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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

- **Revenue and Margin Growth**: Aerospace Products EBITDA up 81% YoY to $165M (34% margin), driven by 33% QoQ module production increase to 184 units.
- **Strategic Acquisitions Pay Off**: $15M Pacific Aerodynamic acquisition delivers 1-year payback via $15M annual savings in blade repair.
- **Free Cash Flow Surges**: First-half $370M vs. $350M target, with 2025 target raised to $750M.
- **2026 Margin Target**: 40%+ margins via PMA part approvals, new repair capabilities, and scale efficiencies.
- **Chinese Market Expansion**: Rome joint venture targets engine exchanges for Chinese airlines, supported by CAAC license.
- **SCI 2 on Track**: Likely launched in Q3/Q4 2025, with SCI 1 50% aircraft investment target met and 50+ airline customers engaged.

**【CEO Summary Section】**
- **Revenue Growth and Market Share Expansion**: Aerospace Products reported $165M in adjusted EBITDA (34% margin), with market share doubling to 9% year-over-year. The company aims for 25% long-term market share.
- **Strategic Acquisitions**: Acquired Pacific Aerodynamic for $15M, enabling $15M annual savings through blade repair capabilities. Also closed a 50% joint venture in Rome (QuickTurn Europe) to expand into the Chinese market via CAAC license.
- **Free Cash Flow and Dividends**: Generated $370M in first-half free cash flow, raising 2025 target to $750M. Announced a $0.30 dividend for August 2025.
- **Production Ramp-Up**: Refurbished 184 CFM56 modules (+33% QoQ), with Montreal facility reducing turnaround time to 66 days. Rome facility expects 100 modules in 2025.
- **MRE Agreement Growth**: SCI contributed $70M in Q2 Aerospace Products revenue, 20% of first-half total. SCI's $4B 2025 investment target is 50% met with 145 aircraft under LOI.

**【CFO Financial Commentary】**
- **Q2 EBITDA**: Total $347.8M (+30% QoQ, +63% YoY), with Leasing ($199M) and Aerospace Products ($165M) driving growth. Aerospace margin improved to 34% vs. 26% in Q1.
- **Free Cash Flow**: First-half $370M vs. $350M target, with $380M expected in H2. 2025 EBITDA raised to $1.25B-$1.3B from $1.15B.
- **Leverage and Capital Allocation**: Targeting BB credit rating by year-end. Share buybacks and dividends likely as surplus cash is identified.

**【Q&A Highlights】**
- **Margin Expansion**: 2026 margins expected to reach 40%+ via PMA part approvals, new repair capabilities (e.g., Pacific Aerodynamic), and scale efficiencies.
- **Production Constraints**: Technician shortages addressed through training academies and AR simulations in Montreal and Rome.
- **Chinese Market Opportunity**: Rome joint venture leverages CAAC license to target engine exchanges for Chinese airlines, with initial customer engagement.
- **SCI 2 Outlook**: Likely launched in Q3/Q4 2025, with SCI 1 returns in line with expectations and 50+ airline customers engaged.
- **Debt Management**: No maturities until 2028; evaluating refinancing opportunities as cost of debt decreases.


FTAI Aviation Ltd. (FTAI) Q2 2025 Earnings Call Transcript

- **Record Q1 EBITDA Growth**: $268.6 million (7% QoQ, 64% YoY), driven by 36% margin in aerospace products.
- **SCI Strategic Win**: 20% of 2025 aerospace EBITDA allocated to SCI, with no demand trade-off.
- **Free Cash Flow Strength**: $350 million H1 target despite $200 million parts inventory investment.
- **Market Share Ambition**: 25% of engine restoration market by scaling to 200+ modules/quarter.
- **Debt Reduction Path**: 3x net leverage by year-end, setting stage for shareholder returns.

**【CEO Opening Remarks】**
- FTAI reported Q1 2025 adjusted EBITDA of $268.6 million, up 7% QoQ and 64% YoY, driven by aerospace products and leasing segments.
- Aerospace Products segment generated $130.9 million EBITDA (36% margin), with 138 CFM56 modules refurbished across Montreal and Miami facilities.
- Free cash flow guidance for H1 2025 is $300-350 million, targeting $650 million for the full year.
- SCI partnership progress: 30 aircraft acquired, with plans to deploy $4 billion+ in capital by year-end.
- Market share expansion goal: increase from 5% to 25% of engine restoration market.

**【CFO Financial Highlights】**
- Leasing segment contributed $162 million EBITDA, including $30 million Russian assets settlement.
- Aerospace Products segment margin improved 12% QoQ to 36%, with $130.9 million EBITDA.
- Q1 2025 GAAP net income: $420 million; Non-GAAP EPS exceeded expectations at $1.08.
- Adjusted free cash flow generation: $234 million from aviation equipment sales, with $440 million expected from SCI asset sales by Q2.

**【Q&A Key Takeaways】**
- **SCI Program Impact**: 20% of 2025 aerospace products EBITDA allocated to SCI, with no cannibalization of third-party demand. Expected to represent ~20% of annual activity moving forward.
- **Tariff Mitigation**: No material negative impact on business; operational flexibility across Montreal, Miami, and Rome facilities minimizes risk.
- **Production Ramp-Up**: Montreal facility to increase module production from 77 in Q1 to 90-100 in Q2, supporting 25% market share goal.
- **PMA Adoption**: Positive performance data driving PMA part acceptance; SCI partnership enhances residual value assurance for lessors.
- **Debt Reduction**: Targeting 3x net leverage by year-end, enabling shareholder returns (dividends/buybacks) if growth capex needs subside.

FTAI Aviation (FTAI)-1 May 25-2025 Q1 Earnings call transcript

- **Record Growth**: 2024 EBITDA up 44% to $862M, 2025 target $1.1B-$1.15B, 2026 outlook $1.4B.
- **SCI Breakthrough**: $2.5B debt commitment, $1B+ deals secured, targeting $4B annual SPV deployment.
- **Margin Expansion**: 34% Aerospace Products margin in Q4, 2025 targeting 35%-50% EBITDA margin range.
- **PMA Payoff**: Exclusive PMA access driving 5-10% margin uplift, 100,000+ hours of PMA part performance in service.
- **Global Expansion**: Rome facility adds European/Middle East capacity, Chinese certification for APAC growth.

**【CEO Opening Remarks】**
- Announced 39th dividend ($0.30/share) and 54th consecutive dividend since inception.
- Highlighted market opportunity: 600+ small/medium airlines with CFM56/V2500 engines, $22B annual maintenance spend.
- Emphasized green time optimization strategy: acquiring unserviceable engines, refurbishing modules, and reassembling right-sized engines.
- 2025 EBITDA guidance: $1.1B-$1.15B (excluding corporate), 2026 target: $1.4B.
- SCI update: $2.5B debt commitment from ATLAS, $1B+ deals already committed in 2025.

**【CFO Financial Highlights】**
- Q4 2024 EBITDA: $252M (up 9% QoQ, 55% YoY), full year 2024: $862M (44% YoY growth).
- Leasing segment: $134M Q4 EBITDA, 2024 total: $500M.
- Aerospace Products: $117M Q4 EBITDA (34% margin), 2024 total: $381M.
- 2025 free cash flow target: $650M, driven by SCI and reduced capital needs.

**【Q&A Key Takeaways】**
- **Competitive Moat**: Exclusive PMA access, scale in module optimization, and SCI institutional capital partnership.
- **SCI Capital Structure**: 70% debt ($2.8B), 20% FTAI equity ($240M), 80% third-party LPs for remaining equity.
- **Profit Drivers**: Green time optimization (mathematical scale benefits), PMA adoption (5-10% margin uplift), and SCI backlog visibility.
- **Rome Facility**: 40% European customer base, test cell reactivation, and Chinese certification for expansion.
- **2025 Margin Outlook**: 35%-50% EBITDA margin potential through module efficiency, PMA, and SCI synergies.

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