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FTAI Aviation (FTAI) Q1 FY26 earnings call: guidance and Q&A

Earnings call· Mar 2026 (Q1 FY26)· Industrials· Apr 30, 2026

Source: earnings call transcript

Executive summary

FTAI Aviation Q1 FY26 — Strong Aerospace Products Growth and Power Business Momentum

FTAI Aviation delivered a solid Q1 FY26, driven by accelerating market share growth in Aerospace Products and significant progress in its Power business, including a new joint venture and strong customer interest. The company is actively deploying capital for its 2025 SPV and preparing for the 2026 SPV launch, while reaffirming its full-year EBITDA and free cash flow outlook despite a dynamic geopolitical backdrop.

Highlights

5

  • Aerospace Products revenue grew 104% year-over-year and 32% quarter-over-quarter.

  • Aerospace Products adjusted EBITDA increased 70% year-over-year to $222.6 million.

  • Adjusted free cash flow was $158 million, or $333 million excluding growth investments.

  • Dividend increased from $0.40 to $0.45 per share per quarter, marking the 3rd consecutive increase.

  • Revolving credit facility upsized from $400 million to $2.025 billion and extended through 2031.

Concerns

2

  • Elevated oil and fuel prices negatively impact airline customers' financial situation, potentially creating volatility.

  • Corporate and Other segment recorded a negative EBITDA of $50 million due to interest, eliminations, and Power start-up expenses.

Guidance & targets

CategoryTargetConfidence
Total business segment EBITDA
$1.625 billion
high materiality
High
Aerospace Products EBITDA
$1.05 billion
high materiality
High
Aviation Leasing EBITDA
$575 million
high materiality
High
Adjusted free cash flow
$915 million
high materiality
High
FTAI Power MOD 1 commercial launch
Q4 this year
medium materiality
High
2026 SPV first close
End of Q2
medium materiality
High
2026 SPV aircraft acquisition start
Q3 this year
medium materiality
High
Remaining insurance recoveries
$5 million
low materiality
High
FTAI Power MOD 1 prototype final testing completion
Q3
medium materiality
High
New maintenance facility east of Rome
Expected by Q1 FY27
medium materiality
Medium

Segment performance

SegmentRevenueYoYQoQMargin
Aerospace Products
Top line revenue growth accelerated both year-over-year and quarter-over-quarter. EBITDA margins are indicative of an increased mix of deals with large airline customers and full performance restoration shop visits.
Adjusted EBITDA: $222.6 million
—104%32%30% EBITDA margin
Aviation Leasing
Segment performed well, including insurance recoveries, gains on sale, 2025 SPV management fees, and balance sheet leasing.
———$153 million EBITDA
Corporate and Other
Includes interest, segment eliminations, and start-up expenses associated with power initiatives.
———Negative $50 million EBITDA

FTAI operating KPIs by quarter

FTAI operating KPIs stated on its earnings calls, by fiscal quarter
KPI Dec 2025 Q4 FY25This call Mar 2026 Q1 FY26 Jun 2026 Q2 FY26Change vs prior quarter
Refurbished CFM56 modules
228 We refurbished 228 CFM56 modules this quarter across our 3 facilities, an increase of 68% compared to Q4 2024, bringing our total for the year to 757 modules. Source: earnings call transcript
270 We refurbished 270 CFM56 module this quarter across our 4 facilities, an increase of 96% compared to Q1 2025. Source: earnings call transcript
296 On the production front, we refurbished 296 CFM56 modules this quarter across our 4 facilities, an increase of 61% compared to Q2 2025. Source: earnings call transcript
+9.6%

Operating figures the company stated on at least two of the calls shown, checked against each call's transcript. Click a figure to read the sentence. A dash means it was not stated that quarter.

Orderbook & backlog

FTAI Power MOD 1 Production Mostly sold out Q1 FY26

For 2027 target production, expected to be fully sold out in the near term.

FTAI Power MOD 1 Production Meaningful portion spoken for Q1 FY26

For 2028 production, based on multiyear multi-block deployment plans.

Deals & partnerships

Jereh Group Packaging and customer conversions for FTAI Power MOD 1 turbines

Jereh Group is one of the leading packagers for mobile gas turbines with manufacturing facilities across the US, UAE, Canada, and China. This partnership provides scale and geographic reach for global product rollout.

Capital programs

FTAI Power Inventory Build for 2027 Production underway
Period spend: $19 million
Start: Q1 FY26

Benefit:100-unit production run in 2027

Incremental inventory investment to build working capital for future production.

Risks & headwinds

Geopolitical conflict in the Middle East Current, fluid

Less than 3% of global current gen narrow-body fleet based in the region; elevated oil prices and fuel prices negatively impact airline customers' financial situation.

Mitigation:FTAI's value proposition (faster, lower-cost engine exchanges) becomes more critical; volatility creates investment opportunities for Strategic Capital; Power business is largely insulated.

What to watch in Q2 FY26

2025 SPV Capital Deployment Completion

Q2 FY26
Current $95 million remaining as of 3/31
Target Fully closed, transition to harvest mode and start of distributions

Why it matters

Signals the transition of the 2025 SPV from investment to distribution phase, impacting capital returns to FTAI.

We do expect that to be closed by Q2, and that will fully close that. As a reminder, SCI 1 is a closed-end fund -- so once we commit that capital, we'll then switch from being in investment mode to harvest mode. And at that point, we'll start doing distributions back to all of the institutional LPs, including FTAI for its 19%.

Find out whether FTAI delivers this. Inve re-checks your case every morning.

Q&A highlights

Can you discuss the trade-offs between accelerating market share growth and the healthy but potentially declining margin rate in Aerospace Products, considering higher work scope and new customers?

Management stated that the increased market share and larger orders from bigger customers are intentional to drive faster EBITDA growth in absolute dollars. They are leveraging scale to capture more of the market, which is a higher priority than optimizing for margin percentage in every deal, especially as capabilities have been built out.

“We are consciously going for a higher market share and to drive faster growth in EBITDA in an absolute dollar amount. And we think that moves the needle much more than anything else and really the opportunity to take advantage of this scale that we have today.”

asked by Sheila Kahyaoglu · answered by Joseph Adams

2 min read 6 chapters

Detailed narrative

Aerospace Products Strategic Focus

FTAI Aviation is prioritizing accelerating market share growth in its Aerospace Products business, leveraging enhanced execution capabilities and increased customer adoption. The company is also focusing on winning more leased engine solutions business from top-tier airlines, capitalizing on its flexibility, customized pricing, and scale. A key objective is to expand production capacity, with plans to add a major maintenance facility east of Rome by Q1 FY27 to support global customer traction.

Strategic Capital Deployment and Expansion

The 2025 SPV is nearing full deployment, with 165 aircraft closed as of Q1 FY26, and will transition to a harvest period with quarterly distributions. The company plans to launch the 2026 SPV with a first close by the end of Q2 FY26 and aircraft acquisitions starting in Q3 FY26, maintaining a similar investment strategy and size. The Strategic Capital team has expanded to over 40 dedicated individuals across multiple global offices to support sourcing, underwriting, and servicing the growing portfolio.

FTAI Power Commercialization and Partnership

The FTAI Power business remains on track for commercial launch of the MOD 1 in Q4 FY26, with prototype testing ahead of schedule and exceeding expectations. A significant joint venture agreement was signed with Jereh Group, a leading packager for mobile gas turbines, to handle packaging and integration, derisking the supply chain and accelerating market speed. Customer momentum is strong, with active negotiations for multiyear, multi-block deployments, and expectations to be mostly sold out of 2027 production soon.

Geopolitical Environment and Business Resilience

While geopolitical conflicts, particularly in the Middle East, present a dynamic environment, FTAI's direct exposure in Aerospace Products is limited to less than 3% of its narrow-body fleet. Elevated oil and fuel prices can impact airline customers, but this also highlights FTAI's value proposition of faster, lower-cost engine exchanges. Strategic Capital sees volatility as an opportunity for investment, and the Power business is largely insulated, running on natural gas and benefiting from aviation retirements for feedstock.

Financial Strength and Capital Structure

FTAI has significantly improved its financial profile, with annualized leverage now at approximately 2.3x, below the targeted range of 2.5x to 3x. The company upsized its revolving credit facility from $400 million to $2.025 billion and extended its maturity through 2031 on improved pricing terms, supported by a diverse syndicate of 15 lenders. This enhances liquidity and lowers the cost of capital for the public company, aligning with its asset-light strategy.

Module Production Acceleration and Drivers

The company achieved a significant acceleration in module production, refurbishing 270 CFM56 modules in Q1 FY26, a 96% increase compared to Q1 FY25. This acceleration is attributed to focused execution, increased capacity, a focus on adding skilled personnel through the training academy, and a strategic parts supply deal with the OEM. The Montreal facility handles heavier work scopes, while Miami, Rome, and Lisbon manage lighter work scopes, with Rome and Lisbon still ramping up.

Summary of the company's earnings call; see how call summaries are prepared. Not investment advice.