Financial Highlights & CEO Commentary StandardAero achieved strong Q2 2025 results with double-digit revenue growth, improved net income and Adjusted EBITDA margins, and raised full-year targets Q2 2025 Financial Performance | Metric | Q2 2025 | YoY Change | | :--- | :--- | :--- | | Revenue | $1,528.9 million | +13.5% | | Net Income | $67.7 million | +$62.3 million | | Net Income Margin | 4.4% | +400 bps | | Adjusted EBITDA | $204.6 million | +20.1% | | Adjusted EBITDA Margin | 13.4% | +80 bps | - The CEO attributed the strong results to solid execution, a robust commercial aerospace aftermarket, and significant milestones in the LEAP engine program, which now has bookings exceeding $1.5 billion38 Second Quarter 2025 Performance Analysis Q2 2025 performance saw broad growth across segments and markets, with net income surging due to higher operating income and reduced interest expenses, improving the leverage ratio Consolidated Financial Results Consolidated revenue grew 13.5% to $1.53 billion, with net income surging to $67.7 million due to improved operating income and lower interest expense, while Adjusted EBITDA margin expanded and leverage improved - Revenue growth was strong across all end markets: commercial aerospace (+13.7%), business aviation (+8.9%), and military/helicopter (+11.7%), with the latter boosted by the ATI acquisition4 Consolidated Financial Metrics | Metric | Q2 2025 | Q2 2024 | | :--- | :--- | :--- | | Revenue | $1,528.9 M | $1,347.2 M | | Net Income | $67.7 M | $5.4 M | | Adjusted EBITDA | $204.6 M | $170.4 M | | Net Debt | $2,262.5 M | $3,266.0 M | | Net Debt to Adj. EBITDA | 3.0x | 5.4x | Segment Performance Both Engine Services and Component Repair Services segments achieved strong revenue growth and margin expansion, with Component Repair notably boosted by the ATI acquisition and 31.3% revenue growth Engine Services Segment Performance | Engine Services Segment | Q2 2025 | Q2 2024 | | :--- | :--- | :--- | | Revenue | $1,350.7 M | $1,211.5 M | | Adjusted EBITDA | $178.5 M | $153.7 M | | Adjusted EBITDA Margin | 13.2% | 12.7% | Component Repair Services Segment Performance | Component Repair Services Segment | Q2 2025 | Q2 2024 | | :--- | :--- | :--- | | Revenue | $178.3 M | $135.7 M | | Adjusted EBITDA | $51.6 M | $34.5 M | | Adjusted EBITDA Margin | 29.0% | 25.4% | - The Component Repair Services segment's revenue growth included a $27.3 million contribution from the ATI acquisition10 Full Year 2025 Guidance StandardAero raised its full-year 2025 guidance, projecting higher revenue and Adjusted EBITDA with improved segment margins, driven by strong first-half performance and sustained market demand FY 2025 Financial Guidance | FY 2025 Guidance | Updated | Prior | | :--- | :--- | :--- | | Revenue | $5,875 - $6,025 M | $5,825 - $5,975 M | | Adjusted EBITDA | $790 - $810 M | $775 - $795 M | | Engine Services Margin | 13.3% | ~13% | | Comp. Repair Services Margin | 28.3% | ~27% | | Free Cash Flow | $155 - $175 M | Unchanged | End Market Revenue Growth Assumptions | End Market Revenue Growth Assumptions | | | :--- | :--- | | Commercial Aerospace | Mid-Teens Growth | | Military & Helicopter | High Single Digit Growth | | Business Aviation | High Single Digit Growth | - The company expects compounding benefits in the coming years from its growth initiatives, including key platform programs and capacity expansion, which are anticipated to drive revenue growth, margin expansion, and attractive free cash flow12 Financial Statements This section presents StandardAero's unaudited condensed consolidated financial statements, including Balance Sheets, Statements of Operations, and Statements of Cash Flows Condensed Consolidated Balance Sheets Total assets increased to $6.48 billion as of June 30, 2025, with total stockholders' equity growing to $2.51 billion due to increased paid-in capital and reduced accumulated deficit Condensed Consolidated Balance Sheets (in thousands) | Balance Sheet (in thousands) | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Total Current Assets | $2,769,014 | $2,485,134 | | Total Assets | $6,482,711 | $6,213,601 | | Total Current Liabilities | $1,285,227 | $1,273,544 | | Long-Term Debt | $2,295,131 | $2,207,977 | | Total Liabilities | $3,969,428 | $3,840,197 | | Total Stockholders' Equity | $2,513,283 | $2,373,404 | Condensed Consolidated Statements of Operations Q2 2025 net income significantly increased to $67.7 million, driven by 13.5% revenue growth and reduced interest expense, resulting in diluted EPS of $0.20 Condensed Consolidated Statements of Operations (in thousands) | Income Statement (in thousands) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | | :--- | :--- | :--- | | Revenue | $1,528,943 | $1,347,198 | | Operating Income | $135,570 | $105,077 | | Interest Expense | $43,835 | $78,051 | | Net Income | $67,713 | $5,404 | | Diluted EPS | $0.20 | $0.02 | Condensed Consolidated Statements of Cash Flows For the six months ended June 30, 2025, net cash used in operating activities was $21.1 million, with $72.4 million used in investing and $81.7 million provided by financing, ending with $91.5 million in cash Condensed Consolidated Statements of Cash Flows (in thousands) | Cash Flow (in thousands) | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | | Net cash used in operating activities | $(21,103) | $(18,154) | | Net cash used in investing activities | $(72,371) | $(44,776) | | Net cash provided by financing activities | $81,714 | $65,912 | | Net (decrease) increase in cash | $(11,068) | $2,292 | | Cash at end of the period | $91,513 | $60,274 | Supplemental Financial Information & Reconciliations This section details financial breakdowns by segment and reconciles GAAP measures to non-GAAP metrics such as Adjusted EBITDA, Net Debt, and Free Cash Flow Segment Financial Details In Q2 2025, Engine Services generated $1.35 billion revenue and $178.5 million Adjusted EBITDA, while Component Repair Services achieved $178.3 million revenue and $51.6 million Adjusted EBITDA, with both segments showing growth Q2 2025 Segment Results (in thousands) | Q2 2025 Segment Results (in thousands) | Revenue | Segment Adjusted EBITDA | Margin | | :--- | :--- | :--- | :--- | | Engine Services | $1,350,677 | $178,509 | 13.2% | | Component Repair Services | $178,266 | $51,640 | 29.0% | Reconciliation of Non-GAAP Measures The company provides reconciliations for key non-GAAP metrics, including Adjusted EBITDA, Net Debt, and Free Cash Flow, for Q2 2025 and as of June 30, 2025 Reconciliation: Net Income to Adjusted EBITDA (Q2 2025, in thousands) | Reconciliation: Net Income to Adjusted EBITDA (Q2 2025, in thousands) | | | :--- | :--- | | Net income | $67,713 | | Income tax expense | $24,022 | | Depreciation and amortization | $48,547 | | Interest expense | $43,835 | | Other adjustments | $20,520 | | Adjusted EBITDA | $204,637 | Reconciliation: Debt to Net Debt (June 30, 2025, in millions) | Reconciliation: Debt to Net Debt (June 30, 2025, in millions) | | | :--- | :--- | | Total Debt | $2,354.0 | | Less: Cash | $91.5 | | Net Debt | $2,262.5 | Reconciliation: Cash Flow to Free Cash Flow (Q2 2025, in millions) | Reconciliation: Cash Flow to Free Cash Flow (Q2 2025, in millions) | | | :--- | :--- | | Cash Flow from Operations | $2.9 | | Total Capital Expenditures | $(33.7) | | Free Cash Flow | $(30.8) | Important Disclosures This section provides important disclosures, including safe harbor statements for forward-looking information and explanations of non-GAAP financial measures like Adjusted EBITDA Forward-Looking Statements Forward-looking statements regarding future performance and financial targets are subject to significant risks and uncertainties, and actual results may differ materially - Forward-looking statements are intended to be covered by safe harbor provisions and involve known and unknown risks. The company does not undertake any obligation to update these statements1721 Non-GAAP Financial Measures StandardAero uses non-GAAP financial measures like Adjusted EBITDA, Net Debt to Adjusted EBITDA, and Free Cash Flow to provide greater transparency into core operating results and evaluate performance - The company uses non-GAAP measures to exclude items that may not be indicative of core operating results, allowing for better comparison over time and with peers. A reconciliation of these measures to their most comparable GAAP counterparts is provided222326
StandardAero, Inc.(SARO) - 2025 Q2 - Quarterly Results