AerSale’s Earnings Call: Growth Amid Challenges

Aersale Corporation ((ASLE)) has held its Q3 earnings call. Read on for the main highlights of the call.Meet Your ETF AI Analyst Discover how TipRanks' ETF AI Analyst can help you make smarter investment decisions Explore ETFs TipRanks' users love and see what insights the ETF AI Analyst reveals about the ones you follow. AerSale Corporation’s recent earnings call painted a mixed picture of the company’s financial health and strategic progress. The sentiment during the call was cautiously optimistic, highlighting strong growth in the Used Serviceable Material (USM) business and increased leasing revenue. However, the company faced challenges with a decline in overall revenue and a net loss for the quarter, primarily due to the absence of whole asset sales. Despite these hurdles, AerSale demonstrated resilience with improved adjusted EBITDA and strategic advancements in key initiatives. USM Business Growth AerSale’s USM business showed significant growth, with the balance of the business increasing by 18.5% to $71.2 million, excluding whole asset sales. This growth was driven by a robust inventory position that supported the USM business and higher leasing revenue, showcasing the company’s strength in these areas. Adjusted EBITDA Improvement The company reported an improvement in adjusted EBITDA, which reached $9.5 million or 13.3% of sales, up from $8.2 million or 10.0% of sales in the prior year period. This improvement reflects stronger leasing contributions, increased USM activity, and effective cost reduction efforts, indicating a positive trend in operational efficiency. Asset Management Revenue Increase AerSale’s Asset Management segment saw a significant revenue increase, with a year-over-year growth of nearly 40.9% to $39.2 million, excluding whole asset transactions. This growth was driven by strong USM volume and higher leasing activity, highlighting the segment’s robust performance. MRO Facility Expansion The completion of expansion projects at Aerostructures and pneumatics facilities marks a strategic milestone for AerSale. These expansions are expected to drive significant revenue growth in 2026 and beyond, positioning the company for future success. AerSafe Deliveries and Compliance AerSale reported a strong increase in AerSafe deliveries year-over-year, driven by compliance with FAA airworthiness directives. This trend is expected to continue at elevated levels through 2026, underscoring the company’s commitment to safety and regulatory compliance. Revenue Decline The company reported a decline in revenue to $71.2 million for the third quarter, down from $82.7 million in the prior year period. This decline was primarily due to the absence of engine or aircraft sales, highlighting a challenge in maintaining revenue levels without these transactions. TechOps Revenue Decline TechOps revenue experienced a slight decline to $32.0 million, compared to $32.3 million in the prior year. This modest decrease was attributed to a slight aggregate decline in MRO services revenue, indicating a need for strategic adjustments in this area. Net Loss AerSale reported a net loss of $0.1 million for the quarter, compared to a net income of $0.5 million in the prior year period. This shift underscores the financial challenges faced by the company amid the absence of whole asset sales. Limited Feedstock Supply The company noted a limited supply of attractively priced feedstock, as new OEM production has yet to catch up with demand. This limitation poses a challenge for AerSale in sourcing materials at competitive prices. Forward-Looking Guidance Looking ahead, AerSale remains optimistic about its growth prospects. The company is supported by ongoing expansion projects at its Aerostructures and pneumatics facilities, which are expected to be significant revenue drivers in 2026. Additionally, the expansion of the 757 passenger-to-freighter conversion program and a strong inventory position, including $371.1 million of feedstock, are expected to bolster future performance. In summary, AerSale Corporation’s earnings call highlighted a mix of growth and challenges. While the company faced a decline in overall revenue and a net loss for the quarter, it demonstrated resilience through improved adjusted EBITDA and strategic progress in key initiatives. The outlook remains positive, with expansion projects and strong inventory positioning expected to drive future growth.