Financial Data and Key Metrics Changes - The company reported adjusted EBITDA of $347.8 million in Q2 2025, up 30% from $268.6 million in Q1 2025 and up 63% from $213.9 million in Q2 2024 [19] - The overall estimated EBITDA for 2025 has been raised from $1.1 billion to a new range of $1.25 billion to $1.3 billion [14] Business Line Data and Key Metrics Changes - Aerospace products generated $164.9 million in EBITDA with a margin of 34%, up 26% from $130.9 million in Q1 2025 and up 81% from $91.2 million in Q2 2024 [21] - The leasing segment posted approximately $199 million of EBITDA, with the pure leasing component at $169 million, an increase from $152 million in Q1 2025 [20] Market Data and Key Metrics Changes - The company estimates a market share of 9%, approximately double from the previous year, with a long-term goal of reaching 25% [7] - The demand for prebuilt engines and modules is growing globally, providing a cost-effective alternative to traditional maintenance [7] Company Strategy and Development Direction - The company is focusing on an asset-light business model, with plans to manage debt and achieve a strong BB rating by the end of the year [13] - The acquisition of Pacific Aerodynamic is expected to enhance operational efficiencies and further differentiate the company's offerings [11][12] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the long-term sustainability of the aerospace products market, driven by the aging of current aircraft and engines [16] - The company anticipates significant growth in free cash flow in the coming years, with an adjusted free cash flow target increased from $650 million to $750 million for 2025 [13] Other Important Information - The company has executed a sizable engine exchange program with a major U.S. airline, which is expected to drive repeat business and higher volumes [8] - The company is actively reviewing other M&A opportunities in the global market [12] Q&A Session Summary Question: What are the margin improvements expected for Aerospace products? - Management indicated that margin improvements are expected to be multifaceted, with potential increases of 5 to 10 percentage points in 2026 due to various initiatives [26][27] Question: Can you elaborate on the Pacific Aerodynamic acquisition? - The acquisition is expected to provide significant savings and enhance the company's repair capabilities, with a payback period of about one year [29][30] Question: What is the customer reception for the CFM56 modules? - Customer reception has been positive, with airlines recognizing the benefits of outsourcing engine maintenance to avoid cost overruns [41][42] Question: How does the company view the Chinese market opportunity? - The company sees significant growth potential in the Chinese market, particularly for engine exchanges, due to the aging fleet and limited local capacity for shop visits [112][114] Question: What is the outlook for the Strategic Capital Initiative (SCI)? - The company is optimistic about the SCI's performance and plans to decide on SCI 2 in the near future, with a strong pipeline of activity [68][69]

Financial Performance - FTAI Aviation reported Q2 2025 Revenue of $676 million[10] - Net Income for Q2 2025 was $162 million[10] - Adjusted EBITDA for Q2 2025 reached $348 million[10] - The company generated $370 million in Adjusted Free Cash Flow in 1H 2025[10] Strategic Capital Initiative (SCI) - FTAI invested $109 million in 1H 2025 as a 20% minority equity interest in the 2025 Partnership[42] - SCI is targeting final closing by Q4 2025 and aims to deploy $4 billion in capital[42] - MRE Contract YTD Revenue from SCI reached $170 million[42] Aerospace Products - Q2 2025 Aerospace Products Revenue was $490 million, equivalent to an annualized ~9% industry market share[16] - Module production rose 33% to 184 CFM56 modules in Q2 2025[16] - Aerospace Products Adjusted EBITDA was $165 million in Q2 2025 with a 34% margin[11,27] Aviation Leasing - Aviation Leasing generated $199.3 million in Adjusted EBITDA for Q2 2025[11,64] - The company sold 45 aircraft to SCI from FTAI's balance sheet for approximately $475 million[44]

[Financial & Business Highlights](index=1&type=section&id=Financial%20%26%20Business%20Highlights) FTAI Aviation reported strong Q2 2025 results with an 80% sequential increase in Net Income and significant growth in Aerospace Products Adjusted EBITDA Selected Financial Results | Selected Financial Results | Q2'25 (in thousands) | | :--- | :--- | | Net Income Attributable to Shareholders | $161,689 | | Basic Earnings per Ordinary Share | $1.58 | | Diluted Earnings per Ordinary Share | $1.57 | | Adjusted EBITDA | $347,805 | - Net Income Attributable to Shareholders of **$161.7 million** represents an **80% increase** compared to Q1 2025[5](index=5&type=chunk) - The company ended the quarter with a strong liquidity position, holding **$302 million** in cash and having a fully undrawn **$400 million** corporate revolving credit facility[5](index=5&type=chunk) - Production of CFM56 Modules ramped up significantly to **184 units** in Q2 2025, a **33% increase** versus the prior quarter[5](index=5&type=chunk) - FTAI expanded its repair capabilities by acquiring **100%** of Pacific Aerodynamic, a specialist in CFM56 compressor blade and vane repairs[5](index=5&type=chunk) [Dividend Declaration](index=1&type=section&id=Dividend%20Declaration) The Board declared quarterly cash dividends for ordinary, Series C, and Series D preferred shares for Q2 2025 Dividend Details | Share Class | Dividend per Share | Record Date | Payable Date | | :--- | :--- | :--- | :--- | | Ordinary Shares | $0.30 | Aug 12, 2025 | Aug 19, 2025 | | Series C Preferred | $0.51563 | Aug 8, 2025 | Aug 15, 2025 | | Series D Preferred | $0.59375 | Aug 8, 2025 | Aug 15, 2025 | [Management Commentary & Business Update](index=2&type=section&id=Management%20Commentary%20%26%20Business%20Update) Management highlighted strong Aerospace Products segment performance and progress on the SCI Partnership's capital deployment - The Aerospace Products segment's Adjusted EBITDA grew **81%** year-over-year in Q2 2025[6](index=6&type=chunk) - Annualized market share increased to approximately **9%**, up from **5%** in the previous year, with a long-term goal of **25%**[6](index=6&type=chunk) - The SCI Partnership is on track to deploy **$4 billion** of capital in 2025, with **145 aircraft** now owned or under Letter of Intent (LOI) out of a total target of **250**[6](index=6&type=chunk) [Financial Statements](index=4&type=section&id=Financial%20Statements) Unaudited financial statements for Q2 2025 show a significant turnaround in profitability and a strengthened cash position [Consolidated Statements of Operations](index=4&type=section&id=Consolidated%20Statements%20of%20Operations) Q2 2025 total revenues increased to $676.2 million, resulting in a net income of $161.7 million, a significant improvement from Q2 2024's net loss | (in thousands, except per share data) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | | :--- | :--- | :--- | | Aerospace products revenue | $420,686 | $245,200 | | Total revenues | $676,237 | $443,594 | | Net income (loss) attributable to shareholders | $161,689 | $(228,205) | | Diluted Earnings (loss) per share | $1.57 | $(2.26) | [Consolidated Balance Sheets](index=5&type=section&id=Consolidated%20Balance%20Sheets) As of June 30, 2025, total assets were $4.10 billion, with cash and cash equivalents increasing to $301.9 million and shareholders' equity rising to $164.9 million | (in thousands) | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Cash and cash equivalents | $301,911 | $115,116 | | Total current assets | $1,759,385 | $1,226,018 | | Total assets | $4,101,075 | $4,037,952 | | Total liabilities | $3,936,131 | $3,956,584 | | Shareholders' equity | $164,944 | $81,368 | [Key Performance Measures (Non-GAAP)](](index=6&type=section&id=Key%20Performance%20Measures%20%28Non-GAAP%29) Consolidated Adjusted EBITDA significantly increased to $347.8 million in Q2 2025, driven by the Aerospace Products segment, with positive Adjusted Free Cash Flow [Adjusted EBITDA Reconciliation](index=6&type=section&id=Adjusted%20EBITDA%20Reconciliation) Q2 2025 Adjusted EBITDA was $347.8 million, a 62.6% year-over-year increase from $213.9 million in Q2 2024 | (in thousands) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | | :--- | :--- | :--- | | Net income (loss) attributable to shareholders | $161,689 | $(228,205) | | **Adjusted EBITDA (non-GAAP)** | **$347,805** | **$213,904** | [Aerospace Products Segment Adjusted EBITDA](index=8&type=section&id=Aerospace%20Products%20Segment%20Adjusted%20EBITDA) Aerospace Products segment Adjusted EBITDA increased by 80.7% to $164.9 million in Q2 2025, up from $91.2 million in Q2 2024 | (in thousands) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | | :--- | :--- | :--- | | Net income attributable to shareholders | $133,582 | $84,875 | | **Adjusted EBITDA (non-GAAP)** | **$164,864** | **$91,240** | [Adjusted Free Cash Flow](index=8&type=section&id=Adjusted%20Free%20Cash%20Flow) Adjusted Free Cash Flow for Q2 2025 was positive at $423.5 million, driven by investing activities and a joint venture adjustment - Adjusted Free Cash Flow for Q2 2025 was comprised of **$(110.3) million** in net cash used in operating activities, **$523.8 million** in net cash provided by investing activities, and a **$10.0 million** adjustment for the QuickTurn Europe joint venture investment[27](index=27&type=chunk) [Other Information](index=2&type=section&id=Other%20Information) This section provides investor details, including conference call information, company overview, and forward-looking statement disclaimers [Conference Call Information](index=2&type=section&id=Conference%20Call%20Information) A conference call to discuss Q2 2025 results is scheduled for July 30, 2025, with webcast and replay available - A conference call is scheduled for Wednesday, July 30, 2025, at 8:00 A.M. Eastern Time. A webcast will be available on the company's website, with a replay available through August 6, 2025[8](index=8&type=chunk)[9](index=9&type=chunk) [About FTAI Aviation Ltd.](index=2&type=section&id=About%20FTAI%20Aviation%20Ltd.) FTAI Aviation Ltd. specializes in owning and maintaining commercial jet engines, focusing on CFM56 and V2500 models, offering cost-saving solutions to customers - FTAI's core business involves owning and maintaining commercial jet engines, focusing on CFM56 and V2500 models, and providing cost-saving solutions to its customer base[11](index=11&type=chunk) [Forward-Looking Statements](index=3&type=section&id=Forward-Looking%20Statements) The report includes cautionary forward-looking statements regarding future goals, which are subject to risks and uncertainties that may cause actual results to differ - The report contains forward-looking statements concerning goals like achieving a **25%** market share and the SCI Partnership's capital deployment, which are subject to risks and uncertainties[12](index=12&type=chunk)

Core Viewpoint - FTAI Aviation reported quarterly earnings of $1.57 per share, exceeding the Zacks Consensus Estimate of $1.33 per share, and showing significant growth from $0.26 per share a year ago, indicating a strong earnings surprise of +18.05% [1] Financial Performance - The company posted revenues of $676.24 million for the quarter ended June 2025, which was 10.4% below the Zacks Consensus Estimate, compared to $443.59 million in the same quarter last year [2] - Over the last four quarters, FTAI Aviation has surpassed consensus EPS estimates three times and topped consensus revenue estimates two times [2] Stock Performance - FTAI Aviation shares have declined approximately 20.6% since the beginning of the year, contrasting with the S&P 500's gain of 8.6% [3] - The current Zacks Rank for FTAI Aviation is 5 (Strong Sell), indicating expectations of underperformance in the near future [6] Earnings Outlook - The consensus EPS estimate for the upcoming quarter is $1.24 on revenues of $593.54 million, and for the current fiscal year, it is $4.97 on revenues of $2.49 billion [7] - The trend of estimate revisions for FTAI Aviation was unfavorable prior to the earnings release, which may impact future stock movements [5][6] Industry Context - The Aerospace - Defense Equipment industry, to which FTAI Aviation belongs, is currently ranked in the bottom 38% of over 250 Zacks industries, suggesting potential challenges for stock performance [8]

Financial Overview - The company reported a net income attributable to shareholders of $161.7 million for Q2 2025, with basic earnings per share of $1.58 and diluted earnings per share of $1.57, representing an 80% increase compared to Q1 2025 [2][9] - Adjusted EBITDA for the quarter was $347.8 million, reflecting a 26% increase from Q1 2025 [2][9] Dividends - The Board declared a cash dividend of $0.30 per ordinary share for the quarter ended June 30, 2025, payable on August 19, 2025 [3] - Cash dividends for Series C and Series D Preferred Shares were declared at $0.51563 and $0.59375 per share, respectively, payable on August 15, 2025 [4] Business Highlights - The company generated over $400 million in positive Adjusted Free Cash Flow and ended the quarter with $302 million in cash and $400 million fully undrawn from its corporate revolving credit facility [6] - The Aerospace Products segment experienced 81% year-over-year growth in Adjusted EBITDA in Q2 2025, increasing its market share to approximately 9% from 5% the previous year [6] - The SCI Partnership is on track to deploy $4 billion of capital in 2025, with 145 aircraft owned or under letter of intent, compared to a target of 250 [6] Revenue Breakdown - Total revenues for Q2 2025 were $676.2 million, up from $443.6 million in Q2 2024 [17] - Aerospace products revenue was $420.7 million, while MRE Contract revenue was $69.6 million [17] Cash Flow - Adjusted Free Cash Flow for the three months ended June 30, 2025, was comprised of net cash used in operating activities of $(110.3) million, net cash provided by investing activities of $523.8 million, and an adjustment for a joint venture investment of $10.0 million [32]

Core Insights - FTAI Aviation Ltd. is expected to report second-quarter 2025 results on July 29, 2025, after market close, with a four-quarter average negative earnings surprise of 9.98% [1] Revenue Performance - The Aviation Leasing Unit is projected to see revenues of $308 million, reflecting a 67% increase year-over-year due to higher engine and aircraft lease revenues supported by an increased number of aircraft and engines on lease along with higher rental rates [2] - The Aerospace Products segment is estimated to generate revenues of $390.3 million, indicating a growth of 59.2% from the previous year, driven by higher sales of commercial jet engines and positive synergies from recent acquisitions [3] Overall Financial Estimates - FTAI's overall second-quarter sales are expected to reach $511.3 million, representing a 15.3% increase from the prior-year quarter, with solid growth expectations across both segments and a decrease in repairs and maintenance expenses benefiting the bottom line [4][9] - The consensus estimate for earnings per share is projected at $1.33, which implies a significant growth of 411.5% compared to the year-ago quarter [5] Earnings Prediction Model - The current model does not predict a definitive earnings beat for FTAI, as it holds a Zacks Rank of 4 (Sell) despite having an Earnings ESP of +2.75% [6][7]

Company Overview - FTAI Aviation is expected to report quarterly earnings of $1.33 per share, reflecting a year-over-year increase of +411.5% [3] - Revenues are anticipated to reach $511.31 million, which is a 15.3% increase from the same quarter last year [3] Earnings Estimates and Revisions - The consensus EPS estimate has been revised 2.76% higher in the last 30 days, indicating a positive reassessment by analysts [4] - FTAI Aviation has an Earnings ESP of +2.75%, suggesting analysts have recently become more optimistic about the company's earnings prospects [12] Earnings Surprise History - In the last reported quarter, FTAI Aviation was expected to post earnings of $0.94 per share but delivered $0.87, resulting in a surprise of -7.45% [13] - Over the past four quarters, the company has beaten consensus EPS estimates two times [14] Comparison with Industry Peers - Woodward (WWD), another company in the Aerospace - Defense Equipment industry, is expected to report earnings of $1.62 per share, indicating a year-over-year change of -0.6% [18] - Woodward's revenues are projected to be $887.75 million, up 4.7% from the previous year, with an Earnings ESP of +4.29% and a Zacks Rank of 2 (Buy) [19][20]

Core Viewpoint - FTAI Aviation has been upgraded to a Zacks Rank 2 (Buy), indicating a positive outlook based on rising earnings estimates, which are a significant driver of stock prices [1][2][4]. Earnings Estimates and Stock Price Movement - Changes in a company's future earnings potential, as indicated by earnings estimate revisions, are strongly correlated with near-term stock price movements [3][5]. - Institutional investors utilize earnings estimates to determine the fair value of shares, influencing their buying and selling decisions, which in turn affects stock prices [3]. FTAI Aviation's Earnings Outlook - FTAI Aviation is projected to earn $5.14 per share for the fiscal year ending December 2025, with no year-over-year change expected [7]. - Over the past three months, the Zacks Consensus Estimate for FTAI Aviation has increased by 12.6%, reflecting a positive trend in earnings estimates [7]. Zacks Rank System - The Zacks Rank system classifies stocks into five groups based on earnings estimates, with a strong historical performance, particularly for Zacks Rank 1 stocks, which have generated an average annual return of +25% since 1988 [6][8]. - The upgrade of FTAI Aviation to a Zacks Rank 2 places it in the top 20% of Zacks-covered stocks, suggesting a strong potential for market-beating returns in the near term [9].

Core Insights - FTAI Aviation Ltd's stock is currently down 2.7% to $115.34, marking its lowest close since May 23, and has seen a decline of 19.9% in 2025, but historical trends suggest a potential for recovery [1] Group 1: Stock Performance and Trends - FTAI is trading within one standard deviation of its 50-day moving average, indicating it has been above this average 80% of the time over the last two months [2] - Historical data shows that similar signals have led to an 82% chance of the stock being higher one month later, with an average gain of 10.1%, which could help recover its nine-month deficit of 13.3% [3] Group 2: Short Interest and Market Dynamics - A short squeeze may contribute to upward movement in shares, as short interest has decreased by 15.4%, yet 6.27 million shares sold short still represent 6.2% of FTAI's total float [5] - At the current trading pace, it would take shorts nearly four trading days to cover their positions [5] Group 3: Options and Volatility - Options are considered attractive due to FTAI's Schaeffer's Volatility Index (SVI) of 56%, which is in the 20th percentile of its annual range, indicating lower-than-usual volatility expectations [6] - Historically, FTAI has exceeded volatility estimates, reflected in its Schaeffer's Volatility Scorecard (SVS) score of 90 out of 100, suggesting larger-than-expected price swings [6]

Company Overview - FTAI Aviation Ltd. focuses on owning and maintaining commercial jet engines, particularly CFM56 and V2500 engines [5] - The company offers a proprietary portfolio of products, including the Module Factory and a joint venture for manufacturing engine PMA, which provides cost savings and flexibility to its customers [5] - FTAI also owns and leases jet aircraft, facilitating the acquisition of engines at attractive prices, and invests in aviation assets and aerospace products that generate strong and stable cash flows with potential for earnings growth and asset appreciation [5] Upcoming Financial Results - FTAI plans to announce its financial results for the second quarter of 2025 after the closing of Nasdaq on July 29, 2025 [1] - A conference call will be hosted by management on July 30, 2025, at 8:00 A.M. Eastern Time, accessible through registration [2] - A simultaneous webcast of the conference call will be available to the public on a listen-only basis, with a replay available from July 30, 2025, after 11:30 A.M. until August 6, 2025 [3]