Executive Summary

Q4 2024 delivered strong top-line and margin expansion: revenue rose 21.8% year over year to $1.41B and adjusted EBITDA increased 37.2% to $186.2M; adjusted EBITDA margin expanded 150 bps to 13.2% .
Reported GAAP net loss of $14.1M (EPS -$0.04) was driven by IPO/refi, stock comp catch-up, LEAP/CFM ramp and integration costs; CFO aggregated ~$29M refi, ~$26M IPO-related, and ~$18M LEAP/CFM/ATI expenses impacting the quarter .
2025 guidance initiated: revenue $5.80–$5.95B, adjusted EBITDA $770–$790M, FCF $155–$175M, with ES margin ~13% and CRS ~27%; end-market growth assumptions remain robust (commercial aero low double-digit to mid-teens) .
Balance sheet transformed post-IPO/refi: net debt/EBITDA at 3.1x and >$130M annual cash interest savings expected, a key earnings and cash flow catalyst for 2025 .
Consensus estimates (S&P Global) were unavailable at time of request; beat/miss versus Street cannot be assessed for Q4 2024 (see Estimates Context).

What Went Well and What Went Wrong

What Went Well
- Commercial aerospace strength: commercial aero revenue +33% YoY in Q4; ES margins supported by favorable mix (higher labor content, lower pass-through material), accelerating EBITDA growth .
- Strategic execution milestones: LEAP test cell correlations (1A/1B), first PRSV induction, nine LEAP customer agreements totaling >$1B future revenue; CAAC LEAP authorization broadens addressable market .
- Deleveraging and refinancing: IPO and new facilities cut interest rates by 125–150 bps, positioning for >$130M annual interest savings and multi-notch ratings upgrades, improving 2025 cash generation .
What Went Wrong
- GAAP earnings burdened by non-recurring costs and legacy leverage: Q4 net loss -$14.1M despite strong operating performance; IPO/refi and stock comp catch-up weighed on reported EPS .
- Military/helicopter headwinds: AE1107 V-22 Osprey grounding earlier in 2024 reduced volumes, partially offset by ATI acquisition contribution; military/helicopter up 9% in Q4 off ATI but still mixed .
- LEAP/CFM ramp dilutes ES margins near term: CFO flagged low single-digit margins on ramp programs as a temporary offset to otherwise upward ES margin momentum in 2025 .

Financial Results

Metric	Q4 2023	Q3 2024	Q4 2024
Revenue ($USD Millions)	$1,157.8	$1,244.6	$1,409.6
Net Income (Loss) ($USD Millions)	$(4.6)	$16.4	$(14.1)
Diluted EPS ($USD)	$(0.02)	$0.06	$(0.04)
Adjusted EBITDA ($USD Millions)	$135.7	$168.4	$186.2
Adjusted EBITDA Margin (%)	11.7%	13.5%	13.2%
Net Income Margin (%)	(0.4)%	1.3%	(1.0)%

Segment performance (quarterly):

Segment Metric	Q4 2023	Q3 2024	Q4 2024
Engine Services Revenue ($USD Billions)	$1.0268	$1.0903	$1.2456
ES Segment Adjusted EBITDA ($USD Millions)	$131.2	$147.4	$159.8
ES Segment Adjusted EBITDA Margin (%)	12.8%	13.5%	12.8%
Component Repair Services Revenue ($USD Millions)	$131.0	$154.3	$164.0
CRS Segment Adjusted EBITDA ($USD Millions)	$30.4	$40.8	$43.7
CRS Segment Adjusted EBITDA Margin (%)	23.2%	26.4%	26.6%

KPIs and non-GAAP bridges:

KPI	Q4 2024	FY 2024	FY 2023
Business transformation costs (LEAP/CFM) ($USD Millions)	$9.6	$43.2	$11.4
Stock compensation ($USD Millions)	$17.4	$17.4	—
Refinancing costs ($USD Millions)	$17.3	$23.7	$19.9
Loss on debt extinguishment ($USD Millions)	$11.7	$15.3	$6.2
Net Debt ($USD Billions)	—	$2.167	$3.201
LTM Adjusted EBITDA ($USD Billions)	—	$0.6905	$0.5611
Net Debt / Adjusted EBITDA (x)	—	3.1x	5.7x
Free Cash Flow ($USD Millions)	$57.1 (Q4)	(45) (FY)	—

Note: CFO also described IPO/refinancing and LEAP/CFM/ATI integration/start-up items that burdened GAAP results and cash flows in Q4/FY (aggregated ~$29M refi, ~$26–27M IPO, ~$18M program/ATI costs) .

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Revenue ($USD Billions)	FY 2025	None (initiating)	$5.80–$5.95	Initiated
Engine Services Revenue ($USD Billions)	FY 2025	None	$5.085–$5.215	Initiated
Component Repair Services Revenue ($USD Billions)	FY 2025	None	$0.715–$0.735	Initiated
Adjusted EBITDA ($USD Millions)	FY 2025	None	$770–$790	Initiated
ES Segment Adj. EBITDA Margin (%)	FY 2025	None	~13%	Initiated
CRS Segment Adj. EBITDA Margin (%)	FY 2025	None	~27%	Initiated
Free Cash Flow ($USD Millions)	FY 2025	None	$155–$175	Initiated
Major Platform Investments Included ($USD Millions)	FY 2025	—	$90	Disclosed
End Market Assumptions	FY 2025	—	Commercial: Low DD–Mid-teens; Military/Helicopter: High SD; Biz Av: High SD	Disclosed

Earnings Call Themes & Trends

Topic	Q2 2024 (Prev-2)	Q3 2024 (Prev-1)	Q4 2024 (Current)	Trend
LEAP program ramp	Unavailable in public filings	Test cell correlations; first engine inducted; Avianca 5-year; pipeline expanding	First PRSV induction; 9 customers >$1B; CAAC authorization; 2025 industrialization completion	Accelerating
CFM56 capacity & turn times	Unavailable	DFW Center of Excellence ribbon-cut; increased capacity	DFW opened; turn times trending back to 2019 aided by USM and repair dev	Improving
CF34 license expansion	Unavailable	Noted program importance; military contracts	New 10-year GE agreement; $50M investment, >$10M annual EBITDA from 2025	Positive
Supply chain/USM/repair dev	Unavailable	Margin tailwind from lighter work scopes; in-sourcing rising	USM and repair dev mitigate bottlenecks; turn times down	Structural improvement
Tariffs/macro sensitivity	Unavailable	Outlook: sequential Q4 improvement; no quarterly guidance	Historically minimal impact; USMCA duty-free; prepared for scenarios	Monitored; low risk
Backlog/contracts	Unavailable	77% revenue under LTAs	LTAs ~77%; deep backlog on CF34/military; LEAP backlog growing	Stable/expanding

Note: Q2 2024 transcript not available in SEC document set; “Unavailable” indicates lack of public source.

Management Commentary

“We achieved significant revenue and earnings growth for the Fourth Quarter 2024 driven by demand across all our end markets and strong execution... commercial aerospace market growing 33% during the Fourth Quarter 2024... Adjusted EBITDA growth... favorable mix and productivity improvements.” — Russell Ford, CEO .
“We industrialized our state-of-the-art LEAP MRO line... completed correlation for LEAP-1A after LEAP-1B... inducted our first LEAP engines... signed agreements with 9 customers representing future revenue of over $1 billion... received CAAC authorization.” — Russell Ford .
“Adjusted EBITDA increased to $186.2 million... net loss in Q4 of $14.1 million primarily due to nonrecurring costs: ~$29M refinancing, ~$26M IPO-related (stock comp catch-up), ~$18M LEAP/CFM/ATI costs.” — Daniel Satterfield, CFO .
“Post-IPO refinancing... new term loan (SOFR+2.25) and revolver (SOFR+2.00)... expect >$130 million annual interest savings... delevered to 3.1x, multi-notch upgrades.” — Daniel Satterfield .

Q&A Highlights

Commercial aero demand drivers: CF34, turboprops, CFM56 largest growth in 2025; LEAP early but pipeline strong; CRS demand robust alongside ES .
Working capital and FCF: WC ~25% of revenue structurally; incremental build front-loaded for LEAP/CFM56; free cash conversion improves significantly in 2025 with lower interest and fewer one-time outflows .
LEAP contracts and pipeline: Nine customers signed; airlines locking long-term slots; maintenance moving earlier with lighter CTEM events; global reach beyond North America .
CFM56 turnaround times: Declining toward 2019 norms; enhanced by USM and repair development to bypass sole-sourced bottlenecks .
Margin dilution: 2025 headwinds mainly from low margins on ramping LEAP/CFM56; excluding these, ES margins show basis-point growth .
Tariffs: Historically minimal due to USMCA duty-free treatment; proactive monitoring and compliance readiness .

Estimates Context

Consensus estimates from S&P Global for Q4 2024 were unavailable at the time of request due to data access limits; as a result, beat/miss versus Street cannot be determined for revenue/EPS/EBITDA.
Given the strong revenue and adjusted EBITDA growth and the GAAP loss driven by discrete items, we would expect analysts to focus on non-GAAP margins and 2025 guidance; however, specific consensus revisions cannot be quantified here.

Key Takeaways for Investors

Revenue growth and margin expansion momentum: Q4 revenue +21.8% YoY to $1.41B; adjusted EBITDA +37.2% to $186.2M with 150 bps margin expansion, driven by favorable mix and CRS accretion .
Near-term GAAP noise vs. improving run-rate: Q4 GAAP loss reflects IPO/refi, stock comp catch-up and LEAP/CFM ramp; >$130M annual interest savings and lower one-time cash outflows set the stage for 2025 cash and earnings improvement .
Growth vectors validated: CFM56 to be largest 2025 growth platform; LEAP ramp de-risked by nine long-term customer agreements and CAAC authorization; CF34 license expansion adds >$10M incremental EBITDA annually from 2025 .
Balance sheet de-risking: Net debt/EBITDA down to 3.1x and multi-notch ratings upgrades enhance strategic flexibility for organic builds and accretive CRS-led M&A .
CRS in-sourcing strategy drives enterprise margins: Higher CRS margins (26.6% Q4) and repair in-sourcing both lift consolidated profitability and reduce supply chain friction .
End-market backdrop remains robust: Commercial aero growth strong (Q4 +33%); business aviation steady; military recovering from V-22 grounding with ATI providing complementary exposure .
Trading implications: Focus on execution across LEAP/CFM56 ramps and FCF inflection in 2025; updates on contract wins and turn times are likely catalysts; monitor tariff policy developments though impact historically limited .

StandardAero, Inc. (SARO)·Q4 2024 Earnings Summary