ASLE — AerSale Corporation

Summary of AerSale Corp. Q4 2025 Earnings Call

1. Key Financial Results and Metrics:

• Q4 2025 Revenue: $90.9 million, a 4% decrease from Q4 2024 ($94.7 million).
• Adjusted EBITDA: Increased by 17.1% to $15.2 million from $13 million in Q4 2024.
• Full Year 2025 Revenue: $335.3 million, down 2.8% year-over-year, primarily due to fewer flight equipment sales.
• Excluding Flight Equipment Sales: Full year revenue increased by 18.7%, driven by stronger demand in USM and leasing.
• Full Year Adjusted EBITDA: Rose 38.2% to $46.1 million, reflecting improved margins and cost efficiencies.
• Cash Flow: Year-to-date cash used in operating activities was $23 million, mainly for feedstock acquisitions.
• Liquidity: Ended the year with $71.6 million in total liquidity, including $4.4 million in cash.

2. Strategic Updates and Business Highlights:

• Feedstock Acquisition: Acquired $15.4 million in feedstock during Q4, totaling $99.6 million for the year. The company remains disciplined in its acquisition strategy due to a hypercompetitive market.
• MRO Facilities: Expanded operations in Millington, Tennessee, and completed a new 90,000 square foot aerostructures facility, expected to ramp up in 2026.
• AerSafe Product: Increased sales in anticipation of the FAA's 2026 compliance deadline for fuel tank safety systems.
• Landing Gear MRO Approval: Received FAA approval to overhaul Boeing 737 MAX and 787 landing gear, enhancing service offerings.

3. Forward Guidance and Outlook:

• 2026 Expectations: Anticipate continued revenue growth driven by increased capacity, efficiency initiatives, and recurring revenue streams from USM and leasing.
• Growth Initiatives: Plans to fill capacity at MRO facilities and expand AerSafe sales as the compliance deadline approaches.
• Profitability: Confident in achieving another growth year for both top and bottom lines, with a focus on reducing earnings volatility.

4. Bad News, Challenges, or Points of Concern:

• Revenue Decline: Q4 revenue decreased year-over-year, and full year revenue was down due to reduced flight equipment sales.
• Competitive Pressures: The feedstock acquisition environment remains challenging, with a win rate of only 4.8% in Q4, indicating significant competition and pricing pressures.
• Market Volatility: Concerns about the sustainability of revenue from AerSafe post-2026 compliance deadline, as sales are expected to diminish significantly thereafter.

5. Notable Q&A Insights:

• Feedstock Strategy: Management indicated a conservative approach to feedstock purchases, projecting lower acquisitions in 2026 compared to 2025 due to market conditions.
• GTF Normalization: The normalization of GTF revenues is not expected until 2027, with a focus on returning parked aircraft to service creating opportunities for heavy checks.
• AerSafe Sales: Anticipated significant sales this year due to compliance deadlines, but management is actively exploring new engineered products to sustain revenue beyond 2026.

Overall, AerSale Corp. demonstrated strong operational improvements and strategic growth initiatives despite facing challenges in revenue and competitive pressures in the market. The company remains optimistic about its future growth trajectory as it adapts to market conditions and expands its service offerings.