Russell Ford: Thank you, Rama, and thank you to everyone for joining our call today. I will start on Slide 3 of our earnings presentation with a review of several highlights from 2025, our 114th year of the company, and our first full year as a publicly traded company. 2025 was another record year for StandardAero, Inc. and one in which we made significant progress on our strategic objectives, enabled by relentless focus and dedication to quality and performance by our 8,000 employees worldwide. We saw exce ...

StandardAero (NYSE:SARO) Q4 2025 Earnings call February 25, 2026 05:00 PM ET Company ParticipantsAlex Trapp - Chief Strategy OfficerDan Satterfield - CFOKristine Liwag - Executive Director and Head of Aerospace & Defense Equity ResearchRama Bondada - Senior Vice President of Investor RelationsRussell Ford - Chairman and CEOSheila Kahyaoglu - Managing Director in Equity ResearchConference Call ParticipantsDoug Harned - Managing Director and Senior AnalystGavin Parsons - Equity AnalystKrista Friesen - Equity ...

Financial Data and Key Metrics Changes - For Q2 2025, the company reported revenue of $1.53 billion, a 13.5% increase from $1.35 billion in Q2 2024, with 11.5% of this growth being organic [18] - Adjusted EBITDA rose to $205 million, reflecting a 20% growth compared to $170 million in the prior year, with adjusted EBITDA margins expanding by 80 basis points to 13.4% [19][28] - Net income increased significantly to $68 million from $5 million year-over-year, driven by higher sales and expanding margins [19] Business Line Data and Key Metrics Changes - Engine Services revenue increased by $139 million to $1.35 billion, representing an 11.5% growth, driven by strong aftermarket activity and production ramp-up on growth programs [20] - Component Repair Services revenue grew by 31% year-over-year to $178 million, with adjusted EBITDA growing 50% and achieving a record margin of 29% [22] Market Data and Key Metrics Changes - Commercial aerospace sales grew by 14% year-over-year, with strong demand for CF34, LEAP, CFM56, and turboprop platforms [6] - Business aviation sales increased by 9%, while military sales grew by 12% due to contributions from the AeroTurbine acquisition [7] Company Strategy and Development Direction - The company is focused on expanding its LEAP program, enhancing CFM56 and CF34 capacity, and improving capabilities in component repair services [9] - The company aims to maintain a disciplined approach to capital allocation, combining organic investments with strategic M&A opportunities [15] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the strong demand environment and the ability to navigate supply chain challenges, with expectations for continued revenue growth and margin expansion [30][27] - The company has increased its 2025 revenue guidance to between $5.875 billion and $6.025 billion, reflecting strong performance in Engine Services [27] Other Important Information - The company expects free cash flow for 2025 to be in the range of $155 million to $175 million, with a significant cash flow expected in the second half of the year [24] - The company’s leverage improved to 2.99 times net debt to EBITDA, down from 5.4 times in 2024 [26] Q&A Session Summary Question: Thoughts on revenue cadence in Engine Services - Management confirmed that revenue growth expectations remain strong, particularly for the CF34 program, and expressed confidence in the second half guidance [35][36] Question: Margin dilution from new programs - Management indicated that while margins expanded by 80 basis points, they would have been higher without the ramp programs, and profitability is expected to improve as revenue increases [38][39] Question: Growth dynamics for LEAP, CFM56, and CF34 - Management explained that LEAP is being carefully ramped up for precision, while CF34 is expected to see increased work due to aging engines coming due for major overhauls [45][46] Question: Engine exchange program details - Management clarified that the engine exchange program involves a one-time investment for an exchange engine, which is then overhauled and reused, maintaining an asset-light structure [47][56] Question: M&A pipeline and organic growth opportunities - Management stated that the M&A pipeline remains robust, with a focus on disciplined capital deployment, while also highlighting strong organic growth opportunities [86][89]