FTAI Aviation Ltd. (NASDAQ:FTAI): Aristotle Capital's Q2 2025 Investor Letter Highlights

Aristotle Capital Small/Mid Cap Equity Strategy highlighted FTAI Aviation Ltd. (NASDAQ:FTAI) in its Q2 2025 investor letter. The company owns and acquires aviation equipment and recently partnered with private equity firms to grow its leasing business. This strategy is expected to result in a less capital-intensive leasing business and provide a captive source of demand for the maintenance, repair, and exchange business, enhancing margins and shareholder value.

FTAI Aviation Ltd. (NASDAQ:FTAI), a leading player in the aviation leasing and aerospace products industry, has reported robust financial and operational performance in its latest Form 10-Q report for the period ending June 30, 2025. The company's total revenues reached $1,178.3 million, marking a significant increase from the previous year, driven by strong performance in Aerospace Products and MRE Contract revenue [1].

Notable financial highlights include a net income of $267.8 million, a substantial improvement from a net loss in the prior year, indicating effective cost management and increased revenue streams. The net income attributable to shareholders was $251.6 million, showcasing a turnaround from the previous year's loss, highlighting improved operational efficiency. Basic and diluted EPS were $2.45 and $2.44, respectively, demonstrating a positive earnings per share compared to a loss in the previous year [1].

The Aviation Leasing segment generated revenue from lease income, maintenance revenue, and asset sales, while the Aerospace Products segment contributed through aerospace products revenue and MRE contract revenue. The Aerospace Products segment saw significant growth, particularly in the sale of CFM56-5B, CFM56-7B, and V2500 engines and related components [1].

Geographically, North America and Europe were the leading regions in terms of revenue, with North America contributing significantly through the Aerospace Products segment. The United States and Ireland were the top contributors within these regions, representing 38% and 14% of total revenues, respectively [1].

FTAI Aviation Ltd. sold 33 and 37 aircraft to the 2025 Partnership during the three and six months ended June 30, 2025, respectively, as part of its Strategic Capital Initiative. The company also expanded its engine maintenance and repair capabilities through the acquisition of Lockheed Martin Commercial Engine Solutions (LMCES) in Montréal, Quebec [1].

Aristotle Capital Small/Mid Cap Equity Strategy highlighted FTAI Aviation Ltd. in its Q2 2025 investor letter, noting the company's growing global demand for air travel and aging fleet of aircraft, driving demand for replacement engines and third-party maintenance and repair services. The strategy of partnering with private equity firms to provide capital to grow the leasing business is expected to result in a less capital-intensive leasing business and a captive source of demand for the maintenance, repair, and exchange business, enhancing margins and shareholder value [2].

The company generated $370 million in free cash flow in the first half of 2025, exceeding its targeted $350 million, mainly due to the sale of aircraft through the Strategic Capital Initiative. The SCI closed on additional equity partners and expects to invest $4 billion through the 2025 partnership [3].

FTAI Aviation Ltd. is well-positioned to capitalize on future market opportunities, particularly in the Chinese market. The company's strategic initiatives and strong market position suggest a promising outlook for the coming quarters [3].

References:
[1] https://www.tradingview.com/news/tradingview:de93857b41d10:0-ftai-aviation-ltd-sec-10-q-report/
[2] https://ca.finance.yahoo.com/news/invest-ftai-aviation-ftai-115558273.html
[3] https://www.ainvest.com/news/ftai-aviation-q2-2025-unpacking-contradictions-sci-impact-margin-projections-chinese-market-opportunities-2507/