StandardAero (SARO) Q4 2025 Earnings Transcript

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DATE

Feb. 25, 2026, 5 p.m. ET

CALL PARTICIPANTS

• Chairman and Chief Executive Officer — Russell Ford
• Chief Financial Officer — Dan Satterfield
• Chief Strategy Officer — Alex Trapp
• Vice President, Investor Relations — Rama Bondada

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RISKS

• The small fire at the Phoenix CRS facility in December caused a shutdown for nearly the entire month and negatively impacted Q4 revenue and margins; recovery to full activity will require several months.
• The U.S. government shutdown led to reduced military business growth in Q4 and created residual effects anticipated to affect performance into 2026.
• Management stated supply chain delays in part availability continued to impact operations during 2025, with ongoing headwinds expected into 2026.

TAKEAWAYS

• Revenue -- $1.6 billion for the quarter, representing 13.5% organic growth.
• Full-year revenue -- $6.05 billion, up 15.8% with approximately 14.5% organic growth.
• Adjusted EBITDA -- $210 million for the quarter, a 12.7% increase; $888 million for the year, up 17%.
• Net income -- $79 million for the quarter and $277 million for the year, reversing a prior-year net loss for the quarterly period and reflecting a $266 million annual increase.
• Adjusted EPS -- $1.19 for the year; 2026 guide is $1.35-$1.45, indicating 18% midpoint growth.
• Free cash flow -- $308 million in Q4, driven by engine completions previously delayed; $209 million for the year, converting 75% of net income, up from a $45 million cash use in the prior year.
• LEAP program -- 60 inductions in 2025, up from 10 prior year, with over 475 component repairs now developed and first full LEAP overhaul delivered.
• Engine Services revenue -- $5.35 billion, up 15.3%, with margin stable as operating leverage and productivity offset initial dilution from LEAP and CFM56 DFW programs.
• Component Repair Services revenue -- $700 million, a 19.6% increase, with 31% EBITDA growth and 250 basis point margin expansion year over year.
• Pass-through revenue elimination -- Management restructured contracts to remove $300-$400 million of low-margin material revenue to improve reported margins and cash efficiency.
• Debt leverage -- Net debt to adjusted EBITDA reduced to 2.4 times from 3.1 times, providing expanded capital allocation flexibility.
• Share repurchase authorization -- $450 million buyback program authorized in December.
• 2026 guidance -- Projected revenue of $6.28-$6.43 billion, including a 4%-6% growth rate that accounts for removal of pass-through revenue; free cash flow expected at $270-$300 million, indicating a 36% midpoint increase.
• End-market growth -- Commercial aerospace revenue grew nearly 18%; business aviation rose 12%; military up 9% despite the U.S. government shutdown.
• Facility activity -- CRS Phoenix facility experienced a fire in December, resulting in temporary shutdown; came back online in January but with gradual normalization anticipated.

SUMMARY

StandardAero(NYSE:SARO) reported double-digit organic revenue, adjusted EBITDA, and free cash flow growth, supported by a substantial ramp-up in LEAP engine inductions and expanded capabilities across key commercial and business aviation platforms. The company achieved a step-change in cash flow and margin quality through contract restructuring, in-sourcing, and the elimination of low-margin revenue streams. Management issued 2026 guidance anticipating continued double-digit EPS growth and strong cash generation, with margin expansion underpinned by operational improvements, product mix enhancements, and accretive investments.

• Expanded commercial capacity for CF34 and HTF-7000 platforms, alongside enhanced repair licensing and facility investments, is positioned as a strategic differentiator for future market share gains.
• ATI acquisition and subsequent synergies were credited with advancing Component Repair Services' margin to the high 20% range, up from the mid-20% level.
• Management expects further LEAP program profitability in the first half of 2026, with customer slots largely secured and additional contract wins targeted.
• The share repurchase program and improved leverage ratio provide flexibility for continued organic and inorganic growth, including opportunistic M&A deployment.
• Continued emphasis on cost discipline, operating excellence, and enhanced pricing power is expected to counterbalance persistent supply chain and labor challenges flagged by management.

INDUSTRY GLOSSARY

• LEAP: Latest-generation high-bypass turbofan engine jointly developed by GE and Safran for narrowbody aircraft, with significant aftermarket maintenance opportunity.
• CFM56 DFW: Refers to the dedicated Dallas-Fort Worth center of excellence for maintenance, repair, and overhaul of the CFM56 engine platform.
• CRS (Component Repair Services): StandardAero's business segment focused on repair and overhaul of engine components for aerospace and power markets.
• HTF-7000: Business jet turbofan engine platform; StandardAero holds exclusive independent heavy overhaul license.
• Pass-through revenue: Revenue from third-party material or components sold to customers at little or no margin, eliminated from results to improve reported profitability and cash efficiency.

Full Conference Call Transcript

Rama Bondada: Welcome to StandardAero, Inc.'s fourth quarter and full year 2025 earnings call. I am joined today by Russell Ford, our Chairman and Chief Executive Officer, Dan Satterfield, Chief Financial Officer, and Alex Trapp, our Chief Strategy Officer. Alongside today's call, you can find our earnings release as well as the accompanying presentation on our website at ir.standardaero.com. An audio replay of this call will also be made available, which you can access on our website or by phone. The phone number for the audio replay is included in the press release announcing this call.

Before we begin, as always, I would like to remind everyone that today's earnings release and statements made during this call include forward-looking statements under federal securities laws. These statements are subject to risks and uncertainties that could cause actual results to differ materially from our expectations and projections. Such risks and uncertainties include the factors set forth in the earnings release and in our filings with the Securities and Exchange Commission, including in the Risk Factors section of our Annual Report on Form 10 for the year ended 12/31/2025. We assume no obligation to update or revise any forward-looking statements whether as a result of new information, future events, or otherwise, except as required by law.

Additionally, during today's call, we will discuss certain non-GAAP financial measures such as adjusted EBITDA, adjusted EBITDA margin, adjusted net income, adjusted earnings per share, free cash flow, and net debt to adjusted EBITDA leverage ratio. A definition and reconciliation of these measures to the most directly comparable GAAP measures can be found in our earnings release and in the appendix to the earnings slide presentation. Non-GAAP financial measures should be considered in addition to and not as a substitute for GAAP measures. I will now turn the call over to Russell Ford.

Russell Ford: Thank you, Rama, and thank you to everyone for joining our call today. I will start on Slide 3 of our earnings presentation with a review of several highlights from 2025, our 114th year of the company, and our first full year as a publicly traded company. 2025 was another record year for StandardAero, Inc. and one in which we made significant progress on our strategic objectives, enabled by relentless focus and dedication to quality and performance by our 8,000 employees worldwide. We saw excellent growth with revenues increasing 16% year over year and adjusted EBITDA up 17%. This strong financial performance was underpinned by continued robust demand for our solutions and high-quality execution.

We also generated meaningful free cash flow, up $209,000,000. This included more than $300,000,000 generated in the second half of the year in line with typical seasonal trends and is reinforced by our asset-light business model and cash management initiatives. We accomplished this while investing $90,000,000 in our growth platforms and navigating a supply chain that continues to be characterized by part availability delays. Importantly, we expect to see continued growth in our free cash flow generation again in 2026 and into the future.

A key highlight in 2025 was the strong progress we made on our LEAP program, where we saw a substantial ramp in work throughout the year and continue to progress along the learning curve. Specifically, we inducted 60 LEAP engines in 2025, up from 10 in 2024, and generated revenues in 2025 that were approximately 2.5 times the revenues we generated in the 2026 with most of our planned slots already filled. Equally important is how we are expanding the content and value of what we do on LEAP.

We have now developed more than 475 LEAP component repairs which directly support turnaround time, customer value, and long-term economics as the fleet matures, and we recently delivered our first full overhaul on the platform which marks a meaningful milestone for us in our ability to address the full market opportunity. As we stated before, we continue to see the market for LEAP MRO only getting stronger, and we expect this program to continue to demonstrate substantial growth for many decades to come.

We completed the expansion of our Augusta Business Aviation facility during the year, adding additional MRO capacity and expanded hangar space to handle large cabin jets. This additional capacity will help us accelerate growth on the popular HTF-7000 engine, where we are the market leader and have the worldwide exclusive independent heavy overhaul license. We also fortified our already market-leading position on the CF34 engine, which powers the majority of the world's regional jets. We are seeing even stronger demand on this platform than we expected both near and long term, leading us to announce late last year that we are expanding our flagship CF34 facility in Winnipeg. We expect the expansion to be complete in 2026.

Combining this initiative with the expanded license relationship with GE from earlier in 2025 as well as the long-term contracts we have with some of the largest operators around the world, we feel really confident in our position on this platform. We have only just begun to realize the value creation from these strategic investments.

Next, performance excellence remains core to our culture and how we operate. As discussed last quarter, we made progress in restructuring customer contracts to get rid of pass-through material, which will eliminate $300,000,000 to $400,000,000 of low-margin revenue and result in higher reported margins that better reflect the true operating performance of the underlying business. We continue to make progress in capturing more high-value component repair work in-house, with in-source component repair revenue increasing by 15%. And importantly, ATI synergies are producing above plan, which supported performance and strong margin expansion at CRS.

On capital allocation, we ended the year with our leverage ratio improving to 2.4 times, giving us meaningful capital allocation flexibility. We are well positioned to invest organically, pursue strategic M&A when it is value accretive, and return capital to shareholders. Consistent with this third point, we authorized a $450,000,000 share repurchase program in December.

Turning to Slide 4. Market demand remains strong for our MRO solutions, and the groundwork we have laid in key end markets is driving growth. In commercial aerospace, we saw nearly 18% growth year over year driven by the strong ramp in LEAP, CFM56, our investments in the CF34 platform, and continued global demand for turboprop MRO needs. In Business Aviation, revenues grew 12% year over year driven by continued strength on both mature engine platforms such as the TFE731 and growth platforms such as the HTF-7000. In military, revenues grew 9% despite the longest government shutdown in U.S. history, which impacted the fourth quarter.

We saw a healthy rebound in the AE1107 platform and continued steady demand on key engines that operate on military transport aircraft, which makes up the vast majority of our military business.

Turning to margins. Even while ramping our LEAP and CFM56 DFW growth programs, we delivered margin expansion in 2025. Margin progress was not accidental. It was driven by deliberate actions and a focus on continuous improvement. As Dan will discuss shortly, we are only in the early stages of our margin expansion journey. Driving the total company margin improvement was strong component repair growth and synergy realization on our 2024 acquisition of ATI, which helped push the margin profile of our CRS segment into the high 20s from the mid-20s previously.

Turning to Slide 5, I will talk about 2026 and our priorities for the year. We continue to see a really positive market backdrop with robust demand, particularly in the commercial end market, that will lead to double-digit earnings growth, continued margin expansion, and accelerating free cash flow generation in 2026. From a strategic and operational standpoint, we remain focused on the same pillars that have defined our success.

Starting first with LEAP, our top priority here in 2026 continues to be execution, and specifically achieving profitability in the first half of the year while continuing to build commercial momentum by winning additional contracts. The way to improve margins is by continuing to improve throughput and productivity as we progress down the learning curve, expanding our repair and process capabilities, and delivering the high quality and turnaround performance our customers expect. As we prove out scalability and performance, we expect to continue converting demand into incremental long-term customer wins.

Second, we are focused on fully leveraging our investments in CFM56 and CF34. On CFM56, the key is to drive higher utilization and efficiency in our DFW center of excellence to support profitable growth. On CF34, we are focused on fully leveraging our expanded license and completing the Winnipeg expansion. The rationale for this expansion is to support demand visibility and position StandardAero, Inc. to continue to take share on a platform where we have deep experience and a durable competitive position.

Third, on component repair. CRS remains a strategic engine for value creation and our priorities this year are to continue to accelerate new repair development while also expanding in-sourcing capture. This means continuing to industrialize additional repairs, increasing the breadth of what we can do internally, and intentionally pulling more repair content into our network. All of this supports better turn times, stronger margin mix, and improved overall economics across the enterprise.

Fourth, continuous improvement remains core to what we do and our culture, and we are looking to lean even more into this in 2026 to execute continuous improvement and pricing opportunities across the portfolio, enhance productivity, and margin improvement. Practically, this means continuing to standardize best practices, drive operating discipline at the shop level, reduce variability, and ensure our pricing reflects the value we deliver, especially in an environment where capacity remains constrained and customer demand remains strong.

Then finally on capital deployment, we will continue the disciplined pursuit of returns, organic growth investments, remain active in evaluating accretive M&A, and be opportunistic on share repurchases, all with a consistent focus on strategic fit and long-term shareholder returns. Our priorities are consistent. We are centered on strengthening our long-term competitive position, delivering service excellence to our customers, and driving consistent and predictable double-digit growth. And we remain, as always, committed to delivering on what we say we will do. With that, I would like to turn the call over to Dan to walk through our results and outlook with additional detail. Dan?

Dan Satterfield: Thank you, Russ. I will begin on Slide 6 with some highlights from our fourth quarter and full year 2025 results. For the quarter ended 12/31/2025, we generated revenue of $1,600,000,000 as compared to $1,400,000,000 for Q4 2024, representing 13.5% growth, all organic. This helped drive 2025 full-year total company revenue growth of 15.8% versus 2024, or about 14.5% on an organic basis. We saw strong growth in both our Engine Services and Component Repair Services segments, which I will get into in a moment. Adjusted EBITDA increased to $210,000,000 for 2025 compared to $186,000,000 for the prior-year period, representing 12.7% growth. Growth was primarily driven by continued end-market strength, productivity gains, and pricing improvements.

As a result, adjusted EBITDA for the year was $888,000,000, representing 17% growth year over year.

We reported net income of $79,000,000 in the fourth quarter 2025, versus a net loss of $14,000,000 in the prior-year period. This year-over-year improvement was primarily driven by growth in our operating earnings, along with lower interest and lower one-time costs, as 2024 was burdened by costs related to the IPO and the refinancing of our debt post-IPO. Full-year 2025 net income was $277,000,000, representing a $266,000,000 year-over-year increase. Adjusted net income came in at $398,000,000 with adjusted EPS at $1.19 per share. Free cash flow for 2025 improved $308,000,000 as we were able to complete engines that were previously held up by supply chain constraints for a significant part of the year.

On a full-year basis, we generated free cash flow of $209,000,000.

Now to our segment performance, starting with Engine Services on Slide 7. Engine Services revenue increased to $5,350,000,000 in 2025, representing 15.3% growth compared to 2024. Notable drivers included the CF34, HTF7000, our turboprop platforms, LEAP, and CFM56, with the latter two contributing several hundred million dollars in revenue growth. On the earnings front, Engine Services adjusted EBITDA grew 15.7% in 2025, driven by the strong revenue growth and mix. Margins were flat year over year, with operating leverage and productivity offsetting the initially dilutive LEAP and CFM56 DFW programs. For the fourth quarter, EBITDA margins of 13.4% were up 60 basis points year over year, which was driven by mix and productivity gains.

Turning to Component Repair Services on Slide 8. CRS revenue increased to $700,000,000 in 2025, representing 19.6% growth compared to 2024. We continue to see strong demand for our aeroderivative solutions in the segment, and growth in our military helicopter and other end markets, including at our AeroTurbine acquisition, which was impacted by the U.S. government shutdown in Q4 but overall had strong performance this year. CRS adjusted EBITDA grew 31%, which was driven by volume growth, price/mix, and synergies from the ATI acquisition. These combined to drive a 250 basis points margin increase year over year. There were two situations that affected CRS performance in Q4 worth noting.

First, we experienced a small fire at our Phoenix CRS facility in early December. It was in the overnight hours and fortunately no employees, civilians, or firefighters were injured. However, the facility was shut down for nearly all of December, and this did impact revenue growth and margins in the quarter. The facility came back online in January, but it will take a few months for it to reach its previous levels of activity. Second, our military business, which had seen strong demand and had been performing very well through September, was affected by the U.S. government shutdown, which impacted its growth.

Now moving to Slide 9, I will dive a little deeper into our free cash flow for the quarter and the full year. We generated free cash flow of $308,000,000 in the fourth quarter as we delivered engines that had been awaiting parts in some cases for several quarters. This drove a reduction in our inventory and contract assets of $183,000,000, marking a meaningful improvement in our working capital. On a full-year basis, 2025 free cash flow was $209,000,000, which compared to a use of $45,000,000 in 2024. This represents a 75% free cash flow conversion on net income in 2025.

Driving this year-over-year cash improvement was primarily our EBITDA growth, the reduction in interest expense to a more normalized level, our lower investments in LEAP and the CFM56 DFW facility, and the reduction in capital market expenses related to the IPO and refinancing of debt in 2024. These cash flow improvements were partially offset by the increase in working capital year over year, much of which was related to our ramping of LEAP and CFM56 programs that continue to come down the learning curve.

Moving on to our balance sheet and liquidity on Slide 10. Over the course of 2025, our net debt to adjusted EBITDA leverage ratio declined from 3.1 to 2.4 times. This reduction was driven by both cash generation and our adjusted EBITDA growth. We are now well within our target leverage ratio range of 2 to 3 times with ample liquidity and financial flexibility to continue to pursue accretive capital deployment for our shareholders. To that end, we are in an attractive position with multiple avenues where we can allocate our capital to drive strong returns.

This includes continued focus on organic investments, investing in new engine platforms as we have with LEAP, license expansions such as we did with the CF34 program, and accretive and synergistic acquisitions. We also now have the additional tool of share repurchases available to us. Underpinning all of this is a disciplined approach focused on strategic fit and return on investments, which are key criteria whenever we make a significant investment decision.

Now let's review our outlook for fiscal year 2026 as shown on Slide 11. We are entering 2026 with solid momentum, driven by our entrenched positions on key engine platforms, visibility into new wins, and opportunities to expand our portfolio. As a result, we are forecasting revenue in the range of $6,275,000,000 and $6,425,000,000. Underpinning this outlook is continued strong demand in our core end markets, where we expect low double-digit to mid-teens growth from our commercial aerospace end market and high single-digit growth in both our business aviation end market and our military and helicopter end market.

I would note that the 4% to 6% growth in our company revenue guidance includes the previously disclosed elimination of $300,000,000 to $400,000,000 of low-margin material pass-through revenue from restructured contracts in our Engine Services segment. This pass-through revenue consumed a significant amount of working capital with little earnings benefit.

For Engine Services, we are forecasting revenue in the range of $5,500,000,000 and $5,620,000,000, or 4% year over year. Year. Our Engine Services guidance incorporates range of $775,000,000 to $800,000,000 or 11%. In 2026, we expect total company We forecast $755,000,000 to $750,000,000. We continue to expect our growth platforms and we believe the CFM56, DFW reach profitability. Margins in the 28.5% range. We are adding adjusted EPS to our guidance metrics. For 2026, we expect adjusted EPS of $1.35 to $1.45 versus 2025 adjusted EPS of $1.19, which implies 18% EPS growth at the midpoint. On free cash flow, we expect cash generation of $270,000,000 to $300,000,000, or 36% growth at the midpoint.

Remember, we are historically a second-half cash generative business. We do not expect 2026 to be much. I would also like to provide some additional color on the expected for in the third quarter. Finally, there are two main drivers. First, the spillover effect of the U.S. government shutdown in the fourth quarter last year. And second, the previously mentioned small fire at our Phoenix CRS facility. Again, both of these situations are factored into our full-year 2026 CRS segment guidance of double-digit revenue.

The accretive organic and inorganic investments we have made over the last several years, our focus on continuous improvement and margin expansion, all of which we believe position us to continue to drive compounding growth and value creation for our shareholders. We are really excited about what we will look in '20. With that, operator, we are now ready to move into Q&A.

Operator: Thank you. We will now be conducting a question-and-answer session. If you would like to ask a question, please proceed.

Kristin: Thanks for taking my question. Nick, just military maybe a higher-level question. Just thinking about your—so if you think about military, on the fighter side, there are European fighters that would be comparable to F-15, F-16, Joint Strike Fighters, F-22s. Anything would come our way. Flight hours have to occur. And then you start seeing MRO being up from that. So we will be able to manage those opportunities. Okay. Thanks. Perfect. I appreciate the color. And I will jump back in the queue.

Russell Ford: Thank you.

Operator: Thank you. And our next question comes from the line of Seth Seifman with JPMorgan. Please proceed with your question.

Seth Michael Seifman: Hey, thanks very much, and good afternoon. I was wondering if you could speak a little bit more—you mentioned a fairly robust demand environment, I think that is the thing we get from a bunch of different sources. But can you talk about the conversation with customers now? I think you mentioned most of the slots for this year. Let me think out how are you looking to kind of slots for multiple years? Are you looking to have kind of spare capacity? Maybe just some additional color on this right now.

Russell Ford: Yes. Thanks, Seth. I will talk about some of the key markets. I think when we talk to—and just bringing this with Kristin about the military. But specifically on the commercial side, the big growth drivers are—you have to look at it by platform and by mission, obviously. Right? So big, big platform is going to be driving growth for us. In the near term for CFM, CF34, and turboprops. All of which remain highly active. And so we have an excellent pipeline of long-term contracts lined up.

Now some of those engines deploy the light work scopes and heavy work scopes, so we try to leave a certain amount as we need to have some open capacity for a lighter work scope that might come along. But then as we continue down the learning curve, specifically on the additional capacity that we have added for CFM56 and the new capacity on LEAP, we—

Dan Satterfield: Great.

Seth Michael Seifman: And just maybe following up, again, if you could talk about the—in terms of the cash conversion, working capital that is in there, I guess, is it working capital down $168,000,000 and now it is at a more manageable level. So the 75% free cash flow conversion that we achieved—and all of that is going to contribute to that 80% to 100% conversion rate that we are anticipating.

Dan Satterfield: Okay, great. Thanks very much.

Operator: Thank you. And our next question comes from the line of Sheila Kahyaoglu with Jefferies.

Sheila Karin Kahyaoglu: Margins and higher margins. As those volumes grow and even though in the second half—that was going to be another way of headwind. All of those things that contribute to good margin performance in 2025 are still there. But now we have got the extra good guy of the material takeout. Is a good guy in March and the CFM for us this year in 2025 and will continue to contribute in 2026.

Dan Satterfield: Profitability. So I think if you can run your models and that will be an accurate representation.

Sheila Karin Kahyaoglu: The CRS margins that are 30% or so—the in-house margins are at similar levels. So as we increase our capacity and our number of LEAP repairs, that is going to add to LEAP profitability for sure. Sure. That is—you are—it is the value that you are adding. I was wondering, can you expand more about what that environment is like? And it is also protected with that capacity? That dynamic is like with the customer reception potentially for higher pricing? Is there price on elasticity here? And what other MRO shops are doing on pricing?

Russell Ford: There is still a higher appetite for by increases than income cycle falls. And to me, we are breaking with an airline, something similar to the airlines. There it is. Alright. If I look at your guide—

Dan Satterfield: Yeah. On the commercial market, our—

Russell Ford: Actually greater right now than supply chain transport. So we have the ability to accelerate when there is revenue upside for us. There is still admin for the platforms that we service thousand, we have got the, you know, the whole wide market share. Can you—let's do—

Dan Satterfield: Over to the next.

Operator: I am not sure how long—

Russell Ford: Would increase from. We looked at—

Sheila Karin Kahyaoglu: The top level, which is the on-time delivery metrics, same thing that we are held accountable for through our end customers like the airlines. We look at our supply on-time delivery.

Dan Satterfield: Supply chain—

Russell Ford: Getting better, but still being a headwind. Correct me if I am wrong, there is competition now. So, I mean, how do you know that?

Dan Satterfield: From a labor perspective? Yeah.

Sheila Karin Kahyaoglu: There was a fair amount of retirements occurring across the aerospace industry. So we started a multi-phased approach to building—

Russell Ford: The input, particularly on the critical system lighting. Get access to people to recruit. We have—we created StandardAero University, our own internal university at our site in San Antonio, Texas—

Sheila Karin Kahyaoglu: They will spend their entire—

Dan Satterfield: Time with us doing that. Their—

Russell Ford: I had any labor constraints that have prevented us from—or just the engines that you guys are currently exposed? Widebody. I know we talked about that in the past, Russ, that—

Sheila Karin Kahyaoglu: Job is making sure that we are talking to OEMs about, you know, obtaining licenses in markets that we think are accretive target. Quite interesting in the commercial side of the business, we have a couple on the inventory side of the business.

Dan Satterfield: And there are certainly a couple of business outside of the business, so it is not a—

Sheila Karin Kahyaoglu: Gotcha. You are not the largest in the world. Right?

Russell Ford: Or is aviation a big part of market? A little bit more on the margins and those questions, how in 2026 we got to—

Dan Satterfield: Okay. Okay.

Russell Ford: License capabilities. I mean, how should we think about the potential? Guidance next year, about 25.5% to 29%, which is good guidance for 2026. Acquisition opportunities where they become available. Sourcing effort, all of that is accretive—

Dan Satterfield: Sure.

Operator: Thank you. And our next question comes—yes, we got it. We just hear you barely, Gavin. Go ahead. Hopefully, it is a little bit clearer. How much can you mix that out in—more bottlenecks to doing that? That is a really interesting area of expansion for any of the acquisition work that we do.

Dan Satterfield: Anytime we do an acquisition in that end market, it brings new repairs. That is one of the things we look for is one that we have added into the portfolio that gives us the ability to in-source more of the work from our Engine Services segment that presently would be going out.

Russell Ford: Because we—it would be essentially for something that we do not have that process out of the market. Nearly 90% of the work that our CRS division does is for outside of StandardAero, Inc. So adding to that portfolio of repairs gives us a very strong expansion. Are you also supply constrained at CRS?

Dan Satterfield: So much. You know, in CRS, someone is typically supplying you the part to be repaired versus in Engine Services area, you may be waiting for an actual part. So it is a different situation where you are doing repair on existing parts.

Operator: Thank you.

Operator: Thank you. And with that, this now does conclude our question-and-answer session. I would now like to turn the floor back to Russell Ford for any closing comments.

Russell Ford: Thank you again. Next quarter.

Operator: Thank you, ladies and gentlemen. This now does conclude today's teleconference. We thank you for your participation. You may disconnect your lines at this time.

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