AerSale(ASLE) - 2025 Q2 - Quarterly Results

AerSale Second Quarter 2025 Earnings Release Second Quarter 2025 Financial Highlights 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] - The company sold eight engines during the quarter, compared to five engines in the same period last year[3][6] - 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] Management Commentary 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] - 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] - The company is positioned to capitalize on future market opportunities due to its strong inventory and expanded operational capabilities[4] Segment Performance 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 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] - Flight equipment sales in the quarter benefited from two engines that were originally scheduled for delivery in Q1 2025[4] 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] - The decline was partially offset by new contracts and higher service revenues from aerostructures, landing gear MROs, and the AerSafe™ product[5][8] Detailed Financial Performance 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] - SG&A expenses decreased to $22.8 million from $23.6 million YoY, demonstrating effective cost reduction efforts despite higher revenue[9] 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] Financial Statements Condensed Consolidated Statements of Operations 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 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 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 Explanation of Non-GAAP Measures 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][19] - These measures exclude non-recurring or unusual items such as mark-to-market adjustments for warrants and share-based compensation[17] - 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] Reconciliation of GAAP to Non-GAAP Measures 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 Conference Call Information 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] - A live webcast will be available on the investor relations section of the company's website[15] - A telephonic replay will be available until August 20, 2025[16] Forward Looking Statements 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] - These statements are subject to risks and uncertainties, and actual results may differ materially from expectations[30] - Readers are advised to review the Risk Factors section in the company's Form 10-K and other SEC filings[30] About AerSale 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] - The company's core offerings include MRO services, aircraft and engine sales/leasing, and USM sales[32] - AerSale also develops its own 'Engineered Solutions' to enhance aircraft performance and economics, such as AerSafe™, AerTrak™, and AerAware™[32]