AerSale — Third Quarter 2026 Earnings Summary

Financial Performance

• Total revenue for the three months ended September 30, 2026, was $91.6 million, a 28.6% increase compared to $71.2 million in the prior year period.
• Net loss for the quarter was $15.0 million, including a $13.4 million non-cash goodwill impairment charge, compared to a net loss of $0.1 million in the prior year.
• Adjusted net loss was $1.1 million, compared to adjusted net income of $1.5 million in the prior year.
• Adjusted EBITDA was $8.6 million (9.3% of revenue), down from $9.5 million (13.3% of revenue) in the prior year.
• Diluted loss per share was $0.31, compared to $0.00 in the prior year; adjusted diluted loss per share was $0.02, compared to adjusted earnings of $0.04.
• Gross margin was 22.5% for the quarter, down from 30.2% in the prior year.
• Selling, general, and administrative expenses were $18.8 million, compared to $18.6 million in the prior year.
• Loss from operations was $11.6 million, compared to income from operations of $2.9 million in the prior year.
• Inventory stood at $334.1 million as of September 30, 2026.
• Aircraft and engines held for lease were $165.9 million as of September 30, 2026.
• Liquidity at quarter-end was $23.1 million, consisting of $3.9 million in cash and $19.2 million available on an $180 million revolving credit facility (expandable to $200 million).
• Year-to-date cash used in operating activities was $42.7 million.

Guidance and Future Outlook

• Management expects a significantly stronger fourth quarter driven by a well-defined Flight Equipment pipeline expected to close before year-end.
• A $35 million sale of a Boeing 737 aircraft to the U.S. Marshals Service is committed and expected to close in the fourth quarter.
• Additional engine sales previously expected in Q3 are now expected to close in Q4.
• Adjusted EBITDA is expected to continue improving as ramp-up costs for new programs designed to deliver higher profitability and recurring revenue diminish over time.
• Leasing margins are expected to improve as 757 utilization increases and additional engines are placed on lease.

Business Segments and Product Lines

• Asset Management Solutions (AMS): Revenue increased 28.9% to $50.5 million. Excluding Flight Equipment sales, AMS revenue grew 6.4% to $41.3 million, driven by leasing and USM. Feedstock acquisitions were $7.1 million for the quarter. The company was awarded seven A330 airframes meeting return requirements. As of September 30, 2026, 18 engines and five B757 freighter aircraft were on lease.
• Technical Operations (TechOps): Revenue increased 28.2% to $41.0 million. Heavy MRO revenue grew as Millington ramped up with two check lines awarded by a regional carrier. Goodyear revenue was flat year-over-year with incremental maintenance beginning in Q4. Roswell performed ahead of plan on storage and fixed-price check work. Component MRO revenue was flat year-over-year. Engineered Solutions revenue increased driven by AerSafe® kit deliveries.
• Flight Equipment Sales: Consisted of one whole engine and $9.3 million in sales for the quarter, compared to $0.4 million in the prior year.
• AerSafe®: Strong commercial demand noted for the AerSafe® product line.

Market and Competitive Landscape

• Feedstock acquisitions were $7.1 million for the quarter and $37.8 million year-to-date, compared to $84.2 million in the prior year-to-date period, reflecting a disciplined approach to pricing in a competitive sellers' market.
• The company is using advanced analytics to identify cost-efficient methods to prepare USM for sale and to optimize workforce efficiency and capacity utilization at Millington, Goodyear, and Component MRO shops.
• Operators are complying with fuel tank flammability Airworthiness Directives, driving demand for AerSafe® kit deliveries.

Risks and Challenges

• The company reported a $13.4 million non-cash goodwill impairment charge in the third quarter of 2026.
• Gross margins declined to 22.5% from 30.2% in the prior year, with TechOps gross margin specifically dropping to 12.5% from 25.3%.
• Year-to-date cash used in operating activities was $42.7 million, primarily due to continued investment in inventory and capitalized repair costs.
• Forward-looking statements regarding expected financial performance, operating capacity, and liquidity are subject to risks and uncertainties that could cause actual results to differ materially.

Management Commentary and Tone

• CEO Nicolas Finazzo stated that strategic initiatives undertaken since early 2025 to monetize assets, optimize the sales force, invest in technology, and expand facilities are "taking hold," resulting in meaningful operational improvements over the second quarter.
• Management highlighted the use of advanced analytics to strengthen USM sales and improve efficiency in TechOps facilities.
• The tone regarding the fourth quarter is confident, citing a clear path to monetizing inventory and a well-defined sales pipeline.

Other Key Points

• The Company has 18 engines and five B757 freighter aircraft on lease as of September 30, 2026, compared to 18 engines and three B757 freighters on lease as of June 30, 2026.
• The Company is advancing opportunities for its remaining two B757 freighters and working with engine MRO partners to finalize engines in repair.
• Share-based compensation expense was $0.5 million in the quarter, down from $1.3 million in the prior year.
• The effective tax rate was negative 4.8% for the quarter.
• The Company will host a conference call on November 5, 2026, at 4:30 pm Eastern Time with CEO Nicolas Finazzo and CFO Martin Garmendia.