Financial Data and Key Metrics Changes - The company reported adjusted EBITDA of $297.4 million for Q3 2025, a 28% increase from $232 million in Q3 2024, and consistent with Q2 2025 results after excluding one-time benefits [17][18] - Adjusted EBITDA from the aerospace product segment was $180.4 million, with a margin of 35%, up 77% year-over-year [17][18] - Year-to-date, the company generated $638 million in positive free cash flow, on track to meet the revised goal of $750 million for 2025 [12][15] Business Line Data and Key Metrics Changes - Aerospace products segment delivered $180 million in adjusted EBITDA, reflecting strong global demand for pre-built engines and modules [7][18] - The leasing segment posted approximately $134 million in adjusted EBITDA, with pure leasing component at $122 million for Q3 [19] - The company refurbished 207 CFM56 modules in Q3, a 13% increase from the previous quarter, and is on track to produce 750 modules in 2025 [8][11] Market Data and Key Metrics Changes - The company anticipates a total business segment EBITDA of $1.525 billion in 2026, up from the original estimate of $1.4 billion [16] - The aerospace products segment is expected to achieve EBITDA of $1 billion in 2026, significantly higher than the $650 to $700 million projected for 2025 [15][16] Company Strategy and Development Direction - The company successfully closed on the final round of equity commitments for its Strategic Capital Initiative (SCI), increasing total equity capital to $2 billion, with a target to deploy over $6 billion in capital through the partnership [4][5] - The company aims to achieve a 25% market share in the engine aftermarket maintenance sector in the coming years [8] - The acquisition of ATOPS for approximately $15 million is expected to enhance production capacity and operational efficiency [10][11] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the long-term growth trajectory, emphasizing the strong demand for engine exchanges and the benefits of the Maintenance Repair Exchange (MRE) model [6][34] - The company expects to see margins grow to over 40% in the aerospace products segment next year, driven by optimized parts procurement and repair strategies [12][15] - Management highlighted the importance of maintaining a disciplined approach to capital allocation, focusing on high-impact growth initiatives [14][15] Other Important Information - The company announced an increase in the quarterly dividend from $0.30 to $0.35 per share, marking the 42nd dividend as a public company [14] - The company is actively pursuing investments in high-impact growth initiatives, with a focus on expanding margins and differentiating product offerings [13][14] Q&A Session Summary Question: Financial implications of the upsizing of SCI - Management indicated that the upsizing will accelerate growth under SCI, potentially increasing its contribution to aerospace products volume from 20% to 25% [24][25] Question: Details on the ATOPS acquisition - The ATOPS acquisition is aimed at increasing production capacity ahead of needs, with the main facility in Florida expected to process 150 modules [26][27] Question: Availability of aircraft engine assets - Management noted that there is a significant supply of older aircraft being sold by lessors, which presents opportunities for acquisition [31][32] Question: Treatment of SCI in financials - The 19% equity portion of SCI will be reflected in the equity income line and will contribute to adjusted EBITDA in the leasing segment [35][36] Question: Insights on the V2500 program - The company is halfway through its commitment to the V2500 program, with strong demand expected to continue [80]

FTAI AVIATION Q3 2025 Earnings Supplement OCTOBER 2025 Disclaimers IN GENERAL. This disclaimer applies to this document and the verbal or written comments of any person presenting it. This document, taken together with any such verbal or written comments, is referred to herein as the "Presentation." The information contained on, or accessible through, any websites included in this Presentation is not incorporated by reference into, and should not be considered a part of, this Presentation. FORWARD-LOOKING S ...

Core Insights - FTAI Aviation reported quarterly earnings of $1.1 per share, missing the Zacks Consensus Estimate of $1.19 per share, but showing an increase from $0.76 per share a year ago, resulting in an earnings surprise of -7.56% [1] - The company posted revenues of $667.06 million for the quarter ended September 2025, surpassing the Zacks Consensus Estimate by 0.69% and increasing from $465.79 million year-over-year [2] - FTAI Aviation shares have increased approximately 26.3% year-to-date, outperforming the S&P 500's gain of 15.5% [3] Earnings Outlook - The current consensus EPS estimate for the upcoming quarter is $1.30 on revenues of $705.33 million, and for the current fiscal year, it is $4.93 on revenues of $2.55 billion [7] - The estimate revisions trend for FTAI Aviation was mixed ahead of the earnings release, resulting in a Zacks Rank 3 (Hold) for the stock, indicating expected performance in line with the market [6] Industry Context - The Aerospace - Defense Equipment industry, to which FTAI Aviation belongs, is currently ranked in the bottom 43% of over 250 Zacks industries, suggesting potential challenges for stock performance [8] - Another company in the same industry, Woodward, is expected to report quarterly earnings of $1.83 per share, reflecting a year-over-year increase of 29.8% [9]

Core Insights - FTAI Aviation Ltd. has successfully completed fundraising for its inaugural Strategic Capital Initiative vehicle, FTAI SCI I, reaching a hard cap of $2.0 billion in equity commitments, an increase from the original target of $1.5 billion [1][2] - FTAI SCI I is positioned to be the largest aircraft leasing vehicle focused on acquiring mid-life, current generation aircraft, with a total purchasing power exceeding $6 billion, including current and future debt financing [1][2] Company Strategy - The company made a strategic decision to launch an asset management business aimed at acquiring on-lease, mid-life aircraft, which has garnered support from a diverse group of institutional investors [2] - FTAI Aviation is recognized as a leader in aftermarket engine maintenance for CFM56 and V2500 engines and aims to become one of the largest lessors of these aircraft globally [2] Market Opportunity - The mid-life, current generation aircraft market is valued at approximately $300 billion and is in need of a well-capitalized buyer to support the engine requirements of airlines as they extend the operational life of their fleets [2] - FTAI's global engine maintenance capabilities will allow the company to leverage its aircraft investment expertise and operational strengths to provide attractive risk-adjusted returns for investors [2] Investment Progress - FTAI SCI I has already invested $1.4 billion in acquiring 101 aircraft and has an additional $2.1 billion of aircraft under contract, totaling 190 aircraft either closed or under letter of intent [2] - Full deployment of the vehicle is anticipated by the end of the first half of 2026 [2] Legal and Financial Advisory - Kirkland & Ellis LLP is serving as legal counsel for the formation of FTAI's Strategic Capital Initiative, while Lincoln International LLC is acting as financial advisor [3] Company Overview - FTAI Aviation Ltd. specializes in aftermarket power for CFM56 and V2500 engines, providing cost savings and flexibility to airlines through the lease, sale, and exchange of refurbished engines and modules [4] - The company also manages and co-invests in on-lease narrowbody aircraft in partnership with institutional investors through its Strategic Capital Initiative [4]

Core Viewpoint - FTAI Aviation Ltd. (NASDAQ:FTAI) is highlighted as a significant stock in the context of AI trade momentum, with mixed sentiments regarding its investment potential due to market perceptions and operational dynamics [1][2]. Group 1: Company Overview - FTAI Aviation Ltd. operates in the aviation equipment sector, focusing on aviation leasing and aerospace products [1]. - The company is undergoing a qualitative transformation, which may not be fully recognized by the market [2]. Group 2: Market Sentiment and Analyst Opinions - Stephen Weiss, Chief Investment Officer at Short Hills Capital Partners, expressed a cautious view on FTAI, noting that while it is in the right sector, the stock chart appears risky [1]. - Crossroads Capital pointed out that despite analysts projecting a 42% revenue growth for Q2, the market undervalues FTAI, treating the recovery in commercial aviation as uncertain [2]. Group 3: Investment Considerations - There is a belief that while FTAI has potential, other AI stocks may offer better returns with lower risk, suggesting a competitive landscape for investment opportunities [3].

Financial Overview - The company reported a net income attributable to shareholders of $114.0 million for Q3 2025, representing a 46% increase compared to Q3 2024 [8] - Basic earnings per ordinary share were $1.11, while diluted earnings per share were $1.10 [2] - Adjusted EBITDA for the quarter was $297.4 million, reflecting a 65% increase from the previous year [8] Dividends - The Board declared a cash dividend of $0.35 per share for Q3 2025, up from $0.30 in the previous quarter [3] - Cash dividends for Series C and Series D Preferred Shares were declared at $0.52 and $0.59 per share, respectively [4] Business Highlights - The company experienced strong growth in the Aerospace Products segment, leading to an increase in guidance for 2026 Adjusted EBITDA from $1.4 billion to $1.525 billion [6][8] - The Strategic Capital Initiative's inaugural vehicle raised $2.0 billion in equity commitments, allowing the company to target over $6 billion in aircraft purchases [6][8] - A definitive agreement was announced to acquire ATOPS MRE to expand MRE operations in Miami [8] Revenue Breakdown - Total revenues for Q3 2025 were $667.1 million, compared to $465.8 million in Q3 2024 [18] - Aerospace products revenue was $459.2 million, a significant increase from $303.5 million in the same quarter last year [18] - MRE contract revenue was $58.7 million, with lease income at $55.1 million [18] Balance Sheet Highlights - As of September 30, 2025, total assets were $4.24 billion, up from $4.04 billion at the end of 2024 [22] - Cash and cash equivalents increased to $509.9 million from $115.1 million [22] - Total liabilities stood at $3.99 billion, slightly up from $3.96 billion at the end of 2024 [22]

Core Insights - FTAI Aviation Ltd. focuses on owning and acquiring aviation and offshore energy equipment, operating through two segments: Aviation Leasing and Aerospace Products [1] - The company manages 363 aviation assets, including 96 commercial aircraft and 267 engines, as of the end of 2023 [1] - The consensus price target for FTAI's stock has generally increased over the past year, with a recent average of $190, indicating a positive outlook from analysts [2][5] Segment Analysis - The Aviation Leasing segment is responsible for managing aviation assets, which are leased and sold to customers [1] - The Aerospace Products segment develops, manufactures, repairs, and sells aircraft engines and aftermarket components [1] Financial Performance - FTAI's innovative SCI fund model has significantly increased market share and generated recurring repair revenue with minimal capital investment [4][5] - Recent quarterly results have shown improving gross margins, now above 40%, and the company has raised its guidance [4] - Despite strong fundamentals and positive quarterly results, FTAI's shares are considered undervalued due to concerns from short-sellers [4][5] Analyst Outlook - Analysts, including Andre Madrid from BTIG, have set a price target of $190 for FTAI, indicating confidence in the company's performance [3] - Zacks Earnings ESP suggests that FTAI is a potential outperformer in quarterly earnings [3]

Core Insights - The current AI boom is perceived as fundamentally different from the dotcom bubble, with strong demand and capital expenditures being supported by companies with robust free cash flows [2][3] Group 1: AI Market Dynamics - Major technology companies are expected to report earnings, and there is a prevailing sentiment on Wall Street that fears of an AI bubble are unfounded [1] - Companies like Meta, Amazon, and Google are driving capital expenditures through their strong free cash flows, indicating sustained demand for AI infrastructure [2][3] Group 2: Company-Specific Insights - **Mp Materials Corp (NYSE:MP)**: The company has seen a 184% increase in stock price over the past six months, driven by rising demand for rare earths and a significant deal with the US Department of Defense, positioning it as a critical player in the supply chain [9][10] - **FTAI Aviation Ltd (NASDAQ:FTAI)**: Despite being in a promising sector, the stock faces market skepticism regarding the recovery of commercial aviation. Analysts expect a 42% revenue growth for Q2, suggesting potential undervaluation [10][11][12] - **AutoZone Inc (NYSE:AZO)**: The company reported a 70 basis point increase in same-store sales and opened 304 new stores, benefiting from strong growth in both DIY and professional customer segments [13][14] - **Applied Materials Inc (NASDAQ:AMAT)**: The company is positioned to benefit from increased demand for semiconductor manufacturing, controlling a 21% market share in wafer fabrication equipment. Analysts expect a re-rating of the stock based on its growth potential [16][18][19] - **Micron Technology Inc (NASDAQ:MU)**: The company has experienced a 42% stock price increase due to strong sales growth in high-bandwidth memory, essential for AI computing. It trades at only 11 times forward earnings, indicating significant upside potential compared to competitors like Nvidia [20][21]

Group 1 - The stock market has reached record highs following a favorable Consumer Price Index (CPI) report, indicating positive economic conditions [1] - FTAI Aviation is highlighted as a smaller player in the aviation sector, showing strong growth potential with an impressive IBD Composite Rating of 97 out of 99 [1] - Other notable stocks include Walmart, which is in the buy zone, and a profitable biotech company, both of which are actionable in the current market environment [2] Group 2 - Dow Jones futures have risen, driven by strong performance from Nvidia and Taiwan Semiconductor Manufacturing Company (TSMC), with Google and Tesla also nearing buy points [4] - Aerospace defense stocks are gaining attention, with several newcomers added to the best stock lists, indicating a growing interest in this sector [4] - The "Magnificent 7" stocks, including Alphabet and Microsoft, are leading new additions to the best stock lists, reflecting their strong market positions [4]

Core Thesis - FTAI Aviation Ltd. is positioned as a specialized industrial compounder in the aerospace aftermarket, trading at a reasonable valuation despite its unique market position [2] Business Model - The company operates a vertically integrated aircraft maintenance, repair, and exchange (MRE) platform with two main segments: Aerospace Products and Leasing [2] - The Aerospace Products segment benefits from ownership of over 600 engines and strategic cost advantages, focusing on the maintenance market for CFM56 and V2500 engines [2] Competitive Advantages - FTAI has an exclusive partnership with Chromalloy, allowing it to receive FAA-approved PMA hot-section parts at cost, saving up to $2 million per shop visit [3] - The company currently enjoys margins near 35%, with potential expansion to 50% as more PMA parts are approved, indicating exceptional economic prospects [3] Growth Potential - FTAI's MRE model is capital-efficient and scalable, targeting 750 module exchanges in 2025 and $600 million in segment EBITDA, with long-term potential exceeding $1 million EBITDA per visit [4] - The Strategic Capital Initiative (SCI) enables asset-light expansion, supporting recurring MRE demand and fee income [4] Financial Health - The company maintains modest leverage at 2.2x and is backed by CEO Joseph Adams, who has a significant personal stake in the company [5] - Despite a short report questioning accounting practices, multiple banks and an internal audit found the claims unfounded, supporting the company's financial integrity [5] Market Outlook - FTAI is expected to achieve 20–30% revenue growth, with expanding margins and an EV/EBITDA of 16x, indicating a potential upside of 16–97% [5] - The long-term growth levers remain intact, with updated financials and margin expansion potential highlighted by recent analyses [6]