AerSale Q3 2026 earnings: net loss widens to $15M
A $13.416 million noncash goodwill impairment was part of the quarter's $15.028 million net loss.
Sentiment and the balance of points
Rhea-AI Sentiment reads the wording of the document, how positive or negative its language is on a 1 to 5 scale. The balance of points shown with the takes weighs what the document actually discloses, so the two can disagree, for example when a trial that missed its main goal is described in upbeat language.
AerSale Corporation (ASLE) reported third-quarter 2026 revenue of $91.556 million, up 28.6% from $71.191 million a year earlier, while net loss was $15.028 million, compared with a $120,000 loss. It recorded a $13.416 million noncash goodwill impairment for Asset Management Solutions after that reporting unit’s estimated fair value fell below carrying value. Segment revenue was $50.547 million for Asset Management Solutions and $41.009 million for TechOps. TechOps gross profit was $5.127 million, down from $8.099 million; MRO services generated a $829,000 gross loss versus $5.259 million gross profit.
For the first nine months, revenue was $233.102 million versus $244.349 million, and AerSale recorded a $24.048 million net loss versus $3.178 million net income. Operating cash used was $42.694 million, compared with $34.333 million. At September 30, the revolving credit facility balance was $158.675 million, and availability was $19.2 million subject to borrowing base limitations. AerSale completed its redomestication from Delaware to Texas on September 25; each outstanding share and equity award continued on a one-for-one basis.
How this balance works
Rhea-AI gives every point it takes from this document a weight. Minor counts 1, Moderate 3 and Major 9, so one Major point outweighs several Minor ones. The bar adds up the weights on each side, and when neither side holds more than 65% of the total the balance reads Mixed.
It reads the document as published, with the same rules for every company, and it does not look at what the market expected or at how the stock traded, so a point can be objectively good on a day the stock falls.
Rhea-AI Sentiment measures something else, the tone of the wording.
Positive
- Moderate pointThird-quarter revenue rose 28.6% to $91.556 million.
Negative
- Moderate pointThird-quarter net loss was $15.028 million, versus $120,000 a year earlier.
- Moderate pointOperating cash used was $42.694 million, versus $34.333 million.
- Minor pointNine-month net loss reached $24.048 million, versus $3.178 million income.
Filing Explained
At September 30, 47,730,257 shares were outstanding, while 3,487,786 restricted stock units and 2,157,931 options could add shares upon vesting or exercise.
AerSale’s unaudited Form 10-Q reports 47,730,257 common shares outstanding at
Of the outstanding restricted stock units, 2,410,705 have vesting provisions tied to both time and performance milestones; the remaining units vest over one to three years, while options vest in thirds over the first three grant anniversaries.
At
Key Figures
Key Terms
goodwill impairment financial
borrowing base financial
Used Serviceable Material technical
redomestication regulatory
performance obligation financial
FAQ
AI-generated questions and answers. How Rhea-AI works. Not financial advice.
What were ASLE's third-quarter 2026 revenue and net loss?
Why did ASLE record a third-quarter goodwill impairment?
What drove ASLE's third-quarter revenue increase?
AI-generated analysis. How Rhea-AI works. Not financial advice.
Table of Contents
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
(Mark One)
For the quarterly period ended
OR
For the transition period from ___________ to ____________.
Commission file number:
(Exact name of registrant as specified in its charter)
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(State or other jurisdiction of | | (I.R.S. Employer Identification No.) |
incorporation or organization) | | |
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(Address of Principal Executive Offices) | | (Zip Code) |
(
Registrant’s telephone number, including area code
N/A |
(Former name, former address and former fiscal year, if changed since last report)
Securities registered pursuant to Section 12(b) of the Act:
| | |||
Title of each class | | Trading Symbol(s) | | Name of each exchange on which registered |
| | The |
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large accelerated filer | ☐ | ☒ | |
Non-accelerated filer | ☐ | Smaller reporting company | |
| | Emerging growth company |
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes
The number of shares of Registrant’s common stock outstanding as of November 2, 2026 was
Table of Contents
TABLE OF CONTENTS
Page | ||
Forward-Looking Statements | i | |
PART I – FINANCIAL INFORMATION | 1 | |
Item 1. | Condensed Consolidated Financial Statements | 1 |
Condensed Consolidated Balance Sheets (Unaudited) | 1 | |
Condensed Consolidated Statements of Operations (Unaudited) | 2 | |
Condensed Consolidated Statements of Stockholders’ Equity (Unaudited) | 3 | |
Condensed Consolidated Statements of Cash Flows (Unaudited) | 4 | |
Notes to Condensed Consolidated Financial Statements (Unaudited) | 5 | |
Item 2. | Management’s Discussion and Analysis of Financial Condition and Results of Operations | 21 |
Item 3. | Quantitative and Qualitative Disclosures About Market Risk | 29 |
Item 4. | Controls and Procedures | 30 |
PART II – OTHER INFORMATION | 30 | |
Item 1. | Legal Proceedings | 30 |
Item 1A. | Risk Factors | 30 |
Item 2. | Unregistered Sales of Equity Securities and Use of Proceeds | 30 |
Item 3. | Defaults Upon Senior Securities | 31 |
Item 4. | Mine Safety Disclosures | 31 |
Item 5. | Other Information | 31 |
Item 6. | Exhibits | 31 |
Signatures | 33 | |
Table of Contents
FORWARD-LOOKING STATEMENTS
This Quarterly Report on Form 10-Q for the quarterly period ended September 30, 2026 (this “Quarterly Report”) contains forward-looking statements. We intend such forward-looking statements to be covered by the safe harbor provisions for forward-looking statements contained in Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). All statements other than statements of historical facts contained in this Quarterly Report may constitute forward-looking statements, and may include, but are not limited to, changes in the market for our services; changes in applicable laws or regulations; the ability to launch new services and products or to profitably expand into new markets; the sufficiency of our liquidity; our recovery of insurance proceeds for casualty losses; and expectations of other economic, business and/or competitive factors. These statements involve known and unknown risks, uncertainties and other important factors that may cause our actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements.
In some cases, you can identify forward-looking statements by terms such as “may,” “will,” “should,” “expect,” “plan,” “anticipate,” “could,” “intend,” “target,” “project,” “contemplate,” “believe,” “estimate,” “predict,” “potential”, or “continue,” or the negative of these terms or other similar expressions. The forward-looking statements in this Quarterly Report are only predictions. We have based these forward-looking statements largely on our current expectations and projections about future events and financial trends that we believe may affect our business, financial condition and results of operations. These forward-looking statements speak only as of the date of this Quarterly Report and are subject to a number of important factors that could cause actual results to differ materially from those in the forward-looking statements, including the following: disruptions in supply chain; factors that adversely impact the commercial aviation industry; the fluctuating market value of our products; our ability to repossess mid-life commercial aircraft and engines (“Flight Equipment”) when a lessee defaults; success at our maintenance, repair and overhaul (“MRO”) facilities is dependent upon continued outsourcing by airlines; shortage of skilled personnel or work stoppages; the inability to obtain certain components and raw materials from suppliers; the highly competitive nature of the markets in which we operate; risks associated with our international operations; the risks from business acquisitions and integration of new businesses acquired; the unique risks we encounter by supplying equipment and services to the U.S. government; further consolidation of customers and suppliers in our markets; cyber or other security threats or disruptions; the significant capital expenditures that may be required to keep pace with technological developments in our industry; lack of ownership of certain intellectual property and tooling that is important to our business; litigation to protect our intellectual property; our dependence on our facilities, which are subject to physical and other risks that could disrupt production; risks from any improper conduct by our employees, agents, subcontractors, suppliers, business partners or joint ventures in which we participate; loss of services from key employees; the failure of our subcontractors to perform their contractual obligations; impacts from future outbreaks and infectious diseases on flight activity, demand for MRO and leasing services, our business partners or customers, and the related macro environment; our dependence on continued availability of financing to manage our business and to execute our business strategy, and unavailability of additional financing on terms acceptable to us; our failure to comply with the covenants in the documents governing our existing indebtedness; limitations on our current and future operations from restrictive covenants contained in documents governing our indebtedness; unanticipated changes in our tax provision; possible goodwill and other asset impairments; changes in interest rates and foreign currency exchange rates; we are subject to significant government regulation and may need to incur significant expenses to comply with new or more stringent government regulation; compliance with U.S. and other anti-corruption laws, enhanced tariffs, export control laws, import and customs laws, trade and economic sanction laws and other laws governing our operations; current or future regulatory proceedings or litigation including product liability, intellectual property disputes and other claims not adequately covered by insurance; the liens of Flight Equipment could exceed the value of such Flight Equipment; the risk that our leased aircraft engines are deemed accessions to the aircraft and our ability to repossess an engine is impaired; product and other liability claims not covered by insurance; the extensive environmental requirements with which we must comply; global climate change, or legal, regulatory or market responses to such change; depressed stock price as a result of substantial future sales of our common stock, or the perception in the public markets that these sales may occur; lack of analyst coverage for our common stock; actual or anticipated sales of significant amounts of our common stock; the fact that we do not intend to pay dividends on our common stock for the foreseeable future; insolvency of our customers; the adverse effect of negative economic conditions; and other factors described under the section titled “Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2025, filed with the Securities and Exchange Commission on March 10, 2026.
Moreover, we operate in an evolving environment. New risk factors and uncertainties may emerge from time to time, and it is not possible for management to predict all risk factors and uncertainties.
You should read this Quarterly Report and the documents that we reference in this Quarterly Report completely and with the understanding that our actual future results may be materially different from what we expect. We qualify all of our forward-looking statements by these cautionary statements. Except as required by applicable law, we do not plan to publicly update or revise any forward-looking statements contained herein, whether as a result of any new information, future events, changed circumstances or otherwise.
Unless otherwise stated or the context otherwise requires, references in this Quarterly Report to the “Company,” “AerSale,” “we,” “us,” “our” and similar terms refer to AerSale Corporation and its consolidated subsidiaries.
i
Table of Contents
PART I – FINANCIAL INFORMATION
ITEM 1 CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
AERSALE CORPORATION AND SUBSIDIARIES
Condensed Consolidated Balance Sheets
(in thousands, except share data and par value data)
(Unaudited)
| | | | | | |
| | September 30, | | December 31, | ||
| | 2026 | | 2025 | ||
Current assets: | | | | | | |
Cash and cash equivalents | | $ | | $ | ||
Accounts receivable, net of allowance for credit losses of $ | |
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Income tax receivable | | | | | ||
Inventory: | | | | | | |
Aircraft, airframes, engines, and parts | |
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Advance vendor payments | |
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Deposits, prepaid expenses, and other current assets | |
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Total current assets | |
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Fixed assets: | | | | |
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Aircraft and engines held for lease, net | |
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Property and equipment, net | |
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Inventory: | | | | |
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Aircraft, airframes, engines, and parts | |
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Operating lease right-of-use assets | | | |
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Deferred income taxes | |
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Deferred financing costs, net | |
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Other assets | |
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Goodwill | |
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Other intangible assets, net | |
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Total assets | | $ | | $ | ||
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Current liabilities: | | | | |
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Accounts payable | | $ | | $ | ||
Accrued expenses | |
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Income tax payable | |
| - | |
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Lessee and customer purchase deposits | |
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Current operating lease liabilities | | | | | ||
Current portion of long-term debt | | | | | ||
Deferred revenue | |
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Deferred insurance proceeds | | | | | ||
Total current liabilities | |
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Revolving credit facility | | | |
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Long-term debt | | | |
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Long-term lease deposits | | | | | ||
Long-term operating lease liabilities | | | | | ||
Maintenance deposit payments and other liabilities | |
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Total liabilities | | | | | ||
Stockholders’ equity: | | | | |
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Common stock, $ | |
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Additional paid-in capital | |
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Retained earnings | |
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Total stockholders' equity | |
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Total liabilities and stockholders’ equity | | $ | | $ | ||
See accompanying notes to condensed consolidated financial statements.
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Table of Contents
AERSALE CORPORATION AND SUBSIDIARIES
Condensed Consolidated Statements of Operations
(in thousands, except share and per share data)
(Unaudited)
| | | | | | | | | | | | | |
| | Three Months Ended September 30, | | Nine Months Ended September 30, | | ||||||||
| | 2026 | | 2025 | | 2026 | | 2025 | | ||||
Revenue: | | | | | | | | | | | | | |
Products | | $ | | $ | | $ | | $ | | ||||
Leasing | |
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Services | |
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Total revenue | |
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Cost of sales and operating expenses: | | | | | | | | | | | | | |
Cost of products | |
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Cost of leasing | |
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Cost of services | |
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Total cost of sales | |
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Gross profit | |
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Selling, general and administrative expenses | |
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Goodwill impairment | | | | | - | | | | | - | | ||
(Loss) income from operations | |
| ( | |
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| ( | |
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Other (expense) income: | |
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Interest expense, net | |
| ( | | | ( | |
| ( | |
| ( | |
Other income, net | | | | | | | | | | ||||
Change in fair value of warrant liability | | | - | | | ( | | | - | | | | |
Total other expense, net | |
| ( | |
| ( | |
| ( | |
| ( | |
(Loss) income before income tax provision | |
| ( | |
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| ( | |
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Income tax (expense) benefit | |
| ( | | | ( | |
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| ( | | |
Net (loss) income | | $ | ( | | $ | ( | | $ | ( | | $ | | |
| | | | | | | | | | | | | |
(Loss) earnings per share: | | | | | | | | | | | | | |
Basic | | $ | ( | | $ | ( | | $ | ( | | $ | | |
Diluted | | $ | ( | | $ | ( | | $ | ( | | $ | | |
Weighted average shares outstanding: | | | | | | | | | | | | | |
Basic | | | | | | | | | | | | | |
Diluted | | | | | | | | | | | | | |
See accompanying notes to condensed consolidated financial statements.
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AERSALE CORPORATION AND SUBSIDIARIES
Condensed Consolidated Statements of Stockholders’ Equity
For the three and nine months ended September 30, 2026 and 2025
(in thousands, except share data)
(Unaudited)
| | | | | | | | | | | | | | |
| | | | | | | | | | | | | Total | |
| | Common Stock | | Additional | | Retained | | Stockholders’ | ||||||
| | Amount | | Shares | | Paid-in Capital | | Earnings | | Equity | ||||
Balance at December 31, 2025 | | $ | | | | $ | | $ | | $ | ||||
Share-based compensation | | | - | | - | | | | | - | | | ||
Shares issued under the 2020 Equity Incentive Plan | | | | | | | - | | | - | | | ||
Net loss | |
| - | | - | |
| - | |
| ( | |
| ( |
Balance at March 31, 2026 | | $ | | | | $ | | $ | | $ | ||||
Share-based compensation | | | - | | - | | | | | - | | | ||
Shares issued under the 2020 Employee Stock Purchase Plan | | | | | | | | | - | | | |||
Shares issued under the 2020 Equity Incentive Plan | | | | | | | - | | | - | | | ||
Net loss | |
| - | | - | | | - | | | ( | |
| ( |
Balance at June 30, 2026 | | $ | | | | $ | | $ | | $ | ||||
Share-based compensation | | | - | | - | | | | | - | | | ||
Shares issued under the 2020 Equity Incentive Plan | | | | | | | - | | | - | | | ||
Shares surrendered for tax withholdings on equity awards | | | - | | - | | | ( | | | - | | | ( |
Net loss | | | - | | - | | | - | | | ( | | | ( |
Balance at September 30, 2026 | | $ | | | | $ | | $ | | $ | ||||
| | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | Shares of | | Treasury | | Total | ||
| | Common Stock | | Additional | | Retained | | | Treasury | | Stock, | | Stockholders’ | |||||||
| | Amount | | Shares | | Paid-in Capital | | Earnings | | | Stock | | at Cost | | Equity | |||||
Balance at December 31, 2024 | | $ | | | | $ | | $ | | | - | | $ | - | | $ | ||||
Share-based compensation | | | - | | - | | | | | - | | | - | | | - | | | ||
Shares issued under the 2020 Equity Incentive Plan | | | | | | | - | | | - | | | - | | | - | | | ||
Purchase of treasury stock | | | - | | - | | | - | | | - | | | | | | ( | | | ( |
Retirement of treasury stock | | | | ( | | | ( | | | - | | | ( | | | | | |||
Shares surrendered for tax withholdings on equity awards | | | - | | - | | | ( | | | - | | | - | | | - | | | ( |
Net loss | | | - | | - | | | - | | | ( | | | - | | | - | | | ( |
Balance at March 31, 2025 | | $ | | | | $ | | $ | | | - | | $ | - | | $ | ||||
Share-based compensation | | | - | | - | | | | | - | | | - | | | - | | | ||
Shares issued under the 2020 Employee Stock Purchase Plan | | | | | | | | | - | | | - | | | - | | | |||
Shares issued under the 2020 Equity Incentive Plan | | | | | | | - | | | - | | | - | | | - | | | ||
Shares surrendered for tax withholdings on equity awards | | | - | | - | | | | | - | | | - | | | - | | | ||
Net income | | | - | | - | | | - | | | | | - | | | - | | | ||
Balance at June 30, 2025 | | $ | | | | $ | | $ | | | - | | $ | - | | $ | ||||
Share-based compensation | | | - | | - | | | | | - | | | - | | | - | | | ||
Shares issued under the 2020 Equity Incentive Plan | | | | | | | - | | | - | | | - | | | - | | | ||
Shares surrendered for tax withholdings on equity awards | | | - | | - | | | ( | | | - | | | - | | | - | | | ( |
Net loss | | | - | | - | | | - | | | ( | | | - | | | - | | | ( |
Balance at September 30, 2025 | | $ | | | | $ | | $ | | $ | - | | $ | - | | $ | ||||
See accompanying notes to condensed consolidated financial statements.
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AERSALE CORPORATION AND SUBSIDIARIES
Condensed Consolidated Statements of Cash Flows
(in thousands)
(Unaudited)
| | | | | | |
| | Nine Months Ended September 30, | ||||
| | 2026 | | 2025 | ||
Cash flows from operating activities: | | | | | | |
Net (loss) income | | $ | ( | | $ | |
Adjustments to reconcile net (loss) income to net cash used in operating activities | | | | | | |
Depreciation and amortization | |
| |
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Amortization of debt issuance costs | |
| |
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Amortization of operating lease assets | | | |
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Inventory reserve | |
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Deferred income taxes | |
| ( | |
| |
Change in fair value of warrant liability | | | - | | | ( |
Share-based compensation | | | | | ||
Goodwill impairment | | | | | - | |
Changes in operating assets and liabilities: | |
| | |
| |
Accounts receivable | |
| ( | |
| ( |
Income tax receivable | | | | | ||
Inventory | |
| ( | |
| ( |
Deposits, prepaid expenses, and other current assets | |
| ( | |
| ( |
Other assets | |
| ( | |
| |
Advance vendor payments | |
| ( | |
| |
Accounts payable | |
| |
| ( | |
Income tax payable | | | ( | |
| - |
Accrued expenses | |
| |
| ( | |
Deferred revenue | |
| |
| ( | |
Lessee and customer purchase deposits | |
| |
| ( | |
Deferred insurance proceeds | | | - | | | |
Other liabilities | |
| |
| ||
Net cash used in operating activities | |
| ( | |
| ( |
Cash flows from investing activities: | |
| | |
| |
Proceeds from sale of assets | |
| - | |
| |
Acquisition of aircraft and engines held for lease, including capitalized costs | |
| ( | |
| ( |
Purchase of property and equipment | |
| ( | |
| ( |
Net cash used in investing activities | |
| ( | |
| ( |
Cash flows from financing activities: | |
| | |
| |
Proceeds from long-term debt | | | |
| ||
Repayments of long-term debt | |
| ( | |
| ( |
Proceeds from revolving credit facility | |
| |
| ||
Repayments of revolving credit facility | |
| ( | |
| ( |
Payments of debt issuance costs | | | - | | | ( |
Purchase of treasury stock | | | - | |
| ( |
Proceeds from the issuance of Employee Stock Purchase Plan shares | | | | | ||
Taxes paid related to net share settlement of equity awards | | | ( | | | ( |
Net cash provided by financing activities | |
| |
| ||
| | | | | | |
(Decrease) increase in cash and cash equivalents | |
| ( | |
| |
Cash and cash equivalents, beginning of period | |
| |
| ||
Cash and cash equivalents, end of period | | $ | | $ | ||
| | | | | | |
Supplemental disclosure of cash activities | |
| | |
| |
Income tax refunds, net | | $ | ( | | $ | ( |
Interest paid | | $ | | $ | ||
Supplemental disclosure of noncash investing activities | | | | | | |
Reclassification of inventory to equipment held for lease, net | | $ | | $ | ||
Reclassification of inventory to property and equipment, net | | $ | - | | $ | |
Reclassification of equipment held for lease, net from property and equipment, net | | $ | - | | $ | ( |
| | | | | | |
See accompanying notes to condensed consolidated financial statements.
4
Table of Contents
AERSALE CORPORATION AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
September 30, 2026
NOTE A – DESCRIPTION OF THE BUSINESS
Organization
AerSale Corporation (the “Company” or “we”) is headquartered in Doral, Florida, with additional offices, hangars, and warehouses located globally.
The Company was originally incorporated in Delaware. At the Company’s 2026 Annual Meeting of Stockholders held on June 11, 2026, stockholders holding a majority of the outstanding shares of common stock of the Company entitled to vote approved and adopted the redomestication of the Company from the State of Delaware to the State of Texas (the “Redomestication”) by means of a plan of conversion (the “Plan of Conversion”). Pursuant to the Plan of Conversion, the Company effected the Redomestication on September 25, 2026 by filing: (i) a certificate of conversion with the Secretary of State of the State of Delaware, (ii) a certificate of conversion with the Secretary of State of the State of Texas, and (iii) a certificate of formation with the Secretary of State of the State of Texas (the “Texas Charter”). The Company also adopted new bylaws (the “Texas Bylaws”) to reflect the Redomestication.
Through the adoption of the Plan of Conversion, at the effective time of the Redomestication: the Company continues its existence as a Texas corporation (the “Texas Corporation”) and continues to operate its business under the current name, “AerSale Corporation”; the internal affairs of the Company ceased to be governed by Delaware law and are instead governed by Texas law; the Company ceased to be governed by the Delaware Amended and Restated Certificate of Incorporation, as amended, and the Delaware Amended and Restated Bylaws, as amended, and is instead governed by the provisions of the Texas Charter and the Texas Bylaws; each outstanding share of the Company’s common stock, par value $
Description of the Business
The Company is a worldwide provider of aftermarket commercial aircraft and engines (“Flight Equipment”) and their parts to airlines, leasing companies, manufacturers of original equipment, government and defense contractors, and repair and overhaul service providers. We focus on the acquisition of mid-life assets, which are monetized through our Asset Management Solutions segment. Asset Management Solutions activities include monetization of the assets through leasing to passenger and cargo operators worldwide, as well as sales of whole assets or their components, or through teardown activities in support of our Used Serviceable Material ("USM") business. Our monetizing services are designed to maximize returns on mid-life Flight Equipment throughout their operating life and to realize the highest residual value at their retirement. We do this by utilizing our deep market and technical knowledge in management of Flight Equipment leasing, sales, and Maintenance, Repair, and Overhaul (“MRO”) activities. Beyond providing asset management services on our own Flight Equipment, we additionally provide asset management services to third-party clients complementing their infrastructure to optimize their Flight Equipment investments. The Company's monetization strategy is driven by maximum value extraction for each asset, which may include a lease of an asset for the time period before its next scheduled overhaul (“green time”) on a short term or “spot” lease, with the intent of trading or disassembling the asset once the remaining green time has been utilized.
Through its Technical Operations (“TechOps”) segment, the Company also operates
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Table of Contents
inventory for market, as their selective refurbishment is frequently required to meet customers’ unique demand. In addition to maintaining the Company’s fleet of aircraft, the MROs provide external customer support for maintaining their aircraft with general maintenance, preservation, lease return work, repair services, and long-term storage programs. Leveraging its robust engineering team, TechOps also provides highly specialized technical support to our MRO facilities, as well as developing advanced technical repairs, modifications and products marketed as Engineered Solutions. Engineered Solutions includes the design, manufacture, and installation of new products, systems, and services that can enhance aircraft performance, safety, and service life.
NOTE B – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Interim Financial Statements
The accompanying unaudited interim condensed consolidated financial statements have been prepared from the books and records of the Company in accordance with Generally Accepted Accounting Principles in the United States (“U.S. GAAP”) for interim financial information and Rule 10-01 of Regulation S-X promulgated by the U.S. Securities and Exchange Commission (“SEC”), which permits reduced disclosures for interim periods. Although these interim condensed consolidated financial statements do not include all of the information and footnotes required for complete annual consolidated financial statements, management believes all adjustments, consisting only of normal recurring adjustments, and disclosures necessary for a fair presentation of the accompanying condensed consolidated balance sheets, statements of operations, stockholders’ equity, and cash flows have been made. These unaudited interim results of operations and cash flows are not necessarily indicative of the results that may be expected for the full year. Unaudited interim condensed consolidated financial statements and footnotes should be read in conjunction with the audited consolidated financial statements and footnotes included in Part II, Item 8 of the Company’s Annual Report on Form 10-K for the year ended December 31, 2025, wherein a more complete discussion of significant accounting policies and certain other information can be found.
Revenue Recognition
Products Revenue — Used Serviceable Material (“USM”) Sales
Revenue from sales of USM is measured based on consideration specified in a contract with a customer, and excludes any sales commissions and taxes collected and remitted to government agencies. We recognize revenue when we satisfy a performance obligation by transferring control over a product or service to a customer. The parts are sold at a fixed price with no right of return. In determining the performance obligation, management has identified the promise in the contract to be the shipment of the spare parts to the customer. Title passes to the buyer when the goods are shipped, and the buyer is responsible for any loss in transit and the Company has a legal right to payment for the spare parts once shipped. We generally sell our USM products under standard 30-day payment terms, subject to certain exceptions. Customers neither have the right to return products nor do they have the right to extended financing. The Company has determined physical acceptance of the spare parts to be a formality in accordance with Accounting Standards Codification (“ASC”) 606 – Revenue from Contracts with Customers (“ASC 606”).
Spare parts revenue is based on a set price for a set number of parts as defined in the purchase order. The performance obligation is completed once the parts have shipped and as a result, all of the transaction price is allocated to that performance obligation. The Company has determined that it is appropriate to recognize spare parts sales at a point in time (i.e., the date the parts are shipped) in accordance with ASC 606.
Products Revenue — Whole Asset Sales
Revenue from whole asset sales is measured based on consideration specified in the contract with the customer. The Company and customer enter into an agreement which outlines the place and date of sale, purchase price, condition of the whole asset, bill of sale and the assignment of rights and warranties from the Company to the customer. The Company has identified the transfer of the whole asset as the performance obligation. The transaction price is set at a fixed dollar amount per fixed quantity (number of whole assets) and is explicitly stated in each contract. Whole asset sales revenue is based on a set price for a set number of assets, which is allocated to the performance obligation discussed above,
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in its entirety. The Company has determined the date of transfer to the customer is the date the customer obtains control over the asset and would cause the revenue recognition. Payment is required in full upon customers’ acceptance of the whole asset on the date of the transfer, unless the Company extends credit terms to customers it deems creditworthy.
Leasing Revenue
The Company leases Flight Equipment under operating leases that contain monthly base rent and reports rental income straight line over the life of the lease as it is earned. Additionally, the Company’s leases provide for supplemental rent, which is calculated based on actual hours or cycles of utilization and, for certain components, based on the amount of time until maintenance of that component is required. In certain leases, the Company records supplemental rent paid by the lessees as maintenance deposit payments and other liabilities in recognition of the Company’s contractual commitment to reimburse qualifying maintenance. Reimbursements to the lessees upon receipt of evidence of qualifying maintenance work are charged against existing maintenance deposit payments and other liabilities. In leases where the Company is responsible for performing certain repairs or replacement of aircraft components or engines, supplemental rent is recorded as revenue in the period earned. In the event of premature lease termination or lessee default on the lease terms, revenue recognition will be discontinued when outstanding balances are beyond the customers’ deposits held. Flight Equipment leases are billed in accordance with the lease agreement and invoices are due upon receipt.
Services Revenue
Revenue for services is recognized as performance obligations are fulfilled and the benefits are transferred to the customer. At contract inception, we evaluate if the contract should be accounted for as a single performance obligation or if the contract contains multiple performance obligations. In some cases, our service contract with the customer is considered one performance obligation as it includes factors such as the good or service being provided is significantly integrated with other promises in the contract, the service provided significantly modifies or customizes the other good or service, or the goods or services are highly interdependent or interrelated with each other. If the contract has more than one performance obligation, the Company determines the standalone price of each distinct good or service underlying each performance obligation and allocates the transaction price based on their relative standalone selling prices. The transaction price of a contract, which can include both fixed and variable amounts, is allocated to each performance obligation identified. Some contracts contain variable consideration, which could include incremental fees or penalty provisions related to performance. Variable consideration that can be reasonably estimated based on current assumptions and historical information is included in the transaction price at the inception of the contract but limited to the amount that is probable that a significant reversal in the amount of cumulative revenue recognized will not occur.
For most service contracts, our performance obligations are satisfied over time as work progresses or at a point in time based on transfer of control of products and services to our customers. We receive payments from our customers based on billing schedules or other terms as written in our contracts.
For our performance obligations that are satisfied over time, we measure progress in a manner that depicts the performance of transferring control to the customer. As such, we utilize the input method of cost-to-cost to recognize revenue over time as this depicts when control of the promised goods or services are transferred to the customer. Revenue is recognized based on the relationship of actual costs incurred to date to the estimated total cost at completion of the performance obligation. We are required to make certain judgments and estimates, including estimated revenue and costs, as well as inflation and the overall profitability of the arrangement. Key assumptions involved include future labor costs and efficiencies, overhead costs and ultimate timing of product delivery. Differences may occur between the judgments and estimates made by management and actual program results. Under most of our MRO contracts, if the contract is terminated for convenience, we are entitled to payment for items delivered, fair compensation for work performed, the costs of settling and paying other claims and a reasonable profit on the costs incurred or committed.
Changes in estimates and assumptions related to our arrangements accounted for using the input method based on labor hours are recorded using the cumulative catchup method of accounting. These changes are primarily adjustments to the estimated profitability for our long-term programs where we provide MRO services.
We have elected to use the following practical expedients permitted under ASC 340 and ASC 606. Shipping and handling fees and costs incurred associated with outbound freight after control over a product has transferred to a customer
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are accounted for as a fulfillment cost and are included in cost of sales in our accompanying condensed consolidated statements of operations and are not considered a performance obligation to our customers. The value of remaining performance obligations for contracts with an original expected duration of one year or less is not disclosed. Our reported revenue on our accompanying condensed consolidated statements of operations is net of any sales or related non-income taxes.
Income Taxes
Income taxes are accounted for under the asset and liability method. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and operating loss and tax credit carryforwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. The Company recognizes the effect of income tax positions only if those positions are more likely than not of being sustained on examination by the taxing authorities. Recognized income tax positions are measured at the largest amount that is greater than 50% likely of being realized. Changes in recognition or measurement are reflected in the period in which the change in judgment occurs.
The Company records interest and penalties related to unrecognized tax benefits in the income tax provision.
New Accounting Pronouncements Not Yet Adopted
In November 2024, the Financial Accounting Standards Board issued ASU 2024-03, Reporting Comprehensive Income—Expense Disaggregation Disclosures (“ASU 2024-03”), which requires public entities to disclose, in a tabular presentation, the following expense items: (1) purchases of inventory, (2) employee compensation, (3) depreciation, (4) intangible asset amortization, and (5) depreciation, depletion, and amortization recognized as part of oil- and gas-producing activities or other types of depletion expenses, as well as other types of expenses when applicable. ASU 2024-03 is effective for fiscal years beginning after December 15, 2026 and interim periods beginning after December 15, 2027, with early adoption permitted. We are currently evaluating the impact of this guidance on our consolidated financial statements and disclosure.
There have been no other accounting pronouncements issued but not yet adopted by us which are expected to have a material impact on our consolidated financial statements.
NOTE C – REVENUE
The timing of revenue recognition, customer billings, and cash collections results in a contract asset or contract liability at the end of each reporting period. Contract assets consist of unbilled receivables or costs incurred where revenue recognized over time exceeds the amounts billed to customers. We record a receivable when revenue is recognized prior to invoicing and we have an unconditional right to consideration (only the passage of time is required before payment of that consideration is due) and a contract asset when the right to payment is conditional upon our future performance. Contract liabilities include advance payments and billings in excess of revenue recognized. Certain customers make advance payments prior to our satisfaction of our performance obligations on the contract. These amounts are recorded as contract liabilities until such performance obligations are satisfied. Contract assets and contract liabilities are determined on a contract by contract basis.
Contract assets are as follows (in thousands):
| | | | | | | | | |
| | September 30, 2026 | | December 31, 2025 | | Change | |||
Contract assets | | $ | | $ | | $ | |||
Contract assets are reported within deposits, prepaid expenses, and other current assets on our condensed consolidated balance sheets. Changes in contract assets primarily result from the timing difference between the performance of services. Contract liabilities are reported as deferred revenue on the accompanying condensed consolidated
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balance sheets and amounted to $
Disaggregation of Revenue
The Company reports revenue by segment. The following tables present revenue by segment, as well as a reconciliation to total revenue for the three and nine months ended September 30, 2026 and 2025 (in thousands):
| | | | | | | | | | | | | | | | | | | |
| | Three Months Ended September 30, | | Nine Months Ended September 30, | | ||||||||||||||
| | 2026 | | 2026 | | ||||||||||||||
| | Asset Management | | | | | | | | Asset Management | | | | | | | | ||
| | Solutions | | TechOps | | Total Revenue | | Solutions | | TechOps | | Total Revenue | | ||||||
USM | | $ | | $ | | $ | | $ | | $ | | $ | | ||||||
Whole asset sales | |
| |
| - | |
| |
| |
| - | |
| | ||||
Engineered solutions | |
| - | |
| |
| |
| - | |
| |
| | ||||
Total products | |
| |
| |
| |
| |
| |
| | ||||||
Leasing | |
| |
| - | |
| |
| |
| - | |
| | ||||
Services | |
| - | |
| |
| |
| - | |
| |
| | ||||
Total revenue | | $ | | $ | | $ | | $ | | $ | | $ | | ||||||
| | | | | | | | | | | | | | | | | | | |
| | Three Months Ended September 30, | | Nine Months Ended September 30, | | ||||||||||||||
| | 2025 | | 2025 | | ||||||||||||||
| | Asset Management | | | | | | | | Asset Management | | | | | | | | ||
| | Solutions | | TechOps | | Total Revenue | | Solutions | | TechOps | | Total Revenue | | ||||||
USM | | $ | | $ | | $ | | $ | | $ | | $ | | ||||||
Whole asset sales | | | | | - | | | | | | | - | | | | ||||
Engineered solutions | |
| - | |
| |
| |
| - | |
| |
| | ||||
Total products | |
| |
| |
| |
| |
| |
| | ||||||
Leasing | |
| |
| - | |
| |
| |
| - | |
| | ||||
Services | |
| - | |
| |
| |
| - | |
| |
| | ||||
Total revenue | | $ | | $ | | $ | | $ | | $ | | $ | | ||||||
NOTE D – INVENTORY
Inventory consisted of the following (in thousands):
| | | | | | |
| | September 30, 2026 | | December 31, 2025 | ||
USM | | $ | | $ | ||
Whole assets | | | | | ||
Work-in-process | | | | | ||
MRO and engineered solutions | | | | | ||
| | $ | | | ||
Less short term | |
| ( | |
| ( |
Long term | | $ | | $ | ||
The Company recorded inventory scrap loss reserves of $
The Company recorded an inventory reserve of $
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and 2025, respectively. The inventory reserves are recorded as a result of the Company’s evaluation of the inventory’s net realizable value. Additions to inventory reserves are included in cost of products in the accompanying condensed consolidated statements of operations.
Our allocation of inventory between short term and long term reflects the inventory’s operating cycle, which is longer than one year due to teardown and repair lead times. Inventory expected to be monetized within
NOTE E – INTANGIBLE ASSETS, NET
In accordance with ASC 350, Intangibles — Goodwill and Other (“ASC 350”), goodwill and other intangible assets deemed to have indefinite lives are not amortized, but are subject to annual impairment tests. The Company reviews and evaluates its goodwill and indefinite life intangible assets for potential impairment at a minimum annually or more frequently if circumstances indicate that impairment is possible.
The Company determined the fair value of assets acquired and liabilities assumed using a variety of methods. An income approach based on discounted cash flows was used to determine the values of our trademarks, customer relationships and FAA certifications. The assumptions we used to estimate the fair value of our reporting units are based on historical performance, as well as forecasts used in our current business plan, and require considerable management judgment.
The Company’s goodwill and intangible assets as defined by ASC 350 are related to its acquired subsidiaries, AerSale Component Solutions (d/b/a AerSale Landing Gear Solutions) (“ALGS”), Avborne Component Solutions (d/b/a AerSale Component Solutions) (“ACS”), and Aircraft Composite Technologies (“ACT” or “AerSale AeroStructures - Miami”), which are included in the TechOps segment, as well as Qwest Air Parts (“Qwest”), which is included under the Asset Management Solutions segment. See Note M for information about our business segments.
During the three months ended September 30, 2026, the Company’s stock price exhibited a sustained decrease, which management considered a triggering event indicating that the fair value of one or more of the Company’s reporting units more likely than not was below its carrying value. Therefore, the Company performed a quantitative goodwill impairment assessment for the Asset Management Solutions and ACT reporting units as of September 30, 2026, which supported that the fair value for the ACT reporting unit exceeded its carrying value as of September 30, 2026. As such, the quantitative test for this reporting unit did not result in goodwill impairment.
For the Asset Management Solutions reporting unit, the impairment assessment indicated that the estimated fair value was lower than its carrying value. As a result, the Company recorded a non-cash goodwill impairment for the full amount of the Asset Management Solutions goodwill in the amount of $
The following table summarizes the changes in the carrying amount of goodwill for the three and nine months ended September 30, 2026 (in thousands):
| | | | | | | | | |
| | Asset | | | | | | | |
| | Management | | | | | | | |
|
| Solutions |
| TechOps |
| Total | |||
Goodwill as of December 31, 2025 | | $ |
| $ |
| $ | |||
Goodwill as of June 30, 2026 | | |
| |
| | |||
Goodwill impairment | | | ( |
| | - |
| | ( |
Goodwill as of September 30, 2026 | | $ | - | | $ | | $ | ||
There was
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Goodwill and other intangible assets, net consisted of the following (in thousands):
| | | | | | |
| | September 30, 2026 | | December 31, 2025 | ||
Asset Management Solutions: | | | | | | |
FAA Certifications | | $ | | $ | | |
Goodwill | |
| - | |
| |
ALGS: | |
| | |
| |
FAA Certifications | |
| |
| | |
Goodwill | |
| |
| | |
ACS: | |
| | |
| |
Trademarks | |
| |
| | |
FAA Certifications | |
| |
| | |
Goodwill | |
| |
| | |
ACT: | |
| | | | |
Trademarks | |
| |
| | |
FAA Certificates | |
| |
| | |
Goodwill | |
| |
| | |
Total intangible assets with indefinite lives | | $ | | $ | | |
Intangible assets with definite useful lives are amortized on a straight-line basis over their estimated useful lives. Net book value of intangible assets with definite lives are as follows (in thousands):
| | | | | | | | |
| | Useful Life | | | | | | |
| | In Years | | September 30, 2026 | | December 31, 2025 | ||
Asset Management Solutions: | | | | | | | | |
Customer relationships | | | $ | | $ | |||
ACS: | | | |
| | |
| |
Customer relationships | | |
| |
| |||
ACT: | | | |
| | |
| |
Customer relationships | | |
| |
| |||
AerSale: | | | | | | | | |
AerAware flight manuals | | | | | | |||
Total intangible assets with definite lives, net | | | | $ | | $ | ||
Total amortization expense amounted to $
During the quarter ended September 30, 2026, the Company’s stock price decreased significantly and had not recovered by September 30, 2026, which management considered a triggering event. Therefore, the Company performed a quantitative impairment for other intangibles as of September 30, 2026. The Company determined that the fair value exceeded the carrying value for other intangibles as of September 30, 2026.
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NOTE F – PROPERTY AND EQUIPMENT, NET
Property and equipment, net, consisted of the following (in thousands):
| | | | | | | | |
| | Useful Life | | | | | | |
| | In Years | | September 30, 2026 | | December 31, 2025 | ||
Tooling and equipment |
| | $ | | $ | |||
Furniture and other equipment |
| |
| |
| |||
Computer software |
| |
| |
| |||
Leasehold improvements |
| |
| |
| |||
| | | |
| |
| ||
Less accumulated depreciation | | | |
| ( | |
| ( |
| | | | $ | | $ | ||
Depreciation expense, which includes amortization of equipment under capital lease, amounted to $
NOTE G – AIRCRAFT AND ENGINES HELD FOR LEASE, NET
Aircraft and engines held for lease, net, as of the below dates consisted of the following (in thousands):
| | | | | | |
| | September 30, 2026 | | December 31, 2025 | ||
Aircraft and engines held for lease | | $ | | $ | ||
Less accumulated depreciation | |
| ( | |
| ( |
| | $ | | $ | ||
Total depreciation expense amounted to $
Supplemental rents recognized as revenue totaled $
The Company’s current operating lease agreements for leased Flight Equipment expire over the next
| | | |
Year ending December 31: | | | |
Remaining three months of 2026 | | $ | |
2027 | | | |
2028 | |
| |
2029 | | | |
2030 | | | |
Thereafter | | | |
Total minimum lease payments | | $ |
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NOTE H — ACCRUED EXPENSES
The following is a summary of the components of accrued expenses as of the below dates (in thousands):
| | | | | | |
| | September 30, 2026 | | December 31, 2025 | ||
Accrued compensation and related benefits | | $ | | $ | ||
Accrued legal fees | |
| |
| ||
Commission fee accrual | |
| |
| ||
Accrued federal, state and local taxes and fees | |
| |
| ||
Other | |
| |
| ||
| | $ | | $ | ||
NOTE I – WARRANT LIABILITY
Warrants to purchase a total of
The Private Warrants included provisions that affected the settlement amount. Such variables were outside of those used to determine the fair value of a fixed-for-fixed instrument, and as such, the Private Warrants did not meet the criteria for equity treatment under guidance contained in ASC Topic 815 – Accounting for Derivative Financial Instruments Indexed to, and Potentially Settled in a Company’s Own Stock. The Company classified the Private Warrants as a liability at their fair value subject to re-measurement at each balance sheet date and adjusted at each reporting period until expired, and any change in fair value was recognized in the Company's condensed consolidated statements of operations. Prior to their expiration, the fair value of the Private Warrants was determined using the Black-Scholes option pricing model.
NOTE J – FINANCING ARRANGEMENTS
Outstanding debt obligations as of September 30, 2026 and December 31, 2025 consisted of the following (in thousands):
| | | | | | |
| | September 30, | | December 31, | ||
| | 2026 | | 2025 | ||
$ | | $ | | $ | ||
$ | | | | | ||
Total | |
| | | ||
Less current portion | |
| ( | | | ( |
Total long-term portion | | $ | | $ | ||
Total deferred financing costs were $
$
On July 20, 2018, our subsidiary, AerSale, Inc. and other subsidiary borrowers, entered in an amended and restated secured Revolving Credit Agreement (as amended, the “Revolving Credit Agreement”). The Revolving Credit Agreement initially provided for a $
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as defined in the Revolving Credit Agreement. Extensions of credit under the Revolving Credit Agreement are available for working capital and general corporate purposes.
On March 9, 2023, we amended the Revolving Credit Agreement to replace the benchmark rate from the London Interbank Offered Rate to the Secured Overnight Financing Rate (“SOFR”). On July 25, 2023, the Revolving Credit Agreement was amended to increase the maximum commitments thereunder to $
As of September 30, 2026, the Company had $
The obligations of AerSale, Inc. under the Revolving Credit Agreement are guaranteed by the Company, and other subsidiaries of AerSale, Inc. may be designated as borrowers on a joint and several basis. Such obligations are also secured by substantially all of the assets of the Company.
The interest rate applicable to loans outstanding on the Revolving Credit Agreement is a floating rate of interest per annum of SOFR plus a margin of
The Company’s ability to borrow on the Revolving Credit Agreement is subject to ongoing compliance by the Company with various customary affirmative and negative covenants. The Revolving Credit Agreement requires the Company to meet certain financial and non-financial covenants. The Company was in compliance with these covenants as of September 30, 2026 and December 31, 2025.
$
On November 22, 2024, the Company entered into a property and equipment revolving term loan (the “CIBC Equipment Loan”) with a total advance commitment of $
Effective November 30, 2025, we amended the CIBC Equipment Loan to extend the term of the advance commitment until November 30, 2026 and reduce the total advance commitment to $
The CIBC Equipment Loan is subject to ongoing compliance by the Company in the form of various customary affirmative and negative covenants, as well as certain financial covenants. The Company was in compliance with these covenants as of September 30, 2026 and December 31, 2025.
The effective rate on this facility was
| | |
Year ending December 31: | | |
Remaining three months of 2026 | $ | |
2027 | | |
2028 |
| |
Total payments | $ |
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NOTE K – EARNINGS PER SHARE
The computation of basic and diluted earnings per share is based on the weighted average number of shares of common stock outstanding during each period.
The following table provides a reconciliation of the computation for basic and diluted earnings per share for the three and nine months ended September 30, 2026 and 2025 (in thousands, except share and per share data):
| | | | | | | | | | | | |
| | Three Months Ended September 30, | | Nine Months Ended September 30, | ||||||||
| | 2026 | | 2025 | | 2026 | | 2025 | ||||
Net (loss) income | | $ | ( | | $ | ( | | $ | ( | | $ | |
| | | | | | | | | | | | |
Weighted-average number of shares outstanding - basic | |
| | |
| | |
| | |
| |
Additional shares from assumed stock-settled restricted stock units | | | - | | | - | | | - | | | |
Additional shares from assumed issuance under the Employee Stock Purchase Plan | | | - | | | - | | | - | | | |
Weighted-average number of shares outstanding - diluted | | | | | | | | | | | | |
| | | | | | | | | | | | |
(Loss) earnings per share – basic: | | $ | ( | | $ | ( | | $ | ( | | $ | |
(Loss) earnings per share – diluted: | | $ | ( | | $ | ( | | $ | ( | | $ | |
| | | | | | | | | | | | |
Anti-dilutive shares/units excluded from loss per share - diluted: | | | | | | | | | | | | |
Additional shares from assumed stock-settled restricted stock units | | | | | | | | | | | | - |
Additional shares from assumed issuance under the Employee Stock Purchase Plan | | | | | | | | | | | | - |
NOTE L – STOCKHOLDERS’ EQUITY
Common Stock
The Company’s common stock, $
On March 18, 2025, the Company repurchased, directly from a selling stockholder,
2020 Equity Incentive Plan
The Company maintains a 2020 Equity Incentive Plan (the “2020 Plan”) and has
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Restricted stock unit activity under the 2020 Plan for the nine months ended September 30, 2026 and 2025 was as follows:
| | | | | |
| | | | Weighted Average | |
| | Amount | | Grant Date Fair Value | |
Outstanding at December 31, 2025 | | | | $ | |
Granted | | | |
| |
Forfeited | | ( | |
| |
Vested | | ( | | | |
Expired | | ( | | | |
Outstanding at September 30, 2026 | | | | $ | |
| | | | | | | | | |
| | | | | |
| | | | Weighted Average | |
| | Amount | | Grant Date Fair Value | |
Outstanding at December 31, 2024 | | | | $ | |
Granted | | | |
| |
Forfeited | | ( | |
| |
Vested | | ( | |
| |
Expired | | ( | |
| |
Outstanding at September 30, 2025 | | | | $ | |
As of September 30, 2026, the unrecognized compensation costs related to restricted stock units was $
For the restricted stock unit awards granted under the 2020 Plan containing both service and performance conditions, the Company recognizes compensation expense when the awards are considered probable of vesting. Restricted stock units are considered granted, and the service inception date begins, when a mutual understanding of the key terms and conditions between the Company and the employee has been established. The fair value of these awards is determined based on the closing price of the shares on the grant date.
The probability of restricted share awards granted with future performance conditions vesting is evaluated at each reporting period and compensation expense is adjusted based on the probability assessment.
As of September 30, 2026, the Company’s outstanding restricted stock units included
The Company recorded $
The share-based compensation expense related to Restricted Stock Units was $
The total grant date fair value of restricted stock awarded was $
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Stock Options
Stock options granted under the 2020 Plan have exercise terms of
Under the 2020 Plan, the fair value of each option grant is estimated on the date of grant using the Black-Scholes option-pricing model. When determining expected volatility, the Company considers the historical volatility of the Company’s stock price. The risk-free interest rate is based on the U.S. Treasury yield curve in effect at the time of grant, based on the options’ expected term.
| | | | | | |
| | Grant Date | ||||
| | August 19, 2026 | | August 6, 2025 | | August 1, 2025 |
Risk-free interest rate | | | | |||
Expected volatility of common stock | | | | |||
Dividend yield | | - | | - | | - |
Expected option term in years | | | | |||
Grant-date fair value (per share) | | $ | | $ | | $ |
Stock options activity under the 2020 Plan for the nine months ended September 30, 2026 and 2025 was as follows:
| | | | | | | | | | |
| | Amount | | Weighted Average Exercise Price per Share | | Weighted Average Remaining Contractual Life (Years) | | Aggregate Intrinsic Value | ||
Outstanding at December 31, 2025 | | | | $ | | | | $ | | |
Granted | | | | | | | - | | | - |
Forfeited | | ( | | | | | - | | | - |
Outstanding at September 30, 2026 | | | | $ | | | | $ | - | |
| | | | | | | | | | |
Exercisable at September 30, 2026 | | | | $ | | | | $ | - | |
| | | | | | | | | | |
| | Amount | | Weighted Average Exercise Price per Share | | Weighted Average Remaining Contractual Life (Years) | | Aggregate Intrinsic Value | ||
Outstanding at December 31, 2024 | | | | $ | | | | $ | - | |
Granted | | | | | | | - | | | |
Forfeited | | ( | | | | | - | | | |
Expired | | ( | | | | | - | | | |
Outstanding at September 30, 2025 | | | | $ | | | | $ | | |
| | | | | | | | | | |
Exercisable at September 30, 2025 | | | | $ | | | | $ | | |
As of September 30, 2026, the unrecognized compensation costs related to stock options was $
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The share-based compensation expense related to stock options was $
2020 Employee Stock Purchase Plan
The Company also maintains the AerSale Corporation 2020 Employee Stock Purchase Plan (the “ESPP”) and has registered
NOTE M – BUSINESS SEGMENTS
The Chairman and Chief Executive Officer is our Chief Operating Decision Maker (“CODM”). We report operational data to our CODM at the segment level, which the CODM uses to evaluate performance and allocate resources based on gross profit (loss) and income (loss) from operations by segment. The CODM utilizes segment gross profit (loss) when making strategic decisions which include considerations of pursuing additional capacity and technical capabilities or acquiring additional Flight Equipment. Additionally, the CODM utilizes segment income (loss) from operations when comparing actual results to budgets and making decisions regarding personnel and capital allocations. While the Company believes there are synergies between the
| ● | Asset Management Solutions — comprised of activities to extract value from strategic asset acquisitions through leasing, trading, or disassembling for product sales through USM. |
| ● | TechOps — comprised of MRO services and product sales of internally developed engineered solutions and other serviceable products. |
The Asset Management Solutions segment provides leasing solutions of Flight Equipment to passenger and cargo operators worldwide. Assets considered to be at or near the end their useful lives, supplied by our leasing portfolio or acquisitions, are analyzed for return maximization to assess whether they will be sold as whole assets or disassembled and sold as individual spare parts and components.
The TechOps segment consists of aftermarket support and services businesses that provide maintenance support for aircraft and aircraft components, and sale of engineered solutions. Our MRO business also engages in longer term projects such as aircraft modifications, cargo conversions of wide-body aircraft, and aircraft storage. The segment also includes MRO services for landing gear, structured components, and other accessories components. Cost of sales consists principally of the cost of product, direct labor, and overhead. Our engineered solutions revenue consists of sales of products internally developed as permitted by Supplemental Type Certificates issued by the FAA. These products are proprietary in nature and function as non-original equipment manufacturer solutions to airworthiness directives and other technical challenges for operators. In order to develop these products, we engage in research and development activities. Our TechOps segment will engage in the repair and sale of used serviceable materials through their ability to overhaul existing inventory.
The accounting policies for the segments are the same as those described in Note B – Summary of Significant Accounting Policies. Our reportable segments are aligned principally around the differences in products and services. Gross profit is calculated by subtracting cost of sales from revenue; income (loss) from operations is calculated by further subtracting unapplied operating expenses and selling, general and administrative expenses. Certain expenses related to corporate activities are not allocated to the segments. The segment reporting excludes the allocation of interest expense, interest income, other income (expense), net, change in fair value of warrant liability and income tax expense (benefit).
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Selected financial information for each segment is as follows (in thousands):
| | | | | | | | | | | | | |
| | Three Months Ended September 30, | | Nine Months Ended September 30, | | ||||||||
| | 2026 | | 2025 | | 2026 | | 2025 | | ||||
Revenue | | | |
| | | | | |
| | | |
Asset Management Solutions | | | |
| | | | | |
| | | |
Aircraft | | $ | | | $ | | | $ | | | $ | | |
Engine | |
| | |
| | |
| | |
| | |
| |
| | |
| | |
| | |
| | |
TechOps | |
| | |
| | |
| | |
| | |
MRO services | |
| | |
| | |
| | |
| | |
Product sales | |
| | |
| | |
| | |
| | |
| |
| | |
| | |
| | |
| | |
Total | | $ | | | $ | | | $ | | | $ | | |
| | | | | | | | | | | | | |
| | Three Months Ended September 30, | | Nine Months Ended September 30, | | ||||||||
| | 2026 | | 2025 | | 2026 | | 2025 | | ||||
Cost of sales | |
| | |
| | |
| | |
| | |
Asset Management Solutions | |
| | |
| | |
| | |
| | |
Aircraft | | $ | | | $ | | | $ | | | $ | | |
Engine | |
| | |
| | |
| | |
| | |
| |
| | |
| | |
| | |
| | |
TechOps | |
| | |
| | |
| | |
| | |
MRO services | |
| | |
| | |
| | |
| | |
Product sales | |
| | |
| | |
| | |
| | |
| |
| | |
| | |
| | |
| | |
Total | | $ | | | $ | | | $ | | | $ | | |
| | | | | | | | | | | | | |
| | Three Months Ended September 30, | | Nine Months Ended September 30, | | ||||||||
| | 2026 | | 2025 | | 2026 | | 2025 | | ||||
Gross profit (loss) | |
| | |
| | |
| | |
| | |
Asset Management Solutions | |
| | |
| | |
| | |
| | |
Aircraft | | $ | | | $ | | | $ | | | $ | | |
Engine | |
| | |
| | |
| | |
| | |
| |
| | |
| | |
| | |
| | |
TechOps | |
| | |
| | |
| | |
| | |
MRO services | |
| ( | |
| | |
| ( | |
| | |
Product sales | |
| | |
| | |
| | |
| | |
| |
| | |
| | |
| | |
| | |
Total | | $ | | | $ | | | $ | | | $ | | |
The following table reconciles segment gross profit to (loss) income before income tax provision for the three and nine months ended September 30, 2026 and 2025 (in thousands):
| | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | |
| | Three Months Ended September 30, 2026 | | Three Months Ended September 30, 2025 | | ||||||||||||||
| | Asset Management Solutions | | | TechOps | | | Total | | Asset Management Solutions | | | TechOps | | | Total | | ||
Gross Profit | | $ | | $ | | $ | | $ | | $ | | $ | | ||||||
Operating expenses | |
| ( | |
| ( | |
| ( | |
| ( | |
| ( | |
| ( | |
Selling, general and administrative expenses | |
| ( | |
| ( | |
| ( | |
| ( | |
| ( | |
| ( | |
Goodwill impairment | | | ( | |
| - | |
| ( | | | - | | | - | | | - | |
Segment (loss) income from operations | | $ | ( | | $ | | $ | ( | | $ | | $ | | $ | | ||||
Other corporate expenses (1) | |
| | |
| | |
| ( | |
| | | | | |
| ( | |
(Loss) income from operations | |
| | | | | | | ( | |
| | | | | | | | |
Other (expense) income: | | | | | | | | | | | | | | | | | | | |
Interest expense, net | | | | | | | | | ( | | | | | | | | | ( | |
Other income, net | | | | | | | | | | | | | | | | | | ||
Change in fair value of warrant liability | | | | | | | | | - | | | | | | | | | ( | |
(Loss) income before income tax provision | | | | | | | | $ | ( | | | | | | | | $ | | |
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| | | | | | | | | | | | | | | | | | |
| | Nine Months Ended September 30, 2026 | | Nine Months Ended September 30, 2025 | ||||||||||||||
| | Asset Management Solutions | | | TechOps | | | Total | | Asset Management Solutions | | | TechOps | | | Total | ||
Gross Profit | | $ | | $ | | $ | | $ | | $ | | $ | ||||||
Operating expenses | |
| ( | |
| ( | |
| ( | |
| ( | |
| ( | |
| ( |
Selling, general and administrative expenses | |
| ( | |
| ( | |
| ( | |
| ( | |
| ( | |
| ( |
Goodwill impairment | | | ( | |
| - | |
| ( | | | - | |
| - | |
| - |
Segment income from operations | | $ | | $ | | $ | | $ | | $ | | $ | ||||||
Other corporate expenses (1) | |
| | |
| | |
| ( | |
| | |
| | |
| ( |
(Loss) income from operations | |
| | | | | | | ( | |
| | | | | | | |
Other (expense) income: | | | | | | | | | | | | | | | | | | |
Interest expense, net | | | | | | | | | ( | | | | | | | | | ( |
Other income, net | | | | | | | | | | | | | | | | | ||
Change in fair value of warrant liability | | | | | | | | | - | | | | | | | | | |
(Loss) income before income tax provision | | | | | | | | $ | ( | | | | | | | | $ | |
| | | | | | | | | | | | |
| | Three Months Ended September 30, | | Nine Months Ended September 30, | ||||||||
(in thousands) | | 2026 | | 2025 | | 2026 | | 2025 | ||||
Total depreciation and amortization expense | |
| | |
| | |
| | |
| |
Asset Management Solutions | | $ | | | $ | | | $ | | | $ | |
TechOps | | | | |
| | | | | |
| |
Corporate | | | | |
| | | | | |
| |
| | $ | | | $ | | | $ | | | $ | |
| | | | | | |
| | Nine Months Ended September 30, | ||||
(in thousands) | | 2026 | | 2025 | ||
Total capital expenditures | | | | | | |
Asset Management Solutions | | $ | | $ | ||
TechOps | | | |
| ||
Corporate | | | |
| ||
| | $ | | $ | ||
| | | | | | |
| | September 30, | | December 31, | ||
(in thousands) | | 2026 | | 2025 | ||
Total Assets |
| | |
| | |
Asset Management Solutions | | $ | | | $ | |
TechOps | | | | |
| |
Corporate | | | | |
| |
| | $ | | | $ | |
Intersegment sales include amounts invoiced by a segment for work performed for another segment. Amounts are based on actual work performed or products sold and agreed-upon pricing which is intended to be reflective of the contribution made by the supplying business segment. All intersegment transactions have been eliminated upon consolidation.
| | | | | | | | | | | | |
| | Three Months Ended September 30, | | Nine Months Ended September 30, | ||||||||
| | 2026 | | 2025 | | 2026 | | 2025 | ||||
Asset Management Solutions | | $ | | $ | | $ | | $ | ||||
TechOps | |
| |
| |
| |
| ||||
Total intersegment revenue | | $ | | $ | | $ | | $ | ||||
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ITEM 2 MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
The following discussion and analysis provides information that our management believes is relevant to an assessment and understanding of our condensed consolidated results of operations and financial condition. You should read the following management’s discussion and analysis and the accompanying financial statements and related notes with AerSale’s Annual Report on Form 10-K for the year ended December 31, 2025 (the “2025 Form 10-K”). This discussion contains forward-looking statements about AerSale’s business, operations and industry that involve risks and uncertainties, such as statements regarding AerSale’s plans, objectives, expectations and intentions. AerSale’s future results and financial condition may differ materially from those currently anticipated because of the factors described in the section titled “Risk Factors” in the 2025 Form 10-K, in the section of this Quarterly Report titled “Forward-Looking Statements” and in any of AerSale’s subsequent reports filed with the Securities and Exchange Commission. Should one or more of these risks or uncertainties materialize, actual outcomes, including the future results of AerSale’s operations, may vary materially from those indicated.
The Company
We operate as a platform for serving the commercial aviation aftermarket sector. Our top executives have on average over 30 years of experience in aircraft and engine (“Flight Equipment”) management, sales and maintenance services, and are supported by an experienced management team. We have established a global purpose built and fully integrated aviation company focused on providing products and services that maximize the value of Flight Equipment in the middle to end of its operating life cycle.
We are a worldwide provider of aftermarket commercial aircraft, engines, and their parts to passenger and cargo airlines, leasing companies, original equipment manufacturers (“OEM”), government and defense contractors, and maintenance, repair and overhaul (“MRO”) service providers. We report our activities in two business segments: Asset Management Solutions, comprised of activities that extract value from strategic Flight Equipment acquisitions either as whole assets or by disassembling for used serviceable material (“USM”), and TechOps, comprised of MRO activities for aircraft and their components, sales of internally developed advanced technical repairs, modifications and products, which we market under the tradename “Engineered Solutions”, and other serviceable products.
Our Asset Management Solutions segment focuses on mid-life Flight Equipment. Asset Management Solutions’ activities include monetization of assets through the lease or sale of whole assets, or through disassembly activities in support of our USM-related activities. Our monetizing services have been developed to maximize returns on mid-life Flight Equipment throughout their operating life, in conjunction with realizing the highest residual value of Flight Equipment at its retirement. We accomplish this by utilizing deep market and technical knowledge related to the management of Flight Equipment sales, leasing and MRO services. To extract value from the remaining flight time on whole assets, we provide flexible short-term (generally less than five years) leasing solutions of Flight Equipment to passenger and cargo operators across the globe. Once the value from the Flight Equipment’s flight time has been extracted, Flight Equipment is considered to be at or near the end of its useful life and is analyzed for return maximization as either whole asset sales or disassembled for sale as USM parts. Revenue from this segment is segregated between Aircraft and Engine depending on the asset type that generated the revenue. Lease revenue and the related depreciation from aircraft and engines installed on those aircraft are recognized under the Aircraft category. Revenue from sales of whole aircraft and related cost of sales are allocated between the Aircraft and Engine categories based on the allocated cost basis of the asset sold.
Our TechOps segment provides internal and third-party aviation services, including internally developed Engineered Solutions, full heavy aircraft maintenance and modification, component MRO, as well as end-of-life disassembly services to all Flight Equipment. Our MRO business also engages in longer-term projects such as aircraft modifications, cargo and tanker conversions of aircraft, and aircraft storage. The TechOps segment also includes MRO services for landing gear, thrust reversers, hydraulic systems, and other aircraft components.
We utilize these capabilities to support our customers’ Flight Equipment, as well as to maintain and improve our own Flight Equipment, which is subsequently sold or leased to our customers. These processes require a high degree of
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expertise on each individual aircraft or component that is being serviced. Our knowledge of these processes allows us to assist customers to comply with applicable regulatory and OEM requirements. A significant amount of skilled labor is required to support this process, which the Company has accumulated through its diversified offerings.
In addition to our aircraft and USM parts offerings, we develop Engineered Solutions consisting of Supplemental Type Certificates (“STCs”) that can be installed on existing Flight Equipment to improve performance, comply with regulatory requirements, or improve safety. An example of these solutions is the AerSafe® product line, which we designed and for which we obtained Federal Aviation Administration (“FAA”) approval to sell as a solution for compliance with the FAA’s fuel tank flammability regulations. Another example of these solutions is our AerAware™ product, an industry-leading, next generation Enhanced Flight Vision System that has received approval by the FAA for the Boeing B737NG product line. These products are proprietary in nature and function as non-OEM solutions to regulatory requirements and other technical challenges, often at reduced delivery time and cost for operators. In order to develop these products, we engage in research and development (“R&D”) activities that are expensed as incurred.
We source parts and components for our business from various suppliers around the world. Current geopolitical conditions, including trade restrictive actions and strained intercountry relations, and potential shutdowns of the U.S. government could cause significant materials and parts shortages, disruptions to government contracts such as delayed payments or halted projects, effects on supply chains due to reduced staffing for customers, inspections and transportation authorities, or delays in regulatory approvals, distribution issues, energy cost increases and price increases. Furthermore, the U.S. government’s adoption of new approaches to trade policy and imposition of tariffs on certain foreign goods (as well as the possibility of imposing significant, additional tariffs in the future) may make it more difficult or costly for us to procure components and other material supplies and, in turn, may increase the cost to our customers, which may materially and adversely impact demand for our products and services, our results of operations or our financial condition. In addition, these U.S. actions have, and could in the future, result in other countries imposing retaliatory tariffs on our goods and services provided to foreign customers, which similarly could materially and adversely impact demand for our products and services. We continue to monitor the current economic environment and its potential impact on our business, results of operations and financial condition, as well as the potential impact on our end customers whose demand for our products and services may be adversely impacted as a result of increased geopolitical instability or changes in policies by the U.S. or other governments, and closely manage our costs and capital resources so that we can respond appropriately as circumstances change. Our estimates may change as new events occur and additional information is obtained. Actual results could differ from these estimates under different assumptions or conditions.
Recent Accounting Pronouncements
The most recently adopted and to be adopted accounting pronouncements are described in Note B of our condensed consolidated financial statements included in this Quarterly Report, as well as in Note B within our consolidated annual financial statements in Part II, Item 8 of the 2025 Form 10-K.
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Results of Operations
Three months ended September 30, 2026 compared to the three months ended September 30, 2025
Revenue and gross profit for AerSale’s two business segments for the three months ended September 30, 2026 and 2025 were as follows:
| | | | | | | | | |
| | Three Months Ended September 30, | | |
| ||||
(in thousands, except percentages) | | 2026 | | 2025 | | Percent Change | |||
Revenue | | | | | | | | |
|
Asset Management Solutions |
| | |
| | |
| | |
Aircraft | | $ | 10,364 | | $ | 8,249 |
| 25.6 | % |
Engine | |
| 40,183 | |
| 30,952 |
| 29.8 | % |
| | | 50,547 | | | 39,201 |
| 28.9 | % |
TechOps | | | | | | |
| | |
MRO services | | | 26,591 | | | 24,820 |
| 7.1 | % |
Product sales | | | 14,418 | | | 7,170 |
| 101.1 | % |
| | | 41,009 | | | 31,990 |
| 28.2 | % |
| | | | | | | | | |
Total | | $ | 91,556 | | $ | 71,191 |
| 28.6 | % |
| | | | | | | | | |
| | Three Months Ended September 30, | | |
| ||||
(in thousands, except percentages) | | 2026 | | 2025 | | Percent Change | |||
Gross Profit (loss) | | | |
| | | | | |
Asset Management Solutions | | | |
| | | | | |
Aircraft | | $ | 2,705 | | $ | 3,326 | | (18.7) | % |
Engine | |
| 12,726 | | | 10,061 | | 26.5 | % |
| | | 15,431 | | | 13,387 | | 15.3 | % |
TechOps | | | | | | | | | |
MRO services | | | (829) | | | 5,259 | | (115.8) | % |
Product sales | | | 5,956 | | | 2,840 | | 109.7 | % |
| | | 5,127 | | | 8,099 | | (36.7) | % |
| | | | | | | | | |
Total | | $ | 20,558 | | $ | 21,486 | | (4.3) | % |
Total revenue for the three months ended September 30, 2026 increased $20.4 million, or 28.6%, compared to the three months ended September 30, 2025, driven by an increase of $11.3 million, or 28.9%, in revenue within Asset Management Solutions, and an increase of $9.0 million, or 28.2%, in revenue within TechOps.
Asset Management Solutions
Revenue in the Asset Management Solutions segment increased $11.3 million, or 28.9%, to $50.5 million for the three months ended September 30, 2026, due to a $9.2 million, or 29.8%, increase in revenue from Engine, and a $2.1 million, or 25.6%, increase in revenue from Aircraft. The increase in Engine revenue is primarily attributable to higher activity in the PW4000 product line due to higher Flight Equipment sales in the amount of $8.9 million, and higher USM sales of $0.3 million. The increase in Aircraft revenue is due to higher USM sales in the amount of $1.2 million, mostly from the B737 product line, as well as higher leasing revenue.
Cost of sales in Asset Management Solutions increased $9.3 million, or 36.0%, to $35.1 million for the three months ended September 30, 2026, compared to the prior year period. The increase in cost of sales was primarily due to the revenue increase discussed above. Gross profit in the Asset Management Solutions segment increased $2.0 million, or 15.3%, to $15.4 million for the three months ended September 30, 2026, compared to the three months ended September 30, 2025. The gross profit increase is mainly attributable to higher revenue generated for the three months ended September 30, 2026, as noted above.
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Aircraft gross profit margins decreased to 26.1% for the three months ended September 30, 2026, from 40.3% for the three months ended September 30, 2025 due to lower margin contribution from leasing revenue and USM sales. Engine gross profit margin was 31.7% for the three months ended September 30, 2026, a decrease from 32.5% for the three months ended September 30, 2025, which was primarily the result of changes in the revenue mix.
TechOps
Our revenue from TechOps increased by $9.0 million, or 28.2%, to $41.0 million for the three months ended September 30, 2026, compared to the prior year period. The increase was driven by higher volume in our heavy MROs as our facility in Millington, Tennessee is fully operational. Additional revenue growth came from our Engineered Solutions product sales, driven by AerSafe.
Cost of sales in TechOps increased $12.0 million, or 50.2%, to $35.9 million for the three months ended September 30, 2026 compared to the prior year period, driven by the sales increase discussed above. Gross profit in TechOps decreased $3.0 million, or 36.7%, for the three months ended September 30, 2026 compared to the three months ended September 30, 2025, driven by lower margin generated from our heavy MROs, as a result of higher labor costs and unused capacity in Millington, Tennessee, as well as higher overhead and unused capacity at our facility in Hialeah Gardens, Florida. Gross profit margin decreased to 12.5% for the three months ended September 30, 2026 compared to 25.3% for the prior year period, which was largely attributable to lower margin on service revenue of negative 3.1% for the three months ended September 30, 2026 compared to 21.2% for the prior year period, driven by the gross profit reduction from our heavy MROs noted above, partly offset by higher margin generated by our Engineered Solutions product sales.
Selling, General and Administrative Expenses
Selling, general and administrative expenses increased $0.2 million, or 0.9%, to $18.8 million for the three months ended September 30, 2026, compared to the prior year period. The increase was mainly related to higher payroll and payroll-related benefit costs.
Change in Fair Value of Warrant Liability
We accounted for private warrants as a liability at their fair value, with changes in fair value recognized in our results from operations for the period. The fair value of our private warrants was determined using the Black-Scholes option pricing model. For the three months ended September 30, 2025, the amount recorded for change in fair value of warrant liability loss was not significant. The Private Warrants expired unexercised during the year ended December 31, 2025.
Goodwill Impairment
Goodwill impairment was $13.4 million for the three months ended September 30, 2026. No impairment was recorded during the three months ended September 30, 2025.
During the three months ended September 30, 2026, the Company’s stock price exhibited a sustained decrease, which management considered a triggering event indicating that the fair value of one or more of the Company’s reporting units more likely than not was below its carrying value. Therefore, the Company performed a quantitative goodwill impairment assessment for the Asset Management Solutions and ACT reporting units as of September 30, 2026, which supported that the fair value for the ACT reporting unit exceeded its carrying value as of September 30, 2026. As such, the quantitative test for this reporting unit did not result in goodwill impairment.
For the Asset Management Solutions reporting unit, the impairment assessment indicated that the estimated fair value was lower than its carrying value. As a result, the Company recorded a non-cash goodwill impairment for the full amount of the Asset Management Solutions goodwill in the amount of $13.4 million in the three months ended September 30, 2026.
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Interest Expense, Net
Interest expense, net was $2.8 million and $2.4 million for the three months ended September 30, 2026 and 2025, respectively. The interest expense is primarily driven by borrowings under our debt facilities.
Income Taxes
The effective tax rate for the three months ended September 30, 2026 was negative 4.8% compared to 119.6% for the three months ended September 30, 2025. The difference between the effective tax rate and the statutory tax rate of 21.0% for the three months ended September 30, 2026, is primarily attributable to goodwill impairment, research and development credits (R&D), and foreign tax credits, offset by state and foreign income taxes. The difference between the effective tax rate and the statutory tax rate of 21.0% for the three months ended September 30, 2025, is primarily due to the impact of state income taxes and stock-based compensation.
Nine months ended September 30, 2026 compared to the nine months ended September 30, 2025
Revenue and gross profit for AerSale’s two business segments for the nine months ended September 30, 2026 and 2025 were as follows:
| | | | | | | | | |
| | Nine Months Ended September 30, | | |
| ||||
(in thousands, except percentages) | | 2026 | | 2025 | | Percent Change | |||
Revenue | | | | | | | | |
|
Asset Management Solutions |
| | |
| | |
| | |
Aircraft | | $ | 30,106 | | $ | 26,018 |
| 15.7 | % |
Engine | |
| 100,708 | |
| 128,661 |
| (21.7) | % |
| | | 130,814 | | | 154,679 |
| (15.4) | % |
TechOps | | | | | | |
| | |
MRO services | | | 76,542 | |
| 70,535 |
| 8.5 | % |
Product sales | | | 25,746 | |
| 19,135 |
| 34.5 | % |
| | | 102,288 | | | 89,670 |
| 14.1 | % |
| | | | | | | | | |
Total | | $ | 233,102 | | $ | 244,349 |
| (4.6) | % |
| | | | | | | | | |
| | Nine Months Ended September 30, | | |
| ||||
(in thousands, except percentages) | | 2026 | | 2025 | | Percent Change | |||
Gross Profit (loss) | | | |
| | | | | |
Asset Management Solutions | | | |
| | | | | |
Aircraft | | $ | 8,259 | | $ | 9,278 | | (11.0) | % |
Engine | |
| 36,701 | |
| 43,114 | | (14.9) | % |
| | | 44,960 | | | 52,392 | | (14.2) | % |
TechOps | | | | | | | | | |
MRO services | | | (80) | |
| 15,046 | | (100.5) | % |
Product sales | | | 10,833 | |
| 7,350 | | 47.4 | % |
| | | 10,753 | | | 22,396 | | (52.0) | % |
| | | | | | | | | |
Total | | $ | 55,713 | | $ | 74,788 | | (25.5) | % |
Total revenue for the nine months ended September 30, 2026 decreased $11.2 million, or 4.6%, compared to the nine months ended September 30, 2025, driven by a decrease of $23.9 million, or 15.4%, in revenue within Asset Management Solutions, partially offset by an increase of $12.6 million, or 14.1%, in revenue within TechOps.
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Asset Management Solutions
Revenue in the Asset Management Solutions segment decreased $23.9 million or 15.4%, to $130.8 million for the nine months ended September 30, 2026, due to a $28.0 million, or 21.7%, decrease in revenue from Engine; offset by a $4.1 million, or 15.7%, increase in revenue from Aircraft. The decrease in Engine revenue is primarily attributable to lower activity in the PW4000 and CF6-80 product lines due to lower Flight Equipment sales of $20.7 million and lower USM sales of $13.4 million, partly offset by higher leasing revenue in the amount of $6.1 million. The increase in Aircraft revenue is primarily attributable to increased leasing activity of our B757 freighters in the amount of $3.3 million and higher USM sales of $1.1 million, partially offset by lower unserviceable Flight Equipment sales.
Cost of sales in Asset Management Solutions decreased $16.4 million, or 16.1%, to $85.9 million for the nine months ended September 30, 2026, compared to the prior year period. The decrease in cost of sales was primarily driven by the revenue decrease noted above. Gross profit in the Asset Management Solutions segment decreased $7.4 million, or 14.2%, to $45.0 million for the nine months ended September 30, 2026, compared to the nine months ended September 30, 2025. The gross profit decrease is mainly attributable to lower Flight Equipment sales, as well as lower USM sales for the nine months ended September 30, 2026.
Aircraft gross profit margin decreased to 27.4% for the nine months ended September 30, 2026, from 35.7% for the nine months ended September 30, 2025, due to lower USM margins as a result of fluctuations in product mix. Engine gross profit margin was 36.4% for the nine months ended September 30, 2026, an increase from 33.5% for the nine months ended September 30, 2025, which was primarily due to changes in our revenue mix, mainly from higher leasing revenue which, historically, tends to generate higher margins.
TechOps
Our revenue from TechOps increased by $12.6 million, or 14.1%, to $102.3 million for the nine months ended September 30, 2026, compared to the prior year period. The increase was primarily driven by higher volume in our heavy MROs, as our Millington, Tennessee facility became fully operational during the current year period, as well as higher Engineered Solutions product sales.
Cost of sales in TechOps increased $24.3 million, or 36.1%, to $91.5 million for the nine months ended September 30, 2026, compared to the prior year period, driven by the higher revenue discussed above. Gross profit in TechOps decreased $11.6 million, or 52.0%, for the nine months ended September 30, 2026, compared to the nine months ended September 30, 2025, driven by lower margin generated from our heavy MROs, as a result of higher labor costs, which include non-recurring hiring and training expenses associated with the return to service of Millington, Tennessee, as well as higher overhead and unused capacity at our facility in Hialeah Gardens, Florida. Gross profit margin decreased to 10.5% for the nine months ended September 30, 2026 compared to 25.0% for the nine months ended September 30, 2025, and was largely attributable to lower margins on service revenue of negative 0.1% for the nine months ended September 30, 2026 compared to 21.3% for the prior year period, driven by gross profit reduction from our heavy MROs noted above.
Selling, General and Administrative Expenses
Selling, general and administrative expenses decreased $4.0 million, or 6.1%, to $62.0 million for the nine months ended September 30, 2026, compared to the prior year period. The decrease was mainly related to lower sales commissions, lower legal fees, and lower rent expense in our AeroStructures business unit, which incurred rent expense for two locations in the 2025 period until the completion of its expanded Hialeah Gardens, Florida facility.
Change in Fair Value of Warrant Liability
We accounted for private warrants as a liability at their fair value, with changes in fair value recognized in our results from operations for the period. The fair value of our private warrants was determined using the Black-Scholes option pricing model. For the nine months ended September 30, 2025, we recorded a $0.1 million favorable change in fair value of warrant liability income. The Private Warrants expired unexercised during the year ended December 31, 2025.
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Goodwill Impairment
Goodwill impairment was $13.4 million for the nine months ended September 30, 2026. No impairment was recorded during the nine months ended September 30, 2025.
During the three months ended September 30, 2026, the Company’s stock price exhibited a sustained decrease, which management considered a triggering event indicating that the fair value of one or more of the Company’s reporting units more likely than not was below its carrying value. Therefore, the Company performed a quantitative goodwill impairment assessment for the Asset Management Solutions and ACT reporting units as of September 30, 2026, which supported that the fair value for the ACT reporting unit exceeded its carrying value as of September 30, 2026. As such, the quantitative test for this reporting unit did not result in goodwill impairment.
For the Asset Management Solutions reporting unit, the impairment assessment indicated that the estimated fair value was lower than its carrying value. As a result, the Company recorded a non-cash goodwill impairment for the full amount of the Asset Management Solutions goodwill in the amount of $13.4 million in the nine months ended September 30, 2026.
Interest Expense, Net
Interest expense, net was $7.3 million for the nine months ended September 30, 2026 compared to $6.0 million for the nine months ended September 30, 2025. The increase was primarily related to higher outstanding borrowings under our debt facilities during the current year period compared to the prior period related to the timing of changes in working capital and feedstock acquisitions.
Income Taxes
The effective tax rate for the nine months ended September 30, 2026 was 7.5% compared to 35.7% for the nine months ended September 30, 2025. The difference between the effective tax rate and the statutory tax rate of 21.0% for the nine months ended September 30, 2026, is primarily attributable to goodwill impairment, research and development credits, the foreign derived deduction-eligible income (FDDEI) deduction, offset by state income taxes. The difference between the effective tax rate and the statutory tax rate of 21.0% for the nine months ended September 30, 2025, is primarily due to the impact of state income taxes and stock-based compensation.
Financial Position, Liquidity and Capital Resources
As of September 30, 2026, we had $3.9 million in cash and cash equivalents. We finance our growth through cash flows generated from operations and borrowings secured by our assets. We had $158.7 million outstanding under the Revolving Credit Agreement (as defined below) as of September 30, 2026, with $19.2 million of availability thereunder, subject to borrowing base limitations. We used cash in operations of $42.7 million for the nine months ended September 30, 2026, primarily for feedstock acquisition and improvements to flight equipment in preparation for sale or lease, and used cash in investing activities of $7.1 million for the nine months ended September 30, 2026.
We believe our equity base, internally generated funds, and existing availability under our debt facilities are sufficient to maintain our level of operations over the next twelve months. Any projections of future cash needs and cash flows beyond the next twelve months are subject to substantial uncertainty, but we believe our sources of liquidity, as discussed above, will be sufficient to meet our long-term cash requirements. The Company does not typically engage in long-term purchase commitments for the acquisition of feedstock; as a result, the Company has generally been able to manage its liquidity by managing the timing of its feedstock acquisitions so as to deploy funds when advantageous to the Company. However, if an event occurs that affects our ability to meet our capital requirements, our ability to continue to grow our asset base consistent with historical trends could be impaired and our future growth limited to that which can be funded from internally generated capital.
We may, from time to time, purchase our outstanding shares of common stock through cash purchases and/or exchanges for equity or debt, open-market purchases, privately negotiated transactions or otherwise, including, but not
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limited to, privately negotiated transactions with certain stockholders who have rights to require us to file a registration statement covering shares of our common stock. Such purchases or exchanges, if any, will be upon such terms and at such prices as we may determine, and will depend on prevailing market conditions, our liquidity requirements, legal and regulatory considerations, contractual restrictions and other factors. Purchases, if any, will be funded through our available cash and cash equivalents. The amounts involved may be material.
On March 18, 2025, the Company repurchased, directly from a selling stockholder, 6,428,571 shares of the Company’s common stock, par value $0.0001 per share, at a price of $7.00 per share for total consideration of $45.0 million.
Cash Flows—Nine months ended September 30, 2026 compared to the nine months ended September 30, 2025
Cash Flows from Operating Activities
Net cash used in operating activities was $42.7 million for the nine months ended September 30, 2026, compared to cash used of $34.3 million for the same period in 2025. The increase in cash deployed of $8.4 million was primarily due to lower results from operations and the timing of changes in working capital levels during the nine months ended September 30, 2026 compared to the prior year period.
Cash Flows from Investing Activities
Net cash used in investing activities was $7.1 million for the nine months ended September 30, 2026, compared to cash used of $5.4 million in the same period for 2025. The increase in cash used in investing activities for the nine months ended September 30, 2026 reflects that during the nine months ended September 30, 2025, we generated cash from the sale of assets versus none during the current year period.
Cash Flows from Financing Activities
Net cash provided by financing activities was $49.3 million for the nine months ended September 30, 2026, compared to cash provided of $40.3 million in the same period for 2025. Cash provided by financing activities during the nine months ended September 30, 2026 resulted from net borrowings under our Revolving Credit Agreement and CIBC Equipment Loan. Cash provided by financing activities during the nine months ended September 30, 2025 resulted from net borrowings under the Revolving Credit Agreement and CIBC Equipment Loan, offset by cash used in the repurchase of common stock.
Debt Obligations and Covenant Compliance
Wells Fargo Senior Secured Revolving Credit Facility
Effective July 25, 2023, we amended our revolving credit agreement (as amended, the “Revolving Credit Agreement”) to increase our maximum commitments under the Revolving Credit Agreement to $180.0 million in the aggregate, expandable to $200.0 million, subject to conditions and the availability of lender commitments and borrowing base limitations, and to extend the maturity date to July 24, 2028, subject to certain conditions.
The maximum amount of such commitments available at any time for borrowings and letters of credit is determined according to a borrowing base calculation equal to the sum of eligible inventory and eligible accounts receivable reduced by the aggregate amount, if any, of trade payables of the loan parties, as defined in the Revolving Credit Agreement, and is subject to contractual restrictions. Extensions of credit under the Revolving Credit Agreement are available for working capital and general corporate purposes.
As of September 30, 2026, there was $158.7 million outstanding under the Revolving Credit Agreement and we had $19.2 million of availability thereunder, subject to borrowing base limitations. We were in compliance with our debt covenants for the Revolving Credit Agreement as of September 30, 2026.
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CIBC Equipment Loan
On November 22, 2024, the Company entered into a property and equipment term loan (the “CIBC Equipment Loan”) with a total advance commitment of $10.0 million for the purpose of financing capital expenditures on property and equipment. Advances made by the lender are convertible into term loans at the option of the lender at a rate of the Secured Overnight Financing Rate (“SOFR”) plus 3.0% and have a maturity date of 36 months from the term loan conversion date. Advances under this loan are collateralized by the property and equipment it finances and require interest only payment until converted to a term loan, at which point, principal and interest payments are required.
Effective November 30, 2025, we amended the CIBC Equipment Loan to extend the term of the advance commitment until November 30, 2026 and reduce the total advance commitment to $2.5 million.
During the nine months ended September 30, 2026, the Company borrowed an additional $1.3 million and repaid $0.7 million under this facility. The balance outstanding under this facility is $2.9 million as of September 30, 2026.
We were in compliance with our debt covenants for the CIBC Equipment Loan as of September 30, 2026.
Off-Balance Sheet Arrangements and Contractual Obligations
We did not have any off-balance sheet arrangements as of September 30, 2026. Refer to Note Q – Leases, within our consolidated annual financial statements in our 2025 Form 10-K for a summary of our non-cancelable contractual obligations under operating leases.
Critical Accounting Policies and Estimates
The preparation of the condensed consolidated financial statements in conformity with accounting principles generally accepted in the United States (“U.S. GAAP”) requires our management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the condensed consolidated financial statements and the reported amounts of revenue and expenses during the reporting periods. Actual results could differ from those estimates. A summary of our critical accounting estimates is included in Management’s Discussion and Analysis of Financial Condition and Results of Operations contained in the 2025 Form 10-K. We continually review these estimates and their underlying assumptions to ensure they are appropriate for the circumstances. Changes in the estimates and assumptions we use could have a material impact on our financial results. During the nine months ended September 30, 2026, there were no material changes in our critical accounting estimates and policies.
ITEM 3 QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
In the normal course of business, we are subject to market risks. Market risk represents the risk of loss that may impact our financial position due to adverse changes in financial market prices and sales. Our exposure to market risk includes fluctuating interest rates and changes in foreign exchange rates.
Interest Rate Risk
We are exposed to the risk that our earnings and cash flows could be adversely impacted by fluctuations in interest rates associated with borrowings under our Revolving Credit Agreement and the CIBC Equipment Loan, which have variable interest rates tied to the Secured Overnight Financing Rate. As of September 30, 2026, we had $158.7 million outstanding variable rate borrowings under the Revolving Credit Agreement and $2.9 million outstanding variable rate borrowings under the CIBC Equipment Loan. A ten percent increase in the average interest rate affecting our variable rate debt outstanding as of September 30, 2026 would increase our interest expense by $0.6 million for the nine months ended September 30, 2026.
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Foreign Currency Exchange Risk
We primarily use the U.S. dollar as our functional currency in all markets in which we operate in order to reduce our foreign currency market risk. Only general office expense and payroll transactions for our international locations are denominated in local currency. A hypothetical ten percent devaluation of the U.S. dollar against foreign currencies would not have had a material impact on our financial position or results of operations as of and for the three and nine months ended September 30, 2026.
ITEM 4 CONTROLS AND PROCEDURES
Limitations on Effectiveness of Controls and Procedures
In designing and evaluating our disclosure controls and procedures, management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives. In addition, the design of disclosure controls and procedures must reflect the fact that there are resource constraints, and that management is required to apply judgment in evaluating the benefits of possible controls and procedures relative to their costs.
Evaluation of Disclosure Controls and Procedures
Our management, with the participation of our Chief Executive Officer and Chief Financial Officer, conducted an evaluation of the effectiveness of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act), as of September 30, 2026.
Based upon that evaluation, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures were effective at the reasonable assurance level as of September 30, 2026.
Changes in Internal Control over Financial Reporting
There were no changes in our internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) that occurred during the quarter ended September 30, 2026 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
PART II - OTHER INFORMATION
ITEM 1 LEGAL PROCEEDINGS
From time to time the Company is subject to litigation incidental to the operation of the business. The Company intends to vigorously defend all matters in which the Company is named as a defendant, and, for insurable losses, maintain significant levels of insurance to protect against adverse judgments, claims or assessments that may affect the Company. Although the adequacy of existing insurance coverage of the outcome of any legal proceedings cannot be predicted with certainty, based on the current information available, the Company does not believe the ultimate liability associated with known claims or litigation, if any, in which the Company is involved will materially affect the Company’s consolidated financial condition or results of operations.
ITEM 1A RISK FACTORS
There are no material changes in the information reported under Part I – Item 1A “Risk Factors” contained in the 2025 Form 10-K.
ITEM 2 UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
None.
| | | | | | | | | |
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ITEM 3 DEFAULTS UPON SENIOR SECURITIES
None.
ITEM 4 MINE SAFETY DISCLOSURES
Not applicable.
ITEM 5 OTHER INFORMATION
Rule 10b5-1 Plan Adoptions or Terminations
During the quarter ended September 30, 2026,
ITEM 6 EXHIBITS
The following is a list of exhibits filed as part of this Quarterly Report on Form 10-Q.
| ||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| | | | Incorporated by Reference | | Filed/ | ||||||
Exhibit | | Exhibit Description | | Form | | File No. | | Exhibit | | Filing | | Furnished Herewith |
| | | | | | | | | | | | |
2.1 | | Plan of Conversion of AerSale Corporation. | | 8-K | | 001-38801 | | 2.1 | | 09/25/2026 | | |
3.1 | | Certificate of Formation of AerSale Corporation. | | 8-K | | 001-38801 | | 3.1 | | 09/25/2026 | | |
3.2 | | Bylaws of AerSale Corporation. | | 8-K | | 001-38801 | | 3.2 | | 09/25/2026 | | |
31.1 | | Certification of Chief Executive Officer pursuant to Rule 13a-14(a)/15d-14(a), under the Securities Exchange Act of 1934, as amended. | | | | | | | * | |||
31.2 | | Certification of Chief Financial Officer pursuant to Rule 13a-14(a)/15d-14(a), under the Securities Exchange Act of 1934, as amended. | | | | | | | * | |||
32.1 | | Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350. | | | | | | | ** | |||
32.2 | | Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350. | | | | | | | | | | ** |
101.INS | | Inline XBRL Instance Document – the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document. | | | | | | | | | | * |
101.SCH | | Inline XBRL Taxonomy Extension Schema Document. | | | | | | | | | | * |
101.CAL | | Inline XBRL Taxonomy Extension Calculation Linkbase Document. | | | | | | | | | | * |
101.DEF | | Inline XBRL Taxonomy Extension Definition Linkbase Document. | | | | | | | | | | * |
101.LAB | | Inline XBRL Taxonomy Extension Label Linkbase Document. | | | | | | | | | | * |
101.PRE | | Inline XBRL Taxonomy Extension Presentation Linkbase Document. | | | | | | | | | | * |
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| ||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| | | | Incorporated by Reference | | Filed/ | ||||||
Exhibit | | Exhibit Description | | Form | | File No. | | Exhibit | | Filing | | Furnished Herewith |
| | | | | | | | | | | | |
104 | | Cover Page Interactive Data File (formatted as Inline XBRL with applicable taxonomy extension information contained in Exhibit 101*). | | | | | | | | | | * |
| | | | | | | | | | | | |
* | | Filed herewith | | | | | | | | | | |
** | | Furnished herewith | | | | | | | | | | |
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SIGNATURES
Pursuant to the requirements of the Securities Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
| AerSale Corporation | ||
| | | |
Date: | November 6, 2026 | By: | /s/ Nicolas Finazzo |
| | | Nicolas Finazzo |
| | Chairman, Chief Executive Officer, and Director | |
| | (Principal Executive Officer) | |
Date: | November 6, 2026 | By: | /s/ Martin Garmendia |
| | | Martin Garmendia |
| | Chief Financial Officer and Treasurer | |
| | (Principal Financial and Accounting Officer) | |
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