Key Points
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Q2 adjusted EBITDA reached $291.4 million, driven by 78% year-over-year Aerospace Products revenue growth. FTAI raised its 2026 CFM56 module-production target to 1,200 from 1,050 and reaffirmed $1.05 billion in 2026 Aerospace Products EBITDA guidance.
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FTAI is shifting aviation leasing toward an asset-light strategic-capital model, reducing its 2026 leasing EBITDA outlook to $475 million while expanding SPV activity. Strategic Capital income is expected to become the majority of aviation leasing earnings by Q4.
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FTAI Power secured a $1.465 billion initial order from a U.S. hyperscaler for 2027 Mod-1 deliveries, supporting a projected $450 million to $750 million of 2027 Power EBITDA. The company also raised its quarterly dividend to $0.50 per share, despite lowering 2026 adjusted free-cash-flow guidance to $878 million.
FTAI Aviation (NASDAQ:FTAI) reported second-quarter adjusted EBITDA of $291.4 million as its Aerospace Products business expanded production and market share, while the company continued shifting its aviation leasing operations toward a more asset-light strategic-capital model.
Chief Executive Officer Joe Adams said the company operates across Aerospace Products, Asset Management and Power, each centered on its aftermarket turbine-performance capabilities. He said all three businesses made progress during the quarter, including increased module production, the launch of a new investment vehicle and a major initial order for its power-generation offering.
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“Our market share grew from 12%-14% this quarter,” Adams said, attributing the increase to production capacity, parts procurement strategies and customer adoption of its maintenance, repair and exchange offerings.
Aerospace Products Growth and Capacity Expansion
President David Moreno said Aerospace Products revenue increased 78% year over year and 18% sequentially. Segment adjusted EBITDA reached $249.7 million, up 51% from a year earlier and 12% from the first quarter, with a 29% EBITDA margin.
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FTAI refurbished 296 CFM56 modules during the quarter across four facilities, a 61% increase from the second quarter of 2025. First-half production totaled 566 modules, ahead of the company’s midyear target. The company raised its 2026 module-production outlook to 1,200 modules from 1,050 previously.
Management said the market for CFM56 engines remains supply-constrained rather than demand-constrained. FTAI is directing a growing share of module output to third-party customers rather than its own aviation leasing fleet, a move intended to support customer relationships and its asset-light balance-sheet strategy.
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Moreno said the shift and a greater mix of heavy engine shop visits are expected to affect near-term margins. In response to an analyst question, Adams said FTAI expects Aerospace Products margins to remain around 30% over the next one to two years as the company prioritizes market share and larger customer programs.
The company also announced maintenance-network expansion through partnerships with GMF AeroAsia in Jakarta, Indonesia, and EgyptAir in Cairo. The Jakarta facility has CFM56-5B and CFM56-7B heavy-repair capabilities, an engine test cell and more than 200 technicians, according to Moreno. The Cairo operation has a test cell and is currently focused on the CFM56-7B.
Other planned additions include a CFM56 and LEAP engine test cell at FTAI’s Rome quick-turn facility and a 113,000-square-foot Lisbon facility. FTAI aims to expand Lisbon production capacity to more than 300 modules annually. Management said the LEAP test-cell investment is part of a broader plan to enter the next-generation engine maintenance market as that platform matures.
Leasing Transition and Strategic Capital
FTAI’s aviation leasing segment generated $88.2 million of EBITDA in the second quarter, including $5 million of insurance recoveries, $48 million from balance-sheet leasing and gains on sale, and $35 million from 2025 special-purpose vehicle management fees and co-investment returns.
Management reduced its 2026 aviation leasing EBITDA outlook to $475 million, citing the deliberate allocation of module production to third-party Aerospace Products customers and reduced reinvestment in the company’s on-balance-sheet leasing fleet. It reaffirmed Aerospace Products EBITDA guidance of $1.05 billion for 2026.
The 2025 SPV is fully committed, with more than 300 aircraft closed or under letters of intent, Moreno said. The vehicle made its first regular quarterly distribution on June 30. Its first asset-backed securities issuance, called MRE 2026, included $612 million of bonds and supported a special distribution to investors in July.
FTAI also launched its 2026 SPV, which is actively making aircraft acquisition commitments. The company plans to maintain a 15% co-investment commitment in the vehicle. Chief Financial Officer Nicholas McAleese said the company expects Strategic Capital income to comprise the majority of aviation leasing earnings by the fourth quarter, and that financial reporting could eventually reflect the company’s three stated businesses: Aerospace Products, Power and Strategic Capital.
FTAI ended the quarter with leverage of 2.7 times, within its 2.5-times to 3-times target range. During the quarter, it redeemed $105 million of 8.25% Series C preferred shares at par and received a Moody’s rating upgrade to Ba1.
Power Business Secures Initial Hyperscaler Order
FTAI Power’s joint venture with Jereh Group, J&F Power Systems, signed a five-year master supply agreement with a U.S. hyperscaler. The agreement included an initial purchase order valued at $1.465 billion for 2027 Mod-1 deliveries.
Moreno said the agreement includes a significant advance payment and milestone-based payments tied to production, testing and commissioning, which he said reduces the working-capital investment needed for the production ramp. The master agreement allows the customer to issue additional orders without renegotiating terms.
The company remains on track for a commercial launch in the fourth quarter, though management said it is prudent to expect Power deliveries in 2027. The company is testing a Mod-1 unit in Miami after completing most initial testing in Montreal, and Moreno said performance has been “exceptional.”
FTAI expects 2027 total business-segment EBITDA of $2.3 billion, comprising $1.4 billion from Aerospace Products, $450 million from aviation leasing and $450 million from Power. Adams said the $450 million Power outlook is a conservative starting point based on less than 100 units, despite the company targeting more than 100 Mod-1 units for 2027. Management described a potential Power EBITDA range of $450 million to $750 million for 2027 as additional customer contracts are pursued.
Cash Flow Outlook and Dividend Increase
FTAI generated $255 million of adjusted free cash flow in the first half, including the final $95 million capital call under its 2025 Strategic Capital equity commitment. The company maintained its target of approximately $1.2 billion of adjusted free cash flow before new growth initiatives for 2026.
However, after accelerating its Mod-1 production build-out by $150 million and accounting for financing related to the 2026 SPV, FTAI updated total 2026 adjusted free cash flow guidance to $878 million from $915 million.
The company increased its quarterly dividend to $0.50 per share from $0.45 per share. The dividend is scheduled to be paid Aug. 24 to shareholders of record as of Aug. 12. Adams said the increase marked FTAI’s fourth consecutive quarterly dividend increase and its 60th consecutive dividend since inception.
About FTAI Aviation (NASDAQ:FTAI)
FTAI Aviation (NASDAQ: FTAI) is a commercial aircraft leasing company that acquires, manages and leases wide-body jet aircraft to airlines globally. The company’s portfolio is focused on modern, fuel-efficient Boeing models, including the 767, 777 and 787 families, which are deployed under long-term operating leases. By concentrating on in-demand wide-body assets, FTAI Aviation seeks to deliver stable cash flows through lease rentals and maintenance reserve collections while providing airlines with flexible fleet solutions.
In addition to lease origination, FTAI Aviation offers end-to-end asset management services.
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The article “FTAI Aviation Q2 Earnings Call Highlights” was originally published by MarketBeat.
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