Detailed narrative
2025 Performance Highlights
StandardAero concluded its 114th year and first full year as a publicly traded company with record performance in 2025. The company achieved 16% year-over-year revenue growth and a 17% increase in adjusted EBITDA, driven by strong demand and high-quality execution. Free cash flow reached $209 million for the year, with over $300 million generated in the second half, demonstrating the asset-light business model and effective cash management.
LEAP Program Progress and Strategic Investments
The LEAP program showed substantial ramp-up in 2025, with 60 engines inducted compared to 10 in 2024, and H2 revenues 2.5 times H1. StandardAero developed over 475 LEAP component repairs and delivered its first full overhaul, marking a significant milestone. The company also expanded its Augusta business aviation facility for large cabin jets and is expanding its Winnipeg CF34 facility, expected to be complete in H2 2026, to meet strong demand.
Operational Excellence and Margin Expansion
Performance excellence initiatives included restructuring customer contracts to eliminate $300 million to $400 million of low-margin pass-through revenue, which will result in higher reported margins. In-source component repair revenue increased by 15%, contributing to better turn times and stronger margin mix. ATI acquisition synergies exceeded plans, boosting CRS segment margins into the high 20s from the mid-20s previously.
Market Demand and Pricing Environment
Market demand remains robust across commercial aerospace (nearly 18% growth), business aviation (12% growth), and military (9% growth). The company noted that the market is still accepting above-average price increases due to persistent engine shortages and supply chain constraints, though pricing has moderated from its peak during COVID. StandardAero actively prices to the market, reflecting capacity constraints and strong customer demand.
Capital Allocation and Leverage Improvement
The net debt to adjusted EBITDA leverage ratio improved significantly from 3.1x to 2.4x by year-end 2025, providing meaningful capital allocation flexibility. This allows for continued organic investments, strategic M&A, and opportunistic share repurchases, including a $450 million share repurchase program authorized in December. The company maintains a disciplined approach focused on strategic fit and return on investments.
Labor Strategy and Workforce Development
StandardAero has proactively addressed potential labor constraints by implementing a multi-phased approach to technician recruitment and training. This includes leveraging advanced social media for recruiting, beefing up internship programs with universities, and establishing an internal university in San Antonio. The company benefits from a low attrition rate and high average employee tenure, minimizing the need for extensive external recruitment and training.