StandardAero, Inc.

Greetings, and welcome to the Standard Arrow first quarter 2025 earnings call and webcast. At this time, all participants are in listen-only mode. If anyone should require operator assistance, please press star zero under telephone keypad. A question and answer session will follow the formal presentation, and you'll be placed into question queue at any time by pressing star one under telephone keypad, and we ask you please ask one question and one follow-up, then return to the queue. As a reminder, this conference is being recorded. It's now my pleasure to introduce your host, Rama Vandana, Vice President, Investor Relations.

Rama, please go ahead. Thank you, and good afternoon, everyone. Welcome to Standard Aero's first 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 Trapp, our Chief Strategy Officer. Alongside today's call, you can find our earnings release as well as the accompanying presentation on our website at IRStandardAero.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'd like to remind everyone that today's earnings release and statements made during this call include forward-looking statements under federal securities laws. These statements are subject to risks and uncertainties that could cause actual results to differ materially from our expectations and projections. Such risks and uncertainties include the factors set forth in the earnings release and in our filings with the Securities and Exchange Commission, including in the risk factor section of our quarterly report on Form 10-Q for the three months ending March 31, 2025, and our annual report, Form 10-K, for the year ending December 31, 2024. We assume no obligation to update or revise any forward-looking statements, whether as a result of new information, future events, or otherwise, except as required by law. Additionally, during today's call, we will discuss certain non-GAAP financial measures, such as adjusted EBITDA, adjusted EBITDA margin, free cash flow, and net debt to adjusted EBITDA leverage ratio. The definition and reconciliation of these measures to the most directly comparable GAAP measures can be found in our earnings release and in the appendix to the earnings slide presentation on our website. Non-GAAP financial measures should be considered in addition to and not as a substitute for GAAP measures. With that finally out of the way, I'd like to now turn the call over to our Chairman and CEO, Russell Ford. Russ, over to you.

Thank you, Rama. Thanks to everyone for joining our earnings call today. I'd like to start off by welcoming Rama Bhandata, our new vice president of investor relations to the Standard Arrow team. We couldn't be more excited to have Rama and his experience as part of Standard Arrow. So let's begin now on page three. 2025 is off to a great start. We delivered strong first quarter results with revenue growing 16% year over year and adjusted EBITDA growing by 20%. Our performance this quarter reflects strong execution across both engine services and component repair services, as well as continuing demand across our key end markets, commercial aerospace, business aviation, military, and helicopter. Our commercial aerospace grew 18% year over year, driven by strong demand across major platforms and continued growth in engine maintenance activity. Despite recent headlines of slowing growth at some airlines, we continue to see strong global demand for maintenance from our customers. Historically, airline operators have taken a longer-term view when it comes to any changes in critical engine maintenance, so we aren't typically impacted by short-term volatility in passenger traffic. From what we're seeing, the outlook for the commercial aftermarket remains very strong, with long-term demand visibility in an MRO-constrained market, and our backlog remains robust. Moving to our other end markets, our business aviation group increased 13% versus Q1 last year, with solid demand on engine platforms that power midsize, super midsize, and large cabin business aircraft. Our military business grew 10% with the contribution from our aero turbine acquisition last year, as well as growth on our J85 program. Our adjusted EBITDA margins continue to expand with a 40 basis point improvement this quarter. This was driven by our continued growth, price, and productivity initiatives, and also favorable mix on our higher margin component repair segment, which continues to become a larger portion of our business. Our engine services segment saw a favorable work scope mix, which offset initial lower margin leap work as we worked through the industrialization learning curve on that platform. In the component repair segment, we saw increased higher margin repairs and continued to see the benefits of pricing and productivity actions. These results highlight the strength of the Standard Aero business and the inherent durability of our purposefully diversified portfolio in which we service over 40 engine platforms covering all major engine OEMs and end markets. We think this portfolio construction and our positioning as the world's leading independent MRO enable us to smoothly navigate the dynamic global macroeconomic and trade environment in which we operate. Turning to page four, on the tariff front, we're in a good position to manage through the current uncertainty and minimize the potential impact to our business. We're having daily conversations with our customers and OEM partners alike and have mitigation actions identified and being implemented. Some of these include contractual mechanisms where many of our contracts allow us to pass on these costs, other pricing opportunities, and continuous cost improvement actions. The work at our Canadian facilities continues to be USMCA compliant and exempt from tariffs, and we expect that much of our work that's performed in the U.S. for international customers will have lower exposure given the recent progress on trade negotiations. Based on what we know today, we estimate the net impact of tariffs will be on the order of $15 million for 2025. However, given our solid performance thus far and the strong demand we're seeing, we are raising our sales and earnings guidance for the year, which now incorporates the additional net tariff impact of $15 million. Dan will provide more detail on our increased guidance later during this call. In addition to the strong financial performance and positive demand backdrop, we also continue to execute across our strategic priority areas that will drive value in 2025 and beyond. First, we're focused on the continuing ramp of our LEAP program. After achieving multiple key milestones in 2024, we continue to make strong progress this year. We've secured additional regulatory approvals for our LEAP 1A and 1B engines from Indian, Japanese, and Emirati authorities, expanding our ability to support a broader set of airlines globally. And while not listed in our Q1 results, we just completed our first LEAP shop visit and delivery. We remain on track to complete the final industrialization steps this year, deliver our first PRSV in the second half, and continue to ramp this large multi-decade program. The long-term demand outlook for LEAP engines continues to grow every quarter, and we're seeing our pipeline and contract award momentum built. During Q1, for example, we secured six new LEAP customer awards, which we expect to represent over 150 shop visits over the term of their contracts. We continue to capitalize on investments we've made in CFN56 and CF34 by leveraging new capacity we added to our Dallas site. We saw a record quarter on the CF34 platform following our investment to expand our GE relationship at the end of 2024. In addition, we continue to add key new customers for the CFN56, such as our recent win with Indonesia's largest airline, Lion Air. We're one of the only independent MRO businesses in the world adding capacity on the CFM56 platform, which remains the largest installed base in the history of aviation, and an estimated 40% of all CFM56 engines in service have not yet gone through their very first shop visit. So this is an enduring revenue stream. Third, we're continuing to expand our engine component repair capabilities. We made significant progress last year, especially on developing new LEAP repairs, and this year we're pushing hard to grow with more high-value repairs across multiple platforms. That includes new repair introductions that will drive both third-party sales and insourcing on addressable repairs from our own engine services business as we continue our initiative to drive closer alignment between our two segments. This improves our cost, turn times, and margin. Finally, we're staying active on the M&A front. We have a growing pipeline of targets and ample balance sheet capacity. We continue to be disciplined and focused on capital allocation where we see strong strategic and synergistic alignment. With an excellent start to the year, a very favorable aftermarket position, and our continued discipline around specific priorities, we remain optimistic, and as a result, are subsequently increasing our 2025 guidance. We continue to expect strong revenue performance with double-digit growth, as well as continued adjusted EBITDA margin expansion. I'll stop there and turn it over to Dan Satterfield, our CFO, to walk through our financial results and outlook in additional detail. Dan?