Industry Overview - The aerospace defense industry is experiencing growth despite supply-chain challenges, driven by increased defense budgets from the U.S. and geopolitical uncertainties in regions like the Middle East, Europe, and South and South-East Asia, which are expected to enhance prospects in Q4 2025 [1][9]. U.S. Defense Budget - A White House report indicated a proposed 13% increase in U.S. defense spending to $1.01 trillion for fiscal year 2026, which is anticipated to benefit defense-focused companies by enabling them to secure more contracts and expand production [2]. Investment Opportunities - It is advisable to invest in aerospace defense stocks with favorable Zacks Ranks for the remainder of 2025. Five recommended stocks include GE Aerospace, Howmet Aerospace Inc., HEICO Corp., Astronics Corp., and AerSale Corp. [3][4]. Stock Performance - The selected stocks have yielded over 35% returns year-to-date, with potential for further growth as indicated by their favorable Zacks Ranks [4][9]. Company Insights GE Aerospace - GE Aerospace, with a Zacks Rank of 1, is benefiting from strong demand for commercial engines and defense budgets, expecting organic revenue growth in the low-double-digit range for 2025 [7][8][10]. Howmet Aerospace Inc. - Howmet Aerospace, ranked 2, is experiencing momentum in the commercial aerospace market and defense sectors, with expected revenue and earnings growth rates of 9.4% and 32.4%, respectively, for the current year [11][12]. HEICO Corp. - HEICO, also ranked 2, is seeing increased orders for aftermarket parts and services, with expected revenue and earnings growth rates of 13.8% and 27.5%, respectively, for the current year [13][14]. Astronics Corp. - Astronics, holding a Zacks Rank of 1, focuses on specialized lighting and electronics for various aircraft, with expected revenue and earnings growth rates of 7% and 46.8%, respectively, for the current year [15][16]. AerSale Corp. - AerSale, ranked 1, provides diversified aviation aftermarket products and services, with expected revenue and earnings growth rates of 3.2% and 94.4%, respectively, for the current year [17][18].

Group 1 - The author has a history of involvement with AerSale (NASDAQ: ASLE), having previously lost money when the stock traded in double digits and missed subsequent opportunities [1] - The author has been contributing to investment websites since 2011, focusing on value investing rather than growth [1] - The author has a background in finance, having obtained Series 7 and 63 licenses in 1999 and experienced the dot-com bubble firsthand [1] Group 2 - There is no current stock, option, or derivative position held by the author in any mentioned companies, nor plans to initiate such positions in the next 72 hours [2] - The article reflects the author's personal opinions and is not compensated beyond contributions to Seeking Alpha [2] - Seeking Alpha clarifies that past performance does not guarantee future results and that the views expressed may not represent the platform as a whole [3]

PART I – FINANCIAL INFORMATION [Item 1. Condensed Consolidated Financial Statements](index=5&type=section&id=Item%201.%20Condensed%20Consolidated%20Financial%20Statements) The company's unaudited financials show increased assets, a return to profitability in Q2 2025, and a significant share repurchase [Condensed Consolidated Balance Sheets](index=5&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) Total assets grew to $646.7 million, funded by increased debt, while stockholders' equity declined due to a share repurchase Condensed Consolidated Balance Sheet Highlights (in thousands) | Account | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | **Assets** | | | | Cash and cash equivalents | $5,747 | $4,698 | | Total Inventory (Current & Non-current) | $388,303 | $355,790 | | Total assets | $646,671 | $604,723 | | **Liabilities & Equity** | | | | Revolving credit facility | $114,509 | $39,235 | | Total liabilities | $230,759 | $149,103 | | Total stockholders' equity | $415,912 | $455,620 | [Condensed Consolidated Statements of Operations](index=6&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) Q2 2025 revenue grew 39.3% year-over-year to $107.4 million, driving a net income of $8.6 million Key Operating Results (in thousands, except per share data) | Metric | Q2 2025 | Q2 2024 | YTD 2025 | YTD 2024 | | :--- | :--- | :--- | :--- | :--- | | Total revenue | $107,382 | $77,101 | $173,158 | $167,641 | | Gross profit | $35,337 | $21,720 | $53,302 | $50,516 | | Income (loss) from operations | $12,514 | $(1,852) | $5,867 | $2,811 | | Net income (loss) | $8,575 | $(3,637) | $3,298 | $2,640 | | Diluted EPS | $0.18 | $(0.07) | $0.07 | $0.05 | [Condensed Consolidated Statements of Stockholders' Equity](index=7&type=section&id=Condensed%20Consolidated%20Statements%20of%20Stockholders'%20Equity) Stockholders' equity decreased to $415.9 million primarily due to a $45.0 million treasury stock retirement - The company purchased and retired **6,428,571 shares** of treasury stock for **$45.0 million** during the first quarter of 2025[20](index=20&type=chunk) - Total stockholders' equity **decreased by $39.7 million** in the first six months of 2025, from $455.6 million to $415.9 million[20](index=20&type=chunk) [Condensed Consolidated Statements of Cash Flows](index=8&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) Net cash used in operations was $25.4 million, while financing activities provided $30.2 million from borrowings Summary of Cash Flows (in thousands) | Cash Flow Activity | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | | Net cash used in operating activities | $(25,436) | $(36,800) | | Net cash used in investing activities | $(3,759) | $(9,000) | | Net cash provided by financing activities | $30,244 | $44,212 | | **Increase (decrease) in cash** | **$1,049** | **$(1,588)** | [Notes to the Condensed Consolidated Financial Statements](index=9&type=section&id=Notes%20to%20the%20Condensed%20Consolidated%20Financial%20Statements) Notes detail strong Asset Management segment growth, a $67.6 million insurance claim, and a $45.0 million share repurchase Disaggregated Revenue by Segment (YTD, in thousands) | Segment / Type | YTD 2025 | YTD 2024 | | :--- | :--- | :--- | | **Asset Management Solutions** | **$115,478** | **$101,061** | | - USM | $64,609 | $37,132 | | - Whole asset sales | $35,137 | $56,561 | | - Leasing | $15,732 | $7,368 | | **TechOps** | **$57,680** | **$66,580** | | - Services (MRO) | $45,715 | $55,365 | | - Engineered solutions/Products | $11,965 | $11,215 | | **Total Revenue** | **$173,158** | **$167,641** | - A fire destroyed a warehouse in April 2024, leading to a **$67.6 million insurance claim** and a **$28.6 million deferred gain** as of June 30, 2025[51](index=51&type=chunk)[52](index=52&type=chunk) - On March 18, 2025, the company repurchased and retired **6,428,571 shares** of its common stock for **$45.0 million**[87](index=87&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=38&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Q2 2025 revenue growth was driven by the Asset Management segment, offsetting a decline in TechOps Q2 2025 vs Q2 2024 Revenue Performance (in thousands) | Segment | Q2 2025 Revenue | Q2 2024 Revenue | % Change | | :--- | :--- | :--- | :--- | | Asset Management Solutions | $76,265 | $41,799 | 82.5% | | TechOps | $31,117 | $35,302 | (11.9)% | | **Total** | **$107,382** | **$77,101** | **39.3%** | Q2 2025 vs Q2 2024 Gross Profit Performance (in thousands) | Segment | Q2 2025 Gross Profit | Q2 2024 Gross Profit | % Change | | :--- | :--- | :--- | :--- | | Asset Management Solutions | $26,957 | $15,361 | 75.5% | | TechOps | $8,380 | $6,359 | 31.8% | | **Total** | **$35,337** | **$21,720** | **62.7%** | - As of June 30, 2025, the company had **$5.7 million in cash**, **$114.5 million outstanding** under its revolving credit facility, and **$63.1 million of availability**[133](index=133&type=chunk)[134](index=134&type=chunk) - Net cash used in operating activities for the first six months of 2025 was **$25.4 million**, while net cash from financing was **$30.2 million**[134](index=134&type=chunk)[138](index=138&type=chunk)[140](index=140&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=51&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company's primary market risks are interest rate fluctuations on its variable-rate debt and minimal foreign currency exposure - The company is exposed to interest rate risk on its **$116.2 million** in variable-rate debt as of June 30, 2025[152](index=152&type=chunk) - A **10% increase** in the average interest rate would increase annual interest expense by **$0.5 million**[152](index=152&type=chunk) - Foreign currency exchange risk is **not considered material** as the company primarily transacts in U.S. dollars[153](index=153&type=chunk) [Item 4. Controls and Procedures](index=53&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded that disclosure controls and procedures were effective with no material changes to internal controls - The CEO and CFO concluded that the company's disclosure controls and procedures were **effective** as of June 30, 2025[156](index=156&type=chunk) - **No material changes** to internal control over financial reporting occurred during the quarter ended June 30, 2025[157](index=157&type=chunk) PART II – OTHER INFORMATION [Item 1. Legal Proceedings](index=54&type=section&id=Item%201.%20Legal%20Proceedings) Current litigation is not expected to materially affect the company's financial condition or results of operations - The company does not expect current legal proceedings to have a **material impact** on its financial condition or operations[159](index=159&type=chunk) [Item 1A. Risk Factors](index=54&type=section&id=Item%201A.%20Risk%20Factors) No material changes to risk factors have been reported since the 2024 Annual Report on Form 10-K - **No material changes** to risk factors were reported since the 2024 Form 10-K[160](index=160&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=54&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) The company reported no unregistered sales of equity securities during the reporting period - None[161](index=161&type=chunk) [Item 3. Defaults Upon Senior Securities](index=54&type=section&id=Item%203.%20Defaults%20Upon%20Senior%20Securities) The company reported no defaults upon its senior securities - None[162](index=162&type=chunk) [Item 4. Mine Safety Disclosures](index=54&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This section is not applicable to the company's operations - Not applicable[163](index=163&type=chunk) [Item 5. Other Information](index=54&type=section&id=Item%205.%20Other%20Information) No directors or officers adopted or terminated Rule 10b5-1 trading arrangements during the quarter - No director or officer adopted or terminated a Rule 10b5-1 trading plan during the quarter[164](index=164&type=chunk) [Item 6. Exhibits](index=54&type=section&id=Item%206.%20Exhibits) This section lists all exhibits filed with the report, including required officer certifications - The report includes certifications from the Chief Executive Officer and Chief Financial Officer as required by Rule 13a-14(a)/15d-14(a) and 18 U.S.C. Section 1350[167](index=167&type=chunk)

Core Viewpoint - AerSale Corporation (ASLE) reported quarterly earnings of $0.20 per share, significantly exceeding the Zacks Consensus Estimate of $0.05 per share, marking a 300% earnings surprise compared to a loss of $0.05 per share a year ago [1] Financial Performance - The company achieved revenues of $107.38 million for the quarter ended June 2025, surpassing the Zacks Consensus Estimate by 29.49%, compared to $77.1 million in the same quarter last year [2] - Over the last four quarters, AerSale has exceeded consensus EPS estimates two times and topped consensus revenue estimates twice [2] Stock Performance and Outlook - AerSale shares have declined approximately 3% since the beginning of the year, while the S&P 500 has gained 7.1% [3] - The company's earnings outlook is crucial for investors, as it includes current consensus earnings expectations for upcoming quarters and any recent changes to these expectations [4] Estimate Revisions and Rankings - Prior to the earnings release, the estimate revisions trend for AerSale was unfavorable, resulting in a Zacks Rank 5 (Strong Sell) for the stock, indicating expected underperformance in the near future [6] - The current consensus EPS estimate for the upcoming quarter is $0.10 on revenues of $85.17 million, and for the current fiscal year, it is $0.20 on revenues of $329.86 million [7] Industry Context - The Aerospace - Defense Equipment industry, to which AerSale belongs, is currently ranked in the bottom 42% of over 250 Zacks industries, suggesting that the industry's outlook can significantly impact stock performance [8]

Financial Data and Key Metrics Changes - The company reported second quarter revenue of $107.4 million, up from $77.1 million in the prior year, reflecting a significant increase in sales growth and profitability [4][16] - Adjusted EBITDA improved to $18.3 million compared to $3.2 million in the previous year, indicating stronger execution and operational efficiency [4][18] - Gross margin increased to 32.9% from 28.2% year over year, driven by improved performance across the business [16][17] Business Line Data and Key Metrics Changes - Asset management segment sales rose to $76.3 million from $41.8 million, attributed to higher flight equipment sales and increased USM part sales [5][16] - Tech ops segment revenue decreased by 11.9% year over year from $35.3 million to $31.1 million, primarily due to reduced activity at heavy MRO facilities [8][18] - The company aggressively pursued feedstock acquisitions, acquiring assets totaling $27.1 million in the quarter, bringing the year-to-date total to $70.5 million [6] Market Data and Key Metrics Changes - The narrow body engine market remains highly competitive, with valuations consistently falling below internal rate of return benchmarks, while the wide body engine market shows more favorable conditions [7][28] - USM sales nearly doubled year over year, supported by improved feedstock and a strong inventory position [21] Company Strategy and Development Direction - The company is focused on expanding its lease pool and MRO operations, with expectations for incremental revenue growth from new capabilities [14][46] - The strategic emphasis is on enhancing operational efficiency and leveraging feedstock acquisitions to support long-term growth objectives [6][15] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in building on the momentum from the second quarter, expecting continued financial improvement in the second half of the year [13][14] - The company anticipates full-year sales growth with EBITDA growth outpacing revenue due to expanding margins and increased operating leverage [13][14] Other Important Information - The company ended the quarter with $68.8 million in liquidity, consisting of $5.7 million in cash and $63.1 million available on its revolving credit facility [19] - The AirSafe backlog stood at $12.9 million, with expectations for increased orders as the company approaches a 2026 compliance deadline [10][14] Q&A Session Summary Question: Can you provide more detail on the types of assets being acquired and the pace of activity? - Management noted a focus on airframes and wide body engines, indicating a strong market niche in these areas, while the narrow body market remains challenging due to competition and maintenance issues [26][28][30] Question: What is the visibility for flight equipment sales in the second half of the year? - Management indicated that while there is a good inventory level, the decision to sell or lease equipment will be evaluated on a case-by-case basis, making it difficult to predict exact sales figures [34][39] Question: Are there any areas of risk regarding the carrying value of assets on the balance sheet? - Management stated that there are currently no anticipated impairments in inventory or overall assets, citing strong opportunities in both passenger and cargo demand [40][42] Question: How is the restructuring of the MRO business progressing? - Management expressed optimism about the completion of MRO facilities and the expected increase in business as they transition to new capabilities, with significant expansion anticipated in the coming months [43][46]

[AerSale Second Quarter 2025 Earnings Release](index=1&type=section&id=AerSale%20Second%20Quarter%202025%20Earnings%20Release) [Second Quarter 2025 Financial Highlights](index=1&type=section&id=Second%20Quarter%202025%20Financial%20Highlights) AerSale's Q2 2025 revenue grew 39.3% to **$107.4 million**, achieving **$8.6 million** GAAP net income and **$18.3 million** Adjusted EBITDA, driven by strong flight equipment sales Q2 2025 Key Financial Metrics (vs. Q2 2024) | Metric | Q2 2025 | Q2 2024 | Change | | :--- | :--- | :--- | :--- | | **Revenue** | $107.4 million | $77.1 million | +39.3% | | **GAAP Net Income (Loss)** | $8.6 million | ($3.6 million) | N/A | | **Adjusted Net Income (Loss)** | $9.4 million | ($2.6 million) | N/A | | **Adjusted EBITDA** | $18.3 million | $3.2 million | +471.9% | - The primary driver for the year-over-year revenue increase was higher flight equipment sales, which rose to **$33.4 million** from **$17.9 million** in the prior-year period[3](index=3&type=chunk) - The company sold eight engines during the quarter, compared to five engines in the same period last year[3](index=3&type=chunk)[6](index=6&type=chunk) - Feedstock acquisitions totaled **$27.1 million**, with an additional **$31.4 million** under contract, supporting an available inventory of **$388.3 million** as of June 30, 2025[6](index=6&type=chunk) [Management Commentary](index=1&type=section&id=Management%20Commentary) CEO Nick Finazzo attributed strong Q2 results, including **$18.3 million** Adjusted EBITDA, to successful flight equipment monetization and core business strength, positioning the company for future market opportunities - The CEO noted that the strategic focus on monetizing flight equipment and expanding service offerings led to a significant improvement in adjusted EBITDA to **$18.3 million** from **$3.2 million** YoY[4](index=4&type=chunk) - Continued strength in core business activities, particularly the commercial demand for Used Serviceable Material (USM) parts, demonstrates the effectiveness of the company's business model[4](index=4&type=chunk) - The company is positioned to capitalize on future market opportunities due to its strong inventory and expanded operational capabilities[4](index=4&type=chunk) [Segment Performance](index=1&type=section&id=Segment%20Performance) Asset Management Solutions revenue grew 82.5% to **$76.3 million** driven by flight equipment sales, while TechOps revenue declined 11.9% to **$31.1 million** due to contract conclusion and facility transition [Asset Management Solutions](index=1&type=section&id=Asset%20Management%20Solutions) Asset Management Solutions revenue surged 82.5% to **$76.3 million**, primarily from flight equipment sales and strong USM demand, with non-flight equipment revenue also growing 79.5% Asset Management Solutions Revenue (Q2 2025 vs Q2 2024) | Metric | Q2 2025 | Q2 2024 | Change | | :--- | :--- | :--- | :--- | | **Total Revenue** | $76.3 million | $41.8 million | +82.5% | | **Revenue (ex-flight equip.)** | $42.9 million | $23.9 million | +79.5% | - Growth drivers included higher flight equipment sales, strong demand for Used Serviceable Material (USM), and a more robust leasing portfolio[4](index=4&type=chunk) - Flight equipment sales in the quarter benefited from two engines that were originally scheduled for delivery in Q1 2025[4](index=4&type=chunk) [TechOps](index=1&type=section&id=TechOps) TechOps revenue decreased 11.9% to **$31.1 million** due to a major contract conclusion and facility transition, partially offset by new contracts and growth in other MRO services TechOps Revenue (Q2 2025 vs Q2 2024) | Metric | Q2 2025 | Q2 2024 | Change | | :--- | :--- | :--- | :--- | | **Revenue** | $31.1 million | $35.3 million | -11.9% | - Key reasons for the revenue decline include the conclusion of a major customer contract and the transition of a facility's primary function from heavy MRO to storage and decommission[5](index=5&type=chunk) - The decline was partially offset by new contracts and higher service revenues from aerostructures, landing gear MROs, and the AerSafe™ product[5](index=5&type=chunk)[8](index=8&type=chunk) [Detailed Financial Performance](index=3&type=section&id=Detailed%20Financial%20Performance) Q2 2025 saw gross margin improve to **32.9%**, SG&A decrease to **$22.8 million**, leading to **$12.5 million** income from operations and **$8.6 million** GAAP net income, with **$68.8 million** liquidity - Gross margin improved to **32.9%** from **28.2%** in the prior year, attributed to product mix, higher overall volume, and cost controls[8](index=8&type=chunk) - SG&A expenses decreased to **$22.8 million** from **$23.6 million** YoY, demonstrating effective cost reduction efforts despite higher revenue[9](index=9&type=chunk) Profitability and Earnings Per Share (Q2 2025 vs Q2 2024) | Metric | Q2 2025 | Q2 2024 | | :--- | :--- | :--- | | **Income (Loss) from Operations** | $12.5 million | ($1.9 million) | | **GAAP Net Income (Loss)** | $8.6 million | ($3.6 million) | | **Adjusted Net Income (Loss)** | $9.4 million | ($2.6 million) | | **Diluted EPS** | $0.18 | ($0.07) | | **Adjusted Diluted EPS** | $0.20 | ($0.05) | - The company ended the quarter with **$68.8 million** of liquidity, comprising **$5.7 million** in cash and **$63.1 million** available on its revolving credit facility[14](index=14&type=chunk) [Financial Statements](index=5&type=section&id=Financial%20Statements) [Condensed Consolidated Statements of Operations](index=5&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) AerSale's Q2 2025 total revenue grew to **$107.4 million**, with gross profit increasing to **$35.3 million**, resulting in **$12.5 million** operating income and **$8.6 million** net income Statement of Operations Summary (Three Months Ended June 30, in thousands) | (in thousands) | 2025 | 2024 | | :--- | :--- | :--- | | **Total revenue** | $107,382 | $77,101 | | **Gross profit** | $35,337 | $21,720 | | **Income (loss) from operations** | $12,514 | ($1,852) | | **Net income (loss)** | $8,575 | ($3,637) | | **Diluted earnings (loss) per share** | $0.18 | ($0.07) | [Condensed Consolidated Balance Sheet](index=6&type=section&id=Condensed%20Consolidated%20Balance%20Sheet) As of June 30, 2025, total assets increased to **$646.7 million** due to inventory, while total liabilities rose to **$230.8 million**, leading to a decrease in stockholders' equity to **$415.9 million** Balance Sheet Summary (in thousands) | Account | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | **Total current assets** | $326,502 | $284,030 | | **Total assets** | $646,671 | $604,723 | | **Total current liabilities** | $84,375 | $74,970 | | **Revolving credit facility** | $114,509 | $39,235 | | **Total liabilities** | $230,759 | $149,103 | | **Total stockholders' equity** | $415,912 | $455,620 | [Condensed Consolidated Statements of Cash Flows](index=7&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) For H1 2025, operating activities used **$25.4 million** cash due to inventory, investing used **$3.8 million**, and financing provided **$30.2 million**, resulting in **$5.7 million** cash at period-end Cash Flow Summary (Six Months Ended June 30, in thousands) | Category | 2025 | 2024 | | :--- | :--- | :--- | | **Net cash used in operating activities** | ($25,436) | ($36,800) | | **Net cash used in investing activities** | ($3,759) | ($9,000) | | **Net cash provided by financing activities** | $30,244 | $44,212 | | **Increase (decrease) in cash** | $1,049 | ($1,588) | | **Cash and cash equivalents, end of period** | $5,747 | $4,285 | [Non-GAAP Financial Measures and Reconciliations](index=3&type=section&id=Non-GAAP%20Financial%20Measures%20and%20Reconciliations) [Explanation of Non-GAAP Measures](index=3&type=section&id=Explanation%20of%20Non-GAAP%20Measures) AerSale uses non-GAAP measures like adjusted EBITDA and net income to provide clearer insights into financial trends by excluding non-recurring items and volatile whole asset sales - The company uses non-GAAP measures like adjusted EBITDA, adjusted net income, and adjusted diluted EPS to provide useful information to management and investors about financial and business trends[17](index=17&type=chunk)[19](index=19&type=chunk) - These measures exclude non-recurring or unusual items such as mark-to-market adjustments for warrants and share-based compensation[17](index=17&type=chunk) - Revenue excluding flight equipment sales is presented to remove the impact of volatility from whole asset sales, allowing for a more meaningful comparison of core revenue[20](index=20&type=chunk) [Reconciliation of GAAP to Non-GAAP Measures](index=8&type=section&id=Reconciliation%20of%20GAAP%20to%20Non-GAAP%20Measures) Q2 2025 GAAP net income of **$8.6 million** was reconciled to **$9.4 million** adjusted net income and **$18.3 million** adjusted EBITDA by accounting for share-based compensation and facility relocation costs Q2 2025 Reconciliation Summary (in thousands) | Metric | Amount | | :--- | :--- | | **Reported net income (GAAP)** | **$8,575** | | Share-based compensation | $668 | | Facility relocation costs | $409 | | Other adjustments (net) | ($102) | | **Adjusted net income (Non-GAAP)** | **$9,437** | | Interest, Taxes, D&A, etc. | $8,834 | | **Adjusted EBITDA (Non-GAAP)** | **$18,271** | Adjusted EPS Reconciliation (Q2 2025) | Metric | Per Share Amount | | :--- | :--- | | **Reported diluted EPS (GAAP)** | **$0.18** | | Adjustments (net) | $0.02 | | **Adjusted diluted EPS (Non-GAAP)** | **$0.20** | [Other Information](index=3&type=section&id=Other%20Information) [Conference Call Information](index=3&type=section&id=Conference%20Call%20Information) AerSale will host a conference call and live webcast on August 6, 2025, at 4:30 pm ET to discuss Q2 results, with replay options available - A conference call to discuss the results is scheduled for August 6, 2025, at 4:30 pm Eastern Time[15](index=15&type=chunk) - A live webcast will be available on the investor relations section of the company's website[15](index=15&type=chunk) - A telephonic replay will be available until August 20, 2025[16](index=16&type=chunk) [Forward Looking Statements](index=9&type=section&id=Forward%20Looking%20Statements) This report contains forward-looking statements on financial performance and market demand, subject to risks and uncertainties, with readers advised to consult SEC filings for detailed risk factors - The report includes forward-looking statements concerning financial performance, demand for USM and MRO services, and market positioning[30](index=30&type=chunk) - These statements are subject to risks and uncertainties, and actual results may differ materially from expectations[30](index=30&type=chunk) - Readers are advised to review the Risk Factors section in the company's Form 10-K and other SEC filings[30](index=30&type=chunk) [About AerSale](index=9&type=section&id=About%20AerSale) AerSale provides integrated aftermarket services for large commercial aircraft, including MRO, sales, leasing, USM, and proprietary 'Engineered Solutions' like AerSafe™, to optimize aircraft operations and monetization - AerSale serves airlines operating large jets from Boeing, Airbus, and McDonnell Douglas[32](index=32&type=chunk) - The company's core offerings include MRO services, aircraft and engine sales/leasing, and USM sales[32](index=32&type=chunk) - AerSale also develops its own 'Engineered Solutions' to enhance aircraft performance and economics, such as AerSafe™, AerTrak™, and AerAware™[32](index=32&type=chunk)

Core Viewpoint - Wall Street anticipates a year-over-year increase in earnings for AerSale Corporation (ASLE) due to higher revenues, with a focus on how actual results compare to estimates impacting stock price [1][2]. Earnings Expectations - AerSale is expected to report quarterly earnings of $0.05 per share, reflecting a year-over-year increase of +200% [3]. - Revenues are projected to be $82.93 million, which is a 7.6% increase from the same quarter last year [3]. Estimate Revisions - The consensus EPS estimate has been revised down by 53.33% over the last 30 days, indicating a reassessment by analysts [4]. - The Most Accurate Estimate aligns with the Zacks Consensus Estimate, resulting in an Earnings ESP of 0% [12]. Earnings Surprise Prediction - A positive Earnings ESP is a strong predictor of an earnings beat, especially when combined with a Zacks Rank of 1, 2, or 3 [10]. - AerSale currently holds a Zacks Rank of 5, making it challenging to predict an earnings beat [12]. Historical Performance - In the last reported quarter, AerSale was expected to post earnings of $0.13 per share but instead reported a loss of -$0.05, resulting in a surprise of -138.46% [13]. - Over the past four quarters, the company has only beaten consensus EPS estimates once [14]. Industry Context - BWX Technologies (BWXT), another player in the Aerospace - Defense Equipment industry, is expected to report earnings of $0.79 per share, indicating a year-over-year change of -3.7% [18]. - BWX's revenues are expected to be $715.86 million, up 5.1% from the previous year, with a slight increase in the consensus EPS estimate [19].

AirSale Conference Call Summary Company Overview - **Company**: AirSale - **Industry**: Aircraft asset management and maintenance, repair, and overhaul (MRO) Key Business Segments - **Asset Management**: Focuses on servicing large commercial aircraft, specifically Boeing and Airbus platforms. The company acquires midlife equipment (10-12 years old) and manages it through leasing, selling, or breaking down into components for their used serviceable material (USM) business [3][4] - **Tech Operations**: Includes MRO facilities and engineered solutions to improve aircraft operations, with three on-airport and three off-airport MROs in the U.S. [4] Financial Outlook - **2024 Expectations**: AirSale anticipates exceeding 2024 results due to a strong inventory position and growth in leasing, particularly in engine leasing [11][12] - **Revenue Growth**: The company expects revenue to ramp up from new expansion projects and increased capacity utilization in MRO facilities [13][14] Market Conditions - **Tariff Impact**: AirSale has managed to mitigate tariff impacts through strategies like using bonded warehouses and passing costs to customers. Currently, there is no significant impact from tariffs or supply chain issues [7][8] - **Used Serviceable Material (USM)**: Demand for USM has increased, especially post-COVID, as operators seek cost-effective alternatives to OEM parts [63][64] Asset Management Strategy - **Acquisition and Monetization**: The company employs proprietary models to assess asset value and determine the best monetization strategy, targeting a 25% internal rate of return [22][54] - **Market Dynamics**: The market for used aircraft and engines remains tight, with operators hesitant to retire assets until new OEM production stabilizes [19][24] MRO Capacity and Demand - **MRO Demand**: There is strong demand for MRO services, particularly from ultra-low-cost carriers and cargo operators. AirSale is expanding its MRO capabilities to meet this demand [39][42] - **Labor and Parts Availability**: While there are challenges in sourcing parts and labor, improvements have been noted, particularly in airframe repairs [43][44] Capital Deployment - **Share Buybacks**: AirSale has conducted stock buybacks to alleviate stock pressure and believes its shares are undervalued [46][47] - **M&A Strategy**: The company is cautious about M&A, preferring organic growth but remains open to opportunities that align with its business model [48][49] Competitive Advantage - **Multidimensional Extraction Process**: AirSale's ability to extract value from assets through leasing, selling, or parting out gives it a competitive edge in the market [50][52] Future Opportunities - **Freighter Conversion Market**: Demand for converted freighter aircraft is increasing, with AirSale actively marketing six converted 757s [69][70] - **Military Market**: Although currently a small part of the business, there are opportunities to grow in the military sector, particularly in MRO services [72][74] Conclusion - AirSale is well-positioned for growth in 2024, with strong inventory management, expanding MRO capabilities, and a strategic approach to capital deployment. The company is navigating market challenges effectively while exploring new opportunities in both commercial and military sectors.

Core Insights - The aviation industry is experiencing growth due to increased air traffic and supply chain disruptions, benefiting companies like AerSale Corporation (ASLE) and Air Lease Corp. (AL) [1][2] - ASLE specializes in aftermarket services and parts, while AL focuses on leasing new aircraft, both of which are in demand due to current market conditions [2][3] Summary of AerSale Corporation (ASLE) - Recent Achievements: ASLE's Q1 2025 revenues for Used Serviceable Material (USM) and engine leasing increased by 44.1% and 143.4% year over year, indicating strong demand [4] - Strategic Acquisition: In January 2025, ASLE acquired a parts portfolio from Sanad Group, enhancing its inventory for popular aircraft models [5] - Financial Stability: As of March 31, 2025, ASLE had $11 million in cash, $1 million in current debt, and $4 million in long-term debt, reflecting a strong solvency position [6] - Share Repurchase: In March 2025, ASLE signed an agreement to repurchase $45 million in shares from Leonard Green & Partners, L.P. [7] Summary of Air Lease Corp. (AL) - Recent Achievements: AL reported an 11.3% year-over-year revenue increase and a net income surge of 274.5% in Q1 2025, with a fleet net book value of $28.6 billion [8][9] - Order Pipeline: AL has contractual commitments for 260 new aircraft from Airbus and Boeing, valued at $16.6 billion, enhancing its long-term revenue prospects [9] - Financial Stability: As of March 31, 2025, AL's cash and cash equivalents were $0.46 billion, with long-term debt at $19.89 billion, indicating a solid solvency position for future investments [10] Comparative Analysis - Stock Performance: ASLE has underperformed with a 12.5% decline over the past three months, while AL has increased by 26% [16] - Valuation Metrics: ASLE trades at a forward earnings multiple of 10.68X, higher than AL's 9.06X, suggesting a less attractive valuation for ASLE [17] - Return on Equity: AL demonstrates a better Return on Equity (ROE) compared to ASLE, indicating more efficient profit generation [21] Final Insights - Both ASLE and AL are positioned to benefit from long-term aviation sector tailwinds, but their near-term prospects differ significantly [22] - AL's consistent growth, strong order backlog, and higher ROE make it a more attractive investment compared to ASLE, which faces declining EPS estimates and a premium valuation [23][24] - AL holds a Zacks Rank 2 (Buy), while ASLE has a Zacks Rank 5 (Strong Sell), indicating a preference for AL among investors [25]

Core Insights - AerSale Corporation (NASDAQ: ASLE) presents an intriguing value case for investors, with the stock having been owned by the author at one point, indicating potential attractiveness despite not appearing strong overall [1]. Company Analysis - The company has been analyzed in the context of value investing, which has been a focus for the author since 2011, suggesting a long-term perspective on investment strategies [1]. Market Context - The author has a background in investment, having obtained Series 7 and 63 licenses in 1999, and has witnessed significant market events such as the dot-com bubble, which may provide valuable insights into current market conditions [1].