Magellan Aerospace Reports Strong Third Quarter 2025 Results, Highlighting Sustained Growth Across Key Markets
Magellan Aerospace Corporation (“Magellan” or the “Corporation”) has announced its financial results for the third quarter ended September 30, 2025. Presented in Canadian dollars unless otherwise noted, the results reflect continued momentum across both commercial and defence markets, supported by improved operating performance, favourable foreign exchange movements, and a more resilient global aerospace environment.
The Corporation delivered strong gains in revenue, gross profit, EBITDA, and net income compared to the same period in 2024. These results further underscore the stability of Magellan’s diversified aerospace portfolio and the effectiveness of strategic initiatives undertaken in recent years.
As with all forward-looking statements, the Corporation notes that future performance is subject to risks and uncertainties, and that non-IFRS measures such as EBITDA are provided as supplemental indicators of operating performance.
1. Corporate Overview
Magellan Aerospace is a global supplier of complex assemblies and components to commercial, defence, and space markets. Through its wholly owned subsidiaries, controlled entities, and joint ventures, the Corporation designs and manufactures aeroengine and aerostructure components, advanced defence products, and space-grade systems. Magellan also supports aftermarket customers with spare parts, repair, and overhaul services.
The Corporation operates as a single reporting segment—Aerospace—reflecting unified oversight for resource allocation, financial performance assessment, and long-term strategic planning. Magellan’s business spans design, development, manufacturing, and aftermarket services for civil and military aviation.
During the first nine months of 2025, commercial aerospace represented 63.8% of revenues, while defence accounted for 36.2%, highlighting the Corporation’s balanced exposure to multiple aviation markets.
2. Financial Performance Highlights for Q3 2025
Magellan delivered a strong third quarter with notable improvements across key metrics. Revenue for Q3 2025 reached $255.7 million, up 14.4% from $223.5 million in the same period of 2024. Gross profit rose 30.3%, while net income more than doubled, supported by higher volumes, favourable product mix, and foreign exchange gains.
Consolidated Revenue Performance
Magellan experienced revenue growth across all geographic regions:
- Canada: Up 14.9%, driven by increased wide-body aircraft component sales and stronger maintenance, repair, and overhaul (MRO) activity.
- United States: Up 15.6%, supported by higher casting product volumes, increased engine shaft sales, and favourable U.S.–Canada exchange rates.
- Europe: Up 12.9%, reflecting stronger demand for wide-body parts, improved MRO activity, and advantageous foreign exchange movements.
On a currency-neutral basis, revenues in the United States and Europe grew 14.4% and 8.9%, respectively.
For the nine-month period ending September 30, 2025, total revenue increased 9.2% to $766.4 million, compared to $701.7 million for the same period of 2024.
3. Profitability and Margins
Gross Profit
Gross profit for Q3 2025 reached $32.6 million, a substantial increase over the $25.0 million recorded in Q3 2024. Gross margin improved to 12.8% (up from 11.2%), reflecting:
- higher production volumes,
- rehabilitated contract performance on key programs,
- improved product mix,
- partially offset by increases in raw material and supply costs.
For the nine-month period, gross profit rose 32.0% to $99.6 million.
Administrative and General Expenses
Administrative and general expenses totaled $16.4 million, up from $13.6 million, primarily due to:
- higher salary and benefit expenses,
- increased investments in information technology and cybersecurity infrastructure.
Despite the increase, administrative expenses remained relatively stable as a share of revenue at 6.4%.
Other Income / Expenses
Magellan recorded a $1.5 million foreign exchange gain in Q3 2025, compared to a $1.1 million loss in Q3 2024. Movements in the U.S. dollar and British pound relative to the Canadian dollar continue to influence quarterly FX outcomes.
Interest Expense
Net interest expense decreased significantly to $0.3 million, compared to $0.95 million in Q3 2024. Higher cash balances led to increased interest income, improving overall financing costs.
Income Tax
The Q3 2025 effective tax rate was 27.2%, down from 36.8% in the prior year’s quarter. The decrease stemmed from shifts in the geographic mix of earnings and the reversal of temporary differences.
Net Income and EBITDA
Net income for Q3 2025 grew 116.7% to $12.7 million, compared to $5.8 million in Q3 2024. For the nine-month period, net income reached $28.9 million, up 47.2%.
EBITDA increased 38.2% year-over-year to $29.8 million, driven by improved margins and FX gains.
4. Quarterly Trends and Market Dynamics
Magellan’s quarterly revenue and profit trends reflect both internal performance improvements and external market factors, including foreign exchange movements. The Corporation noted that higher average exchange rates for the U.S. dollar and British pound increased reported revenues and income. Had exchange rates remained at 2024 levels, Q3 2025 revenue would have been approximately $1.8 million lower.
The lingering effects of global supply chain disruptions, production delays, and inflation—challenges that emerged during the COVID-19 pandemic—continued to ease through 2024 and 2025. As disruptions stabilize, Magellan has been able to restore operational efficiency and maintain a steady upward trajectory in quarterly performance.
The return to normal production programs and sustained demand for wide-body and narrow-body platforms have supported the Corporation’s revenue growth across key customer programs.
5. Reconciliation of Net Income to EBITDA
Magellan includes EBITDA as a supplementary metric to provide stakeholders with insight into operational performance before the effects of financing and taxation. EBITDA for Q3 2025 totaled $29.8 million, up from $21.5 million in Q3 2024. The increase predominantly reflects stronger gross margins and favourable FX movements.
6. Liquidity, Cash Flow, and Capital Resources
Magellan maintains a robust liquidity position supported by:
- cash on hand,
- cash generated from operations,
- available borrowing capacity under its credit facility,
- its accounts receivable securitization program.
Management believes the Corporation has sufficient resources to meet its operational and strategic needs. Should cash flows fall short or capital requirements increase, Magellan may access additional capital through debt, equity, or both.
Cash Flow from Operations
Operating activities generated $4.8 million in Q3 2025, compared to $18.6 million in Q3 2024. The decline was primarily due to:
- higher accounts receivable stemming from timing of customer payments,
- increased contract assets,
- higher prepaid expenses,
- partially offset by increases in accounts payable and accrued liabilities.
Working capital changes used $20.9 million of cash in Q3 2025.
Investing Activities
Magellan invested $11.1 million in Q3 2025, compared to $7.2 million in Q3 2024, focused on:
- upgrading property, plant, and equipment,
- enhancing manufacturing technologies,
- investing in intangible assets.
The Corporation received an $8 million grant from the Manitoba government in support of capital projects at its Winnipeg facilities, recorded as a reduction to capital expenditures.
Magellan remains cautiously optimistic about the global aerospace industry. Demand for commercial aircraft is gradually recovering, defence spending remains strong across key jurisdictions, and supply chain challenges continue to ease. Continued investments in advanced manufacturing and strategic technology initiatives position the Corporation for sustained revenue and earnings growth.
Management will continue to monitor foreign exchange trends, supply chain conditions, and evolving customer program schedules as the industry progresses through 2025 and beyond.
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