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    FTAI
    Earnings call· Dec 2025(Q4 FY25)

    FTAI Aviation Q4 FY25 earnings call FTAI

    Feb 26, 2026 Source

    Executive summary

    FTAI Aviation Q4 FY25 — Strong Growth in Aerospace Products and Launch of FTAI Power

    FTAI Aviation concluded a defining Q4 FY25, marked by significant execution and strategic progress across its Aerospace Products, Aviation Leasing, and newly launched FTAI Power segments. The company achieved strong growth in engine maintenance, successfully deployed capital for its SCI I fund, and initiated fundraising for SCI II. While making substantial investments in future growth, the company also increased its dividend, signaling confidence in its long-term strategy to capitalize on market opportunities in the aftermarket and AI-driven power demand.

    Highlights

    5

    • Aerospace Products Q4 adjusted EBITDA reached $195 million, marking a 66% increase year-over-year.

    • Full-year 2025 Aerospace Products adjusted EBITDA was $671 million, exceeding the original target of $600 million to $650 million.

    • SCI I secured $2 billion in equity commitments, establishing it as the largest fund dedicated to narrow-body midlife aircraft.

    • Total module refurbishment for 2025 achieved 757 units, surpassing the initial goal of 750 modules.

    • The quarterly dividend was increased for the second consecutive quarter, from $0.35 to $0.40 per share.

    Concerns

    2

    • Q4 Aerospace Products EBITDA was slightly below expectations due to increased headcount costs and customer-requested delivery deferrals into Q1 2026.

    • Full-year 2026 Free Cash Flow guidance was revised down to $915 million from $1 billion, reflecting $85 million in increased SCI II investments and $100 million in additional Power working capital.

    Guidance & targets

    9
    CategoryTargetConfidence
    Full-year 2026 Total Business Segment Adjusted EBITDA
    $1.625 billion
    high materiality
    High
    Full-year 2026 Aerospace Products Adjusted EBITDA
    $1.05 billion
    high materiality
    High
    Full-year 2026 Aviation Leasing Adjusted EBITDA
    $575 million
    medium materiality
    High
    Full-year 2026 Free Cash Flow
    $915 million
    high materiality
    High
    Full-year 2026 Module Production Target
    1,050 modules
    medium materiality
    High
    FTAI Power Production Units
    100 units
    high materiality
    High
    FTAI Power First Production Units Delivery
    Q4 2026
    high materiality
    High
    SCI I Capital Deployment Completion
    End of Q2 2026
    medium materiality
    High
    SCI II Investment Start
    By June 30, 2026
    medium materiality
    High

    Segment performance

    3
    SegmentRevenueYoYQoQMargin
    Aerospace Products
    Finished the year with great momentum, exceeding original full-year adjusted EBITDA goal. Growth driven by fixed-price engine offerings and increasing market adoption. Surpassed 2025 module goal.
    Full-year 2025 Adjusted EBITDA: $671 millionFull-year 2025 Module Refurbishments: 757Q4 2025 Module Refurbishments: 228Q4 2025 Module Refurbishments Growth YoY: 68%
    		—66%—$195 million adjusted EBITDA
    Aviation Leasing
    Continued strong results, with EBITDA mix shifting towards SCI as new SPV partnerships launch. Exceeded full-year target of $600 million.
    Q4 2025 Adjusted EBITDA from SCI: $20 millionQ4 2025 Adjusted EBITDA from balance sheet assets: $93 millionFull-year 2025 Leasing EBITDA: $609 millionFull-year 2025 Leasing EBITDA from Russian insurance claim recoveries: $54 million
    		———$113.2 million adjusted EBITDA
    Corporate and Other
    Includes intersegment elimination and start-up expenses associated with the Power initiative.
    		———negative $31 million

    Operational metrics

    20
    Adjusted EBITDA
    $277.2 millionup 10% YoY
    Q4 FY25

    Comprised of $195 million from Aerospace Products, $113.2 million from Leasing, and negative $31 million from Corporate and Other.

    Adjusted EBITDA
    $1.2 billionup 38% YoY
    FY25

    Compared to $862 million in 2024.

    Aerospace Products Adjusted EBITDA Margin
    35%
    Q4 FY25
    Aerospace Products Adjusted EBITDA
    $195 millionup 8% QoQ
    Q4 FY25

    Compared to $180 million in Q3 2025.

    Aerospace Products Adjusted EBITDA
    $671 million76% growth over 2024
    FY25

    Well above original goal of $600 million to $650 million, and above revised target of $650 million to $700 million.

    Aerospace Products Adjusted EBITDA
    $380 million
    FY24
    Aerospace Products Adjusted EBITDA
    $160 million
    FY23
    Leverage Ratio
    2.6x
    FY25 end

    On the low end of targeted range of 2.5x to 3x.

    Dividend Per Share
    $0.40up from $0.35
    Quarterly

    Second consecutive quarterly increase. To be paid March 23 to shareholders of record March 13. 43rd dividend as a public company, 58th consecutive since inception.

    CFM56 Module Refurbishments
    228increase of 68% YoY
    Q4 FY25

    Across 3 facilities.

    CFM56 Module Refurbishments
    757
    FY25

    Surpassed 2025 goal of 750 modules.

    Montreal Workforce
    570increase of roughly 60%
    Current

    From approximately 360 employees at the beginning of 2025.

    Trainees Enrolled in Training Academy
    220
    Since June

    Graduating over 50 per quarter.

    Rome Employee Base
    185almost doubled
    Current

    From 101 since joint venture began in Q2 last year.

    Aerospace Products Market Share Goal
    25%
    Interim goal

    Through new and repeat customers and increasing volume of engine exchanges from SCI funds.

    Total Maintenance Spend Market Growth
    double-digit rate
    This year

    Expected to grow to approximately $25 billion per annum, up from $22 billion per annum projected last year.

    FTAI Power Output
    25-megawatt
    Per unit

    Unit offers grid operators greater flexibility and faster deployment.

    FTAI Power Efficiency
    35% to 40%
    Per unit

    Comparable to other aero derivatives in the market.

    FTAI Power Heat Rate
    9,000
    Per unit
    Aerospace Products Margin Target
    40%up from 35%
    2026

    Driven by PMA HPT blade, lower-cost parts supplies (CFM deal, used material), and expanded piece part repair capability.

    Industry KPIs

    1
    MetricValueDetails
    Market volume mro market benchmark$25 billionUSD

    Orderbook & backlog

    2
    SCI I Aircraft Closed or Under LOI276 aircraftCall date

    Representing $5.3 billion of the $6 billion target for SCI I.

    SCI I Aircraft Closed130 aircraftDecember 31, 2025

    Deployment for 2025.

    Product announcements

    2
    ProductTypeDetails
    FTAI Powerlaunch
    FTAI Power Mod-1launch

    Deals & partnerships

    3
    Strategic Capital Initiative I (SCI I) InvestorsFund focused on acquiring 737NG and A320ceo aircraft.$6 billion total capital

    Largest fund ever dedicated to narrow-body midlife aircraft. Includes support from ATLAS (Apollo affiliate) and Deutsche Bank. 130 aircraft closed as of Dec 31, 2025, with 276 closed or under LOI representing $5.3 billion of the target.

    Strategic Capital Initiative II (SCI II) Anchor Equity CommitmentFund focused on acquiring 737NG and A320ceo aircraft.

    Fundraising process started for SCI II, with an anchor equity commitment in place. Expected to start investing by June 30, 2026.

    CFMMultiyear materials agreement.multiyear

    Reinforces shared priority to extend the life of CFM56 engines through an open MRO ecosystem.

    Capital programs

    3
    FTAI Power Working Capitalunderway$250 million
    Period spend: $150 million
    Spent to date: $150 million
    Start: Q4 2025

    Benefit: Support turbine feedstock and a rotable pool of key components for 2026 production ramp.

    Proactively invested $150 million in Q4 2025 to secure additional turbines ahead of demand. Remaining $100 million expected in 2026.

    Hot Section Parts Investmentcompleted$50 million
    Period spend: $50 million
    Spent to date: $50 million
    Start: Q4 2025

    Benefit: Critical input for engine maintenance business in a tight parts market.

    Additional investment made in Q4 2025.

    Montreal Facility Retrofitting (FTAI Power)underway
    Start: Q4 2025

    Benefit: Establish a dedicated production line for the Power business, with future expansions planned for Montreal, Miami, and Rome.

    Components transitioning from Aerospace into Power applications will not return to aerospace service, maintaining separation for regulatory and asset integrity.

    Risks & headwinds

    3
    Headcount growth and productivity lagQ4 2025

    Q4 Aerospace Products EBITDA slightly less than expected

    Mitigation: Training academy, workflow optimization, AI integration to improve productivity.

    Customer-requested delivery deferralsQ4 2025 to Q1 2026

    Few engines slid from 2025 into 2026

    Mitigation: Accommodated customer needs, implying flexibility in operations.

    Increased investments impacting near-term free cash flowFY26

    2026 FCF revised down to $915 million from $1 billion due to $85 million increased SCI II investments and $100 million additional Power working capital.

    Mitigation: These are high-return growth investments across SCI, Power, and Aerospace expected to drive meaningful value into 2027 and beyond.

    What to watch in Q1 FY26

    5

    SCI I Capital Deployment Completion

    End of Q2 2026
    Current276 aircraft closed or under LOI ($5.3B of $6B target)
    TargetFully invested

    Why it matters

    Completion of SCI I deployment is a key milestone before full transition to SCI II, impacting future asset management revenue.

    As of today, we now have 276 aircraft closed under LOI, representing $5.3 billion of our $6 billion target, and we remain on track to be fully invested by the end of the second quarter.

    Q&A highlights

    6

    How do PMA blades, CFM materials deal, and other initiatives support the 40% AP margin target, and what is the mix going forward?

    Joe Adams confirmed progress on all three drivers (PMA HPT blade approved, lower-cost parts via CFM deal and used material, expanded piece part repair capabilities). He stated confidence in achieving 40% margin but noted a potential prioritization of market adoption and broader customer base over incremental margin percentage if opportunities arise for bigger programs.

    “everything we wanted to have in place to achieve that 40% margin is in place, and we are very confident that we have the capability to do that, to grow that in 2026 to 40%.”

    asked by Sheila Kahyaoglu · answered by Joseph Adams

    2 min read6 chapters

    Detailed Narrative

    01

    Strategic Capital Initiative (SCI) Progress

    FTAI successfully launched SCI I, securing $2 billion in equity commitments and deploying $5.3 billion of its $6 billion target across 276 aircraft (closed or LOI) by Q4 2025, leveraging its engine maintenance capabilities. The company is on track to be fully invested in SCI I by Q2 2026 and has already secured an anchor equity commitment for SCI II, aiming to become the world's largest manager of mid-life narrow-body aircraft.

    02

    Aerospace Products Performance & Outlook

    The Aerospace Products segment delivered strong Q4 FY25 adjusted EBITDA of $195 million (35% margin), contributing to a full-year adjusted EBITDA of $671 million, exceeding its revised target. This growth is driven by increasing market adoption of its fixed-price engine exchange model for CFM56 and V2500 engines, with total module refurbishment reaching 757 units in 2025. The company targets 1,050 modules in 2026, a 39% increase.

    03

    FTAI Power Launch and Strategy

    FTAI launched FTAI Power, a new platform converting CFM56 engines into 25-megawatt aero derivative power turbines, targeting the surging demand for AI data center power. The company proactively invested $150 million in Q4 2025 for turbine feedstock and aims for 100 units of production in 2027, with first deliveries expected in Q4 2026. This initiative leverages existing infrastructure and technical expertise, offering a fast, flexible, and scaled power solution.

    04

    MRE Network Expansion and Efficiency

    FTAI continues to strengthen its Maintenance, Repair, and Exchange (MRE) network. This includes expanding facilities in Montreal, Rome (doubling employee base), and Miami (integrating ATOPS acquisition), alongside investments in component repair capabilities (Pacific and Prime Engine Accessories). The integration of Palantir's AI platform is also enhancing productivity and supply chain optimization.

    05

    Market Dynamics and Competitive Advantage

    The long-term outlook for the CFM56 and V2500 aftermarket remains strong, with total maintenance spend expected to grow to $25 billion per annum. Airlines are extending the life of existing fleets, and shop visit demand is shifting to heavier overhauls. FTAI's multiyear materials agreement with CFM provides OEM replacement parts, reinforcing its competitive position and ability to scale its module remanufacturing platform.

    06

    Financial Performance and Capital Allocation

    FTAI reported Q4 FY25 adjusted EBITDA of $277.2 million and full-year adjusted EBITDA of $1.2 billion. The company ended the year at 2.6x leverage, achieving a strong BB rating across all three agencies. Despite increased investments in SCI II and FTAI Power, leading to a revised 2026 free cash flow target of $915 million, the company increased its quarterly dividend to $0.40 per share, reflecting confidence in future growth and capital redistribution.

    AI-generated summary of the company’s earnings call. Not investment advice.