Oct 29, 2026 earnings call — Record Aerospace Products quarter and Power ramp
Aerospace Products had a record quarter with adjusted EBITDA of $282.4 million and the Mod-1 produced 25 MW peak output.
Revenue $1.0B (est $1.0B) · EPS $1.43 (est $1.41)
Key quotes
"Aerospace Products had its strongest quarter yet. Adjusted EBITDA was $282.4 million, up 57% year-over-year at an EBITDA margin of 31%, in line with our guidance of 30%."
"Strategic Capital is now more than half of the segment's EBITDA, exactly the asset-light transition we planned, and both SCI vehicles will continue to scale into year-end."
"The Mod-1 critical testing is complete, meeting its target of 25 MW for peak power and 23.1 MW for continuous base load power, with testing completed on both natural gas and liquid fuels."
Analyst Q&A 11
Aerospace products momentum and power ramp
Q (Sheila Kahyaoglu · Jefferies): Analyst asked about momentum in Aerospace Products, customer behavior, and lease rates. Also asked how 100+ power units under contract translate to 2027 guidance and production schedule.
A: Management said 30% adjusted EBITDA margin is a reasonable assumption for the next couple years and they expect broad customer acceptance of their engine-exchange model. They said airlines are under stress and seeking liquidity, so sale-leasebacks and lease financing accelerate market share pickup for them.
"First, on margins, as we indicated previously, we think 30% margins is a good assumption for the next couple of years, and it is a nice target." — Joe Adams (CEO)
Power demand and production planning
Q (Giuliano Bologna · Compass Point): Analyst asked if planned 10-15 turbines per month capacity by end of 2027 assumes sufficient demand. Also asked about timing of backlog and weight of 100 contracted units toward 2027.
A: Management said their value proposition is resonating, especially behind-the-meter for data centers because units can be installed quickly and reduce customer cost. They expect to add to backlog and said the combined-cycle option is a positive for customers and can be retrofitted.
"I think our value prop is resonating with the market, really tailored around behind-the-meter." — David Moreno (PRESIDENT)
Aerospace margin outlook and power performance
Q (Kristine Liwag · Morgan Stanley): Analyst asked if the 30% margin assumes keeping market share from tier-one airlines or if mix shifts could pressure margins, and how financing shop visits works for FTAI. Also asked how Mod-1 turbine testing compares to other aeroderivatives and pricing impact from combined cycle.
A: Management said the 30% target reflects the full market mix across large and small airlines, and they expect that mix to stay stable. They explained leasing is effectively financing for customers and FTAI often sells leased assets to financial partners, making it similar to a sale from FTAI's view.
"We think that 30% is representative of the entire market, and the mix that we are seeing now is large airlines, small airlines, heavy shop visits and light shop visits, and we do not see that mix changing." — Joe Adams (CEO)
M&A and facility investment priorities
Q (Andre Madrid · BTIG): Analyst asked how the firm is prioritizing acquisitions versus organic investments and whether more M&A opportunities exist given lower valuations.
A: Management said their M&A focus is adding maintenance facilities to increase module production and more vertical integration for repair or parts manufacturing. They noted they added facilities and are investing $50 million-$60 million to increase production and test capability where needed.
"One is additional maintenance facilities to increase our production of modules, and two, on more vertical integration in terms of repair capability or piece part manufacturing for engines." — Joe Adams (CEO)
Airline finances and fuel impact
Q (Ken Herbert · RBC): Analyst asked how airlines are managing higher crude prices, whether fare increases are holding, and if there are macro risks for 2027.
A: Management said airlines have been able to raise fares and demand has remained strong in many regions, which helps them manage higher fuel costs. They said they are not seeing airlines flip fleet mix due to fuel pressure and cited lease extensions as concrete signs of customer confidence.
"Ultimately, that is the best answer to how do you manage your business is, if your costs go up, you raise your revenues, and you continue to grow." — Joe Adams (CEO)
Why large airlines use their services; JV and testing
Q (Brandon Oglenski · Barclays): Analyst asked why large airlines are becoming core customers and whether two prototypes were tested on liquid and natural gas; also asked about JV partner Jereh and the executive order on Chinese equipment.
A: Management said large airlines adopt the product when it delivers same or lower cost and immediate availability, reducing downtime and spare requirements. They confirmed testing on both jet fuel and natural gas and said the executive order likely targets bulk on-grid equipment and should not materially affect their behind-the-meter Mod-1 approach; packaging and sourcing are diversified.
"On the testing, we have tested both with liquid, so jet fuel, and with natural gas." — David Moreno (PRESIDENT)
Working capital and inventory strategy
Q (Jeff Kauffman · Citizens Bank): Analyst asked about anticipated net working capital for Power in 2027 and when working capital would peak and start to decline.
A: Management said they grow inventory strategically to meet production targets and have a strong execution record, citing past inventory levels that supported large revenue growth. They expect about two times inventory turnover on a forward-looking basis and see upside beyond that as parts recycle through their network.
"We've always really grown inventory very strategically in line with our financial and production targets, and we've always had a strong record on execution on this." — Nicholas McAleese (CFO)
Confidence in Q4 ramp and Power EBITDA range
Q (Shannon Doherty · Deutsche Bank): Analyst asked confidence in hitting steep adjusted EBITDA ramp and what drives the full-year target; also asked if $450 million-$750 million for Power implies a new total adjusted EBITDA number and timing from production to delivery.
A: Management said the strategic capital deployment, especially increased invested capital in SCI I and closing aircraft, drives confidence in the ramp and that SCI closings provide strong visibility. They confirmed the Power range is $450 million-$750 million and that they conservatively clarified the lower end while deliveries and execution progress.
"That is correct. The range is $450 million-$750 million, and then on the total, we are clarifying it on the lower end for conservative purposes with obviously all related to FTAI Power's deliveries." — Nicholas McAleese (CFO)
WestJet deal and aircraft use
Q (Lou Raffetto · Wolfe): Analyst asked for more color on the WestJet transactions and whether the $61 million feedstock investment was for the 10 aircraft from WestJet; also why engines and aircraft in leasing fell sequentially.
A: Management said two transactions: 17 aircraft went into SCI II via sale-leaseback and 10 aircraft were acquired by FTAI for Aerospace Products to harvest engines for rebuild and sale. They said those acquired aircraft were unserviceable and intended for Aerospace Products rather than leasing.
"10 of those aircraft were acquired by FTAI for Aerospace Products." — David Moreno (PRESIDENT)
Investor Day themes and module capacity limit
Q (Josh Sullivan · JonesTrading): Analyst asked what the company will emphasize at Investor Day about reporting evolution and customer packaging, and what limits the 3,000 module capacity.
A: Management said they will emphasize how their businesses partner to provide integrated solutions that feed and support each other, creating unique customer value. They said they do not view 3,000 as a hard cap and continue to find facilities globally and expand capacity where local employment and airline support help.
"One is, how we partner with customers, and that we provide a comprehensive package of solutions." — Joe Adams (CEO)
Free cash flow outlook and conversion
Q (Marni Lysaght · Macquarie Capital): Analyst asked for color on adjusted free cash flow further out, how to think about conversion versus EBITDA and NPAT, and any seasonality to model.
A: Management said they have not provided formal 2027 free cash flow guidance but are confident in improving free cash flow direction given step-up in adjusted EBITDA, committed power deposits, and integrated supply chain. They said operating leverage and shared infrastructure across Power and Aerospace should improve free cash flow conversion year-over-year.
"We've yet to provide formal 2027 free cash flow guidance, but we're very confident in the direction of free cash flow for next year." — Nicholas McAleese (CFO)