Executive Summary

Q4 2024 delivered sequential improvement: revenue rose to $516.8M, Adjusted EBITDA to $162.2M, and diluted EPS to $0.21; Adjusted EPS reached $0.40, with free cash flow positive at $34.7M .
ACMI Services swung to pretax profit of $26M from a $2M loss in Q4 2023, aided by operating all ten Amazon-provided 767-300s and pricing increases; CAM pretax fell on higher depreciation/interest and lower maintenance revenues .
Management did not hold a Q4 earnings call or provide guidance due to the pending Stonepeak acquisition; shareholders approved the deal on Feb 10, 2025, with DOT approval still required at the time .
Strategic narrative: strong free cash flow for FY ($228.1M) and continued CAM leasing momentum; announced first four converted A330 freighters targeted for 2025 delivery, a potential medium-term catalyst .

What Went Well and What Went Wrong

What Went Well

ACMI Services profitability improved materially: Q4 pretax earnings were $26M vs. a $2M loss in Q4 2023, supported by eleven customer‑provided 767-300s added to operations and contractual rate increases .
Free cash flow inflected: Q4 FCF was $34.7M vs. $(65.5)M in Q4 2023; FY 2024 FCF was $228.1M vs. $(111.8)M in 2023, reflecting lower capex and asset sale proceeds .
CAM leasing momentum continued: placed the ninth converted 767‑300 freighter of 2024 in November; 91 CAM‑owned aircraft leased to external customers at quarter end (up YoY) .

“Operating all ten of the additional aircraft recently provided by Amazon with sequential quarter improvements in both passenger and freighter hours flown. We once again generated significant free cash flow, with a total of $228 million for the year.” – Mike Berger, CEO .

What Went Wrong

CAM pretax earnings declined to $12M (vs. $21M prior year) driven by higher depreciation (+$34M YoY), higher interest (+$12M YoY), and lower lease-related maintenance revenues, despite more 767-300 leases .
CAM aircraft leasing and related revenues fell 12% YoY in Q4, reflecting scheduled returns of nine 767‑200 and four 767‑300 aircraft and lower maintenance revenue .
Passenger block hours declined 9% YoY in the quarter; while cargo block hours rose 3%, full-year cargo block hours fell 5% vs. 2023, indicating demand/mix headwinds earlier in the year .

Financial Results

Quarterly progression (oldest → newest)

Metric	Q2 2024	Q3 2024	Q4 2024
Revenue ($USD Millions)	$488.4	$471.3	$516.8
Diluted EPS - Continuing Ops ($)	$0.11	$(0.05)	$0.21
Adjusted EPS ($)	$0.19	$0.13	$0.40
GAAP Pretax ($USD Millions)	$10.7	$(5.2)	$24.3
Adjusted Pretax ($USD Millions)	$17.3	$10.7	$39.8
Adjusted EBITDA ($USD Millions)	$130.4	$129.5	$162.2
Free Cash Flow ($USD Millions)	$91.8	$86.4	$34.7
Adjusted EBITDA Margin (%)	26.7%	27.5%	31.4%

Year-over-year (oldest → newest)

Metric	Q4 2023	Q4 2024
Revenue ($USD Millions)	$517.0	$516.8
Diluted EPS - Continuing Ops ($)	$(0.24)	$0.21
Adjusted EPS ($)	$0.18	$0.40
GAAP Pretax ($USD Millions)	$(15.6)	$24.3
Adjusted Pretax ($USD Millions)	$19.8	$39.8
Adjusted EBITDA ($USD Millions)	$129.9	$162.2
Free Cash Flow ($USD Millions)	$(65.5)	$34.7
Adjusted EBITDA Margin (%)	25.1%	31.4%

Segment breakdown

Segment Metric	Q3 2024	Q4 2024
CAM Total Revenues ($USD Thousands)	$112,469	$111,560
ACMI Services Total Revenues ($USD Thousands)	$321,972	$372,067
Other Activities Revenues ($USD Thousands)	$93,000	$90,982
Customer Revenues ($USD Thousands)	$471,253	$516,791
CAM Pretax ($USD Thousands, incl interest)	$18,279	$11,609
ACMI Pretax ($USD Thousands, incl interest)	$(14,412)	$25,720
Other Activities Pretax ($USD Thousands)	$(1,586)	$(5,746)

ACMI pretax YoY

Metric	Q4 2023	Q4 2024
ACMI Pretax ($USD Thousands, incl interest)	$(2,051)	$25,720

KPIs (operational)

KPI	Q3 2024	Q4 2024
CAM-owned aircraft leased to external customers (#)	89	91
Revenue block hours YoY change (%)	−13%	+1%
Cargo block hours YoY change (%)	−7%	+3%
Passenger block hours YoY change (%)	−34%	−9%

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Adjusted EBITDA ($USD Millions)	FY 2024	~$526 (raised Aug 8, 2024)	No guidance provided (Q3 canceled call/guidance; Q4 no guidance)	Withdrawn/Not provided
Capital Spending ($USD Millions)	FY 2024	$390 (lowered Aug 8, 2024)	No guidance provided	Withdrawn/Not provided
ACMI Services profitability	FY 2024	Expected profitable for full year, weighted to Q4 (Q2 call)	Q4 pretax $26M achieved	Execution improved

Note: ATSG explicitly did not hold a Q4 earnings conference call or provide forward-looking guidance given the pending Stonepeak transaction . Q3 guidance was also curtailed in light of the announced transaction .

Earnings Call Themes & Trends

Topic	Previous Mentions (Q-2: Q2 2024)	Previous Mentions (Q-1: Q3 2024)	Current Period (Q4 2024)	Trend
Amazon flying expansion	Plan to operate 10 additional Amazon-provided 767-300s by peak; 3 flying then, 7 later	Began operating 7 Amazon-provided 767-300s; 3 added subsequently	Operating all ten Amazon-provided aircraft; sequential improvements in hours flown	Improving execution
CAM freighter conversions (A330/767/A321)	Two A330s expected to convert/lease in Q4; ongoing 767 conversions	One A330 expected to complete conversion and lease in Q4; 19 aircraft in/awaiting conversion	First four converted A330 deliveries expected in 2025	Scaling A330 program
ACMI profitability trajectory	Expected profitable FY, weighted to Q4; transitional costs in Q3	ACMI pretax loss −$14M; onboarding Amazon aircraft; Q4 pricing increases expected	ACMI pretax profit $26M; rate increases benefited quarterly results	Positive inflection
Labor negotiations/attrition	Pilot deals likely in 2025; attrition down ~50% YoY	No incremental update disclosed in Q3 release	No update (no call)	Stable; 2025 focus
M&A/regulatory	N/A	Announced all-cash merger at $22.50/share; no guidance going forward	Shareholder approval obtained; DOT approval pending; no call/guidance	Progressing toward close

Management Commentary

“We saw continued momentum in our CAM leasing business... In ACMI Services, we saw improved profitability in the quarter... We once again generated significant free cash flow, with a total of $228 million for the year.” – Mike Berger, CEO .
CAM context: aircraft leasing and related revenues decreased 12% YoY in Q4, partly due to scheduled returns of nine 767‑200 and four 767‑300 aircraft and lower maintenance revenue; CAM pretax declined on higher depreciation and interest .
ACMI context: Q4 pretax earnings of $26M benefited from eleven customer-provided 767‑300 aircraft and rate increases; cargo block hours +3% YoY; passenger block hours −9% YoY .

Q&A Highlights

Note: No Q4 earnings call was held due to the pending transaction . Key Q&A themes from Q2 2024 that framed second-half execution:

ACMI profitability timing: Management expected ACMI Services to be profitable for the year, with Q4 carrying contractual price increases and peak charter tailwinds .
Mid wide-body freighter demand: Solid demand expected; double-digit aircraft deliveries targeted for 2024 with momentum into 2025 .
Lease rates/factors: 767 lease rates remained very stable across cycles; lease factors vary by feedstock costs and aircraft availability (particularly A330) .
Labor agreements timeline: Pilot agreements not expected until 2025; attrition down markedly vs. 2023 .

Estimates Context

We attempted to retrieve S&P Global consensus (EPS, revenue, EBITDA) for Q4 2024; the dataset lacks the CIQ mapping for ATSG, so consensus values were unavailable via our tool. As a result, we cannot assess beats/misses vs Wall Street estimates for Q4 2024. The company also did not provide guidance or host a call this quarter given the pending acquisition .

Key Takeaways for Investors

Sequential operational and financial improvement in Q4: revenue, Adjusted EBITDA, Adjusted EPS, and ACMI pretax all strengthened versus Q3, signaling successful ramp of Amazon-provided aircraft and pricing adjustments into peak season .
CAM pressure likely transient: lower maintenance revenues and returns of older 767s weighed on CAM, but leasing momentum continued, with 91 aircraft leased externally at quarter end and ongoing conversion pipeline .
Free cash flow discipline: Q4 and FY FCF positive, aided by capex reductions and asset sales; should support deleveraging and flexibility through transaction close .
2025 catalysts: first four converted A330s targeted for delivery, potentially diversifying the fleet and supporting lease growth; monitor deployment and lease economics .
Merger overhang resolved post-quarter: shareholders approved Stonepeak transaction; with DOT approval pending at the time, management paused guidance and calls—trading dynamics likely tied to regulatory milestones and deal timing .
ACMI trajectory improving: pretax profit in Q4 validates management’s second-half setup; watch sustainability of block hours and rate increases in 2025 contracts .
No consensus comparison available: inability to source S&P Global estimates limits beat/miss analysis; focus on sequential and YoY operational metrics and merger timeline .

Air Transport Services Group, Inc. (ATSG)·Q4 2024 Earnings Summary