AerSale(ASLE) - 2025 Q1 - Quarterly Results

AerSale First Quarter 2025 Results First Quarter 2025 Highlights AerSale's Q1 2025 revenue declined 27.4% to $65.8 million due to fewer whole asset sales, resulting in a $5.3 million GAAP net loss, despite core business growth Q1 2025 Key Financial Metrics vs. Q1 2024 | Metric | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Total Revenue | $65.8 million | $90.5 million | | Revenue (ex-flight equipment) | $64.0 million | $51.9 million | | GAAP Net (Loss) Income | ($5.3 million) | $6.3 million | | Adjusted Net (Loss) Income | ($2.7 million) | $5.5 million | | Adjusted EBITDA | $3.2 million | $9.0 million | - The significant drop in total revenue was attributed to lower whole asset sales, with only one engine sold in Q1 2025 for $1.8 million, compared to one aircraft and four engines sold for $38.6 million in Q1 2024[3] - Excluding volatile flight equipment sales, revenue grew 23.4%, propelled by strong commercial demand for Used Serviceable Material (USM), AerSafe™ products, and an expanding engine leasing portfolio[3] - The CEO stated that engine sales anticipated for Q1 closed shortly after the quarter ended, and the company is confident in achieving significantly greater engine sales throughout 2025[4] - Strategic initiatives for 2025 include monetizing feedstock investments, deploying 757-freighter aircraft, and capitalizing on expanded MRO capacity[5] Detailed Financial Performance Q1 2025 saw shifts in revenue composition, a contracted gross margin of 27.3%, and an operating loss of $6.6 million, leading to a GAAP net loss Segment Performance Asset Management revenue declined due to fewer whole asset sales, while TechOps revenue decreased from contract completion and strategic shifts Segment Revenue (Q1 2025 vs. Q1 2024) | Segment | Q1 2025 Revenue | Q1 2024 Revenue | Change | | :--- | :--- | :--- | :--- | | Asset Management | $39.2 million | $59.3 million | -33.9% | | TechOps | $26.6 million | $31.3 million | -15.1% | - Excluding volatile whole asset sales, Asset Management revenue increased 81.7% year-over-year to $37.5 million, driven by USM volume and higher leasing[6] - The decline in TechOps revenue was primarily due to lower component part sales at MROs, the completion of a significant customer contract, and transitioning the Roswell facility to focus on aircraft storage and part-out[7] Profitability and Expenses Gross margin contracted to 27.3%, SG&A remained flat, resulting in a $6.6 million operating loss and a $5.3 million GAAP net loss Key Profitability Metrics (Q1 2025 vs. Q1 2024) | Metric | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Gross Margin | 27.3% | 31.8% | | SG&A Expenses | $24.6 million | $24.1 million | | (Loss) Income from Operations | ($6.6 million) | $4.7 million | | GAAP Net (Loss) Income | ($5.3 million) | $6.3 million | | Diluted (Loss) EPS | ($0.10) | $0.12 | - Adjusted for non-cash and unusual items, the adjusted net loss was $2.7 million, or an adjusted diluted loss per share of $0.05[12][13] Liquidity and Cash Flow Total liquidity stood at $48.9 million, with $45.2 million cash used in operating activities primarily due to inventory investments Liquidity Position as of March 31, 2025 | Component | Amount | | :--- | :--- | | Cash and cash equivalents | $4.7 million | | Available Revolving Credit | $44.2 million | | Total Liquidity | $48.9 million | - Cash used in operating activities for the three months ended March 31, 2025, was $45.2 million, mainly due to investments in inventory[15] Financial Statements This section presents the unaudited condensed consolidated financial statements for Q1 2025, including operations, balance sheet, and cash flows Condensed Consolidated Statements of Operations Q1 2025 statements show total revenue of $65.8 million, a gross profit of $18.0 million, and a net loss of $5.3 million, or $0.10 diluted loss per share Q1 2025 Statement of Operations Highlights (in thousands) | Line Item | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Total Revenue | $65,776 | $90,540 | | Gross Profit | $17,965 | $28,796 | | (Loss) Income from Operations | $(6,647) | $4,663 | | Net (Loss) Income | $(5,277) | $6,277 | | Diluted (Loss) Earnings per Share | $(0.10) | $0.12 | Condensed Consolidated Balance Sheet The balance sheet shows total assets of $646.1 million, total liabilities of $239.6 million, and total stockholders' equity of $406.5 million Balance Sheet Highlights (in thousands) | Line Item | March 31, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Cash and cash equivalents | $4,691 | $4,698 | | Total Inventory | $391,162 | $355,790 | | Total Assets | $646,053 | $604,723 | | Revolving credit facility | $133,078 | $39,235 | | Total Liabilities | $239,595 | $149,103 | | Total Stockholders' Equity | $406,458 | $455,620 | Condensed Consolidated Statements of Cash Flows Q1 2025 cash flows show $45.2 million used in operations, $3.5 million in investing, and $48.8 million provided by financing activities Q1 2025 Cash Flow Summary (in thousands) | Cash Flow Category | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Net cash used in operating activities | $(45,221) | $(21,473) | | Net cash (used in) provided by investing activities | $(3,539) | $226 | | Net cash provided by financing activities | $48,753 | $18,011 | | Decrease in cash and cash equivalents | $(7) | $(3,236) | Non-GAAP Financial Measures and Reconciliation This section defines and reconciles non-GAAP financial measures, including Adjusted EBITDA and Adjusted Net Loss, for Q1 2025 - The company defines adjusted EBITDA as net income (loss) adjusted for interest, taxes, depreciation, amortization, and other non-recurring or unusual items, with adjusted net income (loss) further excluding mark-to-market warrant adjustments and stock-based compensation[18] Reconciliation of Net Loss to Adjusted EBITDA (Q1 2025, in thousands) | Line Item | Amount | | :--- | :--- | | Reported Net Loss | $(5,277) | | Interest Expense | $1,181 | | Income Tax Benefit | $(720) | | Depreciation and Amortization | $4,943 | | Stock compensation | $1,160 | | Restructuring costs | $1,054 | | Other Adjustments | $833 | | Adjusted EBITDA | $3,174 | Reconciliation of Net Loss to Adjusted Net Loss (Q1 2025, in thousands) | Line Item | Amount | | :--- | :--- | | Reported Net Loss | $(5,277) | | Adjustments (warrant liability, stock comp, etc.) | $2,612 | | Adjusted Net Loss | $(2,665) | Other Information This section provides supplementary information, including conference call details, forward-looking statements, and a company profile Conference Call Information Details for the Q1 2025 earnings conference call and webcast, including replay availability, are provided - Conference call scheduled for May 7, 2025, at 4:30 pm ET[16] - A replay will be available until May 21, 2025, and an archived version will be on the company's investor relations website[17] Forward-Looking Statements This section contains a disclaimer regarding forward-looking statements, emphasizing inherent risks and uncertainties - Statements in the release that are not historical facts are forward-looking and covered by safe harbor provisions[29] - These statements involve risks and uncertainties, and the company does not plan to publicly update them unless required by law[30] About AerSale AerSale provides integrated aftermarket services and products for large jets, including MRO, asset sales/leasing, USM sales, and proprietary Engineered Solutions - AerSale serves airlines operating large jets from Boeing, Airbus, and McDonnell Douglas[31] - Key offerings include MRO, asset sales/leasing, USM sales, and internally developed Engineered Solutions[31]