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Dec 31, 2023
AerSale Q4 2023 Earnings Report
AerSale's financial performance was impacted by delayed flight equipment sales, with revenue decreasing slightly but underlying business strength shown through increased USM sales and TechOps revenue.
Key Takeaways
AerSale reported a challenging Q4 2023 due to a shift in anticipated flight equipment sales, resulting in a GAAP net loss of $2.7 million. Revenue decreased slightly to $94.4 million, but excluding flight equipment sales, it increased by 7.6%. The company is focusing on long-term growth through feedstock acquisitions and monetization, with strong demand for products and services.
Q4 revenue was $94.4 million, including $47.4 million from flight equipment sales.
GAAP net loss was $2.7 million, primarily due to lower flight equipment sales.
Excluding flight equipment sales, revenue increased 7.6% year-over-year.
AerAware™ received FAA Supplemental Type Certificate, with go-to-market activities launched.
AerSale
AerSale
Forward Guidance
AerSale is ceasing its practice of providing numerical full year guidance due to the timing of revenue and operating results being inherently challenging. The Company will continue to provide as much qualitative detail as possible about opportunities and outcomes expected over future periods. AerSale has a bullish view about 2024 and future years performance which they are confident they can drive from the diversified AerSale platform.
Positive Outlook
- Company is pleased that the underlying business continues to show strong resilience and momentum
- Company anticipates that consolidated financial performance will improve substantially as they begin to close on delayed transactions and further drive ROI from feedstock acquisitions
- AerSale expects USM sales to improve as the Company begins to monetize feedstock acquisitions acquired in 2023 and the availability of inventory ready-for-sale grows.
- AerSale believes it is extremely well positioned to take advantage of the current market dynamic.
- AerSale believes it is well positioned to take advantage of asset availability.
Challenges Ahead
- Timing of the Company’s revenue and operating results is inherently challenging due to the large portion of revenue driven by the Asset Management division and especially as it relates to volatility in flight equipment sales.
- Lower overall flight equipment sales in 2023 and delays of planned flight equipment sales at the end of the year materially impacted our fourth-quarter and full-year results.
- Flight equipment sales may significantly vary quarter-to-quarter
- Loss from operations was $1.1 million in the fourth quarter of 2023 down from $9.1 million income in the fourth quarter of 2022, principally due to lower flight equipment sales.
- Gross margin was 25.9% in the fourth quarter of 2023 compared to 36.0% in the year ago period, driven by a lower mix of higher margin flight equipment sales, many of which slipped into 2024.