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AerSale Corp (ASLE)·Q3 2025 Earnings Summary

Executive Summary

  • Q3 revenue was $71.2M and adjusted diluted EPS was $0.04; results reflected zero flight equipment (aircraft/engine) sales in the quarter, while underlying USM/leasing/engineered products drove 18.5% YoY growth ex-whole assets . Versus S&P Global consensus, AerSale materially missed on revenue ($71.2M vs $93.9M consensus*) and EPS ($0.04 vs $0.18 consensus*), as estimates embedded whole-asset sales that did not occur this quarter .
  • Margins improved: gross margin rose to 30.2% (vs 28.6% YoY) and TechOps margin expanded to 25.3% on mix (leasing, AerSafe) and cost controls . Adjusted EBITDA rose to $9.5M (13.3% margin) from $8.2M (10.0%) YoY despite no whole-asset sales, highlighting the lease-pool strategy .
  • Management reiterated a qualitative full-year view: excluding whole-asset sales, 2025 revenue should exceed 2024 with a greater YoY increase in EBITDA; pipeline visibility improved across Goodyear/Millington MRO and AerSafe demand into 2026 .
  • Strategic catalysts: (i) lease-pool expansion (second 757 freighter placed; two more under LOI) ; (ii) “insatiable” engine demand supporting lease/trade monetization ; (iii) MRO bay utilization and long-term contract discussions that could stabilize recurring revenue .

What Went Well and What Went Wrong

  • What Went Well

    • Lease-led mix lifted profitability: Adjusted EBITDA rose to $9.5M (13.3% margin) from $8.2M (10.0%) YoY despite zero whole-asset sales; CEO: “our EBITDA margins expanded as we continued to strategically increase our lease pool” .
    • TechOps margins scaled materially (13.6% → 25.3%) on refocus to higher-margin work; gross margin also improved to 30.2% on leasing mix and cost actions .
    • Commercial momentum in AerSafe and MRO: AerSafe contributing meaningfully with a regulatory deadline supporting demand into late-2026; Goodyear pipeline expected to keep the facility near full capacity through 2026 .

  • What Went Wrong

    • Consensus misses: revenue ($71.2M vs $93.9M*) and EPS ($0.04 vs $0.18*) below S&P Global expectations, driven by absence of aircraft/engine sales in Q3 .
    • TechOps revenue declined modestly YoY (Roswell/Goodyear transitions), and company-wide SG&A remains sizable despite reductions ($18.6M vs $21.7M YoY) .
    • Operating cash outflow YTD of $34.3M (inventory investments), with revolver usage up to $123.8M outstanding, indicating continued working-capital intensity in feedstock acquisition .

Financial Results

MetricQ3 2024Q1 2025Q2 2025Q3 2025Consensus Q3 2025
Revenue ($M)$82.7 $65.8 $107.4 $71.2 $93.9*
Gross Margin %28.6% 27.3% 32.9% 30.2% N/A
Operating Income ($M)$2.0 $(6.6) $12.5 $2.9 N/A
Net (Loss) Income ($M)$0.5 $(5.3) $8.6 $(0.1) N/A
GAAP Diluted EPS ($)$0.01 $(0.10) $0.18 $0.00 N/A
Adjusted EBITDA ($M)$8.25 $3.17 $18.27 $9.48 $14.92*
Adjusted Diluted EPS ($)$0.04 $(0.05) $0.20 $0.04 $0.18*
  • Notes: Consensus values marked with an asterisk are from S&P Global; values retrieved from S&P Global.

Segment revenue breakdown

Segment Revenue ($M)Q3 2024Q1 2025Q2 2025Q3 2025
Asset Management Solutions$50.4 $39.2 $76.3 $39.2
TechOps$32.3 $26.6 $31.1 $32.0

KPIs and operating mix

KPIQ3 2024Q1 2025Q2 2025Q3 2025
Leasing Revenue ($M)$6.90 $7.50 $8.23 $9.40
Flight Equipment Sales in Quarter ($M)$22.6 $1.8 $33.4 $0.0
Available Inventory ($M, period-end)N/A$449.0 $388.3 $371.1
Liquidity ($M)N/A$48.9 $68.8 $58.9
Engines on Lease (units)N/AN/AN/A15
757 Freighters on Lease (units)N/AN/AN/A1 placed; 2 more under LOI

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Revenue (ex flight equipment)FY 2025Not providedExpect FY25 to exceed FY24 levels (ex-whole asset) Introduced qualitative outlook
EBITDAFY 2025Not providedGreater YoY increase in EBITDA for FY25 Introduced qualitative outlook
AerSafe demandThrough Q4 2026Not providedElevated volumes through regulatory compliance deadline; sufficient orders to achieve 2025 plan Introduced qualitative outlook
757 P2F placements2H25–1H26Not providedSecond 757 placed; two additional under LOI for Q4’25/Q1’26 Positive placement trajectory
MRO expansionsFY 2026Not providedExpect ~$25M revenue and $4–$5M margins from three expansion projects at early run-rate New capacity framework

Earnings Call Themes & Trends

TopicPrevious Mentions (Q2 and Q1 2025)Current Period (Q3 2025)Trend
Mix shift to leasingQ2: Leasing portfolio strengthening ; Q1: expanding lease pool Lease pool expansion drove margin gains; leasing revenue up YoY; second 757 placed; 2 more under LOI Positive; more recurring revenue
USM demand & feedstockQ2: USM strong; $27.1M acquisitions; supply tight ; Q1: USM growth ex-whole assets $13.8M feedstock acquired; inventory $371.1M; disciplined bids; ample USM through 2026 Sustained demand; disciplined sourcing
MRO (Goodyear/Roswell/Millington)Q2: Goodyear contract concluded; Roswell transition to teardown ; Q1: Roswell shift; Goodyear backfill Goodyear pipeline supports near-full capacity to 2026; Roswell margins up on teardown; Millington LOI for large regional fleet Improving utilization and visibility
757 P2F programLimited in Q1/Q2 PRsSecond aircraft leased; multiple customers engaged; no true 757 replacement; improving demand vs 2023 Improving placement prospects
Engine market/tightnessN/A“Insatiable” demand across NB/WB engines; shops are bottleneck; balancing cash sales vs long-term leases Tight supply supports pricing/lease yields
Engineered solutions (AerSafe/AerAware)Q2: AerSafe strength ; Q1: not emphasizedAerSafe strong into late-2026; AerAware capability enhancements, outreach with FAA/Congress AerSafe tailwind; AerAware longer-cycle

Management Commentary

  • “While the quarter did not include any sales of aircraft or engines, our EBITDA margins expanded as we continued to strategically increase our lease pool… [and] we were pleased to place an additional 757 freighter aircraft on lease during the third quarter of 2025.” — CEO Nicolas Finazzo .
  • “Gross margin was 30.2%… due to higher leasing revenue, mix and cost control measures… [we] increased TechOps margins from 13.6% to 25.3%.” — Management commentary .
  • “Looking to the fourth quarter and full-year performance, excluding flight equipment sales, we continue to expect full-year revenue in excess of 2024 levels, with a greater increase in EBITDA year-over-year.” — CFO Martin Garmendia .
  • “At quarter end, our 2025 deliveries of AerSafe, plus current backlog, totaled more than $22 million, and we have sufficient orders secured to achieve our 2025 financial plan.” — Management .
  • “Demand is insatiable [for engines]… we’re weighing cash sales versus long-term leases to optimize risk-adjusted margin.” — Management .

Q&A Highlights

  • MRO expansions baseline (2026): Company expects ~$25M revenue at early run-rate from three projects with $4–$5M margins as facilities come online and scale .
  • 757 program: Second aircraft placed; two more under LOI for near-term delivery; scarcity of true 757 alternatives improving placement prospects .
  • USM/feedstock: Tight supply but disciplined acquisitions sustain margin/IRR; ample USM inventory to carry through 2026 even if buying slows .
  • Engine market: Significant demand across NB/WB types; engine-shop cycle times are long; company balancing immediate cash sales versus leasing to maximize returns .
  • Facility transitions: Goodyear near full on recommissioning/transition work through 2026; Roswell shifted to higher-margin teardown; Millington LOI for a large regional fleet .

Estimates Context

  • Revenue: $71.2M actual vs $93.9M consensus* — significant miss primarily due to no aircraft/engine sales in Q3 .
  • EPS (adjusted/primary): $0.04 actual vs $0.18 consensus* — miss as whole-asset sales embedded in estimates did not occur; adjusted EPS flat YoY .
  • EBITDA: $9.5M adjusted actual vs $14.92M consensus* — miss; note consensus/actual may use different EBITDA methodologies; company reports adjusted EBITDA with reconciliation .

Values retrieved from S&P Global.

Key Takeaways for Investors

  • Q3 headline misses versus consensus were driven by timing/absence of whole-asset sales; underlying mix (leasing/USM/AerSafe) strengthened margins, supporting the strategy to smooth volatility via lease pool growth .
  • Consistent YoY gross margin and TechOps margin expansion indicate cost/mix progress; watch for continued leasing uplift and AerSafe shipments into the 2026 regulatory deadline .
  • Near-term catalysts: additional 757 placements (two under LOI), engine lease/trade monetization amid tight market, and Goodyear/Millington pipeline conversion to longer-term contracts .
  • Working-capital needs remain elevated as inventory/feedstock build continues; revolver utilization increased; monitor cash conversion cadence as asset monetization progresses .
  • For modeling, reduce reliance on quarterly whole-asset sales timing; emphasize recurring leasing, MRO, and AerSafe contributions; company’s qualitative guide calls for FY25 revenue (ex-whole asset) above FY24 and a larger YoY increase in EBITDA .
  • Upside scenario: faster 757 placements, accelerated engine turn-times, and incremental long-term MRO contracts. Downside: extended engine-shop bottlenecks and delayed asset sales could weigh on quarterly optics.