What FTAI Aviation (FTAI) Said on Its Q3 Earnings Call

Key Points

• Record Aerospace Products performance drove results, with revenue up 76% year over year to $910 million and adjusted EBITDA up 57% to $282.4 million. FTAI produced a record 311 CFM56 engine modules and reaffirmed its 2026 and 2027 production targets.
• Strategic Capital continued to expand, contributing more than half of Aviation Leasing’s EBITDA. FTAI fully committed its first vehicle at 301 aircraft, launched its second vehicle and secured $5.5 billion in warehouse financing from 13 lenders.
• FTAI announced a new $500 million accelerated share repurchase, increasing total repurchase authorization to $1 billion, while maintaining leverage below its target range. The company also reaffirmed its 2026 and 2027 adjusted EBITDA outlook and maintained its $0.50 quarterly dividend.

FTAI Aviation NASDAQ: FTAI reported third-quarter results marked by record Aerospace Products performance, growth in its Strategic Capital platform and progress in its power-generation business, while reaffirming its 2026 and 2027 segment guidance.

Adjusted EBITDA totaled $348.3 million in the third quarter, up 15% from $303.5 million in the second quarter and 17% from $297.4 million a year earlier, Chief Financial Officer Nicholas McAleese said. Net income attributable to shareholders was $149.1 million, or $1.45 per share, compared with $117.6 million in the prior quarter.

Chief Executive Officer Joe Adams said the company is positioning itself as a provider of maintenance, leasing and financing solutions for airlines operating mid-life narrowbody fleets. He cited limited availability of new aircraft, extended delivery timelines and continued maintenance challenges for newer-generation engines as factors supporting demand for FTAI’s products.

Aerospace Products Sets Records

FTAI’s Aerospace Products segment generated $910 million in revenue, up 76% year over year, and $282.4 million in adjusted EBITDA, up 57% from the year-earlier period. The segment’s EBITDA margin was 31%, consistent with the company’s 30% guidance.

The company produced a record 311 CFM56 engine modules during the quarter, bringing year-to-date production to 877 modules. Management said it remains on track to produce 1,200 modules in 2026 and 1,700 in 2027. Adams said FTAI’s CFM56 market share reached approximately 15% during the quarter.

Management said the company expects a roughly 30% EBITDA margin in Aerospace Products over the next several years. Adams said the margin expectation reflects a customer mix that includes large and small airlines as well as both heavy and light engine shop visits.

FTAI said it is seeing increased interest in engine leasing and financing as airlines seek to preserve liquidity. Adams said the company can rebuild and sell engines directly, exchange them for runout engines or arrange leases through capital partners. The structure allows airlines to finance maintenance needs while FTAI can sell leased assets to financial partners, he said.

During the call, management also pointed to a transaction with WestJet as an example of its integrated model. WestJet sold 27 Boeing 737-700 aircraft: 17 leased aircraft went to Strategic Capital II through a sale-leaseback, while 10 off-lease aircraft were acquired by Aerospace Products for engine harvesting and module production.

Strategic Capital Expands

Aviation Leasing generated $104 million in adjusted EBITDA, up 18% sequentially. The total included $50 million from balance-sheet leasing and $54 million from Strategic Capital, including $7.4 million in servicing fees and $46.2 million in returns from FTAI’s 19% co-investment in the 2025 special-purpose vehicle.

President David Moreno said Strategic Capital now accounts for more than half of Aviation Leasing EBITDA. Strategic Capital I was fully committed at 301 aircraft, and FTAI expects substantially all of those aircraft to close by Dec. 31, representing about $6 billion of total capital deployed. Since the end of the quarter, the company closed a $1 billion transaction involving 30 aircraft, according to Moreno.

Strategic Capital I distributed 17.5% of commitments during the year and plans to distribute another 5% at year-end, management said. Strategic Capital II began investing in September and had commitments for 109 aircraft, including the WestJet transaction.

FTAI has raised $5.5 billion in warehouse financing from 13 lenders across the two Strategic Capital vehicles in less than two years, Moreno said. He added that sale-leaseback activity is increasing as airlines pursue liquidity. In Strategic Capital I, about 20% of aircraft sourcing has come from sale-leasebacks, compared with about 40% so far in Strategic Capital II.

Power Business Reaches Testing and Contract Milestones

FTAI said its Mod-1 power unit completed critical testing milestones, reaching 25 megawatts of peak output and 23.1 megawatts of continuous baseload output. Testing was completed using both natural gas and liquid fuels.

The company also said it has more than 100 Mod-1 units under contract for delivery in 2027 and 2028, with most of those commitments weighted toward 2027. Customer deposits received during the quarter totaled $234 million, partially offsetting inventory investments for future production.

Management expects production to begin at roughly zero to five units per month before increasing to 10 to 15 units per month by the end of 2027. The company said this production ramp supports its target of delivering 100 units during 2027, though Moreno said the range of potential 2027 Power EBITDA reflects execution on the production ramp and customer delivery schedules.

FTAI also announced a joint venture to develop a mobile, trailer-mounted combined-cycle unit designed to add 9 megawatts of output by using excess heat without additional fuel, emissions or water. Management said the system is expected to raise efficiency above 50%, with first units scheduled for testing in the second half of 2027.

Capital Returns, Balance Sheet and Outlook

The company announced a new $500 million accelerated share repurchase program that is expected to be completed by year-end. It also increased its total repurchase authorization to $1 billion. FTAI had repurchased $80 million of stock since its initial September authorization, leaving $420 million available for opportunistic open-market purchases for one year after the accelerated repurchase is completed.

FTAI ended the quarter with approximately $3.5 billion of total debt, $386 million of cash and approximately $3.1 billion of net debt. Net debt to run-rate adjusted EBITDA was 2.2 times, below the company’s stated target range of 2.5 to 3.0 times. Management said it expects leverage to remain below 3.0 times while funding the accelerated repurchase through a combination of its revolver and capital-markets access.

For the first nine months of 2026, FTAI generated $724 million of adjusted free cash flow before growth initiatives. The company now expects full-year adjusted free cash flow before growth initiatives of $1.1 billion, lowered by $61 million for opportunistic engine acquisitions. Growth initiatives are expected to total $463 million for the year, driven primarily by Power research and development and facility spending.

FTAI reaffirmed 2026 adjusted EBITDA guidance of $1.05 billion for Aerospace Products and $475 million for Aviation Leasing. Its 2027 adjusted EBITDA outlook remains $2.3 billion at the lower end of its range, including $1.4 billion from Aerospace Products, $450 million to $750 million from FTAI Power and $450 million from Aviation Leasing.

The company also maintained its quarterly dividend at $0.50 per share, payable Nov. 23 to shareholders of record as of Nov. 10.

About FTAI Aviation (NASDAQ:FTAI)

FTAI Aviation Ltd. is an aviation-focused company that owns, acquires, leases and sells commercial aircraft engines, aircraft and related aviation assets. Its portfolio primarily supports the global narrowbody aircraft market, with a particular focus on widely used engine platforms such as the CFM56 and V2500.

The company provides engine leasing solutions to airlines, aircraft leasing companies and other aviation customers. It also supplies aviation parts and materials and offers maintenance, repair and overhaul-related services.

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