops revenue as we continue working to transition our heavy MRO facilities.”
  • “At the end of the quarter, we held 388,300,000 of total inventory and flight equipment, including 11 engines available for sale or lease and another 11 engines currently undergoing repairs.”
  • “We expect orders [for AerSafe] to continue rising over the course of the year as we approach a 2026 compliance deadline… As of quarter end, our AerSafe backlog stood at $12,900,000.”
  • “We were pleased to receive Transport Canada Civil Aviation validation of our AerAware STC… demonstrated… foldable SkyLens model after a successful test flight with the [FAA] on July 14.”
  • CFO: “Adjusted EBITDA was $18,300,000 in the second quarter, up from $3,200,000… liquidity… $68,800,000… cash generated by operating activities during the quarter was $19,800,000.”
  • CFO on cost programs: “We anticipate for the year to be about a $5,000,000 to $6,000,000 overall benefit… about a 200 basis point overall improvement.”

Q&A Highlights

  • Asset mix and feedstock: Management emphasized strength in widebody engines/airframes where AerSale has a niche; narrowbody engines remain highly competitive with valuations below IRR targets, so discipline is maintained .
  • Flight equipment visibility: Management balances selling engines vs hybrid short-term leases for recurring revenue; decisions are case-by-case, with >20 engines to monetize over the year (11 marketed, 11 in repair) .
  • Balance sheet risk: CFO sees no impairment risk across inventory, PPE, intangibles given market outlook and demand (including 757 cargo uptick) .
  • MRO progress: Goodyear utilization at 7 of 8 bays; Roswell pivot to storage/part-out with margin benefits; Millington targeting multi-year contracts next .
  • Cost trajectory and USM margins: ~$5–$6M annual benefit; maintaining ~25% IRR for new feedstock; margin impact depends on mix .
  • AerAware revenue timing: Initial 2025 delivery improbable; pursuing airline trials to build operational experience and regulatory usage patterns .

Estimates Context

MetricQ2 2025 ConsensusQ2 2025 Actual
Revenue Consensus Mean ($USD Millions)$85.467M*$107.382M
Primary EPS Consensus Mean ($)$0.03*Primary EPS $0.20*; GAAP Diluted EPS $0.18
Primary EPS – # of Estimates2*—
Revenue – # of Estimates2*—

Values retrieved from S&P Global.*

Interpretation: Revenue and EPS were significant beats versus consensus, driven by engine sales timing, strong USM part sales, and cost control .

Key Takeaways for Investors

  • Bold beat vs consensus on both revenue and EPS, with gross margin expansion to 32.9% and adjusted EBITDA rising to $18.3M, showcasing operating leverage .
  • Asset Management ex-flight equipment grew 79.5% YoY, indicating underlying demand strength beyond lumpy whole-asset sales .
  • TechOps headwinds should fade as Goodyear utilization improves (7/8 bays filled) and Roswell focuses on higher-margin storage/part-out; Millington is next to ramp .
  • AirSafe backlog ($12.9M) and 2026 AD deadline underpin visibility; expect incrementally rising deliveries each quarter .
  • AerAware made regulatory progress (TCCA validation; FAA demo), but expect slower commercialization; near-term revenue likely minimal in 2025 .
  • Cost program quantified ($5–$6M in 2025) with ~200 bps margin uplift potential; SG&A fell YoY despite higher revenue, supporting sustained margin expansion .
  • Liquidity improved to $68.8M; Q2 cash from operations $19.8M, positioning AerSale to continue feedstock acquisitions and lease pool expansion .

Appendix: Non-GAAP Adjustments

  • Q2 2025 adjustments included ~$0.7M share-based compensation, ~$0.4M facility relocation costs, and ~$0.1M warrant mark-to-market; adjusted net income $9.4M and adjusted diluted EPS $0.20 .
  • Management provides reconciliation tables; note adjusted metrics remove non-recurring/unusual items per company definitions .