FTAI Aviation Ltd. (FTAI) Earnings & Analysis

Latest quarter

FTAI reported Q2 FY2026 revenue of $953.1 million, above the consensus of $859.3 million. Adjusted earnings per share of $1.13 missed the consensus of $1.32.

Revenue rose from $676.2 million a year earlier. The filing attributed the increase largely to aerospace products, where revenue grew by $271.5 million, primarily from engine and module sales. MRE contract revenue also increased, while lease income, maintenance revenue and asset sales revenue declined.

FTAI’s diluted earnings per share fell to $1.13 from $1.57 a year earlier. Gross margin declined to 33.3% from 45.4%, and operating margin fell to 13.7% from 21.7%. The filing said cost of sales increased primarily alongside engine, module and parts inventory sales.

FTAI recorded free cash flow of −$432.9 million for the quarter, compared with −$96.3 million a year earlier.

Adjusted EPS is the figure the consensus estimates, not the GAAP EPS above.

What management said on the call

CEO Joe Adams said aerospace products market share rose from 12% to 14% during the quarter as production capabilities, parts procurement and customer adoption progressed. He described the CFM56 market as “supply constrained, not demand constrained” and said FTAI was directing more module production to third-party customers rather than its own leasing pool. Adams said the company would continue prioritizing market share and customer relationships in the second half of the year.

Asked about margin compression, Adams said a greater share of heavier engine restoration work required more investment per engine and produced a lower percentage margin. He said FTAI was prioritizing the dollars earned and expected margins around 30% for the near term, which he described as probably one to two years. Adams said the company could revisit pricing as market share and penetration increased.

President David Moreno said production capacity was rising from 2,000 to 3,000 modules, including through developments in Egypt and Indonesia. He said the partnerships were intended to guarantee throughput and capacity while bringing FTAI closer to customers.

On power, Adams said FTAI’s joint venture with Jera Group had signed a master supply agreement and an initial purchase order valued at $1.465 billion for 2027 Mod 1 deliveries. Asked about the business, Moreno declined to provide exact numbers, citing commercial sensitivity, and said the company was still targeting 100 units for next year. He also said Mod 1 testing had moved to Miami, where the unit was running.

CFO Nicholas McAleese said FTAI was accelerating the Mod 1 production build-out by $150 million. He said a financing facility for the 2026 SPV would bridge a substantial portion of FTAI’s equity co-investment funding into 2027.

Guidance

CFO Nicholas McAleese said FTAI revised its 2026 Aviation Leasing adjusted EBITDA guidance to $475 million from $575 million, reflecting a greater-than-expected shift of module production toward third-party customers. He also said the company updated its 2026 total adjusted free cash flow outlook to $878 million from $915 million, including the accelerated Mod 1 production build-out.