StandardAero, Inc.

Good afternoon and welcome to Standard Arrow's fourth quarter and full year 2025 earnings conference call. At this time, all participants are in a listen-only mode. A question and answer session will follow the formal presentation. If anyone should require operator assistance during the conference, please press star zero on your telephone keypad. Please note this conference is being recorded. I would now like to turn the call over to Rama Bhanda, Senior Vice President of Investor Relations. Please proceed.

Thank you and good afternoon, everyone. Welcome to Standard Aero's fourth quarter and full year 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 ir.standardaero.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 would 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 factors section of our annual report on Form 10-K for the year ended December 31, 2025. 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, adjusted net income, adjusted earnings per share, 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. Non-GAAP financial measures should be considered in addition to and not as a substitute for GAAP measures. I would now like to turn the call over to Russ. Russ?

Thank you, Rama, and thank you to everyone for joining our call today. I'll start on slide three of our earnings presentation with a review of several highlights from 2025, our 114th year as a company and our first four years as a publicly traded company. 2025 was another record year for Standard Aero and one in which we made significant progress on our strategic objectives, enabled by relentless focus and dedication to quality and performance by our 8,000 employees worldwide. We saw excellent growth with revenues increasing 16% year over year and adjusted EBITDA up 17%. This strong financial performance was underpinned by continued robust demand for our solutions and high-quality execution. We also generated meaningful free cash flow of $209 million. This included more than $300 million generated in the second half of the year in line with typical seasonal trends and is reinforced by our asset-light business model and cash management initiatives. We accomplished this while investing $90 million in our growth platforms and navigating a supply chain that continues to be characterized by part availability delays. Importantly, we expect to see continued growth in our free cash flow generation again in 2026 and into the future. A key highlight in 2025 was the strong progress we made on our LEAP program. where we saw a substantial ramp in work throughout the year and continued to progress along the learning curve. Specifically, we inducted 60 LEAP engines in 2025, up from 10 in 2024, and generated revenues in the second half of 2025 that were approximately two and a half times the revenues we generated in the first half of the year. As we look ahead, we had several significant customer wins during the year that provide very good visibility for 2026, with most of our planned slots already filled. Equally important is how we're expanding the content and value of what we do on LEAP. We've now developed more than 475 LEAP component repairs, which directly support turnaround time, customer value, and long-term economics as the fleet matures. and we recently delivered our first full overhaul on the platform, which marks a meaningful milestone for us in our ability to address the full market opportunity. As we stated before, we continue to see the market for LEAP MRO only getting stronger, and we expect this program to continue to demonstrate substantial growth for many decades to come. We completed the expansion of our Augusta business aviation facility during the year, adding additional MRO capacity and expanded hangar space to handle large cabin jets. This additional capacity will help us accelerate growth on the popular HTF 7000 engine, where we are the market leader and have the worldwide exclusive independent heavy overhaul license. We also fortified our already market-leading position on the CF-34 engine, which powers the majority of the world's regional jets. We're seeing even stronger demand on this platform than we expected, both near and long term, leading us to announce late last year that we're expanding our flagship CF34 facility in Winnipeg. We expect the expansion to be complete in the second half of 2026. Combining this initiative with the expanded license relationship with GE from earlier in 2025, as well as the long-term contracts we have with some of the largest operators around the world, we feel really confident in our position on this platform. We've only just begun to realize the value creation from these strategic investments. Next, performance excellence remains core to our culture and how we operate. As discussed last quarter, we made progress in restructuring customer contracts to get rid of pass-through material, which will eliminate $300 million to $400 million of low-margin revenue and result in higher reported margins that better reflect our true operating performance of the underlying business. We continued to make progress in capturing more high-value component repair work in-house with in-source component repair revenue increasing by 15%. And importantly, ATI synergies are producing a bug plan which supported performance and strong margin expansion at CRS. On capital allocation, we ended the year with our leverage ratio improving to 2.4 times, giving us meaningful capital allocation flexibility. We are well positioned to invest organically, pursue strategic M&A when it's value accreted, and return capital to shareholders. Consistent with this third point, we authorized a $450 million share repurchase program in December. Turning to slide four, market demand remains strong for our MRO solutions, and the groundwork we've laid in key end markets is driving growth. In commercial aerospace, we saw nearly 18% growth year-over-year, driven by the strong ramp in LEAP, CFM56, our investments in the CF34 platform, and continued global demand for turbocrop MRO needs. In business aviation, revenues grew 12% year-over-year, driven by continued strength on both mature engine platforms, such as the TFE731, and growth platforms such as the HDF-7000. In military, revenues grew 9% despite the longest government shutdown in U.S. history, which impacted fourth quarter. We saw a healthy rebound in the AE-1107 platform and continued steady demand on key engines that operate on military transport aircraft, which makes up the vast majority of our military business. Turning to margins. Even while ramping our LEAP and CFM56 DFW growth programs, we delivered margin expansion in 2025. Margin progress was not accidental. It was driven by deliberate actions and a focus on continuous improvement. As Dan will discuss shortly, we are only in the early stages of our margin expansion journey. Driving the total company margin improvement was strong component repair growth and synergy realization on our 2024 acquisition of ATI, which helped push the margin profile of our CRS segment into the high 20s from the mid 20s previously. Turning to slide five, I'll talk about 2026 and our priorities for the year. We continue to see a really positive market backdrop with robust demand, particularly in the commercial end market that will lead to double digit earnings growth continued margin expansion, and accelerating free cash flow generation in 2026. From a strategic and operational standpoint, we remain focused on the same pillars that have defined our success. Starting first with LEAP, our top priority here in 2026 continues to be execution, and specifically achieving profitability in the first half of the year while continuing to build commercial momentum by winning additional contracts. The way to improve margins is by continuing to improve throughput and productivity as we progress down the learning curve, expanding our repair and process capabilities, and delivering the high quality and turnaround performance our customers expect. As we prove out scalability and performance, we expect to continue converting demand into incremental long-term customer wins. Second, we're focused on fully leveraging our investments in CFN56 and CF34. On CFN 56, the key is to drive higher utilization and efficiency in our DFW Center of Excellence to support profitable growth. On CF 34, we're focused on fully leveraging our expanded license and completing the Winnipeg expansion. The rationale for this expansion is to support demand visibility and position Standard Aero to continue to take share on a platform where we have deep experience and a durable competitive position. Third, on component repair, CRS remains a strategic engine for value creation, and our priorities this year are to continue to accelerate new repair development while also expanding in-source and capture. This means continuing to industrialize additional repairs, increasing the breadth of what we can do internally, and intentionally pulling more repair content into our network. All of this supports better turn times, stronger margin mix, and improved overall economics across the enterprise. Fourth, continuous improvement. It remains core to what we do and our culture, and we're looking to lean even more into this in 2026 to execute continuous improvement and pricing opportunities across the portfolio to enhance productivity and margin improvement. Practically, this means continuing to standardize best practices, drive operating discipline at the shop level, reduce variability, and ensure our pricing reflects the value we deliver, especially in an environment where capacity remains constrained, and customer demand remains strong. Then finally, on capital deployment, we will continue the disciplined pursuit of high-return organic growth investments, remain active in evaluating accretive M&A, and be opportunistic on share repurchases, all with a consistent focus on strategic fit and long-term shareholder returns. Our priorities are consistent. We're centered on strengthening our long-term competitive position delivering service excellence to our customers, and driving consistent and predictable double-digit growth. And we remain, as always, committed to delivering on what we say we will do. With that, I'd like to turn the call over to Dan to walk through our results and outlook with additional detail. Dan?