Good day, and welcome to the AerSale First Quarter 2024 Earnings Conference Call. All participants will be in a listen-only mode. After today’s presentation there will be an opportunity to ask questions. Please note, this event is being recorded. I would now like to turn the conference over to Jackie Carlon, Vice President of Marketing and Communications. Please go ahead.

Good afternoon. I'd like to welcome everyone to AerSale's first quarter 2024 earnings call. Conducting the call today are Nick Finazzo, Chief Executive Officer; and Martin Garmendia, Chief Financial Officer. Before we discuss this quarter's results, we want to remind you that all statements made on this call that do not relate to matters of historical facts should be considered forward-looking statements within the meaning of the federal securities law, including statements regarding our current expectations for the business and our financial performance. These statements are neither promises nor guarantees, but 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. Important factors that could cause actual results to differ materially from forward-looking statements are discussed in the Risk Factors section on Form 10-K for the year ended December 31, 2023, filed with the Securities and Exchange Commission on March 8, 2024, and its other filings with the SEC. These filings identify and address other important risks and uncertainties that could cause actual events and results to differ materially from those indicated by the forward-looking statements on this call. We'll also refer to non-GAAP measures that we view as important in assessing the performance of our business. A reconciliation of those non-GAAP metrics to the nearest GAAP metrics can be found in the earnings presentation materials made available on the Investors section of the AerSale website at ir.aersale.com. With that, I'll turn the call over to Nick Finazzo.

Thank you, Jackie. Good afternoon, and thank you for joining our call today. I'll begin with a recap of the quarter and our strategic objectives before turning the call over to Martin to review the numbers in greater detail. We're off to a good start in 2024, driven by stronger feedstock acquisitions in the back half of 2023. This facilitated whole asset sales and increased USM volume and was supported by continued strength in our TechOps segment as commercial MRO demand remains robust. This translated to first quarter revenue of $90.5 million, which was up $15.7 million from the first quarter of 2023 and also led to stronger profitability as adjusted EBITDA grew 80% year-over-year to $9 million. As we remind investors every quarter, due to the nature of our business and the impact of whole asset sales, our revenue levels tend to be volatile quarter-to-quarter, and we believe our business is best assessed based on aggregate performance over a longer period of time with a focus on MRO activity, feedstock levels and our unique business model that enables us to extract significant value from our inventory. At the segment level, beginning with Asset Management, first quarter sales were $59.3 million, which increased 22.4% year-over-year. Stronger revenue in the first quarter of 2024 stemmed from higher flight equipment sales of $38.6 million compared to $27.7 million in the year ago period. Excluding whole asset sales in a period, segment level sales were relatively flat as lower leasing revenue offset gains in USM volume. In the quarter, we sold one aircraft and four engines compared to two aircraft and one engine in the year ago period. Commercial demand remains strong and is particularly elevated for USM. Airline traffic and capacity continued to operate above pre-pandemic levels, which is a strong indicator for our business. That being said, the supply side remains challenging, given OEM production and delivery delays, which substantially limit our ability to acquire feedstock. Regardless, our primary competitive advantage is in our purpose-built end-to-end solution, which enables us to drive asset value from feedstock across various segments of the supply chain. As asset availability improves, we're ready to move decisively on acquisitions. To date, we've acquired $31 million of feedstock and have an additional $52 million under LOI. In our USM parts business, we continue to realize the benefits of better feedstock acquisitions in the second half of 2023, specifically in engine USM, which grew more than 30% year-over-year. In the cargo market, the environment continues to be under pressure as we saw during 2023 as the strong demand that carried through the pandemic unwinds and cargo shipping normalizes. We expect these conditions to persist for some time, but we did see incrementally positive movements in quoting activity and customer interest in our 757 freighters in the first quarter. As of quarter end, we have one converted 757 available for sale with six more that will complete the conversion process through the remainder of this year. Finally, in our leasing portfolio, full year sales declined by approximately 45% as we had fewer assets under lease during the period and no aircraft on lease in the first quarter of 2024 compared to one aircraft in the prior year that was subsequently sold. We expect to see an increase in leasing activity as more engines become available and placed on lease this year resulting from increased feedstock availability. Turning to our TechOps segment, our MRO facilities were busy during the quarter. Sales improved across all of our facilities with additional growth from the sale of components by our off-airport MRO shops, which includes landing gear, thrust reversers and other complex assemblies. As a result, segment sales were $31.3 million compared to $29.8 million in the year ago period. We anticipate continued strength throughout the forecast period because of a supportive end market. As we look to increase our MRO business beyond the current run rate, we see growth opportunities on component MRO, heavy MRO and aerostructures. In our Goodyear heavy MRO, we're realigning our operations to create additional facility capacity for heavy maintenance activities, coupled with a significant initiative to increase the availability of trained mechanics. We've been actively recruiting and training new employees for our on-airport heavy MROs, which has been assisted by awards of over $2 million in state and federal training grants this year. We also expect to commence operations at our on-airport heavy MRO facility in Millington, Tennessee in the third quarter and anticipate this facility to be a positive contributor in the latter half of 2024 and beyond. In our component MROs, we're winning new contracts that are generating recurring and predictable revenue, utilizing existing facility capacity to significantly grow these business units. Next, I'd like to provide an update on our Engineered Solutions business, beginning with AerAware. In the first quarter, we continued our go-to-market efforts, and all five of the written proposals we made remain outstanding and under consideration since we reported these in March. We continue engagement with these customers. And notably, we've had incrementally positive discussions with several as it relates to the safety enhancements that AerAware provides. Across the airline system, the pandemic led to early retirements of commercial pilots and experience levels have decreased as new pilots are brought online. AerAware can enhance safety under these circumstances and has been a focus area with potential launch customers beyond the ROI associated with decreased diversions and ground stops. This has led some discussions to expand well beyond the original scope. All of the proposals remain under review, but we consider this enhanced focus on the safety profile of the AerAware system to be a meaningfully positive note to our overall market acceptance of this product. Besides the existing proposals we've made, we're engaged with three new operators who have expressed a requirement for their 737s. As word spreads throughout the industry, there is also interest in other aircraft models, including the A320, wide bodies and regional aircraft. Concurrently with our go-to-market strategy, in April, we successfully demonstrated our AerAware ground and flight training program to the FAA, which included classroom and flight training of six airline and four FAA pilots. Once our AerAware training program is published by the FAA, it will be the first and only FAA validated training program, covering operation of a 737, incorporating an enhanced flight vision system. Although FAA validation of this training program was not a requirement of our STC, it will assist in the adoption process for airlines that install AerAware in their fleets. Besides AerAware, we've increased our marketing efforts for AerSafe, our STC product covering field tank flammability. Operators that do not have an existing system to prevent fuel tank explosions must provide a means to mitigate a potential electrical short in the wiring of an aircraft's fuel quantity indication system from causing a catastrophe. Installation of AerSafe complies with this requirement with regulatory compliance deadlines for different aircraft types running through 2026. We expect increasing sales of AerSafe throughout the balance of this year and into 2026 with sustainment sales lasting the life of a given airframe. In closing, we're off to a good start in 2024 and end market demand remains strong. Our team is working hard to maximize the ROI on feedstock we've acquired, and we continue to evaluate additional opportunities amid a challenging supply environment. Meanwhile, we're working diligently to advance conversations with potential customers for our Engineered Solutions products. I want to thank our dedicated employees for their hard work and our investors for their continued support. We look forward to updating you on our progress. Now I'll turn the call over to Martin for a closer look at the numbers.

Thanks, Nick. First quarter revenue was $90.5 million, which included $38.6 million of flight equipment sales comprising of one aircraft and four engines. Our revenue in the first quarter of 2023 was $78.3 million and included $27.7 million of flight equipment sales, consisting of two aircraft and one engine. Excluding flight equipment, the company continues to demonstrate underlying growth as our base revenue increased to $51.9 million from $50.6 million in the prior year. As we have pointed out in the past, flight equipment sales fluctuate significantly from quarter-to-quarter, and we believe monitoring our progress based on asset purchases and sales over the long term is more appropriate. First quarter gross margin was 31.8% compared to 31.2% in the first quarter of 2023, largely due to the sales mix in the first quarter, which included additional higher-margin flight equipment sales. Selling, general and administrative expenses were $24.1 million in the first quarter of 2024, which included $800,000 of noncash equity-based compensation expenses. Selling, general and administrative expenses were $25.2 million in the first quarter of 2023 and included $2.7 million of noncash equity-based compensation expenses. First quarter income from operations was $4.7 million, while loss from operations was $800,000 in the first quarter of 2023. Net income was $6.3 million in the first quarter compared to $5,000 in the first quarter of 2023. Adjusted for noncash equity-based compensation, mark-to-market adjustment to the private warrant liability and facility relocation costs, first quarter adjusted net income was $5.5 million, while adjusted net income was $3.3 million in the first quarter of 2023. First quarter diluted earnings per share was $0.12 compared to zero earnings in the first quarter of 2023. Excluding the adjustments mentioned, first quarter adjusted diluted earnings per share was $0.11 compared to $0.07 for the first quarter of 2023. Our adjusted EBITDA was $9 million in the first quarter of 2024 compared to $5 million in the prior year. The increase in adjusted EBITDA was primarily due to the increase in flight equipment sales. Cash used in operating activities was $21.5 million, primarily as a result of cash deployed to increase inventory availability. As we look to the balance of the year, we expect to see continued demand in our TechOps segment driven by a healthy commercial backdrop and several contract wins that will allow us to benefit from our available capacity. We also remain focused on monetizing the inventory we have on hand from a stronger feedstock environment in 2023. While the current supply side for feedstock remains challenged, we have a healthy pipeline of deals recently completed or in process to drive volume through 2024 and into early 2025. We continue to make progress on our go-to-market with AerAware and anticipate AerSafe will be supportive to our results as the year progresses. With that, operator, we are ready to take questions.

We will now begin the question-and-answer session. The first question comes from Gautam Khanna from TD Cowen. Please go ahead.

Hi, good afternoon, guys. I had a couple of questions. First off, I was wondering if you could comment on whether you see any used equipment monetizations in the second quarter? And what your visibility is for that in general for the remainder of the year? And if you could just update us on the 757s in particular as part of the answer.

We have no pending sales or transactions involving the 757s for the second quarter. Regarding other equipment sales, we are indeed selling engines, which is typical for us.

Yes, Gautam. We're seeing a very supportive overall market. We are definitely already in negotiations for several engine sales that we've acquired overall in the overall portfolio. So we expect to see continued growth in whole asset opportunities in Q2. And again, we're also working on opportunities in Q3 and Q4. We're also starting to monetize inventory through the USM line. So we saw some modest increases in the USM sales in Q1, and we expect that to continue through Q2 and then start getting even better through the latter part of the year.

That's helpful. I'm curious about the AerAware product and how customers are considering it. Did it perform as expected with the launch customer during development? What do you think might be causing customers to hesitate in making a decision? Do you believe it could be related to pricing, training capabilities, or something else?

I wouldn't say we had a sticking point. It's more of a complex process that involves various aspects of the airline, including pilot training, regulations, finance, operations, planning, and engineering. Currently, distractions in the industry are affecting all the domestic airlines we're in contact with, which is somewhat frustrating. However, I believe the safety aspect of our system could encourage these airlines to focus on improving safety and accelerate the process of getting their teams organized to take advantage of a system that enhances safety and helps avoid the challenges airlines are facing today.

Have your pricing expectations for the product changed just given what you've learned over the last several months? Or do you still think it's going to confer the level of unit price and gross margins you guys have spoken about in the past?

So we stated 2.5 years ago that our list price for our system was about $770,000, which included our portion of about $300,000 from Elbit. Our list price today is $1,495,000, which covers both Elbit's and AerSale's portions. We believe that if we receive a launch order and a multiple aircraft order, we can offer a discount on that price. Our costs in the system are still aligned with our original expectations, and we are optimistic about delivering this product at an attractive price for airlines. We also don't believe there's a competitive system currently available that can match what ours offers, and when such systems do become available, we expect their prices to be significantly higher than ours.

Okay. That’s helpful. I appreciate it. I’ll get back in the queue. Thank you.

Thanks, Gautam.

The next question comes from Ken Herbert from RBC Capital Markets. Please go ahead.

Hi, good afternoon, Nick and Martin.

Good afternoon.

Hi, Nick. Maybe just wanted to first start on AerAware. You've indicated that you're waiting for some of the manuals and the training documentation to be published by the FAA, do you have any update on timing on that? Or can you give us any more expectations around sort of how that maybe could play out over the next few months?

Yes, it's actually a brief process. We completed the demonstration, which included ground school training for ten pilots and the flight training. We initially planned for five sets of crews but ended up doing four, and they were satisfied that we passed. The FAA reviews our entire flight training manuals and the whole process, including ground school training, and they essentially recommend validation of our system. We have been verbally informed that our system meets the requirements, and they're going to send it for publication. I'm not sure if it has been published yet or where it gets published, but it will be. After that, there will be a comment period for anyone who wishes to provide feedback regarding the publication of our system validation, and then it will automatically become validated. I believe this will likely happen within the next 30 days.

Great. Do you see any other significant roadblocks to a potential initial order, or is there anything else that the airlines could be waiting for?

I don't believe the airlines waited for that. We have always communicated that we would work on it. Larger airlines could have managed this independently, and we simply facilitated the process. For smaller airlines, it poses more challenges, which is precisely why we invested the resources to address it. The main concern from those we are engaging with revolves around how to integrate this system into their simulators and the timeline for that process. We have your FAA validated flight training program pending publication, and there are numerous inquiries from various airlines regarding the safety aspects of the system. I think the current situation in the industry, along with increased scrutiny stemming from recent events, is acting as a catalyst. This heightened awareness has led potential customers, including one of the three I mentioned earlier, and new clients to approach us, expressing interest primarily because of the system's emphasis on safety. Therefore, I don’t foresee any significant hurdles moving forward apart from the logistical steps of system installation and integration into their simulators and flight training manuals, including determining the timeline for the system to become operational. Pricing has not been a concern in our discussions thus far.

Okay, great. Very helpful. That was just my final question. With what appears to be a significant increase in your list price, how much of that impacts your gross margins? And how much of it is related to higher costs than you initially expected when you started discussing bringing the system to market?

Our customers would love to know that information. So I'm sorry I can't. I can't answer that.

All right, Nick. Appreciate that. All right, thanks. I’ll get back in the queue.

You’re welcome.

The next question comes from Bert Subin from Stifel. Please go ahead.

Hi, good afternoon. I appreciate the questions.

Hi, Bert.

Hi, Nick. Maybe just to start out, if we go back three months, you guys stopped providing guidance. It seems like you're sort of off to a good start here in 2024, and you're acquiring feedstock maybe less than you'd like, but you're acquiring it. It sounds like you're starting to get a handle on sort of monetizing a good portion of the inventory outside of the 757s. So with that in mind, would you agree that maybe relative to three months ago, your visibility is improving? And is there anything in terms of forward-thinking commentary you can provide about how to think about the rest of the year?

I believe our overall situation is improving. We feel confident about our inventory position, which stands at $350 million, plus an additional $50 million in feedstock. This provides us with support for our future projections. We continue to face variability in the timing of flight equipment sales and the management of whole assets, whether they are USM or leasing. We are working to gain a better understanding of this overall aspect. On the TechOps side, we are optimistic about our developments. We are beginning to utilize the capacity in our component MROs, aerostructures, and landing gear facilities. New contracts are starting to build our backlog of work, and as this stabilizes, we will gain clearer visibility into our operations. We have initiatives to boost our heavy MROs by adding more labor and reconfiguring some facilities for increased asset flow. We feel positive about the overall dynamics and believe we are beginning to capture insights into this. We expect to see improvements going forward. Regarding guidance, we might hold off on providing it until we see further growth and more establishment in these new areas, especially as whole assets make up a smaller portion of our business.

Got it. Okay. On the other piece of that inventory that the freighter side posted their earnings call yesterday and called out sort of the weakness in freighters as a result of what they are seeing in belly capacity. How does that make you think about those assets? Is it still just sort of a wait and monetize those as cargo rebounds or have you started to think about other alternatives?

So once we made the investments in the airframes to convert them to freighter and basically take them, do heavy checks in landing gear etc that there really is no better options for those airframes at that point than to wait it out and put them in the freighter market. Now to mitigate the delay associated with when the freighter market returns, and again 757 is a niche freighter, we are looking at placing the engines off those airplanes, which is in very high demand; putting those engines on lease with different carriers. The risk that we face with that is we put the engines on lease and then for whatever reason we can't get them back in the time that we need then it would impair our ability to put the aircraft out. So we are doing a little bit of a balancing act because we have seven airplanes that will be available this year. We feel we can take that risk with some of the later deliveries until we see we get let's say we get three or four delivered than if we have aircraft engines on lease we should have sufficient time to pull them back to accommodate any future requirements.

If I could add, what we're seeing right now in some of the increase that we're receiving, market information that we have, providing estimated values on the 757. We have a good book value position on those assets. And definitely, at this point, we can afford to wait for the highest use or the highest monetization strategy, which we deploy in those as passenger freighter assets into the cargo market either through lease or through sale.

Got it. Okay. I've got one final and then just a clarification. But I guess, for my last question here, Nick, just as you think over time, you've been in this business a long time, and you've seen a lot of different cycles. And it seems like right now, the aftermarket cycle is really looking favorable and sort of a consensus expectation of extending out. As you think about that in the context of your USM business, that's maybe not performed as well, just broadly across the industry because it's tough to get feedstock and that feedstock gets priced at a higher rate. Where do you think we are in the USM cycle? Do you think that is countercyclical and gets better and aftermarket starts to weaken because of retirement? So what do you expect out of that business over the next few years?

I believe the availability of USM will remain limited because there are very few aircraft available, particularly A320s and 737s. We are not seeing any 767s that have reached retirement age to be parted out. We have acquired some 747s primarily for their engines, which will supply 767 freighters and passenger aircraft. However, we are not anticipating any significant improvement in the availability of aircraft that could become USM parts unless an airline retires a fleet of aircraft. For instance, we are currently purchasing four 747s and have closed on the first one. I don't foresee a notable increase in aircraft availability unless the existing equipment is so worn out that it requires extensive overhauls for landing gear, airframes, and engines. Typically, we are acquiring aircraft with multiple issues, and we focus on purchasing in volume and maximizing value from the inventory. This allows us to combine the best engines and airframes, giving us a competitive edge in the market. While we are actively bidding, we are very selective. In the last quarter, we bid on over $500 million worth of feedstock and secured around $15 million, resulting in roughly a 3% win rate, which is below our typical 10%. This reflects the high competitiveness of the market. Just because others are winning bids doesn’t mean they will profit; they may be buying for their own needs rather than resale. For those looking to resell without the capability to extract value like we do, acquiring feedstock will be very challenging. The future of the feedstock and USM markets looks tough for others, as it will remain difficult for those unable to derive the value we can. The market is overly competitive and not rational. Change will come when the new airplanes and A320 engine issues are resolved, leading to an influx of aircraft into the market. We are prepared to take advantage of that and have the infrastructure to extract value from these assets. I believe our best opportunities are still ahead of us and will improve significantly once the current aircraft issues are addressed.

Thanks, Nick. Just a clarification on some of your earlier AerAware comments. Have you started the process for approval with international regulators and for the A320?

Not yet on the A320, but yes, on the international regulators in multiple jurisdictions.

The next question comes from Michael Ciarmoli from Truist. Please go ahead.

Hi, good evening, guys. Nice quarter. Thanks for taking the question here. Nick, you just said I think you bid on $500 million in the first quarter. How is it looking quarter-to-date? I mean are you still as active?

We are still active in evaluating everything, and I must say our success rate has not improved.

Okay. How is the documentation issue? I know that came up last quarter and even at the MRO Americas show, a lot of guys were saying, you don't even much buy the equipment, you really are paying for the accurate documentation. So what's sort of the update there?

We are continually evaluating the condition of the records we examine, and in most instances, we find deficiencies. We have created an AI tool over the past year that allows us to process a record package which would typically take us a week to review in about four hours. This tool can analyze an engine through our system, providing a comprehensive summary of all necessary information within that time frame. This capability enables our limited resources to focus not on compiling and assessing the records but rather on addressing the immediate issues. Instead of spending a week understanding the problems, the AI completes this in four hours, allowing our team to concentrate on solutions. This is a significant investment aimed at streamlining the review process and addressing existing record challenges. These challenges will always be present, but our goal is to expedite the resolution process and direct our personnel towards fixing the issues.

Like we noted in the meeting, if anything, that's a competitive advantage that we have. So we have the expertise, we have the records team that can actually go through this material and make sense of it. Other competitors might just move away from it, but we can work with counterparties to clean up those records and come through it. If we can't, we adjust the pricing fairly. So if we cannot do not have the records, we do not pay for those that material. Subsequently, we continue to work on it to see if we can fill in the gaps and sell that material. So if anything, that is a competitive advantage. In this market where feedstock is more limited, having that ability is absolutely something that we are proud of, and we're making investments to continue to support.

Got it. That’s helpful. I’m not sure if this is for Nick or Martin, and I don't know how much information you want to provide, but about the $350 million in inventory, which is significantly higher than before, and the additional $50 million in feedstock, can you share how much of that is currently available for sale compared to the 757s? Can you break it down in terms of the value or percentage of whole assets versus used spare parts or components? Also, could you provide an update on how many AerAware kits you have and how much of that is included in the inventory?

Overall, we have 150 AerSafe kits. I can’t provide an exact inventory value for competitive reasons, but that’s the total number. In terms of 757s, we have seven assets, one ready for fetch and six in process, with related inventory costs that comprise both airframe and engine values. I can’t disclose those specific amounts either due to competitive considerations. However, we are confident in our book value based on market conditions and believe we can monetize those assets moving forward. Regarding our overall inventory, most of our assets are being evaluated to be monetized either through USM, full asset opportunities, or leasing. Approximately three-quarters of our inventory value consists of engine material that is readily available. We have a variety of engines, including CFM56, CF6-80, and PWs, while some engine materials are still being processed, including through the USM channel. We’ve noticed a slowdown in monetizing engines, which indicates strong demand for that material, prolonging our processing time. We also replenished our inventory portfolio last year with additional feedstock, providing opportunities to add various engine types to our leasing portfolio, which we are beginning to deploy now. We’ve already added a couple in the current quarter, with more available and a growing demand. Approximately ten additional engines are currently in repair and will be included in the leasing portfolio. I expect to see growth in our engine leasing portfolio as we start monetizing these assets. From a USM perspective, we are also set to monetize at a faster pace. We noticed an uptick starting in March, and we anticipate the second quarter will be on par with Q1, leading to stronger growth in the latter half of the year.

Got it. That’s helpful. Last question for me. I understand you don't want to share the margins on AerAware with the updated pricing. However, considering you've been assembling these kits for a while, if we receive an order, is it reasonable to expect that the profitability will be significantly better on these initial 150 kits? They appear to be ready for deployment, so is it just a matter of having the labor available for installation? Should we anticipate a larger margin benefit when these first units are shipped?

I believe we can achieve a better margin profile for the subsequent units produced after the initial one. While I’m pleased with our current cost structure, I see opportunities for greater efficiency than what we accomplished in-house. I’m not worried about the gross margin from kit sales. Once we begin to see AerAware sales, we will discuss the volume of those sales and may disclose the gross revenue, but margins will likely remain undisclosed. You might observe the margin on our TechOps side, perhaps the dollar margin, but revealing detailed margin information is challenging as we’re still in negotiations within the industry.

Understandable. All right, perfect. Thanks guys. Appreciate it.

And we have a follow-up question from Ken Herbert. Please go ahead.

Yes. Hi, Martin. I maybe just wanted to follow up on a comment you made earlier in the call. We're sort of five to six weeks here into the second quarter. I can appreciate you don't want to give any sort of full-year guidance, but it sounds like you were just commenting the second quarter EBITDA. It wasn't clear if that was for the company or a particular segment. But second quarter EBITDA looks very similar to first quarter EBITDA. Did I get that correctly with maybe a more pronounced step-up in the second half over the first half?

No, that comment was specifically to USM sales overall; activity improving, probably Q2 will be similar to Q1 activities. Then as more material flows through, specifically engine material, we'll see an acceleration of that through the remainder of the year.

Do you have any high-level insights on EBITDA for the second quarter and how it might compare to the first quarter? Any information you can share as we consider the near-term outlook would be helpful.

Yes, I think we won't provide any specific financial guidance overall. What we can say is we are seeing good opportunities in all sides of the business. We're starting to see AerSafe sales that Nick mentioned in his remarks. So we're starting to see that contribution flow through the P&L. We're seeing a pick-up in our component MROs that we've talked about with some of the new contract sales. So we're expecting improvements there. Then from the asset management side, we've already have done with some deals related to engines, so we expect whole asset sales in the second quarter and USM, as I noted, being overall. You will start seeing some increase in leasing, but that also will be a stronger acceleration starting in Q3.

Perfect. Thanks, Martin.

This concludes our question-and-answer session. I would like to turn the conference back over to Nick Finazzo, CEO. Please go ahead.

I want to thank Gautam, Ken, Bert, and Michael for the good questions because it really helps our investors better understand our business. So thank you, everyone. We appreciate you listening to our call today and for your interest in AerSale. I hope everyone has a good evening.

The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.