Q3 2025 StandardAero, Inc. Earnings Call Transcript
Key Points
- StandardAero Inc (SARO) reported a strong third quarter with revenue of $1.5 billion, marking a 20% year-over-year growth.
- The company achieved an adjusted EBITDA of $196 million, reflecting a 16% increase from the previous year.
- Commercial aerospace revenue grew by 18% year-over-year, driven by significant contributions from various engine platforms.
- Business aviation revenue increased by 28% year-over-year, supported by the expansion of the Augusta facility.
- Military and helicopter revenue saw a 21% year-over-year growth, bolstered by strong engine volumes and strategic acquisitions.
- Adjusted EBITDA margins slightly decreased to 13.1% from 13.5% year-over-year due to lower margin work scopes and ramping programs.
- Free cash flow was a $4 million use in the quarter, impacted by supply chain challenges and increased working capital.
- The company faces ongoing supply chain constraints, particularly with specific parts like forgings and castings.
- The ramping of new programs such as LEAP and CFM 56 DFW is currently at zero margins, affecting overall profitability.
- The company anticipates a reduction in nominal top-line growth due to structural changes in long-term contracts, eliminating $300 to $400 million of material pass-through revenue.
Good afternoon and welcome to Standard Arrow's 3rd quarter 2025 earnings conference call. If anyone should require operator assistance during the conference, please press 0 on your telephone keypad. I'd now like to turn the call over to Raman Bodata, Vice President of Investor relations. Please proceed.
Thank you and good afternoon, everyone. Welcome to Standard Arrow's 3rd quarter 2025 earnings call. I'm joined today by Russell Ford, our Chairman and Chief Executive Officer, Dan Satterfield, our Chief Financial Officer, and Alex Strapp, our Chief Strategy Officer. Alongside today's call, you can find our earnings release as well as the accompanying presentation on our website at IR.standardarrow.com.
An audio replay of this call will also be made available, which you can access on our website or by phone. The phone number for the audio replay is included in the press release announcing this call.
Before we begin, as always, I would like to remind everyone that
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