AerSale Q2 Earnings Call Highlights

AerSale (NASDAQ:ASLE) reported second-quarter revenue and adjusted EBITDA that declined from a year earlier, primarily because the company did not record any flight equipment sales during the period. Management said it expects a stronger second half as it monetizes inventory, expands leasing activity and increases utilization at its maintenance facilities.

Revenue for the quarter totaled $70.9 million, compared with $107.4 million in the prior-year period. Adjusted EBITDA was $2.2 million, or 3.1% of revenue, versus $18.3 million, or 17% of revenue, a year earlier. Net loss was $5.6 million, compared with net income of $8.6 million in the second quarter of 2025.

Chief Executive Officer Nick Finazzo said the results reflected “timing, not trajectory,” pointing to the absence of flight equipment sales that contributed $33.4 million of revenue in the year-earlier quarter through the sale of eight engines. Excluding flight equipment sales, revenue declined 4.2% year over year, as lower used serviceable material, or USM, sales outweighed growth in leasing and maintenance operations.

Leasing Growth Offsets Lower USM Sales

Asset management solutions revenue fell 51.3% to $37.1 million. Excluding flight equipment sales, however, segment revenue declined 13.6%, reflecting lower USM sales. The company said it acquired $5.6 million of feedstock during the second quarter, down from $27.1 million a year earlier, as it maintained pricing discipline in what Finazzo described as a highly competitive acquisition market.

Leasing revenue rose about 50% to $12.4 million, supported by a larger engine and converted freighter portfolio. AerSale ended the quarter with 18 engines and three Boeing 757 freighters on lease, compared with 16 engines and one freighter a year earlier.

In July, AerSale placed its fourth converted 757 freighter on lease and signed a lease for a fifth freighter expected to be delivered in August. The company has two remaining freighters from its passenger-to-freighter conversion program to monetize.

Finazzo also said AerSale was awarded a $35 million sale of a Boeing 737 aircraft to the U.S. Marshals Service. The company expects the transaction to close in the third quarter or early in the fourth quarter. Management also cited several engine transactions expected to close in late third quarter or early fourth quarter.

During the question-and-answer session, Finazzo said AerSale had 17 engines in work and expects many to emerge from repair facilities in the coming months. Depending on market conditions, the company may place those engines into its lease portfolio or sell them to customers offering better economic returns.

Management said it is increasingly using USM inventory to restore aircraft engines and other flight equipment for sale or lease, rather than selling all material as individual piece parts. Chief Financial Officer Martin Garmendia said USM margins have typically been around 25%, while flight equipment transactions have at times generated higher margins and faster capital recovery.

Maintenance Operations Expand, but Ramp-Up Costs Weigh on Margins

Tech Ops revenue increased 8.7% to $33.8 million. Growth was led by the ramp-up of AerSale’s CRJ700 and CRJ900 multi-line maintenance program in Millington, Tennessee, additional aircraft storage at its Goodyear, Arizona, operation, and higher landing gear and aerostructures activity.

However, gross margin declined to 22.9% from 32.9% a year earlier. Garmendia said margins were affected by the lack of higher-margin flight equipment sales, lower USM gross profit, and the cost of staffing and building capacity ahead of expected work at Goodyear and Millington.

At Millington, AerSale has two maintenance lines in operation and capacity to add two additional lines, Garmendia said. The company has seen improvements in labor efficiency and aircraft turnaround times as the program progresses.

Goodyear was operating at less than 20% of available capacity during the quarter, according to Garmendia. But AerSale has been carrying additional labor in anticipation of heavy maintenance work related largely to aircraft formerly operated by Spirit Airlines.

Finazzo said AerSale had 84 former Spirit aircraft in storage at Goodyear. The aircraft are now owned by banks or leasing companies, and each will require some level of maintenance before returning to service. Some aircraft may instead be dismantled for parts, particularly where engines have greater value as standalone leased assets.

Management said it expects the maintenance demand associated with those aircraft, along with work from other customers, to help fill Goodyear’s capacity over the coming year. Garmendia said AerSale’s on-airport MRO operations have historically generated margins in the 20% to 30% range when operating at fuller utilization.

AerSale’s landing gear facility was operating at about 80% capacity on one shift after receiving gear from customer programs involving Boeing 737 MAX and 787 aircraft. The company expects to add a second shift as volumes increase.

Liquidity and Product Outlook

Cash used in operating activities totaled $33.5 million year to date, driven largely by investments in feedstock and make-ready costs for equipment intended for lease or sale. AerSale ended the quarter with $376 million of inventory and $133 million of aircraft and engines held for lease.

Available liquidity was $34 million, including $2.2 million of cash and cash equivalents and $31.8 million available under its $180 million revolving credit facility. The facility may be expanded to $200 million, subject to conditions and borrowing-base availability.

Management said demand remains strong for its AerSafe product and expects activity to peak in the third quarter ahead of a November 2026 Federal Aviation Administration compliance deadline related to a fuel-tank flammability airworthiness directive.

Regarding its AerAware enhanced flight vision product, Finazzo said the company continues to engage with regulators and industry participants but did not identify new customer commitments. He said AerSale is evaluating other parts-manufacturing-approval and repair opportunities, though it does not currently expect those efforts to make a substantial contribution in the near term.

For the rest of 2026, AerSale said its priorities remain expanding its lease pool, strategically monetizing inventory, increasing MRO capacity and improving operational profitability as recent expansion investments gain scale.

About AerSale (NASDAQ:ASLE)

AerSale Inc is an integrated aftermarket solutions provider serving the global commercial, defense and business aviation markets. The company specializes in aircraft and engine maintenance, repair and overhaul (MRO), asset leasing and aviation parts distribution. Its key offerings include airframe heavy maintenance, engine tear‐down and component overhaul, used serviceable material programs and end‐of‐life aircraft disassembly. Through these services, AerSale supports operators seeking to optimize fleet availability, extend asset life cycles and reduce maintenance costs.

Founded in 2009 and headquartered in Coral Gables, Florida, AerSale has grown through strategic acquisitions and organic expansion.

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