AerSale Q3 Earnings Call Highlights

Key Points

• Revenue rose 29% to $91.6 million, including a $9.3 million engine sale; revenue excluding flight equipment sales increased 16% to $82.3 million.
• AerSale posted a $15 million net loss, including a $13.4 million non-cash goodwill impairment. Adjusted EBITDA fell to $8.6 million, while higher staffing and technology costs cut TechOps gross margin to 12.5% from 25.3%.
• Cash used in operations reached $42.7 million for the first nine months, and quarter-end available liquidity was $23.1 million. Management expects aircraft sales before year-end and stronger fourth-quarter results, with maintenance demand and facility expansion expected to support future performance.

AerSale NASDAQ: ASLE reported a 29% increase in third-quarter revenue, but higher costs associated with expanding its maintenance operations and a goodwill impairment pushed the company to a wider net loss.

Revenue rose to $91.6 million from $71.2 million a year earlier, including a $9.3 million engine sale. Excluding flight equipment sales, revenue increased 16% to $82.3 million, supported by growth in leasing, used serviceable material, heavy maintenance and engineered products, Chief Financial Officer Martin Garmendia said.

The company reported a net loss of $15 million, or $0.31 per share, compared with a loss of $0.1 million a year earlier. The latest quarter included a $13.4 million non-cash goodwill impairment in its Asset Management Solutions segment. Garmendia said the write-off followed a sustained decline in AerSale’s stock price and market capitalization and did not affect liquidity or debt covenant compliance.

Adjusted EBITDA fell to $8.6 million, or 9.3% of revenue, from $9.5 million, or 13.3% of revenue, a year earlier. Adjusted loss per share was $0.02, compared with adjusted earnings of $0.04 per share in the prior-year quarter.

Maintenance Revenue Rises, but Margins Narrow

TechOps revenue increased 28% to $41 million. Engineered Solutions revenue rose to $8.4 million from $2.2 million, driven in part by deliveries of AerSafe kits used by operators complying with a fuel tank flammability directive. Heavy maintenance revenue increased to $16.3 million from $13.4 million, while component maintenance revenue was essentially flat at $16.3 million.

Despite the revenue growth, TechOps gross margin declined to 12.5% from 25.3%. Garmendia said the company had added labor and technology costs to prepare for increased demand. AerSale’s overall gross margin fell to 22.5% from 30.2%.

Chief Executive Officer Nick Finazzo said AerSale had received a multi-line contract from a North American cargo airline for Boeing 757 and 767 heavy maintenance work at its Goodyear facility. He also said maintenance demand associated with Airbus A320 aircraft affected by the Spirit Airlines wind-down was expected to continue through 2027.

At Millington, Tennessee, AerSale generated revenue from two maintenance check lines awarded by a regional carrier and recently added a third modification line, Finazzo said. The company expects to add shifts at both Millington and Goodyear to increase throughput.

In response to an analyst’s question, Garmendia said the company anticipated that its heavy and component maintenance businesses would begin making positive EBITDA contributions next year as demand improves and facilities absorb more fixed costs.

Asset Sales and Liquidity in Focus

Asset Management Solutions revenue rose 29% to $50.5 million. Excluding flight equipment sales, segment revenue increased 6% to $41.3 million, driven by leasing and used serviceable material. AerSale ended the quarter with 18 engines and five Boeing 757 freighters on lease, compared with 18 engines and three freighters at the end of the second quarter.

Finazzo said AerSale expects its previously announced $35 million Boeing 737 sale to the U.S. Marshals Service and other flight equipment sales to close before year-end. Management expects those transactions to recover invested capital, generate a return and improve liquidity.

For the first nine months of 2026, cash used in operating activities was $42.7 million, up from $34.3 million a year earlier. Garmendia attributed the increase primarily to inventory investment, including feedstock and capitalized repair costs. Free cash flow was negative $49.8 million.

AerSale ended the quarter with $23.1 million in available liquidity, comprising $3.9 million in cash and $19.2 million available under its revolving credit facility. Borrowings under the facility stood at $158.7 million, up from $110.1 million at year-end.

Management said it expects a significantly stronger fourth quarter, but Garmendia declined to provide a gross-margin forecast. He said anticipated flight equipment sales and improvements in TechOps should support margins.

About AerSale (NASDAQ:ASLE)

AerSale Corporation NASDAQ: ASLE is an aviation aftermarket company that provides products and services to commercial airlines, aircraft leasing companies, original equipment manufacturers, government agencies and other aviation customers. The company focuses primarily on commercial aircraft and engines, including aircraft sales and leasing support, component sourcing, and related asset management services.

AerSale also operates maintenance, repair and overhaul capabilities for aircraft, engines and components.

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