StandardAero, Inc. ((SARO)) has held its Q3 earnings call. Read on for the main highlights of the call.
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StandardAero, Inc. recently held its earnings call, revealing a positive sentiment driven by robust revenue and earnings growth. The company has successfully navigated supply chain challenges, maintaining strong financial performance and strategic positioning for future growth. The raised financial guidance and reduced leverage further highlight a promising outlook for the company.
Strong Revenue Growth
StandardAero, Inc. reported impressive revenue figures, reaching $1.5 billion, which marks a 20% increase compared to the previous year. The adjusted EBITDA also saw a significant rise of 16% year-over-year, amounting to $196 million. This growth underscores the strong demand across various end markets.
Commercial Aerospace and Business Aviation Growth
The commercial aerospace sector experienced an 18% increase in revenue, while business aviation revenue surged by 28% year-over-year. These gains were fueled by strong contributions from multiple engine platforms and the performance of mid and super midsize aircraft.
Military and Helicopter Revenue Increase
Military and helicopter revenue grew by 21% year-over-year, driven by increased volumes of AE1107 engines and the strength of C-130 transport aircraft programs.
Component Repair Services (CRS) Performance
The Component Repair Services division achieved record margins and a 32% growth in adjusted EBITDA year-over-year. This success was supported by strong demand in military platforms and the land and marine business sectors.
Raised Financial Guidance
StandardAero, Inc. has raised its full-year 2025 guidance for revenue, earnings, and free cash flow, reflecting confidence in sustained strength across its segments. The company anticipates $170 million to $190 million in free cash flow for the year.
Reduced Leverage
The company has improved its leverage, reducing it to 2.9 times net debt to EBITDA, which indicates a strong financial health and a positive step towards financial stability.
Supply Chain Challenges
Persistent supply chain challenges have led to delays in specific parts, resulting in a $4 million use of free cash flow in Q3. However, these issues are expected to unwind in Q4.
Lower Margin Workscope Mix
Adjusted EBITDA margins slightly decreased to 13.1%, impacted by lower margin work scopes and the ramping up of LEAP and CFM56 DFW programs.
High Contract Assets
Contract assets increased by $300 million over the past year due to part delays, affecting working capital.
Forward-Looking Guidance
StandardAero, Inc. has demonstrated robust financial performance in the third quarter of 2025, with a 20% year-over-year increase in revenue. The company has raised its full-year guidance, expecting continued strength and improved cash flow. Strategic investments in growth platforms like the LEAP and CFM56 programs, along with operational efficiency improvements, are expected to drive future success.
In summary, StandardAero, Inc.’s earnings call reflected a positive sentiment, highlighting significant revenue growth and strategic initiatives that position the company well for future success. Despite facing supply chain challenges, the company’s raised guidance and reduced leverage underscore a strong financial outlook.