Executive Summary

Q3 FY2025 headline results: revenue $193.6M, net income $18.1M, Adjusted EBITDA $182.4M; utilization remained >99%. Sequentially lower vs Q2 (driven by smaller gains on sale and lower maintenance revenue) and down y/y given unusually high maintenance revenue in the prior-year period .
Trading and fleet actions remained active: acquired 8 aircraft for $259M (69% new-technology by purchase price) and sold 8 aircraft (avg. age 17 years) for $145M generating $20M in gains; owned fleet NBV $7.1B with 213 unencumbered aircraft (NBV $6.1B) .
Balance sheet/liquidity positioned for offense: $2.8B total liquidity as of Jan 1, 2025; adjusted net debt-to-equity 1.8x; total debt $4.5B (85% unsecured), weighted avg. interest 5.3% .
Management emphasized discipline in capital deployment with leverage below target pending attractive risk-adjusted opportunities; noted OEM supply constraints, strong airline demand, and macro/geopolitical risks as key market drivers .

What Went Well and What Went Wrong

What Went Well
- High fleet utilization (>99%) amid tight aircraft supply; continued strength in lease extensions and placements supporting stable core lease rental revenue ($158.4M vs $156.8M y/y) .
- Productive trading: $20.5M gains on sale; acquisitions tilted to new-tech (69%) positioning mix for durability; CEO: “demand for aircraft remains strong and the constrained supply…is expected to continue for the remainder of this decade” .
- Robust liquidity and improving credit trajectory: $2.8B liquidity; Moody’s outlook to Positive; CFO reiterated confidence in ratings upgrades on stronger metrics and model .
What Went Wrong
- Sequential and y/y revenue decline: total revenue $193.6M vs $216.7M in Q2 and $238.7M y/y; lower maintenance revenue ($14.5M vs $19.4M in Q2 and $58.7M y/y) was a headwind .
- Higher impairments vs Q2 ($8.4M vs $5.8M), and lower trading gains vs Q2 ($20.5M vs $35.4M) pressured net income ($18.1M vs $28.7M in Q2) and Adjusted EBITDA ($182.4M vs $199.3M) .
- Management acknowledged the pace of lease rate/value increases has “slowed,” and discussed interest-rate volatility and macro/geopolitical uncertainties as near-term considerations .

Financial Results

Quarterly trend (oldest → newest)

Metric	Q1 FY2025	Q2 FY2025	Q3 FY2025
Total Revenues ($M)	$205.2	$216.7	$193.6
Net Income ($M)	$16.1	$28.7	$18.1
Adjusted EBITDA ($M)	$185.7	$199.3	$182.4
Lease Rental Revenue ($M)	$162.6	$162.4	$158.4
Maintenance Revenue ($M)	$42.1	$19.4	$14.5
Gain on Sale of Flight Equipment ($M)	$1.0	$35.4	$20.5
Fleet Utilization (%)	99.1%	99.2%	99.2%

Year-over-year comparison (Q3 FY2024 vs Q3 FY2025)

Metric	Q3 FY2024	Q3 FY2025
Total Revenues ($M)	$238.7	$193.6
Net Income ($M)	$25.6	$18.1
Adjusted EBITDA ($M)	$213.0	$182.4
Lease Rental Revenue ($M)	$156.8	$158.4
Maintenance Revenue ($M)	$58.7	$14.5
Gain on Sale of Flight Equipment ($M)	$20.2	$20.5

Notes: The company does not report EPS in quarterly press materials; it reports net income to common shareholders. No segment reporting is provided in the releases; key KPIs include utilization, trading activity, fleet mix, liquidity, leverage .

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Formal financial guidance (revenue, margins, EPS)	FY2025	None provided	None provided	N/A
Ratings outlook	Forward	Positive outlooks at S&P/Moody’s	Management reiterates confidence in upgrade path	Maintained constructive stance
Capital deployment/leverage	Forward	Targeting higher leverage over time	Leverage 1.8x; deploying “with discipline”	Reiterated disciplined approach

Management did not issue numeric guidance; commentary focused on disciplined growth, trading cadence, and leveraging liquidity in a constrained OEM environment .

Earnings Call Themes & Trends

Topic	Previous Mentions (Q1 & Q2 FY2025)	Current Period (Q3 FY2025)	Trend
OEM supply constraints / aircraft & engine availability	Q1: Strong demand, OEM output below needs; extended viability of current-tech narrowbodies . Q2: Load factors high; Boeing/Airbus only minimal delivery improvements near term .	CEO: Constraints to persist into 2025+; Airbus 75/month target moved to 2027; aging global fleet driving extensions at favorable rates .	Persistent constraint; supportive backdrop for lessors .
Lease rates/values	Q1/Q2: Robust placements/extensions; strong market .	Pace of increase has “slowed,” not weakening; pricing remains negotiation among several factors .	Moderating momentum .
Demand/airline profitability	Q1: Traffic meets/exceeds 2019 levels . Q2: Global demand all-time high .	IATA expects continued growth (2025 6.2%) and modest margin improvement; multi-year demand tailwind .	Sustained demand with moderation .
Macro/interest rates	Q1/Q2: Not central in releases.	Rates more volatile; requires careful return/price discipline; spreads “reasonably tight” .	Heightened vigilance .
Geopolitics/tariffs	Q1/Q2: Not explicit in releases.	Elevated focus on disruptions; potential downstream impacts to airlines; manage via strong balance sheet/shareholder support .	Rising risk factor .
Portfolio strategy/mix	Q1: Growing fleet in sought-after narrowbodies . Q2: Preparing to expand new-tech in 2H .	New-tech new deliveries in Q4 (MAX-9s to United; A321neos to IndiGo) to lift new-tech share over time .	Increasing new-tech mix .

Management Commentary

“Demand for aircraft remains strong and the constrained supply of new aircraft coming from OEMs is expected to continue for the remainder of this decade. We’re meeting our customers’ high demand for extensions while also making disciplined trades in a competitive market” .
“We acquired 8 aircraft for $259,000,000… We sold 8 aircraft… $145,000,000 in proceeds and $20,000,000 in gains” .
“Airline profits for 2024 are projected… $31.5B… 2025… $36.6B… assumes stable global GDP and easing oil prices” .
“Average age of the global commercial airline fleet… end of 2024 was 14.8 years… proof that demand for new replacement aircraft is not being met… lease extension requests at favorable lease rates” .
CFO: “For the 3rd quarter, we earned net income of $18,000,000 on total revenues of $194,000,000… Adjusted EBITDA was $182,000,000… total debt was $4,500,000, 85% unsecured… weighted average interest rate… 5.3%… net debt to equity of 1.8x… total liquidity of $2.8B” .
On capital deployment: “The simple answer… is discipline… buying and selling means growth occurs at a slightly slower pace… we’re going to keep doing it disciplined” .

Q&A Highlights

Leverage/Capital deployment: Management comfortable running below target leverage near-term post equity injection, prioritizing disciplined risk-adjusted returns; willing to pursue larger portfolios if returns/risks pencil .
Rates and spreads: Volatility higher than expected; requires careful calibration of purchase prices/returns; spreads “reasonably tight” .
Lease rates/values: Pace of increase has slowed, not weakening; pricing is one element within broader lease negotiations .
Sales strategy: Consistent approach to bring assets to market and reshape portfolio; taking advantage of strong bid for selected mid-life assets while increasing new-tech exposure .
Risk/return balance on acquisitions (e.g., United MAX-9): Maintain balanced portfolio across credit/age/asset types to drive appropriate risk-adjusted returns .

Estimates Context

Wall Street consensus (S&P Global) for Q3 FY2025 EPS/Revenue/EBITDA was unavailable at time of request due to provider rate limits; we could not validate beats/misses versus consensus. Values retrieved from S&P Global were unavailable due to rate limit.

Key Takeaways for Investors

Core engine remains healthy: utilization >99% with stable lease rental revenue; OEM supply constraints extend the supportive backdrop for lessors into 2025+ .
Sequential softness reflects mix: lower maintenance revenue and smaller trading gains vs Q2 weighed on revenues/EBITDA/NI; y/y comps also affected by unusually high maintenance revenue in prior-year quarter .
Balance sheet optionality: $2.8B liquidity, 1.8x net debt-to-equity, and largely unencumbered fleet provide capacity to lean into opportunities while maintaining investment-grade trajectory .
Pricing power moderating at the margin: lease rate/value increases continue but at a slower pace; underwriting discipline and asset selection will be key to protecting returns in a higher-rate, tight-spread environment .
Mix shift to new-tech: deliveries to United (MAX-9) and IndiGo (A321neo) reinforce strategy to grow new-technology narrowbody share and refresh fleet economics .
Watch macro/geopolitics: management explicitly flags geopolitical/tariff risks; near-term caution warranted though long-term air travel demand trajectory remains constructive .
Trading implication: Absent consensus markers, the narrative skews neutral-to-constructive—solid operations/liquidity offset by sequentially lower gains/maintenance and moderated pricing tailwinds; catalysts include any rating upgrade and evidence of accelerating disciplined deployment .

Appendix: Additional Context and Source Checks

Q3 FY2025 8-K 2.02 press release and full financials (including statements and EBITDA reconciliation) read in full .
Q3 FY2025 earnings call transcript read in full .
Prior two quarters’ earnings press releases read in full for trend analysis and .
No additional AYR press releases were available in the Q3 window (Oct 1, 2024–Mar 31, 2025) beyond the 8-K exhibit; comprehensive search returned none [ListDocuments: press-release returned 0].

Aircastle LTD (AYR)·Q3 2025 Earnings Summary