FTAI Aviation Ltd. Q3 FY2025 earnings call

Key Updates - SCI Partnership: Successfully closed final equity commitments, upsized to $2 billion equity capital, targeting $6 billion deployment by mid-2026 with over 190 aircraft closed/LOI. The MRA agreement provides a multiyear contractual pipeline for rebuilt engines. - Facilities and Acquisitions: Montreal training academy has over 100 trainees, Rome operations expanding, ATOPS acquisition adds 150 modules capacity, Prime Engine Accessories JV expected to save $75,000 per shop visit. - Dividend: Dividend increased from $0.30 to $0.35 per share, paid November 19.

Aerospace Products: In Q3 2025, generated $180 million in adjusted EBITDA with a 35% margin, up ~77% year-over-year. Targets 1,000 CFM56 modules in 2026, a 33% increase from 2025, and margins to grow to 40%+ next year. Aviation Leasing: Posted approximately $134 million of adjusted EBITDA in Q3 2025. The $45 million seed portfolio contributed an aggregate gains on sale of $50.1 million to 2025 leasing EBITDA at a margin of 10%. The 19% equity portion of SCI will be reflected in equity income and servicing revenue.

2025 - Targets $750 million adjusted free cash flow. Business segment EBITDA expected $1.25 billion to $1.3 billion, with Aerospace Products $650 million to $700 million and Aviation Leasing $600 million. ### 2026 - Estimates $1 billion adjusted free cash flow. Business segment EBITDA $1.525 billion, with Aerospace Products $1 billion and Aviation Leasing $525 million, up from prior estimates.

Uncertainty in forward-looking statements differing from actual results. Market risks related to engine maintenance demand, competition, and economic conditions affecting aircraft leasing and MRO markets.

Q: Walk through financial implications of SCI upsizing on segment EBITDA and free cash flow?

A: Upsizing accelerates growth, SCI business expected to be 20%-25% of Aerospace Products volume, locked-in volume benefits production planning and cross-selling.

Q: Color on ATOPS acquisition and EBITDA contribution?

A: ATOPS adds 150 modules capacity, Medley facility near test cell, Lisbon facility for field service, expected to increase production from 1,800 to 1,950 modules.

Q: Treatment of SCI 19% equity in financials?

A: Reflected in equity income line, servicing revenue grows with asset base, included in adjusted EBITDA Leasing segment.

Q: Secret sauce of module facility growth?

A: Focus on CFM56/V2500, attracting great people, solving customer problems of avoiding shop visits, and training initiatives.

Q: FTAI as spread business?

A: Manufacturing business buying, rebuilding, and selling engines; asset management business raising capital for aircraft, providing committed volume.

Q: Guidance for 2026 and drivers?

A: Volume growth (33% module production increase), margin improvement (40%+ margins) from parts acquisitions, repairs, and PMA approval.

Q: Margin impact of Finnair contract?

A: In line with large programs, covers entire fleet, provides cost savings and flexibility for airline.

Q: Management and performance fees for SCI vehicles?

A: Market-based fees on total assets, incentive compensation on returns exceeding hurdle, aiming to manage large capital volumes.

Q: Pace of long-term partnerships and margin impact?

A: Pace of investing accelerating, margins similar to third-party customers, expected larger orders from existing customers.

Q: M&A impact on 2026 cash flow outlook?

A: M&A adds capacity at low cost, deals are accretive with minimal capital investment, evaluating various entry methods.