AerSale Corporation Q4 FY2025 earnings call

• Fourth quarter adjusted EBITDA increased, fourth quarter revenue decreased but excluding flight equipment sales increased. Full year revenue decreased primarily due to fewer flight equipment sales but excluding them increased. Full-year adjusted EBITDA increased. - Acquired 15.4 million of feedstock in Q4 2025, full-year acquisitions 99.6 million. Win rate in Q4 2025 was 4.8% vs 17.2% in Q4 2024. - Ended 2025 with two Boeing 757 passenger-to-freighter converted aircraft on lease and five in inventory; actively engaged in discussions with potential customers. - Made strategic adjustments in on-airport MRO facilities: Goodyear transitioned to new business at higher rates, Roswell shifted focus to storage and end-of-life fleet activities, Millington on-airport MRO expansion project fully operational. - Component MRO facility expansion initiatives: Moved into new aerostructures facility in Jan 2026, pneumatic expansion project nearly complete. - Landing gear shop received FAA approval to overhaul Boeing 737 MAX and 787 landing gear. - Priorities for 2026: Grow more recurring and predictable parts of business, fill capacity at on-airport MRO facilities, grow USM sales, increase component MRO revenue with expanded capacity, increase assets in lease pool, strength in airsafe revenue, market AeroWare and educate regulators on it. - Efficiency programs implemented last year to streamline workflow and maximize profitability.

Fourth quarter adjusted EBITDA increased 2.2 million or 17.1% to 15.2 million compared to 13 million in the fourth quarter of 2024. Fourth quarter revenue was 90.9 million, a 4% decrease from the prior year period. Excluding flight equipment sales, fourth quarter revenue increased 9.8%. For full year, total revenue was $335.3 million, a decrease of $9.8 million or 2.8% year over year, primarily due to fewer flight equipment sales. Excluding flight equipment sales, full year revenue increased 18.7%. Full-year adjusted EBITDA increased $12.8 million to $46.1 million. Asset management: Fourth quarter revenue declined ~11.1% year-over-year to $56.9 million due to fewer flight equipment sales; excluding flight equipment sales, revenue increased 9.1%. Full year asset management revenue was $211.6 million, down 1.8% year-over-year; excluding flight equipment sales, segment revenue increased 47.3%. Tech ops: Fourth quarter revenue increased 10.7% to $34 million; full year TechOps revenues declined 4.5% to $123.7 million, but improved mix and efficiency initiatives improved gross margin to 25.6% from 16.6% in prior year.

• Expect 2026 to be another growth year for top and bottom lines. - Shift emphasis away from trading toward expanding recurring core elements of business, expect full-year revenue and profitability to increase relative to 2025. - Anticipate steady incremental improvement as new revenue streams ramp up and efficiency initiatives continue to gain traction.

• Feedstock environment remains constrained, hyper-competitive market for feedstock purchases with high win rate (losing many deals). Overpaying for feedstock could kill the company. - Uncertainty regarding the normalization of GTF revenues and the impact on storage and return-to-service work. - Potential headwind next year as AirSafe sales diminish after the 2026 deadline if new engineered products and STCs aren't sufficient to fill the gap.

Q: Do you have a goal in mind of how much material feedstock you think you can buy?

A: Nick says anticipate lower level of feedstock purchases this year than last year due to hyper-competitive market and overpaying concerns. Martin adds starting 2026 with about $364 million of inventory including $150 million ready for USM channel and $118 million in whole assets.

Q: About growth trajectory, including GTF normalization and air safe 26 deadline?

A: Nick says GTF situation not normalizing in 26 as it's about returning parked aircraft for return-to-service work. AirSafe greatest sales in 26 but engineering group working on other engineered products and STCs, and looking to deploy AirAware across multiple platforms.