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- **SCI Expansion**: $6B deployment target, 19% equity stake, and 375 aircraft portfolio highlight strategic capital initiative success.
- **Aerospace Dominance**: 77% YoY EBITDA growth to $180M, 35% margin, and 207 modules refurbished, positioning for 25% market share.
- **Acquisition Impact**: ATOPS ($15M) adds 150 modules/year; Bauer JV saves $75K/shop visit, driving 2026 margin expansion to 40%+.
- **Financial Strength**: $638M free cash flow year-to-date, $1B 2026 target, and 42nd dividend increase to $0.35/share.
- **Growth Outlook**: 2026 EBITDA $1.525B (Aerospace $1B, Leasing $525M), reflecting asset-light model and SCI scalability.

**【CEO Summary】**
- **SCI Expansion**: Upsized total equity capital to $2B, targeting $6B deployment (double original $3B goal). 190 aircraft closed/under LOI, with full deployment by mid-2026. MRE agreement ensures fixed engine exchanges, generating predictable cash flows for LPs.
- **Aerospace Products Growth**: Q3 EBITDA of $180M (35% margin), up 77% YoY. 207 CFM56 modules refurbished, on track for 750 in 2025. Acquired ATOPS for $15M, adding 150 modules/year and a European logistics hub. JV with Bauer for $75K savings per shop visit.
- **Free Cash Flow & Dividends**: Q3 free cash flow $268M, year-to-date $638M. Dividend increased to $0.35/share, 42nd consecutive payout.
- **2026 Outlook**: Aerospace EBITDA $1B (vs. $650M-$700M in 2025), Leasing EBITDA $525M. Total EBITDA $1.525B, free cash flow $1B (33% increase vs. 2025 target).

**【CFO Financial Commentary】**
- **Q3 Financials**: Adjusted EBITDA $297.4M (28% YoY growth). Aerospace Products $180.4M (35% margin), Leasing $134.4M. Free cash flow $268M, including $88M from seed portfolio sale.
- **SCI Impact**: 19% equity interest in SCI generates $50.1M gains on seed portfolio sales. Servicing fees and minority equity offset declining on-balance sheet leasing.
- **Cash Flow Transition**: Moving to industrial accounting, operating cash flow includes asset sales proceeds ($722M for 9 months ended Q3).

**【Q&A Highlights】**
- **SCI Demand**: Investors prefer lower residual risk, higher cash flows. 375 aircraft target exceeds United's CFM fleet. FTAI's role as servicer enhances cross-selling opportunities.
- **ATOPS & Bauer JV**: ATOPS adds 150 modules/year, Bauer JV saves $75K/shop visit. Both acquisitions driven by margin expansion and capacity needs.
- **Asset Management Model**: Targeting $20B in managed assets. Management fees (1%+ incentive) and minority equity returns (low double digits) create dual earnings streams.
- **V2500 Program**: Halfway through 5-year deal, demand driven by GTF grounding. Expect continued growth in performance restorations.
- **2026 Margins**: Aerospace Products targeting 40%+ margins via PMA approvals and component repair vertical integration.

FTAI Aviation Ltd. (FTAI) Q3 2025 Earnings Call Transcript

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