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Introduction & Market Context
FTAI Aviation Ltd (NASDAQ:FTAI) released its Q2 2025 earnings presentation on July 30, 2025, revealing strong financial performance and significant progress in its strategic initiatives. The company, which specializes in aftermarket solutions for CFM56 and V2500 commercial jet engines, reported substantial year-over-year growth across key metrics as it continues to capitalize on favorable industry trends.
The company operates in a $22 billion total addressable market that is being driven by aging narrowbody aircraft. According to the presentation, 60% of narrowbody aircraft are pre-A320neo/B737 Max models, and the average retirement age has increased from 25 to 30 years. Additionally, 40% of CFM56 engines have yet to undergo their first shop visit, creating a substantial long-term opportunity for FTAI’s maintenance, repair, and exchange (MRE) services.
As shown in the following slide outlining the company’s mission and market position:
Quarterly Performance Highlights
FTAI Aviation reported impressive financial results for Q2 2025, with revenue reaching $676 million and net income of $162 million. Adjusted EBITDA surged to $348 million, representing a 63% year-over-year increase. The company also generated $370 million in adjusted free cash flow during the first half of 2025 and maintained a solid cash balance of $302 million.
These results mark a significant improvement from Q1 2025, when the company missed earnings expectations with an EPS of $0.87 against a forecast of $0.97, as reported in earlier earnings coverage. The Q2 performance suggests a strong recovery and acceleration of growth momentum.
The following slide details the company’s Q2 2025 financial highlights and statement of operations:
The Aerospace Products segment was particularly strong, with revenue of $490 million in Q2 2025 and adjusted EBITDA of $165 million, representing an 81% increase compared to Q2 2024. This segment’s growth has been fueled by accelerating adoption of the company’s MRE solutions, with market share doubling over the past 12 months to approximately 9% of the CFM56 and V2500 aftermarket.
The following slide illustrates the rapid growth in MRE adoption and market share gains:
Strategic Initiatives
FTAI Aviation is executing several strategic initiatives to capitalize on market opportunities and drive sustainable growth. A central element is the company’s shift toward an asset-light business model through its Strategic Capital Initiative (SCI). This involves selling aircraft from its balance sheet to SCI while maintaining service contracts for engine maintenance.
As of July 25, 2025, the company had closed or secured letters of intent for 145 aircraft (54% of its annual target) and generated $170 million in year-to-date revenue from engines sold to the 2025 SPV. The initiative aims to deploy $4 billion in capital across approximately 250 aircraft.
The following slide outlines the company’s strategic positioning and key growth initiatives:
Production capacity is also expanding rapidly, with module production increasing 33% to 184 CFM56 modules in Q2 2025. The company is ramping up operations across its facilities in Montreal, Miami, and Rome, with a total production capacity of 1,800 modules against a 2025 goal of 750 modules. The recent acquisition of a 50% joint venture in Rome (QuickTurn Europe) adds 450 modules of annual capacity and provides access to approximately 40% of FTAI’s customer base.
The following slide details the production ramp-up across facilities:
FTAI is also pursuing strategic acquisitions to enhance its capabilities and drive cost efficiencies. Recent acquisitions include Pacific Aerodynamic, a specialist in CFM56 HPC blade and vane repairs, which is expected to generate average savings of $50,000 per shop visit. The company is developing technical talent through a new Training Academy in Montreal and leveraging augmented reality tools to enhance training and maintenance procedures.
The following slide illustrates the company’s M&A strategy and recent acquisitions:
Detailed Financial Analysis
FTAI Aviation’s financial position continues to strengthen, with net debt to run-rate adjusted EBITDA improving to 2.4x in Q2 2025, down from 5.0x in 2022. The company has total liquidity of $702 million, including $400 million available on its corporate revolver facility, which was fully repaid in Q2 2025.
The company has revised its 2025 adjusted free cash flow target to $750 million, with $370 million already generated in the first half of the year. This projection includes the impact of strategic investments in leasing assets, inventory, and equity contributions to SCI.
The following slide details the revised free cash flow target and its components:
The Aviation Leasing segment reported adjusted EBITDA of $199.3 million for Q2 2025, including gains from the sale of 33 aircraft from the seed portfolio to SCI and $24.2 million in recoveries from assets previously written off due to the Russia/Ukraine conflict. Excluding these one-time items, the segment’s adjusted EBITDA grew 29% year-over-year.
The company’s capital structure has evolved significantly as part of its pivot to an asset-light strategy, with net debt decreasing to $3.14 billion in Q2 2025 from $3.33 billion in 2024, while run-rate adjusted EBITDA has increased to $1.30 billion from $862 million in 2024.
The following slide illustrates the evolution of the company’s capital structure:
Forward-Looking Statements
FTAI Aviation has set a revised target for its net debt to run-rate adjusted EBITDA ratio of 2.5x to 3.0x for fiscal year 2025, reflecting its commitment to maintaining financial discipline while pursuing growth opportunities. The company expects to complete the sale of its seed portfolio to SCI by Q3 2025 and continues to invest in inventory and leasing assets at opportunistic prices.
The aging narrowbody aircraft market is expected to provide a durable growth runway, with the company forecasting continued strong demand for CFM56 shop visits over the next decade. Industry trends extending aircraft lifespans include OEM delivery delays for new aircraft, durability issues with new-generation engines, lower capital costs for mid-life aircraft, and higher inflation and interest rates.
The following slide shows the projected demand for CFM56 shop visits and industry trends:
FTAI Aviation’s stock closed at $114.38 on July 29, 2025, down 0.21% for the day, but rose 1.33% to $115.90 in after-market trading following the earnings release. The stock has traded between $75.06 and $181.64 over the past 52 weeks, suggesting investors see potential upside as the company executes on its strategic initiatives and capitalizes on favorable industry trends.
With its expanding market share, production capacity increases, strategic acquisitions, and shift to an asset-light model, FTAI Aviation appears well-positioned to continue its growth trajectory in the commercial aircraft engine aftermarket.
Full presentation:
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