Revenue rose 46.6% and diluted EPS 30.0% against a year earlier, but pre-tax margin narrowed to 17.7% from 21.6% 8-K. Aerospace Products is replacing a shrinking leasing base, and management reaffirmed 2026 and 2027 Adjusted EBITDA guidance.
FTAI Aviation Ltd. · Q3 2026 · Reported 29 Oct 2026 · US
Key figures
Million USD | Q3 2026 | Q3 2025 | Change |
|---|---|---|---|
Revenue | 977.66 | 667.06 | +46.6 % |
Pre-tax income | 172.85 | 144.05 | +20.0 % |
Net income | 150.61 | 117.72 | +27.9 % |
Diluted EPS | 1.43 USD/share | 1.10 USD/share | +30.0 % |
Pre-tax margin | 17.7 % | 21.6 % | -3.9 pp |
Net margin | 15.4 % | 17.6 % | -2.2 pp |
Figures in USD, as reported. Margins are computed from the reported lines.
Aerospace Products drove revenue up 46.6% while leasing income halved
Revenue reached $977.66 million, up 46.6% from a year earlier, and diluted EPS rose 30.0% to $1.43 against $1.10 8-K. Aerospace products revenue was $780.6 million against $459.2 million, and MRE contract revenue from an affiliate was $129.4 million against $58.7 million 8-K. Management reports segment Aerospace Products revenue of $910.0 million, up 76% from Q3 2025, with 311 CFM56 modules produced, up 50% 8-K.
The older leasing lines moved the other way. Lease income fell to $25.3 million from $55.1 million, maintenance revenue to $27.3 million from $52.4 million, and asset sales revenue to $5.9 million from $38.5 million 8-K. Growth is coming from a different business than the one that produced revenue a year earlier.
Profit grew more slowly than revenue and margins narrowed
Pre-tax income rose 20.0% to $172.85 million and net income 27.9% to $150.61 million 8-K. Pre-tax margin fell to 17.7% from 21.6%, a 3.9 point decline 8-K. A calculation that excludes the $4.6 million gain on sale to the 2025 Partnership in Q3 2025 puts the year-earlier margin at 20.9%, a 3.2 point decline, and pre-tax income growth at 24.0% 8-K. The margin squeeze is therefore mostly not the year-earlier gain.
Cost of sales rose to $623.8 million from $362.9 million, and FTAI Power research and development of $22.0 million had no year-earlier equivalent 8-K. Interest expense rose to $65.1 million from $60.8 million 8-K. Equity in earnings of unconsolidated entities swung to a $16.9 million gain from a $4.2 million loss, which cushioned the decline 8-K. EPS growth of 30.0% also outpaced net income growth because preferred dividends fell to $1.5 million from $3.7 million 8-K.
Leasing earnings are shrinking as Strategic Capital takes over the model
Company-defined consolidated Adjusted EBITDA rose to $348.3 million from $297.4 million 8-K. Aerospace Products delivered $282.4 million against $180.4 million, a 31% margin against the 30% guided 8-K. Aviation Leasing fell to $104.0 million from $134.4 million, and Corporate Other widened to a loss of $38.1 million from $17.4 million 8-K.
Management says Strategic Capital now represents more than 50% of Aviation Leasing, reflecting its planned move to an asset-light model 8-K. Leasing equipment on the balance sheet was $1,035.0 million at September 30, 2026 against $1,545.8 million at December 31, 2025 8-K. This suggests the earnings drop in leasing is partly the intended result of shifting assets to the SCI vehicles.
A $500 million buyback sits beside a larger inventory build
The board raised the repurchase authorization to $1.0 billion and plans a $500.0 million accelerated share repurchase with Royal Bank of Canada, expected to complete in Q4 2026 8-K. About $80.0 million had already been repurchased at a weighted average price of $178.73 per share 8-K. Cash was $385.6 million at September 30, 2026 and long-term debt $3,455.5 million 8-K.
Inventory rose to $1,932.3 million from $1,193.8 million at December 31, 2025, and a new $234.0 million affiliate contract liability appeared 8-K. The inventory increase fits the module ramp, which is my reading rather than a stated cause. It makes cash conversion the key test of the quarter's earnings quality.
What to watch next
Whether Aerospace Products holds its 30% Adjusted EBITDA margin guidance and reaches the 2026 outlook of 1,200 modules, with 877 produced year to date 8-K.
Management reaffirmed 2026 and 2027 Adjusted EBITDA guidance across all business lines; the Power segment must still deliver Mod-1 units, with first deliveries expected next year 8-K.
Completion of the $500.0 million accelerated share repurchase in Q4 2026 and SCI I closing substantially all of its 301 committed aircraft by year end, after 212 closed through September 30, 2026 8-K.
The report does not give operating cash flow.
Sources
Produced by Clarifo Research with the Clarifo financial research engine from the company's public filings. AI was used in parts of the analysis and drafting. Figures are checked automatically against the filings they come from. This is not investment advice.