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• Revenue: $1.4 billion, 16% growth year-over-year.

• Adjusted EBITDA: $198 million, 20% growth year-over-year.

• Adjusted EBITDA Margin: 13.8%, 40 basis point improvement.

• Net Income: $63 million, up from $3 million in the prior year period.

• Free Cash Flow: Use of $64 million, $38 million improvement year-over-year.

• Engine Services Revenue: $1.3 billion, 16% growth year-over-year.

• Component Repair Services Revenue: $167 million, 21% growth year-over-year.

• Leverage Ratio: Improved to 3.09x from 5.7x at the end of Q1 2024.

• 2025 Revenue Guidance: $5.825 billion to $5.975 billion.

• 2025 Adjusted EBITDA Guidance: $775 million to $795 million.

• Warning! GuruFocus has detected 4 Warning Sign with SARO.

Release Date: May 12, 2025

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• StandardAero Inc (NYSE:SARO) reported a strong start to 2025 with a 16% year-over-year revenue growth and a 20% increase in adjusted EBITDA.

• The company experienced robust demand across its key markets, including commercial aerospace, business aviation, military, and helicopter sectors.

• Adjusted EBITDA margins expanded by 40 basis points, driven by growth, pricing, productivity initiatives, and a favorable mix in the higher-margin component repair segment.

• StandardAero Inc (NYSE:SARO) secured additional regulatory approvals for LEAP engines, expanding its global support capabilities.

• The company increased its 2025 sales and earnings guidance, reflecting strong demand and performance across its segments.

Negative Points

• The company faces a potential $15 million impact from tariffs in 2025, although mitigation strategies are in place.

• Engine Services margins were flat due to mix headwinds from the LEAP and CFM56 growth programs, which initially have lower margins.

• Free cash flow was negative in Q1, attributed to working capital seasonality and increased capital expenditures.

• The Component Repair Services segment faced temporary headwinds from facility consolidation and the exit of a low-margin noncore product line.

• There is ongoing uncertainty regarding the Section 232 investigation, which could impact the MRO sector, although specifics are not yet clear.

Q & A Highlights

Q: With U.S. airlines discussing slower capacity, how confident are you in the visibility and growth of the CF34 platform? A: Russell Ford, CEO: Despite volatility in passenger traffic, engine MRO is nondiscretionary, and airlines prioritize engine maintenance over other discretionary aftermarket activities. This dynamic has not changed, and we continue to see strong demand for CF34 maintenance.