StandardAero reported third‑quarter 2025 results that surpassed revenue expectations and met earnings estimates, delivering revenue of $1.498 billion—up 20.4% year‑over‑year—and net income of $68.1 million, a jump of $51.7 million from the same period a year earlier. Adjusted EBITDA rose to $195.6 million, a 16.2% increase, while the adjusted EBITDA margin slipped to 13.1% from 13.5% in 2024, reflecting a mix shift toward lower‑margin work on its LEAP and CFM56 programs. Earnings per share of $0.20 matched the consensus estimate of $0.20, giving the company a revenue beat of roughly 4.5% against analyst forecasts.
Engine Services drove the bulk of the revenue increase, generating $1.322 billion—up 21.3% YoY—and delivering $165.4 million in adjusted EBITDA, a 12.2% rise. Component Repair Services also expanded, reporting $175.8 million in revenue, up 13.9% YoY, and $54.0 million in adjusted EBITDA, a 32.4% jump that was largely driven by a higher mix of high‑margin work and the contribution from the ATI acquisition completed in early 2024. The mix shift toward LEAP and CFM56 work, while boosting volume, has temporarily compressed margins as the programs work through their learning curves.
Management raised its full‑year 2025 outlook, projecting revenue of $5.970 billion to $6.030 billion, adjusted EBITDA of $795 million to $815 million, and free cash flow of $170 million to $190 million—an upward revision that signals confidence in sustained demand and operational execution. Net debt as of September 30, 2025, stood at $2.265 billion, down from $3.418 billion a year earlier, reflecting a successful debt refinancing and a stronger balance sheet. The company also earmarked $90 million for capital allocation toward next‑generation engine initiatives, underscoring its commitment to the LEAP and CFM56 platforms.
The revenue beat and guidance raise illustrate that StandardAero is capitalizing on robust demand across commercial, business aviation, and military markets, even as supply‑chain constraints continue to pressure working capital and free cash flow. The margin compression in the LEAP and CFM56 segments is expected to reverse in early 2026 as the programs mature and economies of scale take hold, while the high‑margin Component Repair Services segment is positioned to sustain profitability. The company’s investment in facility expansion—adding 70,000 sq ft to its Winnipeg plant—and contract renegotiations that will eliminate $300‑$400 million of material pass‑through revenue in 2026 are expected to improve working‑capital efficiency and free‑cash‑flow generation in the medium term.
CEO Russell Ford said the quarter was a "strong demonstration of our execution and the resilience of our business model," noting that "momentum across our growth platforms and record margins in Component Repair Services underscore the strength of our strategy." CFO Daniel Satterfield added that the company generated $1.5 billion in revenue, up 20.4% YoY, and that free cash flow was a $4 million use this quarter, but that it was a meaningful sequential improvement and that the company remains confident in raising its free‑cash‑flow guidance for the year.
Investors reacted positively to the results, with the market citing the revenue beat and the upward revision of full‑year guidance as key drivers of the favorable response. The consensus view that StandardAero is well‑positioned to capture growth in the next‑generation engine market, combined with a stronger balance sheet and a clear path to margin recovery, reinforced confidence in the company’s near‑term outlook.
Additional context highlights the company’s strategic focus on the LEAP and CFM56 programs, which are projected to generate $1 billion in annual revenue by late 2029/2030, and the ongoing effort to unwind supply‑chain bottlenecks. The company’s debt reduction—from $3.418 billion to $2.265 billion—has improved its net‑debt‑to‑adjusted‑EBITDA ratio from 5.3× to 2.9×, providing a stronger financial cushion as it continues to invest in growth initiatives.
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