FTAI Aviation Ltd.

FTAI reported second-quarter adjusted EBITDA of $291.4 million, including $249.7 million from Aerospace Products, $88.2 million from Aviation Leasing, and a negative $46.5 million from Corporate & Other. Aerospace Products revenue increased 78% year over year and 18% sequentially; Aerospace Products adjusted EBITDA increased 51% year over year and 12% sequentially to $249.7 million, with a 29% margin. The company refurbished 296 CFM56 modules in Q2, up 61% year over year, bringing first-half production to 566 modules. Management raised 2026 module production guidance to 1,200 from 1,050, reaffirmed Aerospace Products EBITDA of $1.05 billion, and cut 2026 Aviation Leasing EBITDA guidance to $475 million. Full-year 2026 adjusted free cash flow guidance was updated from $915 million to $878 million, while the company maintained its target of approximately $1.2 billion of adjusted free cash flow before new growth initiatives. For 2027, management guided to total segment EBITDA of $2.3 billion, including $1.4 billion Aerospace Products, $450 million Aviation Leasing, and $450 million Power. The quarterly dividend was increased from $0.45 to $0.50 per share, payable August 24 to holders of record August 12.

Joe Adams framed the quarter as evidence that all three businesses are gaining momentum, highlighting Aerospace Products market share growth from 12% to 14%, SCI’s transition to a programmatic capital vehicle, and Power’s first major customer win. His tone was confident and strategic, emphasizing that FTAI is deliberately shifting toward an asset-light model and prioritizing third-party demand over balance sheet leasing. He also said the Power business is only at the beginning of a long runway, with an active pipeline and expectations to raise the 2027 outlook as more contracts close.

Nicholas McAleese focused on EBITDA strength, balance sheet discipline, and updated cash flow guidance. He cited $291.4 million of Q2 adjusted EBITDA, 2.7x leverage at quarter-end, a redemption of the $105 million Series C preferred shares, and a Moody’s upgrade to Ba1. He said the company generated $255 million of adjusted free cash flow in the first half and updated 2026 adjusted free cash flow to $878 million, while keeping the approximately $1.2 billion pre-growth target intact. He also noted 2027 segment EBITDA guidance of $2.3 billion and said Power should have a higher cash conversion profile because of customer prepayments and inventory flexibility.

Analysts pressed management on whether the Power guidance implied lower unit economics than previously discussed. Joe Adams said the $450 million 2027 Power EBITDA figure does not assume 100 units and was chosen as the low end of a $450 million to $750 million range, with the intent to build upward as more customers sign. Questions also focused on Aerospace Products margins and the leasing shift; management said margin pressure is mainly mix-driven toward heavier shop visits, that near-term margins should be around 30%, and that the Aviation Leasing decline largely reflects moving module production to Aerospace Products ahead of SCI ramping. On LEAP, management said the market could be 2 to 3 times larger than CFM56 and that FTAI expects to participate through SCI and its broader maintenance platform.