StandardAero, Inc. (NYSE:SARO) stock rose 4.55% (As on May 13, 11:22:14 AM UTC-4, Source: Google Finance) after the company beats earning expectations for the first quarter of FY25. Net income was $62.9 million for the three months ended March 31, 2025, as compared to net income of $3.2 million for the prior year period. The increase in net income compared to the prior year period reflects the $33.8 million lower interest expense associated with the company’s post-IPO capital structure, as well as higher operating earnings. Adjusted EBITDA increased 19.7% to $198.2 million for the First Quarter 2025, as compared to $165.6 million for the prior year period. The increase reflects revenue growth in both segments and continued margin expansion, positive mix, and pricing and cost initiatives. Adjusted EBITDA margin expanded 40 basis points to 13.8%, as compared to 13.4% for the prior year period. Net debt, calculated as total funded debt, net of cash and cash equivalents on our balance sheet as of March 31, 2025, was $2,233.0 million compared to $3,304.4 million as of March 31, 2024. Net debt to Adjusted EBITDA for the last twelve months was 3.1x compared to 5.7x at the end of the prior year period.

Moreover, Engine Services segment revenue increased $171.0 million, or 15.6%, to $1,268.3 million for the three months ended March 31, 2025, compared to the prior year period. Revenue increases in the commercial aerospace and business aviation end markets were driven by continued high engine aftermarket demand on the platforms that the company service.  Component Repair Services segment revenue increased $28.9 million, or 20.9%, to $167.3 million for the three months ended March 31, 2025, compared to the prior year period. Revenue growth was primarily attributable to increased demand for component repairs for platforms the company serve, as well as $21.9 million of revenue attributable to the ATI acquisition.

SARO in the first quarter of FY25 has reported the adjusted earnings per share of 24 cents, beating the analysts’ estimates for the adjusted earnings per share of 18 cents. The company had reported the adjusted revenue growth of 16.2 percent to $1.4 billion in the first quarter of FY25. The increase was driven by both the Engine Services and Component Repair Services segments, with continued strength across the commercial aerospace and business aviation end markets, which increased 18.1% and 12.9%, respectively, compared to the prior year period. The military and helicopter end market increased 9.9% compared to the prior year period, driven by the contribution of the acquisition of Aero Turbine, Inc. that closed in August 2024 (“ATI”).