AerSale Corp

AerSale Corporation operates in the commercial aviation aftermarket, providing comprehensive support to owners and operators of mid-life commercial aircraft. The company's mission is to offer a full-service, one-stop shop that integrates multiple service and product offerings, aiming to save customers time and money while providing value to stockholders through operating efficiency. Founded in 2008, AerSale has established a global footprint and scalable platform for growth, partnering with private equity firm Leonard Green & Partners, L.P. in early 2010 to scale its business and finance the creation of a fully integrated aviation company.

The company's core business model revolves around maximizing the value of mid-life commercial aircraft throughout their operating life and extracting residual value upon retirement. This is achieved by acquiring Flight Equipment (aircraft and engines) as feedstock, which is then monetized through sales, short-term leases, or disassembly for Used Serviceable Material (USM). AerSale's integrated business units allow for the maximization of alternative revenue streams, from whole asset sales or leases down to utilizing individual components as USM feedstock or to reduce MRO costs. The company also offers its integrated Asset Management Solutions to third-party clients who may lack the expertise or infrastructure to optimize their Flight Equipment investments.

AerSale's operations are divided into two reporting segments: Asset Management Solutions and Technical Operations (TechOps). The Asset Management Solutions segment accounted for approximately 63% ¹ of total revenue during the fiscal year ended December 31, 2025, and 62% ² in 2024. This segment focuses on acquiring Flight Equipment, selling and leasing aircraft and engines, and disassembling assets for component parts (USM). The majority of acquired aircraft and engines are ultimately disassembled for USM parts once the full value of their remaining operating life has been extracted.

The TechOps segment represented approximately 37% ³ of total revenue during the fiscal year ended December 31, 2025, and 38% ⁴ in 2024. This segment provides nose-to-tail Maintenance, Repair, and Overhaul (MRO) services for commercial aircraft, engines, and components across passenger, cargo, and government sectors. TechOps operates U.S.-based MRO facilities with approximately 530,000 square feet ⁵ of hangar space in Goodyear, Arizona, Roswell, New Mexico, and Millington, Tennessee, offering airframe MRO, structural modification, conversions, flight system upgrades, and long-term storage for up to 650 aircraft ⁶. Additionally, specialized component MRO capabilities are offered from facilities in Miami, Florida, Hialeah Gardens, Florida, Rio Rancho, New Mexico, and Millington, Tennessee. The TechOps segment also develops "Engineered Solutions" such as AerSafe® and AerAware™, which are proprietary technical repairs, modifications, and products designed to enhance aircraft performance, safety, and service life at lower costs than OEM products.

For the fiscal year ended December 31, 2025, AerSale reported total revenue of $335.286 million ⁷, a decrease of $9.8 million ⁸ or 2.8% ⁹ compared to 2024. Gross profit for the year was $105.774 million ¹⁰, an increase of 1.8% ¹¹ from $103.936 million ¹² in 2024. Selling, general and administrative expenses decreased by $4.2 million ¹³ to $90.0 million ¹⁴, or 4.5% ¹⁵, for the year ended December 31, 2025, compared to 2024. Income from operations was $15.790 million ¹⁶ in 2025, up from $9.744 million ¹⁷ in 2024. Net income for 2025 was $8.575 million ¹⁸, resulting in diluted EPS of $0.18 ¹⁹. Cash and cash equivalents stood at $4.379 million ²⁰ as of December 31, 2025. Total debt, comprising the Wells Fargo senior secured revolving credit facility and the CIBC property and equipment revolving term loan, was $112.330 million ²¹ as of December 31, 2025.

Year-over-year comparisons show a decrease in total revenue by $9.8 million ⁸ or 2.8% ⁹ in 2025. Asset Management Solutions revenue decreased by $3.9 million ²² or 1.8% ²³ to $211.583 million ²⁴, primarily due to a $5.8 million ²⁵ decrease in Aircraft revenue, partly offset by a $1.9 million ²⁶ increase in Engine revenue. TechOps revenue decreased by $5.9 million ²⁷ or 4.5% ²⁸ to $123.703 million ²⁹, mainly due to a $22.5 million ³⁰ decrease in MRO services revenue, partially offset by a $16.6 million ³¹ increase from Component MROs and Engineered Solutions products. Gross profit in TechOps increased by $10.2 million ³² or 47.5% ³³ to $31.711 million ³⁴, with gross profit margin increasing to 25.6% ³⁵ in 2025 from 16.6% ³⁶ in 2024, driven by higher margins on MRO services and Engineered Solutions.

During the reported fiscal period, AerSale repurchased 6,428,571 shares ³⁷ of its common stock at a price of $7.00 per share ³⁸ for a total consideration of $45.0 million ³⁹ on March 18, 2025. The company also recorded a $0.1 million ⁴⁰ gain on the change in fair value of warrant liability for the year ended December 31, 2025, as the Private Warrants expired unexercised during the year. Additionally, in April 2024, one of the company's leased secondary parts warehouses in Roswell, New Mexico, was destroyed by a fire, leading to an insurance claim for $104.5 million ⁴¹ for destroyed or unsellable inventory, with $34.6 million ⁴² collected from insurance companies as of December 31, 2025, and $3.7 million ⁴³ collected during 2025.

Management's specific revenue, margin, or EPS guidance for the upcoming period is not explicitly stated in the filing.

AerSale intends to pursue growth opportunities aligned with its existing capabilities. One key growth area is broadening MRO capabilities by utilizing its FAA "unlimited" repair station licenses to develop new services and augment brand loyalty. The MRO segment is considered accretive to the Asset Management Solutions business, providing incremental opportunities for cross-selling Flight Equipment and USM spare parts after an initial MRO service relationship is established.

Another significant growth vector is expanding the company's government presence. Many commercial aircraft and engine platforms serviced by AerSale have military or civilian government agency equivalents. Given that government funding is generally stable and uncorrelated with the commercial aviation cycle, AerSale views this as an important growth market. The company plans to increasingly focus on capturing additional USM parts sales and MRO service opportunities directly with government customers or through subcontracting arrangements with government contractors.

AerSale also plans to introduce new Engineered Solutions. These offerings provide value-add for customers through proprietary alternative products, repairs, and modifications designed to enhance aircraft performance, reliability, safety, regulatory compliance, service life, and cost-of-ownership economics. The company's broad range of engineering and MRO capabilities, coupled with its deep knowledge of maintenance-intensive mid-life aircraft, positions it to efficiently identify and implement new Engineered Solutions and proprietary component repairs.

The company aims to expand its geographical footprint, leveraging the growth in the international aviation sector. As international fleets grow in size and age in both established and emerging markets, AerSale expects to play an increasing role in supplying Flight Equipment spares, MRO support, and USM parts to markets that currently lack mature infrastructure to meet this demand.

AerSale will continue to pursue strategic acquisitions, building on its proven track record of expanding capabilities through acquisitions such as Great Southwest Aviation (AerSale - Roswell) in 2010, Aero Mechanical Industries (AerSale Landing Gear Solutions) in 2015, Goodyear Maintenance Facility (AerSale – Goodyear) in 2017, Avborne Accessory Group (AerSale Component Solutions) in 2018, Qwest Air Parts in 2019, Q2 Aviation in 2019, and Aircraft Composite Technologies (AerSale AeroStructures-Miami) in 2020. The company will evaluate opportunities that meet its financial return profile and enhance its value proposition by integrating acquired businesses into its existing product and service offerings.

Regarding operational outlook, selling, general and administrative expenses decreased by $4.2 million ¹³ to $90.0 million ¹⁴ for the year ended December 31, 2025, compared to 2024, due to lower variable and fixed payroll costs resulting from efficiency initiatives implemented earlier in the year, partially offset by inflationary cost increases. Gross profit margin in TechOps increased to 25.6% ³⁵ in 2025 from 16.6% ³⁶ in 2024, driven by higher margins on MRO services and Engineered Solutions.

Planned capital allocation includes continued investment in R&D activities for Engineered Solutions, which are expensed as incurred. The company used $3.9 million ⁴⁴ in investing activities for the year ended December 31, 2025, a decrease from $16.1 million ⁴⁵ in 2024, driven by lower purchases of property and equipment due to the completion of expansion projects. AerSale does not intend to pay dividends on its common stock in the foreseeable future, planning to retain future earnings to fund operations, service debt, and meet other corporate needs. The Revolving Credit Agreement limits the company's ability to pay cash dividends. The company may also purchase its outstanding common stock through various transactions, as demonstrated by the repurchase of 6,428,571 shares ³⁷ for $45.0 million ³⁹ in March 2025.

Management explicitly flagged several structural headwinds and execution risks. These include disruptions in the supply chain, factors adversely impacting the commercial aviation industry (such as geopolitical events, high fuel prices, inflation, high interest rates, and weak economic conditions), the fluctuating market value of products, and the inability to repossess Flight Equipment when a lessee defaults. The success of MRO facilities is dependent on continued outsourcing by airlines, and a shortage of skilled personnel or work stoppages could adversely affect operations. The inability to obtain certain components and raw materials from suppliers is also a risk. Geopolitical factors, such as military conflicts in Ukraine and the Middle East, including recent military action in Iran, are creating an adverse climate for the business. These conflicts could lead to enhanced export restrictions, sanctions, regional instability, energy shortages, and adverse effects on macroeconomic conditions, security conditions, currency exchange rates, and financial markets. The company's enterprise resource planning vendor and the supplier of most components for its AerAware™ EFVS offering are both based in Israel, posing a specific risk related to the conflict.

AerSale's business is subject to numerous risks and uncertainties, including macroeconomic factors such as overall economic conditions, inflation, high interest rates, and energy costs, which can negatively impact the commercial aviation industry and reduce demand for products and services ⁴⁶. Geopolitical risks are significant, with military conflicts in Ukraine and the Middle East, including recent military action in Iran, creating an adverse climate that could lead to enhanced export restrictions, sanctions, regional instability, energy shortages, and adverse effects on macroeconomic conditions, security conditions, currency exchange rates, and financial markets ⁴⁷. The company's enterprise resource planning vendor and the supplier of most components for its AerAware™ EFVS offering are both based in Israel, exposing it to specific risks related to the conflict ⁴⁸. Operational risks include supply chain disruptions leading to materials and parts shortages, delivery delays, and price increases ⁴⁹. The fluctuating market value of aviation products and the inability to repossess Flight Equipment from defaulting lessees pose financial risks ⁵⁰. The success of MRO facilities depends on continued outsourcing by airlines, and a shortage of skilled personnel or work stoppages could adversely affect operations ⁵¹. Cybersecurity threats, including malicious software and ransomware attacks, could lead to disruptions and unauthorized release of sensitive information ⁵². Regulatory risks involve compliance with extensive government regulations, including FAA requirements, U.S. and foreign anti-corruption laws (such as the FCPA), export and import control laws, and trade and economic sanctions ⁵³. Changes in environmental and climate protection laws or regulations, such as CORSIA, could lead to additional operational restrictions and compliance costs ⁵⁴.

Management's message to shareholders emphasizes the company's mission to provide full-service support to owners and operators of mid-life commercial aircraft, aiming to save customers time and money while providing value to stockholders through operating efficiency. They highlight the company's global footprint and scalable platform for growth, established since its founding in 2008. The strategic priorities for the period ahead include broadening MRO capabilities by utilizing FAA "unlimited" repair station licenses to develop new services and augment brand loyalty, expanding the government presence by focusing on capturing additional USM parts sales and MRO service opportunities directly with government customers or through subcontracting arrangements, and introducing new Engineered Solutions to enhance aircraft performance, reliability, safety, regulatory compliance, service life, and cost-of-ownership economics. Management also notes the company's intention to expand its geographical footprint to serve a broader set of foreign aircraft owners, operators, OEMs, and MRO customers, and to pursue strategic acquisitions that meet its financial return profile and enhance its value proposition. The company does not intend to pay dividends on its common stock in the foreseeable future, planning to retain future earnings to fund operations, service debt, and meet other corporate needs.