Core Viewpoint - AerSale Corporation will release its earnings results for Q4 and the full year ended December 31, 2025, on March 5, 2026, after market close, followed by a conference call at 4:30 PM Eastern Time to discuss the results [1]. Company Overview - AerSale is a global provider of integrated aviation aftermarket services and solutions, catering to operators of Boeing, Airbus, and legacy McDonnell Douglas aircraft [3]. - The company aims to optimize the value, safety, and operational efficiency of aircraft fleets throughout their lifecycle [3]. Service Capabilities - AerSale's offerings include aircraft and engine sales and leasing, used serviceable material (USM) sales, component and airframe MRO services, and FAA-certified engineered solutions [4]. - The company has developed innovative technologies such as AerSafe, AerTrak, and the AerAware™ Enhanced Flight Vision System to enhance aircraft performance, improve safety, and reduce operating costs [4]. Business Model - With deep technical expertise and a fully integrated business model, AerSale provides comprehensive solutions through a single, trusted partner [5].

Core Insights - AerSale Corporation has opened a new Aerostructures MRO facility in Hialeah Gardens, Florida, which replaces its previous operation in Medley, Florida, marking a significant expansion in capabilities and capacity [1][5] Facility Expansion - The new facility spans just under 90,000 square feet, approximately three times larger than the previous location, significantly increasing throughput while maintaining high-quality structural repair standards [2][12] - The facility is equipped with advanced infrastructure, including a new heating oven, paint booth, and sanding booth, capable of accommodating larger widebody structures such as Boeing 777 and Airbus A330 components, as well as GE90 and Rolls-Royce Trent engine nacelles and thrust reversers [3][12][14] Strategic Location - The Hialeah Gardens facility is strategically located between Miami International Airport and Fort Lauderdale-Hollywood International Airport, providing logistical advantages for airlines, operators, and lessors in the Americas and beyond [4] Commitment to Investment - The opening of the new facility reflects AerSale's commitment to investing in infrastructure, technology, and capabilities that deliver value to customers in the global aviation aftermarket [5]

Core Viewpoint - AerSale Corporation (ASLE) has shifted its focus from the AerAware product, which failed to achieve commercial success, to Maintenance, Repair & Overhaul (MRO) opportunities in the aerospace sector [2] Company Overview - AerSale Corporation was initially seen as a promising investment due to its AerAware product, which aimed to provide an enhanced vision system [2] - The company has pivoted towards MRO opportunities as it seeks to capitalize on different aspects of the aerospace industry [2] Analyst Background - The analysis is provided by Dhierin-Perkash Bechai, an aerospace, defense, and airline analyst with a background in aerospace engineering [2] - The analyst runs The Aerospace Forum, which aims to identify investment opportunities within the aerospace, defense, and airline sectors [2]

Core Viewpoint - AerSale Corporation (ASLE) has shifted its focus from the AerAware product, which failed to achieve commercial success, to Maintenance, Repair & Overhaul (MRO) opportunities in the aerospace sector [2]. Company Overview - AerSale Corporation was initially attractive to investors due to its AerAware product, which aimed to provide an enhanced vision system [2]. - The company has pivoted towards MRO services as a new strategic direction after the lack of commercial success with its previous product [2]. Analyst Background - The analysis is provided by Dhierin-Perkash Bechai, an aerospace, defense, and airline analyst with a background in aerospace engineering [2]. - The analyst runs The Aerospace Forum, which focuses on identifying investment opportunities within the aerospace, defense, and airline industries [2].

Revenue Performance - Total revenue for the three months ended September 30, 2025, decreased by $11.5 million, or 13.9%, compared to the same period in 2024, driven by a 22.2% decrease in Asset Management Solutions revenue[110] - Revenue in the Asset Management Solutions segment decreased by $11.2 million, or 22.2%, to $39.2 million, primarily due to a $10.5 million, or 25.4%, decrease in Engine revenue[111] - Total revenue for the nine months ended September 30, 2025 decreased by $6.0 million, or 2.4%, compared to the same period in 2024, driven by a decrease in TechOps revenue[124] - Revenue in the Asset Management Solutions segment increased by $3.2 million, or 2.1%, to $154.7 million, primarily due to a $11.6 million, or 9.9%, increase in Engine revenue[125] - TechOps revenue decreased by $9.2 million, or 9.3%, to $89.7 million, primarily due to lower MRO services[129] Profitability - Gross profit for the Asset Management Solutions segment decreased by $5.9 million, or 30.6%, to $13.4 million for the three months ended September 30, 2025[112] - Gross profit in the Asset Management Solutions segment decreased by $4.9 million, or 8.6%, to $52.4 million, attributed to changes in the revenue mix[126] - Gross profit margin for TechOps increased to 25.3% for the three months ended September 30, 2025, compared to 13.6% for the prior year period, driven by higher margin opportunities[117] - Gross profit margin for TechOps increased to 25.0% for the nine months ended September 30, 2025, compared to 17.1% for the same period in 2024[130] Expenses - Selling, general and administrative expenses decreased by $3.1 million, or 14.1%, to $18.6 million for the three months ended September 30, 2025, due to lower payroll costs[118] - Selling, general and administrative expenses decreased by $3.3 million, or 4.8%, to $66.0 million, due to lower payroll costs[131] Interest and Tax - Interest expense, net increased to $2.4 million for the three months ended September 30, 2025, compared to $1.8 million in the prior year, primarily due to higher borrowings[120] - Interest expense, net increased to $6.0 million for the nine months ended September 30, 2025, compared to $4.2 million in the prior year[133] - The effective tax rate for the three months ending September 30, 2025, was 119.6%, significantly higher than the 13.3% for the same period in 2024, mainly due to state income taxes and stock-based compensation[121] Cash Flow and Commitments - Cash used in operating activities was $34.3 million for the nine months ended September 30, 2025, an increase of $8.0 million from the prior year[141] - As of September 30, 2025, the company had $123.8 million outstanding under the Revolving Credit Agreement and $53.6 million of availability[148] - The company has a purchase commitment of $6.8 million for technical equipment related to the AerAware product, expected to be satisfied in 2025[152] Debt and Currency Risk - As of September 30, 2025, the company had $123.8 million in outstanding variable rate borrowings under the Revolving Credit Agreement[155] - The company also had $2.5 million in outstanding variable rate borrowings under the CIBC Equipment Loan as of September 30, 2025[155] - A hypothetical 10% increase in the average interest rate affecting the company's variable rate debt would increase annual interest expense by $0.6 million[155] - The company primarily uses the U.S. dollar as its functional currency to mitigate foreign currency market risk[156] - Only general office expenses and payroll transactions for international locations are denominated in local currency[156] - A hypothetical 10% devaluation of the U.S. dollar against foreign currencies would not have a material impact on the company's financial position as of September 30, 2025[156]

Core Insights - AerSale (NASDAQ: ASLE) reported Q3 CY2025 revenue of $71.19 million, falling short of analyst expectations of $102.4 million, representing a 13.9% year-on-year decline and a 30.5% miss [6] - The company's non-GAAP profit was $0.04 per share, significantly below the consensus estimate of $0.18, marking a 77.1% miss [6] - Management attributed the revenue shortfall primarily to the absence of engine or aircraft sales, which were five in the same quarter last year [3][7] Financial Performance - Revenue: $71.19 million vs analyst estimates of $102.4 million (13.9% year-on-year decline, 30.5% miss) [6] - Adjusted EPS: $0.04 vs analyst expectations of $0.18 (77.1% miss) [6] - Adjusted EBITDA: $9.48 million vs analyst estimates of $14.92 million (13.3% margin, 36.5% miss) [6] - Operating Margin: 4%, up from 2.4% in the same quarter last year [6] - Market Capitalization: $329.8 million [6] Operational Highlights - The decline in revenue was entirely driven by the lack of whole asset sales, with management noting that these transactions are unpredictable and can significantly impact short-term results [7] - Leasing and used serviceable materials (USM) activity grew robustly, with an 18.5% increase in the balance of the business, supported by disciplined feedstock acquisitions [7] - The Roswell facility shifted focus toward higher-margin teardown and decommissioning work, contributing to margin improvements [7] Future Outlook - AerSale's outlook focuses on expanding its recurring revenue base and launching new operational capacity, with expectations for revenue growth into 2026 [4] - Completion of new Maintenance, Repair, and Overhaul (MRO) facility expansions is anticipated to drive significant revenue growth in 2026 and beyond [4][7] - Deliveries of AerSafe, a safety solution required to meet FAA directives, are expected to remain strong through 2026, with a reported backlog of $22 million [8]

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Core Viewpoint - AerSale Corporation reported quarterly earnings of $0.04 per share, missing the Zacks Consensus Estimate of $0.10 per share, representing a -60.00% earnings surprise [1] - The company posted revenues of $71.19 million for the quarter ended September 2025, missing the Zacks Consensus Estimate by 16.96% and down from $82.68 million year-over-year [2] Financial Performance - Over the last four quarters, AerSale has surpassed consensus EPS estimates two times [2] - The company had a previous quarter earnings expectation of $0.05 per share but reported $0.20, resulting in a +300% surprise [1] - The current consensus EPS estimate for the upcoming quarter is $0.15 on revenues of $97.22 million, and for the current fiscal year, it is $0.35 on revenues of $356.1 million [7] Stock Performance - AerSale shares have increased by approximately 15.1% since the beginning of the year, compared to the S&P 500's gain of 15.6% [3] - The stock currently holds a Zacks Rank 3 (Hold), indicating expected performance in line with the market in the near future [6] Industry Outlook - The Aerospace - Defense Equipment industry, to which AerSale belongs, is currently ranked in the bottom 41% of over 250 Zacks industries, suggesting potential challenges ahead [8] - Empirical research indicates a strong correlation between near-term stock movements and trends in earnings estimate revisions, which could impact AerSale's stock performance [5]

Financial Data and Key Metrics Changes - The company reported revenue of $71.2 million for Q3 2025, down from $82.7 million in the prior year, primarily due to the absence of engine or aircraft sales this quarter [4][15] - Adjusted EBITDA increased to $9.5 million, or 13.3% of sales, compared to $8.2 million, or 10.0% of sales, in the prior year period, reflecting stronger leasing contributions and cost reduction efforts [5][16] - Gross margin improved to 30.2% from 28.6% year-over-year, driven by higher lease revenue and effective cost control measures [15] Business Line Data and Key Metrics Changes - In asset management, revenue was $39.2 million, down from $50.4 million in the prior year, but excluding whole asset transactions, segment revenue increased nearly 40.9% year-over-year [6][8] - Tech ops revenue was $32.0 million, slightly down from $32.3 million in the prior year, with stronger component sales partially offsetting lower services revenue [9][10] Market Data and Key Metrics Changes - The company has a strong inventory position with over $371.1 million of feedstock inventory, including nine engines available for sale or lease and ten engines undergoing repairs [8][17] - Demand for engines remains high, with more demand than available engines, particularly for narrow-body and wide-body engines [41] Company Strategy and Development Direction - The company is focusing on balancing whole asset transactions with assets deployed on lease to achieve more stability in quarterly results [7] - Expansion projects at air structures and pneumatics facilities are complete, expected to drive significant revenue growth in 2026 and beyond [11][14] - The company remains disciplined in feedstock acquisitions, aiming to extract greater value from inventory despite a competitive market [8][29] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the future, citing a strong inventory position and a growing base of recurring revenue [13][18] - The company anticipates continued improvement in profitability and shareholder value as it moves into 2026, supported by robust demand trends across end markets [18] Other Important Information - The company has made strategic decisions to enhance its operational model, focusing on higher-margin activities and transitioning facilities to meet market demands [10][34] - The AeroWare system is being enhanced to address industry-wide challenges, with ongoing outreach to government authorities to raise awareness of its benefits [12] Q&A Session Summary Question: Baseline EBITDA for MRO business into 2026 - Management projected approximately $25 million of revenue and strong margins of $4-$5 million from MRO business in 2026, with full capacity expected to generate $50 million [21][22] Question: Update on passenger to freighter conversions - Management noted a lack of competitive aircraft to replace the 757, leading to optimism about placing remaining converted aircraft [23][24] Question: USM strategy and demand signals - Management confirmed ample USM inventory available for sale, with disciplined acquisition strategies to maintain target margins [25][28] Question: Transition timeline for Roswell and Goodyear facilities - Management indicated substantial transition at Roswell and ongoing progress at Goodyear, with expectations for significant revenue generation in 2026 [32][36] Question: Demand for engines and timeline for repairs - Management expects all ten engines undergoing repair to be available by the end of Q1 2026, with high demand for both trading and leasing opportunities [38][41]

Company Overview - AerSale (NASDAQ:ASLE) is an aerospace and defense company that provides full-service support to mid-life commercial aircraft, integrating multiple services and product offerings [3]. Revenue Performance - In Q3 CY2025, AerSale reported revenue of $71.19 million, which represents a 13.9% year-on-year decline and a 30.5% miss against analyst estimates of $102.4 million [6][8]. - The company's non-GAAP profit was $0.04 per share, falling 77.1% short of the consensus estimate of $0.18 [6]. - Adjusted EBITDA was $9.48 million, missing expectations of $14.92 million, with a margin of 13.3% [6]. - Free cash flow was negative at -$9.80 million, a decline from $8.87 million in the same quarter last year [6]. Long-term Growth Analysis - AerSale's annualized revenue growth over the last five years was only 3.9%, which is below the benchmark for the industrials sector [4]. - The company's revenue has been flat over the last two years, indicating a slowdown in demand [5]. Segment Performance - AerSale's revenue is primarily derived from two segments: Products (51.9% of revenue) and Services (34.9% of revenue) [7]. - Over the past two years, revenue from Products has remained flat, while Services revenue has experienced an average decline of 10.9% year-on-year [7]. Future Outlook - Analysts project a revenue growth of 28.9% over the next 12 months, suggesting that newer products and services may drive improved performance [8].