AerSale Q1 Earnings Call Highlights

Key Points

• Leasing drove results: Q1 revenue rose to $70.6 million (+7.4% YoY) and adjusted EBITDA jumped to $7.4 million (+131.9% YoY), powered by a surge in leasing revenue (up 4,757.9% YoY), three 757 freighters on lease (one under LOI) and 18 engines on lease.
• TechOps expansion boosting revenue but pressuring margins: New CRJ work in Millington and an expanded aerostructures facility lifted TechOps revenue, but start‑up training and inefficiencies weighed on near‑term margins—management expects margins to improve as operations scale and Millington targets gross margins >20%.
• Balance sheet and backlog highlights: AerSale used $26.7 million in operating cash YTD largely for $25.1 million of feedstock purchases, ended the quarter with $369.5 million of inventory, available liquidity of $41.8 million (including $2.1 million cash), and a $15.3 million AerSafe backlog ahead of an FAA compliance deadline.

AerSale NASDAQ: ASLE reported first-quarter 2026 revenue of $70.6 million, up 7.4% from the prior-year period, as higher leasing activity and growth in on-airport maintenance work helped drive results. Adjusted EBITDA rose to $7.4 million, up $4.2 million, or 131.9%, from a year earlier, according to management’s prepared remarks.

Chief Executive Officer Nick Finazzo said the company remained focused on executing its strategy across Asset Management and TechOps, including “disciplined acquisition and monetization of flight equipment and used serviceable material,” expanding MRO capabilities, and building a “more predictable revenue base through MRO services and leasing.”

Leasing growth supports results as USM sales decline

Finazzo said leasing demand was a key driver during the quarter, with leasing revenue growing 4,757.9% compared to the prior-year period. The company placed an additional Boeing 757 freighter into service, ending the quarter with three aircraft on lease and another under a letter of intent.

“We continue to engage in discussions with potential customers as increased demand for cargo continues to make us bullish on deploying the remaining 4 757 freighters we converted in 2026,” Finazzo said.

AerSale also expanded its engine leasing portfolio, ending the quarter with 18 engines on lease compared to 16 in the prior-year period. Finazzo attributed stronger asset yields across aircraft and engines to higher average lease rates and improved utilization.

Partially offsetting the leasing gains was a decrease in used serviceable material (USM) sales, which Finazzo said reflected internal consumption of engine material for the company’s own engine builds. He said AerSale is using inventory materials because it expects “a higher value and total $ margin consuming this material rather than selling as USM piece parts to third parties.”

TechOps expansion drives revenue, with near-term margin pressure

In Technical Operations, AerSale began work under a recently awarded long-term multi-line aircraft maintenance agreement at its Millington, Tennessee, facility for CRJ700 and CRJ900 aircraft. The company also started operations at its expanded aerostructures facility in Hialeah Gardens, Florida. Both initiatives contributed to higher TechOps revenue, Finazzo said.

However, management noted margin pressure tied to ramping up newer operations. Finazzo said the company incurred incremental training costs and early-stage inefficiencies during the quarter. “We view these impacts as temporary and expect margins and throughput to improve as volumes continue to increase and operations stabilize,” he said. TechOps results were also affected by lower MRO parts sales, and the Roswell facility posted declines due to fewer aircraft in storage.

During Q&A, Finazzo provided additional detail on capacity additions and demand trends across the MRO network. He said Millington’s CRJ line is expected to expand “to 3 aircraft that will be at full capacity” and described the work as “a very profitable contract with a very good customer.”

At Goodyear, he said AerSale is ramping work after a prior-year low following the completion of a long-term contract, adding that it continues to serve multiple operators, “including Spirit,” and is seeing increased return-to-service work. Finazzo also noted the company’s aerostructures expansion provides significant room to grow, describing the site as a “90,000 sq ft facility” with capacity to fill. He added that the landing gear shop has been performing well and that two agreements—one with an OEM and another with an international carrier—are expected to increase volume as the company moves through the quarter.

On margins, Finazzo said demand remains strong and available maintenance slots limited in on-airport MRO, contributing to pricing and margin improvement. While Millington start-up issues weighed on the quarter, he said the company expects gross profit margins “in excess of 20%” as the facility ramps. He added that Goodyear margins should improve with more return-to-service work, depending on job mix.

FAA compliance deadline supports AerSafe backlog; AerAware marketing continues

Finazzo said AerSafe, the company’s engineered solutions product tied to fuel tank safety systems, “continues to remain strong” ahead of a Federal Aviation Administration compliance deadline in November 2026 related to a Fuel Quantity Indicating System Airworthiness Directive. AerSale ended the quarter with a backlog of $15.3 million, and Finazzo said the majority is expected to close in 2026.

He added that the company continues to market AerAware, which he described as an “enhanced flight vision system,” to select interested customers, while also working with U.S. regulators and safety agencies to highlight potential safety and economic benefits.

Financial details: segment results, expenses, liquidity and feedstock investment

Chief Financial Officer Martin Garmendia said first-quarter revenue increased to $70.6 million from $65.8 million a year ago. Flight equipment sales totaled $5.2 million and consisted of one engine sale, compared to $1.8 million from one engine sale in the prior-year quarter. Excluding flight equipment sales, revenue rose 2.2% year-over-year, driven by leasing growth and partially offset by lower USM and MRO parts sales.

Adjusted EBITDA increased to $7.4 million, or 10.4% of revenue, from $3.2 million, or 4.8% of revenue, in the prior-year period. Garmendia said the improvement was primarily driven by higher leasing revenue and flight equipment sales.

• Asset Management Solutions: Revenue increased 10% year-over-year to $43.1 million. Garmendia said results reflected an expanded lease pool and favorable engine mix, partially offset by lower USM volumes.
• Technical Operations: Revenue increased 3.4% to $27.5 million, driven by higher on-airport MRO activity, including early CRJ ramp-up at Millington. Lower MRO parts sales partially offset the gains.

Gross margin was 26.7%, down from 27.3% a year earlier. Garmendia attributed the decline to startup and training costs related to Millington’s CRJ lines and the aerostructures expansion, as well as higher labor costs at Goodyear as staffing levels were maintained ahead of expected demand later in the year. He said the company expects margins to normalize as utilization improves.

Selling, general and administrative expenses decreased to $22.2 million from $24.6 million, reflecting efficiency initiatives and the absence of one-time severance costs incurred last year. Share-based compensation expense increased to $1.8 million from $1.2 million.

AerSale posted a net loss of $3.5 million, compared with a net loss of $5.3 million in the prior-year period. Adjusted net income was approximately breakeven, compared with an adjusted net loss of $2.7 million a year earlier.

Cash used in operating activities was $26.7 million year-to-date, which Garmendia said was primarily related to $25.1 million in feedstock acquisitions. The company ended the quarter with $369.5 million in inventory and $121.5 million of aircraft and engines held for lease.

Available liquidity totaled $41.8 million at quarter-end, including $2.1 million in cash and $39.7 million of availability under its $180 million asset-backed revolving facility, which Garmendia said can be expanded to $200 million.

Outlook and commentary on market conditions

Looking ahead, Finazzo said the company’s priorities for the remainder of 2026 include placing the remaining four converted 757 freighters, continuing to monetize inventory through USM sales, filling capacity across the MRO network, and improving profitability as expansion initiatives scale.

Asked about potential impacts from conflict in the Middle East, Finazzo said AerSale was “not really hearing much from our customers at this point.” He added that a prolonged period of higher fuel costs and aircraft parking could eventually increase aircraft storage activity—which could benefit AerSale’s storage operations—while potentially affecting USM demand. However, he said the company is not seeing an impact currently and does not expect a short-term effect, adding that for key USM parts “there continues to be excess demand than there is available inventory.”

In closing remarks, Finazzo said that despite “non-recurring startup costs” tied to expansion projects in the first quarter, the operating business continued to improve, and he reiterated management’s view that the company’s integrated model can support growth as initiatives mature.

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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