Exchange Income Corporation Posts Record Second Quarter Financial Results and Increases Guidance by $35 Million to a Range of $725 million to $765 million

Executive Summary

• Exchange Income Corporation (EIC) reported record financial results for the second quarter of 2025, with revenue reaching $720 million (up 9% year-over-year) and Adjusted EBITDA hitting a record $177 million (up 13%).
• The company announced the completion of its acquisition of Canadian North effective July 1, 2025, alongside a new ten-year Air Services Agreement with the Government of Nunavut, which includes an option for a five-year extension.
• EIC updated its full-year 2025 Adjusted EBITDA guidance to a range of $725 million to $765 million, reflecting the addition of Canadian North, and noted that 2026 guidance will be provided in November.

Key Details

• Q2 2025 Financial Performance:
  • Revenue: $720 million (up $59 million or 9% from Q2 2024).
  • Adjusted EBITDA: $177 million (up $20 million or 13% from Q2 2024).
  • Free Cash Flow: $123 million (up $23 million or 23% from Q2 2024); Free Cash Flow per share was $2.40.
  • Net Earnings: $40 million (up 23% from Q2 2024); Net Earnings per share was $0.78.
  • Adjusted Net Earnings: $47 million (up 25% from Q2 2024); Adjusted Net Earnings per share was $0.92.
  • Payout Ratios: Trailing Twelve Month Adjusted Net Earnings Payout Ratio was 81%; Trailing Twelve Month Free Cash Flow less Maintenance Capital Expenditures Payout Ratio was 63%.
  • Dividends: $33.9 million declared for the quarter.
• Segment Performance:
  • Aerospace & Aviation: Revenue grew 7% to $455 million; Adjusted EBITDA grew 10% to $148 million. Growth driven by improved yields in medevac operations, increased passenger volumes due to forest fires, and robust parts demand.
  • Manufacturing: Revenue grew 13% to $265 million; Adjusted EBITDA grew 26% to $44 million. Growth driven by the acquisition of Spartan Mat, partially offset by declines in Multi-Storey Window Solutions due to aluminum tariffs and project deferrals.
• M&A Activity:
  • Completed the acquisition of Canadian North on July 1, 2025.
  • Secured a new ten-year Air Services Agreement with the Government of Nunavut for all of Nunavut, with an option to extend for five additional years. This is described as the largest passenger contract in EIC’s history.
• Guidance & Outlook:
  • Updated 2025 Adjusted EBITDA guidance to $725 million – $765 million (an increase of $35 million from previous guidance).
  • 2026 guidance will be released in November 2025.
  • CEO Mike Pyle expressed confidence in the business model despite geopolitical unrest, noting that tariffs had not materially impacted consolidated results, though they negatively affected Multi-Storey Window Solutions.
  • Subsequent to quarter-end, approximately $100 million in inquiries were converted into firm bookings in the Multi-Storey Window Solutions business line.
• Operational Updates:
  • Management is evaluating locations for a second plant in the Environmental Access Solutions business line.
  • The company utilized a Social Loan to fund the acquisition of five King Air 360 aircraft for the BC Medevac contract.

Notable Quotes

• Mike Pyle, CEO: “The financial results of the second quarter once again proved the strength and soundness of our diversified business model... Perhaps the most significant result of our efforts in the second quarter actually occurred subsequent to quarter end, when we completed our previously announced acquisition of Canadian North... This is a highly strategic acquisition and is largely asset backed by the aircraft and infrastructure assets of Canadian North.”
• Mike Pyle, CEO: “We have updated our 2025 fiscal year guidance... expect an Adjusted EBITDA range of $725 million to $765 million... we are very bullish about the long-term prospects of EIC as our exposures to secular trends provides very favorable prospects for our various business lines.”
• Adam Terwin, Chief Corporate Development Officer: “The acquisition of Canadian North and as important, the negotiation of the long-term Air Services Agreement with the Government of Nunavut, are key milestones on the continued execution of our strategy to acquire niche businesses and add to our portfolio of Northern aviation operators.”