Q3 2025 General Electric Co Earnings Call

October 21, 2025

Speaker #1: Good day, ladies and gentlemen, and welcome to the GE Aerospace third quarter 2025 earnings conference call. At this time, all participants are in a listen-only mode.

Operator: Good day, ladies and gentlemen, and welcome to the GE Aerospace third quarter 2025 earnings conference call. At this time, all participants are in a listen-only mode. My name is Dustin, and I will be your conference coordinator today. If you experience issues with the webcast slides refreshing, or there appears to be delays in the slides' advancement, please hit F5 on your keyboard to refresh. As a reminder, this conference is being recorded. I would now like to turn the program over to your host for today's conference, Blaire Shoor, Head of Investor Relations. Please proceed.

Operator: Good day, ladies and gentlemen, and welcome to the GE Aerospace Q4 2025 earnings conference call. At this time, all participants are in a listen-only mode. My name is Dustin, and I will be your conference coordinator today. If you experience issues with the webcast slides refreshing or there appears to be delays in the slide advancement, please hit F5 on your keyboard to refresh. As a reminder, this conference is being recorded. I would now like to turn the program over to your host for today's conference, Blaire Shoor, Head of Investor Relations. Please proceed.

Operator: Good day, ladies and gentlemen, and welcome to the GE Aerospace Q4 2025 Earnings Conference Call. At this time, all participants are in a listen-only mode. My name is Dustin, and I will be your conference coordinator today. If you experience issues with the webcast slides refreshing or there appears to be delays in the slide advancement, please hit F5 on your keyboard to refresh. As a reminder, this conference is being recorded. I would now like to turn the program over to your host for today's conference, Blaire Shoor, Head of Investor Relations. Please proceed.

Speaker #1: My name is Dustin, and I will be your conference coordinator today. If you experience issues with the webcast slides, refreshing, or if there appear to be delays in the slides' advancement, please hit F5 on your keyboard to refresh.

Speaker #1: As a reminder, this conference is being recorded. I would now like to turn the program over to your host for today's conference, Blaire Shoor, Head of Investor Relations.

Speaker #1: Please proceed.

Speaker #2: Thanks, Dustin. Welcome to GE Aerospace's third quarter 2025 earnings call. I'm joined by Chairman and CEO Larry Culp and CFO Rahul Ghai. Many of the statements we're making are forward-looking and based on our best view of the world and our businesses as we see them today.

Blaire Shoor: Thanks, Dustin. Welcome to GE Aerospace's Q4 2025 earnings call. I'm joined by Chairman and CEO, Larry Culp, and CFO, Rahul Ghai. Many of the statements we're making are forward-looking and based on our best view of the world and our businesses as we see them today. As described in our SEC filings and website, those elements may change as the world changes. Additionally, Larry and Rahul, consistent with prior quarters, will speak to total company and corporate financial results and guidance on a non-GAAP basis. Now, over to Larry.

Blaire Shoor: Thanks, Dustin. Welcome to GE Aerospace's third quarter 2025 earnings call. I'm joined by Chairman and CEO Larry Culp and CFO Rahul Ghai. Many of the statements we're making are forward-looking and based on our best view of the world and our businesses as we see them today. As described in our SEC filings and website, those elements may change as the world changes. Additionally, Larry and Rahul, consistent with prior quarters, will speak to total company and corporate financial results and guidance on a non-GAAP basis. Now, over to Larry.

Speaker #2: As described in our SEC filings and website, those elements may change as the world changes. Additionally, Larry and Rahul, consistent with prior quarters, will speak to total company and corporate financial results and guidance on a non-GAAP basis.

Speaker #2: Now, over to Larry.

Speaker #3: Larry, thank you. And good morning, everyone. At GE Aerospace, our purpose is simple: we invent the future of flight, lift people up, and bring them home safely.

Larry Culp: Blaire, thank you. Good morning, everyone. At GE Aerospace, our purpose is simple: we invent the future of flight, lift people up, and bring them home safely. Every moment, nearly a million people are flying with our technology under wing, an incredible responsibility that we take seriously. FlightDeck, our proprietary lean operating model, is how we turn strategy into results. Our exceptional third quarter and year-to-date results demonstrate FlightDeck in action. We're making meaningful progress to accelerate delivery of our services and products to meet robust customer demand. Our commitment to ongoing investments in LEAP durability and the future of flight is centered on delivering value to our customers. Guided by our purpose, our team is energized every day to define flight for today, tomorrow, and the future. Let's take a closer look at our third quarter performance.

Larry Culp: Larry, thank you, and good morning, everyone. At GE Aerospace, our purpose is simple: we invent the future of flight, lift people up, and bring them home safely. Every moment, nearly a million people are flying with our technology under wing, an incredible responsibility that we take seriously. Flight Deck, our proprietary lean operating model, is how we turn strategy into results, and our exceptional Q3 and year-to-date results demonstrate Flight Deck in action. We're making meaningful progress to accelerate delivery of our services and products to meet robust customer demand. And our commitment to ongoing investments in leap durability and the future of flight is centered on delivering value to our customers. Guided by our purpose, our team is energized every day to define flight for today, tomorrow, and the future. Let's take a closer look at our Q3 performance.

Speaker #3: Every moment, nearly a million people are flying with our technology under wing—an incredible responsibility that we take seriously. Flight Deck, our proprietary lean operating model, is how we turn strategy into results.

Speaker #3: And our exceptional third quarter and year-to-date results demonstrate Flight Deck in action. We're making meaningful progress to accelerate the delivery of our services and products to meet robust customer demand.

Speaker #3: And our commitment to ongoing investments in leap durability and the future of flight is centered on delivering value to our customers. Guided by our purpose, our team is energized every day to define flight for today, tomorrow, and the future.

Speaker #3: Let's take a closer look at our third-quarter performance. Orders were up 2%, with solid growth in commercial services, partially offset by the timing of equipment orders in commercial equipment and defense.

Larry Culp: Orders were up 2%, with solid growth in commercial services, partially offset by the timing of equipment orders in commercial equipment and defense. Year-to-date, orders are up 13%, with services up 31%. In Q3, revenue grew 26%, and profit was $2.3 billion, also up 26%, driven by strong deliveries across aftermarket, OE, and defense. This supported 44% growth in EPS to $1.66 and over 130% free cash flow conversion. In commercial engines and services, or CES, we're servicing and growing the industry's most extensive commercial installed base. Services demand remains robust, with orders up 32% and services revenue up 28%, as improved material availability helped fulfill customer demand, driving total CES operating profit growth of 35% year-on-year. In defense and propulsion technologies, or DPT, we're improving delivery of our leading platforms while developing mission-critical technology.

Orders were up 2%, with solid growth in commercial services, partially offset by the timing of equipment orders in commercial equipment and defense. Year-to-date, orders are up 13%, with services up 31%. In Q3, revenue grew 26%, and profit was $2.3 billion, also up 26%, driven by strong deliveries across aftermarket, OE, and defense. This supported 44% growth in EPS to $1.66 and over 130% free cash flow conversion. In commercial engines and services, or CES, we're servicing and growing the industry's most extensive commercial installed base. Services demand remains robust, with orders up 32% and services revenue up 28%, as improved material availability helped fulfill customer demand, driving total CES operating profit growth of 35% year-on-year. In defense and propulsion technologies, or DPT, we're improving delivery of our leading platforms while developing mission-critical technology.

Larry Culp: Orders were up 2%, with solid growth in commercial services, partially offset by the timing of equipment orders in commercial equipment and defense. Year-to-date, orders are up 13%, with services up 31%. In the third quarter, revenue grew 26%, and profit was $2.3 billion, also up 26%, driven by strong deliveries across aftermarket, OE, and defense. This supported 44% growth in EPS to $1.66 and over 130% free cash flow conversion. In Commercial Engines and Services, or CES, we're servicing and growing the industry's most extensive commercial installed base. Services demand remains robust, with orders up 32% and services revenue up 28%, as improved material availability helped fulfill customer demand, driving total CES operating profit growth of 35% year on year. In Defense and Propulsion Technologies, or DPT, we're improving delivery of our leading platforms while developing mission-critical technology.

Speaker #3: Year-to-date, orders are up 13%, with services up 31%. In the third quarter, revenue grew 26%, and profit was $2.3 billion, also up 26%. This growth was driven by strong deliveries across aftermarket, OE, and defense.

Speaker #3: This supported 44% growth in EPS to $1.66 and over 130% free cash flow conversion. In Commercial Engines and Services, or CES, we're servicing and growing the industry's most extensive commercial installed base.

Speaker #3: Services demand remains robust, with orders up 32% and services revenue up 28%. Improved material availability helped fulfill customer demand, driving total CES operating profit growth of 35% year-on-year.

Speaker #3: In Defense and Propulsion Technologies, or DPT, we're improving the delivery of our leading platforms while developing mission-critical technology. We delivered very solid results, with higher output supporting revenue growth of 26%, and profit up 75%.

Larry Culp: We delivered very solid results, with higher output supporting revenue growth of 26%, with profit up 75%. Given our year-to-date results, combined with our Q4 expectations, we're raising our full-year guidance across the board. I want to thank our team and our supplier partners for delivering for our customers and for another quarter of strong performance. Shifting to slide 5, we continue to experience significant demand for our services and products, and we're encouraged by how Flight Deck is taking hold across the supply chain to deliver on our roughly $175 billion backlog. Much of this improvement is due to the progress within our technology and operations team, bringing together our safety, quality, engineering, supply chain, and manufacturing teams to hardwire problem-solving, resulting in improved delivery for our customers.

We delivered very solid results, with higher output supporting revenue growth of 26%, with profit up 75%. Given our year-to-date results, combined with our Q4 expectations, we're raising our full-year guidance across the board. I want to thank our team and our supplier partners for delivering for our customers and for another quarter of strong performance. Shifting to slide 5, we continue to experience significant demand for our services and products, and we're encouraged by how Flight Deck is taking hold across the supply chain to deliver on our roughly $175 billion backlog. Much of this improvement is due to the progress within our technology and operations team, bringing together our safety, quality, engineering, supply chain, and manufacturing teams to hardwire problem-solving, resulting in improved delivery for our customers.

Larry Culp: We delivered very solid results with higher output, supporting revenue growth of 26%, with profit up 75%. Given our year-to-date results combined with our fourth quarter expectations, we're raising our full-year guidance across the board. I want to thank our team and our supplier partners for delivering for our customers and for another quarter of strong performance. Shifting to slide five, we continue to experience significant demand for our services and products, and we're encouraged by how FlightDeck is taking hold across the supply chain to deliver on our roughly $175 billion backlog. Much of this improvement is due to the progress within our technology and operations team, bringing together our safety, quality, engineering, supply chain, and manufacturing teams to hardwire problem-solving, resulting in an improved delivery for our customers.

Speaker #3: Given our year-to-date results, combined with our fourth-quarter expectations, we're raising our full-year guidance across the board. I want to thank our team and our supplier partners for delivering for our customers and for another quarter of strong performance.

Speaker #3: Shifting to slide five, we continue to experience significant demand for our services and products, and we're encouraged by how Flight Deck is taking hold across the supply chain to deliver on our roughly $175 billion backlog.

Speaker #3: Much of this improvement is due to the progress made within our Technology and Operations team. By bringing together our Safety, Quality, Engineering, Supply Chain, and Manufacturing teams, we have hardwired problem-solving, resulting in improved delivery for our customers.

Speaker #3: Our team is working better cross-functionally to deliver improved outcomes, and in turn, accelerate the same type of collaboration with our supply base. For example, this quarter we partnered with a critical supplier to address several key constraints utilizing flight deck tools such as problem-solving, 5S, and standard work.

Larry Culp: Our team is working better cross-functionally to deliver improved outcomes and, in turn, accelerating the same type of collaboration with our supply base. For example, this quarter, we partnered with a critical supplier to address several key constraints utilizing Flight Deck tools, such as problem-solving, 5S, and standard work. This resulted in the supplier improving first-time yields meaningfully and, in turn, delivering a more than 2x increase in their output. Our priority suppliers also continue to improve shipments against their targets, shipping more than 95% of committed volume for the third consecutive quarter. Greater stability enables us to meet our commitments. As a result of these actions, material input from our priority suppliers continues to grow, up 35% year-over-year and up high single digits sequentially.

Our team is working better cross-functionally to deliver improved outcomes and, in turn, accelerating the same type of collaboration with our supply base. For example, this quarter, we partnered with a critical supplier to address several key constraints utilizing Flight Deck tools, such as problem-solving, 5S, and standard work. This resulted in the supplier improving first-time yields meaningfully and, in turn, delivering a more than 2x increase in their output. Our priority suppliers also continue to improve shipments against their targets, shipping more than 95% of committed volume for the third consecutive quarter. Greater stability enables us to meet our commitments. As a result of these actions, material input from our priority suppliers continues to grow, up 35% year-over-year and up high single digits sequentially.

Larry Culp: Our team is working better cross-functionally to deliver improved outcomes, in turn, accelerating the same type of collaboration with our supply base. For example, this quarter, we partnered with a critical supplier to address several key constraints utilizing FlightDeck tools such as problem-solving, 5S, and standard work. This resulted in the supplier improving first-time yields meaningfully, in turn, delivering a more than 2X increase in their output. Our priority suppliers also continue to improve shipments against their targets, shipping more than 95% of committed volume for the third consecutive quarter. Greater stability enables us to meet our commitments. As a result of these actions, material input from our priority suppliers continues to grow, up 35% year over year and up high single digits sequentially.

Speaker #3: This resulted in the supplier improving first-time yields meaningfully, and in turn, delivering a more than 2X increase in their output. Our priority suppliers also continue to improve shipments against their targets, shipping more than 95% of committed volume for the third consecutive quarter.

Speaker #3: Greater stability enables us to meet our commitments. As a result of these actions, material input from our priority suppliers continues to grow, up 35% year-over-year, and up in the high single digits sequentially.

Speaker #3: And we continue to advance on our durability roadmap. With our next iteration of the Leap 1A HPT blade now in production, that will further enhance output.

Larry Culp: We continue to advance on our durability roadmap with our next iteration of the LEAP 1A HPT blade now in production, and that will further enhance output. As you can see, operational momentum is building, leading to significant growth. CES services revenue was up 28%, with internal shop visit revenue up 33% and spare parts revenue up more than 25% year over year. Total engine deliveries were up 41% year over year and 18% sequentially. Commercial units were up 33%, including record LEAP deliveries, up 40% year over year in the third quarter. Year-to-date, commercial units were up 19%, with LEAP up 21%. Based on this progress, we now expect to grow LEAP deliveries more than 20% for the full year, up from our prior outlook of 15% to 20%. Defense units were up 83% year over year, marking the second consecutive quarter of defense output exceeding 80% growth.

Larry Culp: We continue to advance on our durability roadmap with our next iteration of the LEAP-1A HPT blade now in production, and that will further enhance output. As you can see, operational momentum is building, leading to significant growth. CES services revenue was up 28%, with internal shop visit revenue up 33%, and spare parts revenue up more than 25% year-over-year. Total engine deliveries were up 41% year-over-year and 18% sequentially. Commercial units were up 33%, including record LEAP deliveries, up 40% year-over-year in Q4. Year-to-date, commercial units were up 19%, with LEAP up 21%. Based on this progress, we now expect to grow LEAP deliveries more than 20% for the full year, up from our prior outlook of 15% to 20%. Defense units were up 83% year-over-year, marking the second consecutive quarter of defense output exceeding 80% growth.

We continue to advance on our durability roadmap with our next iteration of the LEAP-1A HPT blade now in production, and that will further enhance output. As you can see, operational momentum is building, leading to significant growth. CES services revenue was up 28%, with internal shop visit revenue up 33%, and spare parts revenue up more than 25% year-over-year. Total engine deliveries were up 41% year-over-year and 18% sequentially. Commercial units were up 33%, including record LEAP deliveries, up 40% year-over-year in Q4. Year-to-date, commercial units were up 19%, with LEAP up 21%. Based on this progress, we now expect to grow LEAP deliveries more than 20% for the full year, up from our prior outlook of 15% to 20%. Defense units were up 83% year-over-year, marking the second consecutive quarter of defense output exceeding 80% growth.

Speaker #3: As you can see, operational momentum is building, leading to significant growth. CES services revenue was up 28%, with internal shop visit revenue up 33%, and spare parts revenue up more than 25% year-over-year.

Speaker #3: Total engine deliveries were up 41% year-over-year and 18% sequentially. Commercial units were up 33%, including record leap deliveries. They were up 40% year-over-year in the third quarter.

Speaker #3: Year-to-date, commercial units are up 19%, with Leap up 21%. Based on this progress, we now expect to grow Leap deliveries more than 20% for the full year, up from our prior outlook of 15% to 20%.

Speaker #3: Defense units were up 83% year-over-year, marking the second consecutive quarter of defense output exceeding 80% growth. Additionally, while CFM56 continues to fly for longer, and with the fleet size expected to triple by 2030, the flight deck is also helping us expand our capacity and capabilities to reduce turnaround times and improve shop visit output.

Larry Culp: Additionally, while CFM56 continues to fly for longer and with LEAP's fleet size expected to triple by 2030, Flight Deck is also helping us expand our capacity and capabilities to reduce turnaround times and improve shop visit output, two top priorities to meet the demands of our customers. For example, we've made progress with LEAP turnaround time at our Malaysia MRO shop. Our team there improved flow and delivered a 30% reduction in engine disassembly time. As a result of actions like these, total LEAP internal shop visit output grew by more than 30% in Q4. We're also investing in incremental capacity to support our customers' growing fleets. This quarter, our XEOS MRO facility in Poland completed its first LEAP shop visits. Our LEAP Q3 MRO network also continues to grow rapidly, with external shop visits up roughly twofold.

Additionally, while CFM56 continues to fly for longer and with LEAP's fleet size expected to triple by 2030, Flight Deck is also helping us expand our capacity and capabilities to reduce turnaround times and improve shop visit output, two top priorities to meet the demands of our customers. For example, we've made progress with LEAP turnaround time at our Malaysia MRO shop. Our team there improved flow and delivered a 30% reduction in engine disassembly time. As a result of actions like these, total LEAP internal shop visit output grew by more than 30% in Q4. We're also investing in incremental capacity to support our customers' growing fleets. This quarter, our XEOS MRO facility in Poland completed its first LEAP shop visits. Our LEAP Q3 MRO network also continues to grow rapidly, with external shop visits up roughly twofold.

Larry Culp: Additionally, while CFM56 continues to fly for longer and with LEAP's fleet size expected to triple by 2030, FlightDeck is also helping us expand our capacity and capabilities to reduce turnaround times and improve shop visit output, two top priorities to meet the demands of our customers. For example, we've made progress with LEAP turnaround time at our Malaysia MRO shop. Our team there improved flow and delivered a 30% reduction in engine disassembly time. As a result of actions like these, total LEAP internal shop visit output grew by more than 30% in the third quarter. We're also investing in incremental capacity to support our customers' growing fleets. This quarter, our ZEOS MRO facility in Poland completed its first LEAP shop visits, and our LEAP third-party MRO network also continues to grow rapidly, with external shop visits up roughly twofold.

Speaker #3: Two top priorities to meet the demands of our customers. For example, we've made progress with leap turnaround time at our Malaysia MRO shop. Our team there improved flow and delivered a 30% reduction in engine disassembly time.

Speaker #3: As a result of actions like these, total LEAP internal shop visit output grew by more than 30% in the third quarter. We're also investing in incremental capacity to support our customers' growing fleets.

Speaker #3: This quarter, our ZEOS MRO facility in Poland completed its first Leap shop visits. Our Leap third-party MRO network also continues to grow rapidly, with external shop visits up roughly twofold.

Larry Culp: In addition, we collaborated with our leasing partner for LEAP to reduce the time it takes to redeploy spare engines between customers, resulting in improved spare engine availability. We're also investing nearly $1 billion in our supply chain to expand capacity, and we're counting on our suppliers to also make like investments to support the growth ahead. While this is progress, we know there's much more work to do to improve LEAP turnaround times to meet customer expectations. We're accelerating our use of FlightDeck, taking lessons learned and applying them across our network to deliver a better experience for our customers. This quarter clearly marked another step forward, with year-to-date commercial services revenue and total engine deliveries both up 25%. We're well-positioned to ramp further as we go into 2026.

Larry Culp: In addition, we collaborated with our leasing partner for LEAP to reduce the time it takes to redeploy spare engines between customers, resulting in improved spare engine availability. We're also investing nearly $1 billion in our supply chain to expand capacity, and we're counting on our suppliers to also make like investments to support the growth ahead. While this is progress, we know there is much more work to do to improve LEAP turnaround times to meet customer expectations. We're accelerating our use of Flight Deck, taking lessons learned and applying them across our network to deliver a better experience for our customers. This quarter clearly marked another step forward with year-to-date commercial services revenue and total engine deliveries both up 25%. We're well-positioned to ramp further as we go into 2026.

In addition, we collaborated with our leasing partner for LEAP to reduce the time it takes to redeploy spare engines between customers, resulting in improved spare engine availability. We're also investing nearly $1 billion in our supply chain to expand capacity, and we're counting on our suppliers to also make like investments to support the growth ahead. While this is progress, we know there is much more work to do to improve LEAP turnaround times to meet customer expectations. We're accelerating our use of Flight Deck, taking lessons learned and applying them across our network to deliver a better experience for our customers. This quarter clearly marked another step forward with year-to-date commercial services revenue and total engine deliveries both up 25%. We're well-positioned to ramp further as we go into 2026.

Larry Culp: Turning to slide six, one of the FlightDeck behaviors that guides our company is to be customer-driven in all that we do. Earlier this month, at our GE Aerospace Research Center, we had the opportunity to share how our experience across 2.3 billion flight hours and our roughly $3 billion of annual R&D investment is enabling continuous improvement in our field performance. For reference, we've posted these materials on our Investor Relations website, and I encourage you to take a look. We're applying insights from our experience and investments to improve reliability and durability of our products as time on wing remains critical for our customers. For example, the lessons learned from 15 years of enhancing the GEnx durability over 2X are being applied to LEAP to achieve the same level of improvement.

Larry Culp: Turning to slide 6, one of the Flight Deck behaviors that guides our company is to be customer-driven in all that we do. Earlier this month at our GE Aerospace Research Center, we had the opportunity to share how our experience across 2.3 billion flight hours and our roughly $3 billion of annual R&D investment is enabling continuous improvement in our field performance. For reference, we've posted these materials on our investor relations website, and I encourage you to take a look. We're applying insights from our experience and investments to improve reliability and durability of our products as time on wing remains critical for our customers. For example, the lessons learned from 15 years of enhancing the GEnx durability over 2x are being applied to LEAP to achieve the same level of improvement.

Turning to slide 6, one of the Flight Deck behaviors that guides our company is to be customer-driven in all that we do. Earlier this month at our GE Aerospace Research Center, we had the opportunity to share how our experience across 2.3 billion flight hours and our roughly $3 billion of annual R&D investment is enabling continuous improvement in our field performance. For reference, we've posted these materials on our investor relations website, and I encourage you to take a look. We're applying insights from our experience and investments to improve reliability and durability of our products as time on wing remains critical for our customers. For example, the lessons learned from 15 years of enhancing the GEnx durability over 2x are being applied to LEAP to achieve the same level of improvement.

Larry Culp: We're increasing our investments in LEAP services technologies, such as our analytics-based maintenance, which predicts the optimal time for a shop visit and repairs, which reduce reliance on new material, benefiting both cost of ownership and turnaround times. Combined with our progress on delivery, we're actively working to meet customer expectations on LEAP. We're also applying similar lessons from GEnx and LEAP durability to our next generation of engines. We just launched our second dust test on the GE 9X, which will continue to mature the design pre-entry into service. This builds upon over 30,000 cycles of testing, including 9,000 endurance cycles, which will make the GE 9X the most tested engine in our history. Earlier this month, we began similar dust testing on next-generation HPT blades for our RISE Compact Core development. This marks the earliest we've ever started this type of testing and development.

Larry Culp: We're increasing our investments in LEAP services technologies, such as our analytics-based maintenance, which predicts the optimal time for a shop visit, and repairs which reduce reliance on new material, benefiting both cost of ownership and turnaround times. Combined with our progress on delivery, we're actively working to meet customer expectations on LEAP. We're also applying similar lessons from GEnx and LEAP durability to our next generation of engines. We just launched our second dust test on the GE9X, which will continue to mature the design pre-entry into service. This builds upon over 30,000 cycles of testing, including 9,000 endurance cycles, which will make the GE9X the most tested engine in our history. Earlier this month, we began similar dust testing on next-generation HPT blades for our RISE Compact Core development. This marks the earliest we've ever started this type of testing and development.

We're increasing our investments in LEAP services technologies, such as our analytics-based maintenance, which predicts the optimal time for a shop visit, and repairs which reduce reliance on new material, benefiting both cost of ownership and turnaround times. Combined with our progress on delivery, we're actively working to meet customer expectations on LEAP. We're also applying similar lessons from GEnx and LEAP durability to our next generation of engines. We just launched our second dust test on the GE9X, which will continue to mature the design pre-entry into service. This builds upon over 30,000 cycles of testing, including 9,000 endurance cycles, which will make the GE9X the most tested engine in our history. Earlier this month, we began similar dust testing on next-generation HPT blades for our RISE Compact Core development. This marks the earliest we've ever started this type of testing and development.

Earlier this month, we began similar dust testing on Next Generation HPT blades for our IES compact court development.

Larry Culp: While we're investing in Compact Core to mature RISE technologies, there could be applications of these learnings for today's fleet as well. We recently announced the first-ever chief mechanic and architect for our Open Fan technology, making durability a top priority in engine design with an uncompromising commitment to safety. Our focus on delivering for our customers across current and future platforms is driving success in the marketplace. And a couple of key wins this quarter. Of note, Korean Air announced the largest fleet commitment in its history with 103 Boeing aircraft powered by GEnx, GE9X, and LEAP-1B engines, plus long-term services. We also secured a commitment from Cathay Pacific for GE9X engines to power 14 additional 777-9s, bringing their total commitment to 35 777Xs aircraft powered by our GE9X.

While we're investing in Compact Core to mature RISE technologies, there could be applications of these learnings for today's fleet as well. We recently announced the first-ever chief mechanic and architect for our Open Fan technology, making durability a top priority in engine design with an uncompromising commitment to safety. Our focus on delivering for our customers across current and future platforms is driving success in the marketplace. And a couple of key wins this quarter. Of note, Korean Air announced the largest fleet commitment in its history with 103 Boeing aircraft powered by GEnx, GE9X, and LEAP-1B engines, plus long-term services. We also secured a commitment from Cathay Pacific for GE9X engines to power 14 additional 777-9s, bringing their total commitment to 35 777Xs aircraft powered by our GE9X.

Larry Culp: While we're investing in Compact Core to mature RISE technologies, there could be applications of these learnings for today's fleet as well. We recently announced the first-ever Chief Mechanic and Architect for our open fan technology, making durability a top priority in engine design with an uncompromising commitment to safety. Our focus on delivering for our customers across current and future platforms is driving success in the marketplace. A couple of key wins this quarter. Of note, Korean Air announced the largest fleet commitment in its history, with 103 Boeing aircraft powered by GEnx, GE 9X, and LEAP 1B engines, plus long-term services. We also secured a commitment from Cathay Pacific for GE 9X engines to power 14 additional 777Xs, bringing their total commitment to 35 777X aircraft powered by our GE 9X.

This marks the earliest we've ever started this type of testing in development.

While we're investing in compact core to mature rice technologies, there could be applications of these learnings for today's fleet as well.

4-hour open fans technology. Making durability a top priority in engine design with an uncompromising commitment to safety.

Our focus on delivering for our customers across current and future platforms is driving success.

In the marketplace.

And a couple of key wins this quarter of note: Korean Air announced the largest fleet commitment in its history with 103 Boeing aircraft powered by GE's GE9X and LEAP-1B engines.

Plus long-term services.

We also secured a commitment from Cathay Pacific for GE9X engines to power 1,479, bringing their total commitment to 35 Triple 7X aircraft.

Larry Culp: These wins build upon our solid backlog, and we're sold out, in effect, both on LEAP and GEnx through the rest of this decade. Stepping back, we know our customers are counting on us to deliver reliability, predictability, time on wing, and at the right cost of ownership. With Flight Deck, we're making daily progress to meet those objectives, supporting their and our growth. Rahul, over to you. Larry, thank you. And good morning, everyone. GE Aerospace delivered another strong quarter marked by robust services growth and an improvement in engine deliveries, driving substantial earnings and free cash flow. Revenue was $11.3 billion, up 26%, with both segments growing over 25%. Operating profit was $2.3 billion, up 26%. Services volume, price, and productivity were partially offset by OE growth, investments, and higher corporate cost.

These wins build upon our solid backlog, and we're sold out, in effect, both on LEAP and GEnx through the rest of this decade. Stepping back, we know our customers are counting on us to deliver reliability, predictability, time on wing, and at the right cost of ownership. With Flight Deck, we're making daily progress to meet those objectives, supporting their and our growth. Rahul, over to you.

Larry Culp: These wins build upon our solid backlog, and we're sold out in effect both on LEAP and GEnx through the rest of this decade. Stepping back, we know our customers are counting on us to deliver reliability, predictability, time on wing, and at the right cost of ownership. With FlightDeck, we're making daily progress to meet those objectives, supporting their and our growth. Rahul, over to you.

These winds will build upon our solid backlog.

And we're sold out, in effect, both on lead and GNX.

Through the rest of this decade.

Stepping back, we know our customers are counting on us to deliver reliability, predictability, time on wing, and at the right cost of ownership.

With Flight Deck, we're making daily progress to meet those objectives, supporting their and our growth.

Rahul Ghai: Larry, thank you. And good morning, everyone. GE Aerospace delivered another strong quarter marked by robust services growth and an improvement in engine deliveries, driving substantial earnings and free cash flow. Revenue was $11.3 billion, up 26%, with both segments growing over 25%. Operating profit was $2.3 billion, up 26%. Services volume, price, and productivity were partially offset by OE growth, investments, and higher corporate cost.

Rahul Ghai: Larry, thank you. Good morning, everyone. GE Aerospace delivered another strong quarter, marked by robust services growth and an improvement in engine deliveries, driving substantial earnings and free cash flow. Revenue was $11.3 billion, up 26%, with both segments growing over 25%. Operating profit was $2.3 billion, up 26%. Services volume, price, and productivity were partially offset by OE growth, investments, and higher corporate cost. Operating margins were flat at 20.3%, with margin expansion in both segments offset by corporate cost timing. Adjusted EPS was $1.66, up 44%, from increased operating profit, a lower tax rate, and a reduced share count. Free cash flow was $2.4 billion, up 30%, from higher earnings with over 130% conversion. Working capital and AD&A combined increased by roughly $300 million from increased inventory. Cash flow from long-term service agreements continued to be favorable, and day sales outstanding declined three days year over year.

Rahul, over to you. Larry, thank you and good morning everyone. G Aerospace delivered another strong quarter marked by robust services growth and an improvement in engine deliveries.

Driving substantial earnings and free cash flow.

Revenue was $11.3 billion, up 26%, with both segments growing over 25%.

Operating profit was $2.3 billion, up 26%.

Larry Culp: Operating margins were flat at 20.3%, with margin expansion in both segments offset by corporate cost timing. Adjusted EPS was $1.66, up 44% from increased operating profit, a lower tax rate, and a reduced share count. Free cash flow was $2.4 billion, up 30% from higher earnings with over 130% conversion. Working capital and AD&A combined increased by roughly $300 million from increased inventory. Cash flow from long-term service agreements continued to be favorable, and day sales outstanding declined three days year-over-year. Year-to-date, revenue is up 21%, and operating profit is up more than $1.5 billion from 25% growth in commercial services. We have delivered $5.9 billion of free cash flow, up nearly $1.3 billion year-over-year at 115% of net income. Given the momentum during the first nine months, we are poised to deliver another solid year, going deeper into the drivers of 44% year-over-year EPS growth.

Operating margins were flat at 20.3%, with margin expansion in both segments offset by corporate cost timing. Adjusted EPS was $1.66, up 44% from increased operating profit, a lower tax rate, and a reduced share count. Free cash flow was $2.4 billion, up 30% from higher earnings with over 130% conversion. Working capital and AD&A combined increased by roughly $300 million from increased inventory. Cash flow from long-term service agreements continued to be favorable, and day sales outstanding declined three days year-over-year. Year-to-date, revenue is up 21%, and operating profit is up more than $1.5 billion from 25% growth in commercial services. We have delivered $5.9 billion of free cash flow, up nearly $1.3 billion year-over-year at 115% of net income. Given the momentum during the first nine months, we are poised to deliver another solid year, going deeper into the drivers of 44% year-over-year EPS growth.

Services volume, price, and productivity were partially offset by OE growth investments and higher corporate costs.

Operating margins were flat at 20.3%. Margin expansion in both segments was offset by corporate cost timing.

Adjusted EPS was $1.66, up 44% from increased operating profit, a lower tax rate, and a reduced share count.

Free cash flow was $2.4 billion, up 30% from higher earnings, with over 130% conversion.

Working capital and ADNA combined increased by roughly $300 million from increased inventory.

Rahul Ghai: Year-to-date, revenue is up 21%, and operating profit is up more than $1.5 billion, from 25% growth in commercial services. We have delivered $5.9 billion of free cash flow, up nearly $1.3 billion year over year at 115% of net income. Given the momentum during the first nine months, we are poised to deliver another solid year. Going deeper into the drivers of 44% year-over-year EPS growth, increase in operating profit drove nearly $0.35 or 70% of the improvement in EPS, with increased segment profit in CES and DPT partially offset by higher corporate and other costs of roughly $300 million. The increase in corporate was primarily from timing of reserves for environmental, health, and safety expenses. Eliminations were roughly $140 million, up about $30 million year over year.

Cash flow from long-term service agreements continued to be favorable, and sales outstanding declined by 3 days year over year.

Year-to-date revenues are up 21%, and operating profit is up more than $1.5 billion from 25% growth in Commercial Services.

We have delivered $5.9 billion of free cash flow, up nearly $1.3 billion year-over-year, at 115% of net income.

Given the momentum during the first nine months, we are poised to deliver another solid year.

Larry Culp: Increase in operating profit drove nearly $0.35, or 70% of the improvement in EPS, with increased segment profit in CES and DPT partially offset by higher corporate and other costs of roughly $300 million. The increase in corporate was primarily from timing of reserves for environmental, health, and safety expenses. Eliminations were roughly $140 million, up about $30 million year-over-year. Additionally, our tax rate declined from approximately 20% to 15% from benefits of long-term planning projects and timing of favorable audit settlements, improving EPS by $0.10. Impact from stock buyback actions and reduction in interest expense also contributed to EPS growth. Taking a closer look at our businesses, starting with CES in the quarter, orders were up 5%, with services up 32% and equipment down 42% due to timing of some wide body and regional orders shifting from Q3 to Q4.

Increase in operating profit drove nearly $0.35, or 70% of the improvement in EPS, with increased segment profit in CES and DPT partially offset by higher corporate and other costs of roughly $300 million. The increase in corporate was primarily from timing of reserves for environmental, health, and safety expenses. Eliminations were roughly $140 million, up about $30 million year-over-year. Additionally, our tax rate declined from approximately 20% to 15% from benefits of long-term planning projects and timing of favorable audit settlements, improving EPS by $0.10. Impact from stock buyback actions and reduction in interest expense also contributed to EPS growth. Taking a closer look at our businesses, starting with CES in the quarter, orders were up 5%, with services up 32% and equipment down 42% due to timing of some wide body and regional orders shifting from Q3 to Q4.

Going deeper into the drivers of 44% year-over-year EPS growth.

An increase in operating profit drove nearly 35 cents, or 70% of the improvement in EPS, with increased segment profit in CES and DPT, partially offset by higher corporate and other costs of roughly $300 million.

The increase in corporate expenses was primarily due to the timing of reserves for environmental health and safety expenses.

Rahul Ghai: Additionally, our tax rate declined from approximately 20% to 15% from benefits of long-term planning projects and timing of favorable audit settlements, improving EPS by $0.10. Impact from stock buyback actions and reduction in interest expense also contributed to EPS growth. Taking a closer look at our businesses, starting with CES in the quarter, orders were up 5%, with services up 32% and equipment down 42% due to timing of some wide-body and regional orders shifting from Q3 to Q4. Revenue was 27%, and with services up 28%, internal shop visit revenue grew 33% from higher volume, wide-body work scopes, and price. Spare parts sales were up over 25% as improved material availability supported increased output. Equipment revenue grew 22%, with engine deliveries up 33%, including LEAP up 40%. This more than offset a sequential and a year-over-year decline in spare engine ratio.

Eliminations for roughly $140 million, up about $30 million year over year.

Additionally, our tax rate declined from approximately 20% to 15% due to the benefits of long-term planning projects and the timing of favorable audit settlements, improving EPS by $0.10.

Impact from stock buyback actions and reduction in interest expense also contributed to EPS growth.

Taking a closer look at our businesses.

Starting with CES in the quarter.

Larry Culp: Revenue was 27%, and with services up 28%. Internal shop visit revenue grew 33% from higher volume, wide body work scopes, and price. Spare part sales were up over 25% as improved material availability supported increased output. Equipment revenue grew 22%, with engine deliveries up 33%, including LEAP up 40%. This more than offset a sequential and a year-over-year decline in spare engine ratio. Life of program, the spare engine ratio for LEAP remains in low double digits. Profit was $2.4 billion, up 35%. Services margins were strong, driven by higher volume, price, and a favorable shop visit and spare parts mix. This more than offset the impact of higher installed deliveries, including 9X shipments and an increase in R&D spend. Segment margins expanded 170 basis points to 27.4%, with services revenue growth, mix, and price more than offsetting OE growth and impact from adverse mix.

Revenue was 27%, and with services up 28%. Internal shop visit revenue grew 33% from higher volume, wide body work scopes, and price. Spare part sales were up over 25% as improved material availability supported increased output. Equipment revenue grew 22%, with engine deliveries up 33%, including LEAP up 40%. This more than offset a sequential and a year-over-year decline in spare engine ratio. Life of program, the spare engine ratio for LEAP remains in low double digits. Profit was $2.4 billion, up 35%. Services margins were strong, driven by higher volume, price, and a favorable shop visit and spare parts mix. This more than offset the impact of higher installed deliveries, including 9X shipments and an increase in R&D spend. Segment margins expanded 170 basis points to 27.4%, with services revenue growth, mix, and price more than offsetting OE growth and impact from adverse mix.

Orders were up 5%, with Services up 32% and Equipment down 42% due to the timing of some wide-body and regional orders, shifting from Q3 to Q4.

Revenue was 27%.

As with Services, up 28%, internal shop visit revenue grew 33%, from higher volume wide-body work scopes and price.

Square path sales were up over 25% as improved material availability supported increased output.

40%.

Rahul Ghai: Life of program, the spare engine ratio for LEAP remains in low double digits. Profit was $2.4 billion, up 35%. Services margins were strong, driven by higher volume, price, and a favorable shop visit and spare parts mix. This more than offset the impact of higher install deliveries, including GE 9X shipments and an increase in R&D spend. Segment margins expanded 170 basis points to 27.4%, with services revenue growth, mix, and price more than offsetting OE growth and impact from adverse mix. Year-to-date, CES has delivered revenue growth of 24%, operating profit of $6.6 billion, up $1.7 billion year over year, with margin expansion of 210 basis points, while delivering around a 20% increase in engine shipments. Moving to DPT, orders were down 5% due to timing across quarters. Defense book-to-bill remained above 1 in the quarter and is 1.2 year-to-date.

This more than offset a sequential and a year-over-year decline in spare engine ratio.

The spare engine ratio for LEAP remains in low double digits.

Profit was $2.4 billion, up 35%.

Services margins were strong, driven by higher volume, price, and a favorable, sharp visit and spare parts mix.

This more than offset the impact of higher installed deliveries, including 9x shipments, and an increase in R&D spend.

Segment margins expanded 170 basis points to 27.4%.

Larry Culp: Year-to-date, CES has delivered revenue growth of 24%, operating profit of $6.6 billion, up $1.7 billion year-over-year with margin expansion of 210 basis points, while delivering around 20% increase in engine shipments. Moving to DPT, orders were down 5% due to timing across quarters. Defense book-to-bill remained above 1 in the quarter and is 1.2 year-to-date. Our total DPT backlog is at $19 billion, up $1.5 billion year-over-year. Revenue grew 26% in the quarter. Defense and systems revenue was up 24%, driven by higher engines volume, up 83% year-over-year and improved pricing. Propulsion and additive technologies grew 29%, with all businesses growing over 20%. Profit of $386 million was up 75% year-over-year. Higher volume in defense and R&O, customer mix, price, and lowered losses at additive offset continued investments and inflation. Margin expanded 380 basis points to 13.6%.

Year-to-date, CES has delivered revenue growth of 24%, operating profit of $6.6 billion, up $1.7 billion year-over-year with margin expansion of 210 basis points, while delivering around 20% increase in engine shipments. Moving to DPT, orders were down 5% due to timing across quarters. Defense book-to-bill remained above 1 in the quarter and is 1.2 year-to-date. Our total DPT backlog is at $19 billion, up $1.5 billion year-over-year. Revenue grew 26% in the quarter. Defense and systems revenue was up 24%, driven by higher engines volume, up 83% year-over-year and improved pricing. Propulsion and additive technologies grew 29%, with all businesses growing over 20%. Profit of $386 million was up 75% year-over-year. Higher volume in defense and R&O, customer mix, price, and lowered losses at additive offset continued investments and inflation. Margin expanded 380 basis points to 13.6%.

With services, revenue growth, mix, and price more than offsetting OE growth and the impact from adverse mix.

Year-to-date, CS has delivered revenue growth of 24%.

Operating profit of $6.6 billion is up $1.7 billion year-over-year, with margin expansion of 210 basis points.

While delivering around a 20% increase in engine shipments.

Moving to DPT.

Orders were down 5% due to timing across quarters.

Rahul Ghai: Our total DPT backlog is at $19 billion, up $1.5 billion year over year. Revenue grew 26% in the quarter. Defense and systems revenue was up 24%, driven by higher engines volume, up 83% year over year, and improved pricing. Propulsion and additive technologies grew 29%, with all businesses growing over 20%. Profit of $386 million was up 75% year over year. Higher volume in defense and avio, customer mix, price, and lowered losses at additive offset continued investments and inflation. Margins expanded 380 basis points to 13.6%. Year-to-date, DPT has delivered 11% revenue growth, $1 billion of profit, up 27% with 170 basis points of margin expansion. Turning to guidance on slide 11, given the strong year-to-date performance and trajectory entering the fourth quarter, we are raising our full-year guidance across the board. We expect revenue to grow high teens, up from our prior outlook of mid-teens.

Defense spoke to Bill, remaining above 1 in the quarter and at 1.2 year-to-date.

Our total DPD backlog is at $19 billion, up $1.5 billion year-over-year.

Revenue grew 26% in the quarter; Defense and Systems revenue was up 24%.

Driven by higher engine volumes, up 83% year-over-year, and improved pricing.

Propulsion and Additive Technologies grew 29%, with all businesses growing over 20%.

Profit of $386 million was up 75% year-over-year.

In defense at Rio, customer mix, price, and lowered losses at Additive offset continued investments and inflation.

Larry Culp: Year-to-date, DPT has delivered 11% revenue growth, $1 billion of profit, up 27% with 170 basis points of margin expansion. Turning to guidance on slide 11, given the strong year-to-date performance and trajectory entering the fourth quarter, we are raising our full-year guidance across the board. We expect revenue to grow high teens, up from our prior outlook of mid-teens. At CES, we now expect growth of low 20s, up from our prior outlook of high teens. This is driven by higher services revenue, which we now expect to grow low to mid-20s, up from high teens. We continue to expect equipment to grow high teens to 20%. We now expect DPT growth of high single digits, up from mid to high single digits previously. Operating profit is now expected to be in a range of $8.65 to 8.85 billion, up $400 million at the midpoint from the prior guide.

Year-to-date, DPT has delivered 11% revenue growth, $1 billion of profit, up 27% with 170 basis points of margin expansion. Turning to guidance on slide 11, given the strong year-to-date performance and trajectory entering the fourth quarter, we are raising our full-year guidance across the board. We expect revenue to grow high teens, up from our prior outlook of mid-teens. At CES, we now expect growth of low 20s, up from our prior outlook of high teens. This is driven by higher services revenue, which we now expect to grow low to mid-20s, up from high teens. We continue to expect equipment to grow high teens to 20%. We now expect DPT growth of high single digits, up from mid to high single digits previously. Operating profit is now expected to be in a range of $8.65 to 8.85 billion, up $400 million at the midpoint from the prior guide.

Margin expanded 380 basis points to 13.6%.

Year to date, DPT has delivered 11% revenue growth, $1 billion of profit, up 27%, with 170 basis points of margin expansion.

Turning to guidance on slide 11.

Given the strong year-to-date performance and trajectory entering the fourth quarter, we are raising our full-year guidance across the board.

Rahul Ghai: At CES, we now expect growth of low 20s, up from our prior outlook of high teens. This is driven by higher services revenue, which we now expect to grow low to mid-20s, up from high teens. We continue to expect equipment to grow high teens to 20%. We now expect DPT growth of high single digits, up from mid to high single digits previously. Operating profit is now expected to be in a range of $8.65 to $8.85 billion, up $400 million at the midpoint from the prior guide. CES operating profit is now expected to be in a range of $8.45 to $8.65 billion, up $450 million at the midpoint from prior guide. This reflects the drop through from roughly $1 billion improvement in services revenue in the second half versus our prior guide and favorable services mix.

We expect revenue to grow high teens, up from our prior outlook of mid-teens.

At CES, we now expect growth in the low 20s, up from our prior outlook of high teens.

This is driven by higher services revenue, which we now expect to grow in the low to mid-20s, up from the high teens.

We continue to expect equipment to grow in the high teens to 20%.

We now expect DPT growth of high single digits, up from mid to high single digits previously.

Larry Culp: CES operating profit is now expected to be in a range of $8.45 to 8.65 billion, up $450 million at the midpoint from prior guide. This reflects the drop-through from roughly $1 billion improvement in services revenue in the second half versus our prior guide and favorable services mix. We expect DPT profit to be in the $1.2 to 1.3 billion range, up $50 million at the midpoint versus the prior guide, reflecting year-to-date performance from improved deliveries. Corporate cost and eliminations are expected to be roughly $1 billion. Additionally, we are improving our interest expense and tax rate outlook for the year and now expect interest expense of approximately $850 million and tax rate of 17.5%. Taken together, we are raising our EPS guidance to $6 to 6.20, up $0.40 at the midpoint from the prior guide.

CES operating profit is now expected to be in a range of $8.45 to 8.65 billion, up $450 million at the midpoint from prior guide. This reflects the drop-through from roughly $1 billion improvement in services revenue in the second half versus our prior guide and favorable services mix. We expect DPT profit to be in the $1.2 to 1.3 billion range, up $50 million at the midpoint versus the prior guide, reflecting year-to-date performance from improved deliveries. Corporate cost and eliminations are expected to be roughly $1 billion. Additionally, we are improving our interest expense and tax rate outlook for the year and now expect interest expense of approximately $850 million and tax rate of 17.5%. Taken together, we are raising our EPS guidance to $6 to 6.20, up $0.40 at the midpoint from the prior guide.

Operating profit is now expected to be in a range of $8.65 to $8.85 billion, up $400 million at the midpoint from the prior guidance.

CES operating profit is now expected to be in a range of $8.45 billion to $8.165 billion, up $450 million at the midpoint from prior guidance.

Rahul Ghai: We expect DPT profit to be in the $1.2 to $1.3 billion range, up $50 million at the midpoint versus the prior guide, reflecting year-to-date performance from improved deliveries. Corporate cost and eliminations are expected to be roughly $1 billion. Additionally, we are improving our interest expense and tax rate outlook for the year and now expect interest expense of approximately $850 million and tax rate of 17.5%. Taken together, we are raising our EPS guidance to $6 to $6.20, up $0.40 at the midpoint from the prior guide. We are also raising our free cash flow guidance to $7.1 to $7.3 billion, up $500 million at the midpoint, primarily from higher earnings. We are all set to close out another excellent year in 2025 and well-positioned for continued growth heading into 2026. With that, Larry, back to you.

This reflects the drop-through from roughly $1 billion improvement in Services revenue in the second half versus our prior guide and favorable Services mix.

We expect DPT profit to be in the $1.2 to $1.3 billion range.

50 million at the midpoint versus the prior guide.

Reflecting year-to-date performance from improved deliveries.

Corporate costs and eliminations are expected to be roughly $1 billion.

Additionally, we are improving our interest expense and tax rate outlook for the year. We now expect interest expense of approximately $850 million and a tax rate of 17.5%.

Larry Culp: We are also raising our free cash flow guidance to $7.1 to $7.3 billion, up $500 million at the midpoint, primarily from higher earnings. We are all set to close out another excellent year in 2025 and well-positioned for continued growth heading into 2026. With that, Larry, back to you. Rahul, thank you. I'm encouraged by our progress this quarter, which builds upon our leadership positions across both commercial and defense, and in turn supports the improved financial outlook we're sharing today. GE Aerospace has sustained competitive advantages. With the industry's largest fleet, 78,000 engines and growing, we have accumulated over 2.3 billion flight hours and have certified seven commercial engine programs in the last 20 years. This experience base keeps us close to our customers and provides unmatched insights on performance, making us the partner of choice.

We are also raising our free cash flow guidance to $7.1 to $7.3 billion, up $500 million at the midpoint, primarily from higher earnings. We are all set to close out another excellent year in 2025 and well-positioned for continued growth heading into 2026. With that, Larry, back to you.

Taken together, we're raising our EPS guidance to $6.00 to $6.20, up $0.40 at the midpoint from the prior guide.

We are also raising our free cash flow guidance to $7.1 billion to $7.3 billion, an increase of $500 million at the midpoint, primarily from higher earnings.

We are all set to close out another excellent year in 2025.

Larry Culp: Rahul, thank you. I'm encouraged by our progress this quarter, which builds upon our leadership positions across both commercial and defense, and in turn supports the improved financial outlook we're sharing today. GE Aerospace has sustained competitive advantages. With the industry's largest fleet, 78,000 engines and growing, we have accumulated over 2.3 billion flight hours and have certified seven commercial engine programs in the last 20 years. This experience base keeps us close to our customers and provides unmatched insights on performance, making us the partner of choice.

And well positioned for continued growth heading into 2026.

Larry Culp: Rahul, thank you. I'm encouraged by our progress this quarter, which builds upon our leadership positions across both commercial and defense and, in turn, supports the improved financial outlook we're sharing today. GE Aerospace has sustained competitive advantages. With the industry's largest fleet, 78,000 engines and growing, we have accumulated over 2.3 billion flight hours and have certified seven commercial engine programs in the last 20 years. This experience base keeps us close to our customers and provides unmatched insights on performance, making us the partner of choice. We use these insights to continuously improve our services and products, delivering reliability, predictability, time on wing, and lower costs of ownership. We offer the best performing products under wing across our narrow-body, wide-body, regional, and defense platforms.

Thank you.

I'm encouraged by our progress this quarter, which builds upon our leadership positions across both commercial and defense.

And in turn supports the improved financial outlook.

We're sharing today.

GE Aerospace has sustained competitive advantages.

With the industry's largest Fleet.

78,000 engines and growing.

We have accumulated over 2.3 billion flight hours.

And have certified seven commercial engine programs in the last 20 years.

This experience-based approach keeps us close to our customers.

And provides unmatched insights.

Larry Culp: We use these insights to continuously improve our services and products, delivering reliability, predictability, time on wing, and lower costs of ownership. We offer the best-performing products under wing across our narrow-body, wide-body, regional, and defense platforms. Our world-class engineering teams, combined with roughly $3 billion in annual R&D investment, drive next-gen technology to improve durability, efficiency, and turnaround times, along with advanced defense capabilities. And through Flight Deck, we're turning strategy into results with a relentless focus on safety, quality, delivery, and cost, always in that order. The GE Aerospace team is poised to deliver exceptional value to our customers and shareholders, and I'm confident in our path ahead. So with that, let's open it up to questions. Before we open the line, I'd ask everyone in the queue to consider your fellow analysts and ask one question so we can get to as many people as possible.

We use these insights to continuously improve our services and products, delivering reliability, predictability, time on wing, and lower costs of ownership. We offer the best-performing products under wing across our narrow-body, wide-body, regional, and defense platforms. Our world-class engineering teams, combined with roughly $3 billion in annual R&D investment, drive next-gen technology to improve durability, efficiency, and turnaround times, along with advanced defense capabilities. And through Flight Deck, we're turning strategy into results with a relentless focus on safety, quality, delivery, and cost, always in that order. The GE Aerospace team is poised to deliver exceptional value to our customers and shareholders, and I'm confident in our path ahead. So with that, let's open it up to questions.

On performance, making us the partner of choice.

We use these insights to continuously improve our services and products.

Delivering reliability, predictability, time on wing, and lower costs of ownership.

Larry Culp: Our world-class engineering teams, combined with roughly $3 billion in annual R&D investment, drive next-gen technology to improve durability, efficiency, and turnaround times, along with advanced defense capabilities. Through FlightDeck, we're turning strategy into results with a relentless focus on safety, quality, delivery, and cost, always in that order. The GE Aerospace team is poised to deliver exceptional value to our customers and shareholders, and I'm confident in our path ahead. Let's open it up to questions.

We offer the best-performing products under wing across our narrow-body, wide-body, and regional defense platforms.

Our world-class engineering teams, combined with roughly $3 billion in annual R&D investment, drive next-gen technology to improve durability, efficiency, and turnaround times.

Along with Advanced defense capabilities.

And through Flight Deck, we're turning strategy into results.

With a relentless focus on safety, quality, delivery, and cost, always in that order.

The GE Aerospace team is poised to deliver exceptional value to our customers and show shareholders, and I'm confident in our path ahead.

Blaire Shoor: Before we open the line, I'd ask everyone in the queue to consider your fellow analysts and ask one question so we can get to as many people as possible. Dustin, can you please open the line?

So, with that, let's open it up to questions.

Larry Culp: Dustin, can you please open the line? Ladies and gentlemen, if you wish to ask a question, please press star one on your telephone. If you wish to withdraw your question or your question has already been answered, please press star one. Our first question comes from the line of Sheila Kahyaoglu from Jefferies. Please proceed. Good morning. Good morning, Larry. How are you? Good morning, Sheila. Thank you. Maybe if we could peel back the layers behind the services' performance at 25% year-to-date, which is pretty phenomenal, and on a dollar basis, up $750 million sequentially Q3 versus Q2. So how much of that is pure volume unlock through Flight Deck and the supply chain versus tariff, price surcharges, or any other factors that you would say play into it, and why the step down sequentially in Q4? Yeah. Sheila, let me start.

Operator: Ladies and gentlemen, if you wish to ask a question, please press star one on your telephone. If you wish to withdraw your question or your question has already been answered, please press star one. Our first question comes from the line of Sheila Kahyaoglu from Jefferies. Please proceed.

Before we open the line, I'd ask everyone in the queue to consider your fellow analysts and ask one question so we can get to as many people as possible. Dustin, can you please open the line?

[Company Representative]: Ladies and gentlemen, if you wish to ask a question, please press star one on your telephone. If you wish to withdraw your question or your question has already been answered, please press star one. Our first question comes from the line of Sheila Tagliabue from Jefferies. Please proceed.

Ladies and gentlemen, if you wish to ask a question, please press *1 on your telephone.

If you wish to enjoy our question or if your question has already been answered, please press *1.

Our first question comes from the line of Sheila Taylor Blue from Jefferies.

Sheila Kahyaoglu [Managing Director in Equity Research: Good morning. Good morning, Larry. How are you?

[Analyst 1]: Good morning. Good morning, Larry. Rahul Ghai.

Larry Culp: Good morning, Sheila.

[Company Representative]: How are you, Sheila?

Sheila Kahyaoglu [Managing Director in Equity Research: Thank you. Maybe if we could peel back the layers behind the services' performance at 25% year-to-date, which is pretty phenomenal, and on a dollar basis, up $750 million sequentially Q3 versus Q2. So how much of that is pure volume unlock through Flight Deck and the supply chain versus tariff, price surcharges, or any other factors that you would say play into it, and why the step down sequentially in Q4?

[Analyst 1]: Thank you. Maybe if we could peel back the layers behind the services performance, up 25% year-to-date, which is pretty phenomenal, and on a dollar basis, up $750 million sequentially Q3 versus Q2. How much of that is pure volume unlock through FlightDeck and the supply chain versus tariff price surcharges or any other factors that you would say play into it, and why the step down sequentially in Q4?

Um, good morning. Good morning, Larry. Bye.

Rahul Ghai: Yeah. Sheila, let me start. So agree with you, we had a really strong quarter on services. We were expecting high teens growth for the year, and year-to-date results, we are at about 25%. So now we've raised the outlook for the year to be low- to mid-20s% growth. And the improved outlook is both in our shop visit revenue and in the spare parts. So a lot of that from the strength that we observed in the third quarter. So if I start with the shop visits, we've had year-to-date growth of, call it, 22%. And what's driving that, as you hinted at, is improved material availability is driving higher volume. So that's a big piece of that. But along with that, the work scopes continue to increase, so that's helping as well. And the demand environment just continues to be strong.

[Company Representative]: Yeah. Sheila, let me start. I agree with you. We had a really strong quarter on services. We were expecting high teens growth for the year, and year-to-date results, we are at about 25%. Now we've raised the outlook for the year to be low to mid-20s growth. The improved outlook is both in our shop visit revenue and in the spare parts. A lot of that from the strength that we observed in the third quarter. If I start with the shop visits, you know we've had year-to-date growth of, call it, 22%. What's driving that, as you hinted at, is improved material availability is driving higher volume. That's a big piece of that. Along with that, you know the work scopes continue to increase. That's helping as well. The demand environment just continues to be strong.

Thank you. Um, maybe if we could peel back the layers behind the services that performance up 25% year to date, which is pretty phenomenal and on a dollar basis up 750 million sequentially, Q3 versus Q2. So, how much of that is pure volume unlock through Flight Deck. Uh, and the supply chain versus pair of price or charges, or any other factors that you would say, play into it and why the, uh, step down sequentially in Q4.

Yeah.

Larry Culp: So agree with you, we had a really strong quarter on services. We were expecting high teens growth for the year, and year-to-date results, we are at about 25%. So now we've raised the outlook for the year to be low- to mid-20s% growth. And the improved outlook is both in our shop visit revenue and in the spare parts. So a lot of that from the strength that we observed in the third quarter. So if I start with the shop visits, we've had year-to-date growth of, call it, 22%. And what's driving that, as you hinted at, is improved material availability is driving higher volume. So that's a big piece of that. But along with that, the work scopes continue to increase, so that's helping as well. And the demand environment just continues to be strong.

Um, should let me stop. Um, so.

You know, I agree with you. We had a really strong quarter on Services. We were expecting high double-digit growth for the year, and year-to-date results are at about 25%. So now we've raised the outlook for the year; we are looking at mid-20s growth.

Larry Culp: I mean, year-to-date, our inductions have outpaced output even with the results that we have delivered. This improvement in output is especially visible in LEAP. That is up 30% year-to-date, and part of that is the incremental capacity that we've set up for LEAP. On the spare parts, the year-to-date results have been equally strong, growth of more than 25%. Orders have remained strong, as Larry mentioned. Our orders, services, orders growth of greater than 30% year-to-date. But the improved material availability is now helping us achieve those orders and execute on the demand that we are seeing. And as we look at Q4, our backlog still remains strong. 90% of the spare parts that we need to ship in Q4 are in the backlog, which is 15 points higher than where we have been historically.

I mean, year-to-date, our inductions have outpaced output even with the results that we have delivered. This improvement in output is especially visible in LEAP. That is up 30% year-to-date, and part of that is the incremental capacity that we've set up for LEAP. On the spare parts, the year-to-date results have been equally strong, growth of more than 25%. Orders have remained strong, as Larry mentioned. Our orders, services, orders growth of greater than 30% year-to-date. But the improved material availability is now helping us achieve those orders and execute on the demand that we are seeing. And as we look at Q4, our backlog still remains strong. 90% of the spare parts that we need to ship in Q4 are in the backlog, which is 15 points higher than where we have been historically.

[Company Representative]: I mean, year-to-date, our inductions have outpaced output even with the results that we have delivered. This improvement in output is especially visible in LEAP that is up 30% year-to-date. Part of that is the incremental capacity that we've set up for LEAP. On the spare parts, the year-to-date results have been equally strong. You know growth of more than 25%. Orders have remained strong, as Larry mentioned. You know our orders, services orders growth of greater than 30% year-to-date. The improved material availability is now helping us, you know, achieve those orders and execute on the demand that we are seeing. As we look at the fourth quarter, our backlog still remains strong. 90% of the spare parts that we need to ship in the fourth quarter are in the backlog, which is 15 points higher than where we have been historically.

And the improved Outlook is both in our shop, visit revenue, and in the spare parts. Um, so a lot of that from the strength that we observed in the third quarter. So if I start with the shop visits, you know, we've had year to date growth of call it 22%. Um, and what, what's driving that as you hinted at is improved material availability is driving higher volume. So that's a big piece of that but along with that you know, the work Scopes continue to increase. So that's that's helping as well. Uh and the demand environment just continues to be to be strong. I mean year to date our inductions have outpaced output even with the results that we have delivered um and this Improvement in

[Company Representative]: Really strong external LEAP shop visits up 2X is helping. You know mid-single-digit growth in total worldwide shop visits and CFM56 is helping. All that. You know, again, as we look at that, it set us up for really well, not only for 2025 but also for 2026. Now, as we think about the fourth quarter, we typically have a seasonal step down in our third quarter to fourth quarter revenue, largely driven by spare parts because you don't expect the same level of improvement on material availability, a little bit of seasonality in demand. Still, if you step back and look at the full year, you know, really strong year, and you know, versus where we were in July, more than $1 billion of revenue increase in the services revenue. That's a large part responsible for the incremental $450 million of guidance raised on profit for CES. Thank you.

Larry Culp: So really strong external LEAP shop visits, up 2x, is helping with single-digit growth in total worldwide shop visits. CFM56 is helping. So all that. So again, as we look at that, it set us up for really well, not only for 2025, but also for 2026. Now, as we think about the fourth quarter, we typically have a seasonal step down in our third quarter to fourth quarter revenue, largely driven by spare parts because you don't expect the same level of improvement on material availability, a little bit of seasonality in demand. But still, if you step back and look at the full year, really strong year, and versus where we were in July, more than $1 billion of revenue increase in the services revenue, and that's a large part responsible for the incremental $450 million of guidance raise on profit for CES. Thank you.

So really strong external LEAP shop visits, up 2x, is helping with single-digit growth in total worldwide shop visits. CFM56 is helping. So all that. So again, as we look at that, it set us up for really well, not only for 2025, but also for 2026. Now, as we think about the fourth quarter, we typically have a seasonal step down in our third quarter to fourth quarter revenue, largely driven by spare parts because you don't expect the same level of improvement on material availability, a little bit of seasonality in demand. But still, if you step back and look at the full year, really strong year, and versus where we were in July, more than $1 billion of revenue increase in the services revenue, and that's a large part responsible for the incremental $450 million of guidance raise on profit for CES.

Output is specially visible in leap. That is up, um, you know, 30% year to date and part of that is the incremental capacity that we we've set up for, for leap, um, on the spare parts, the year to date results have been equally strong. Um, you know, growth of more than 25% orders have remained strong as Larry mentioned, you know, our out of the services orders growth of greater than 30% year to date. Um, but the improved material availability is now helping us, uh, you know, achieve those orders and execute on the demand that we are that we are seeing. And as we look at the fourth quarter, our backlog Still Remains strong. 90% of the spare parts that we need to shift in the fourth quarter are in the backlog which is 15 points higher than where we have been historically.

In the fourth quarter, we typically have a seasonal step down in our third quarter to fourth quarter revenue, largely driven by spare parts because you don't expect the same level of improvement on material availability and a little bit of off-seasonality in demand. But still, if you step back and look at the full year, it was a really strong year, especially compared to where we were in July.

Operator: Thank you. The next question comes from the line of Doug Harned from Bernstein. Please proceed.

More than $1 billion of revenue increase in the services revenue, and that’s a large part responsible for the incremental $450 million of guidance raised on profit for CES.

[Company Representative]: The next question comes from the line of Doug Harded from Bernstein. Please proceed.

Larry Culp: The next question comes from the line of Doug Harned from Bernstein. Please proceed. Yes, good morning. Thank you. Morning, Doug. Morning, Doug. Sorry, excuse me. You've been talking about the improvement in margin, the margin outlook for LEAP on the services side to get up to sort of services overall margins once you get out to 2028. Now, that's a strong trajectory, but could you talk about how you have what gives you confidence in that? Because you're still in the very early days of PRSVs, and I would expect really understanding what the cost is for full shop visits. So how do you think about that 2028 LEAP services margin, and how does price and cost factor in?

Doug Harned: Yes, good morning. Thank you.

Thank you. The next question comes from the line of Doug Hardie from Bernstein.

[Analyst 2]: Yes, sir. Good morning. Thank you.

Rahul Ghai: Morning, Doug.

[Company Representative]: Morning, Doug.

Larry Culp: Morning, Doug.

[Analyst 2]: Morning, Doug. You've been talking about the improvement in the margin outlook for LEAP on the services side to get up to sort of services overall margins once you get out to 2028. That's a strong trajectory, but could you talk about what gives you confidence in that? You're still in the very early days of PRSVs, and I would expect really understanding what the cost is for full shop visits. How do you think about that 2028 LEAP services margin, and how does price and cost factor in?

His proceeds. Um, yes, good morning. Thank you. Um, $20.

Doug Harned: Sorry, excuse me. You've been talking about the improvement in margin, the margin outlook for LEAP on the services side to get up to sort of services overall margins once you get out to 2028. Now, that's a strong trajectory, but could you talk about how you have what gives you confidence in that? Because you're still in the very early days of PRSVs, and I would expect really understanding what the cost is for full shop visits. So how do you think about that 2028 LEAP services margin, and how does price and cost factor in?

You know, you excu—excuse me, you've been, um, talking about...

The improvement in margin, the margin outlook for the leap, uh, on the services side to get up to, um,

So, of services overall, with margins, once you get out to 2028, um,

Now, that's a strong trajectory, but could you?

Could you talk about how?

You have Khan. What gives you confidence in that? Because you're still in the very early days of Q3.

Um, PRSV and I, I would expect really understanding what the cost is, um, you know, for a full shop visit. So

How do you think about that 2028 leap, services margin, and how do these price and cost factors come into play?

Larry Culp: Doug, I would say that the roadmap to 2028 with respect to LEAP really is something that we're looking to manage every day, really a combination of the field performance that you spoke to and, frankly, what we're doing in our own operations with FlightDeck to make sure we not only have the material availability, the improvements of which you see here in the third quarter financial results, but also in the underlying operational data points that Rahul just mentioned a moment ago. As we project that forward, we've been making the improvements in the supply base, in the field performance, witnessed the durability kit with the 1A that's now in the field, very much, and the cost reductions as well, be they productivity, which material availability really does unlock in our shops, very much in line with our expectations.

Larry Culp: Doug, I would say that the roadmap to 2028 with respect to LEAP really is something that we're looking to manage every day, really a combination of the field performance that you spoke to, and frankly, what we're doing in our own operations with Flight Deck to make sure we not only have the material availability, the improvements of which you see here in the Q3 financial results, but also in the underlying operational data points that Rahul just mentioned a moment ago. As we project that forward, I mean, we've been making the improvements in the supply base, in the field performance, witnessed the durability kit with the 1A that's now in the field, very much, and the cost reductions as well, be they productivity, which material availability really does unlock in our shops, very much in line with our expectations.

Doug, I would say that.

The, uh, the roadmap to 2028.

with respect to leap.

Really, it's something that, uh, we're looking to manage every day. Uh, really, it's a combination of the field performance that you spoke to and, frankly, what we're doing in our own operations with Flight Deck to make sure we not only have the material availability.

the improvements of which you see here in the third quarter,

Natural results, but also in the underlying operational data points that Rahul just mentioned a moment ago.

As we project that forward, I mean we've been making the improvements.

In the supply base, in the field, performance witnessed the durability kit with the 1A. That's now in the field.

Larry Culp: So there's a lot of work to do between now and 2028, but I think given the multiple levers that we have to pull and the underlying product improvements, that we have the conviction not only behind the strength of today's results, but the roadmap from here, both in terms of the eyes of investors, as you just framed it, as well as customers. Rahul, anything you'd add there? Just maybe a couple of things to add here, Doug. Larry spoke about the Flight Deck improvement. We spoke about all the improvements that we are driving this year in LEAP output. As we see ourselves till 2030, we expect this 30% year-over-year internal shop visit growth to continue, right? So the volume is going to be a big piece of that.

So there's a lot of work to do between now and 2028, but I think given the multiple levers that we have to pull and the underlying product improvements, that we have the conviction not only behind the strength of today's results, but the roadmap from here, both in terms of the eyes of investors, as you just framed it, as well as customers. Rahul, anything you'd add there?

Larry Culp: There's a lot of work to do between now and 2028. I think given the multiple levers that we have to pull and the underlying product improvements, that we have the conviction not only behind the strength of today's results, but the roadmap from here, both in terms of the eyes of investors, as you just framed it, as well as customers.

Uh, very much, and the cost reductions as well, be they productivity, which material availability will really unlock in our shops, very much in line with our expectations.

So,

There's a lot of work to do between now and 2028, but I think given the multiple levers that we have to pull,

And the underlying product improvements.

That we have the conviction, not only behind the strength of today's results, but the roadmap.

[Company Representative]: Yeah.

Larry Culp: Rahul, anything you'd add there?

[Company Representative]: Larry, just maybe a couple of things to add here, Doug. Larry spoke about the FlightDeck improvement. We spoke about all the improvements that we are driving this year in LEAP output. As we see ourselves till 2030, we expect this 30% year-over-year internal shop visit growth to continue, right? The volume is going to be a big piece of that. As you think about the external channel, we spoke of, I think Larry spoke earlier in his prepared remarks about the external channel being up 2X year over year. That unlocks the spare parts revenue stream for us. That's helping. We also spoke about the investments that we are making on repair technology. That reduces the cost of the shop visit in addition to unlocking our shop visit output. All those things are helping, and durability is kind of hanging in there.

Rahul Ghai: Just maybe a couple of things to add here, Doug. Larry spoke about the Flight Deck improvement. We spoke about all the improvements that we are driving this year in LEAP output. As we see ourselves till 2030, we expect this 30% year-over-year internal shop visit growth to continue, right? So the volume is going to be a big piece of that.

Larry Culp: As you think about the external channel we spoke of, I think Larry spoke earlier in his prepared remarks about the external channel being up 2x year-over-year. I mean, that unlocks the spare parts of revenue stream for us. That's helping. We also spoke about the investments that we are making on repair technology. That reduces the cost of the Shop Visit in addition to unlocking our Shop Visit output. So all those things are helping, and durability is kind of hanging in there. I think with the introduction of the Durability Kit, we are very confident of getting to CFM56 levels of performance on LEAP-1A and then soon on LEAP-1B as we look forward through 2028. All those things are what gives us confidence about the trajectory that we have on LEAP. Thank you.

As you think about the external channel we spoke of, I think Larry spoke earlier in his prepared remarks about the external channel being up 2x year-over-year. I mean, that unlocks the spare parts of revenue stream for us. That's helping. We also spoke about the investments that we are making on repair technology. That reduces the cost of the Shop Visit in addition to unlocking our Shop Visit output. So all those things are helping, and durability is kind of hanging in there. I think with the introduction of the Durability Kit, we are very confident of getting to CFM56 levels of performance on LEAP-1A and then soon on LEAP-1B as we look forward through 2028. All those things are what gives us confidence about the trajectory that we have on LEAP.

From here, both in terms of the eyes of investors, is you just framed it as well as customers. Yeah. Probably. Anything you'd add there. Just let me just maybe a couple of things to add here Doug. Um you know Larry spoke about the flight deck Improvement. We spoke about all the improvements that we are driving this year in in leap output. You know, as we see us ourselves Bill 2030, we expect this 30% year-over-year, internal shop as a growth to continue, right? So that the volume is going to be a big piece of that. And as you think about the external Channel, we spoke with Larry spoke earlier and it's prepared remarks about the external Channel being up, 2x year over year, I mean that drives that unlocks the spare parts of the revenue stream for us. So that's, that's helping. We also spoke about the Investments that we are making on repair.

[Company Representative]: I think with the introduction of the durability kit, we are very confident of getting to CFM56 levels of performance on LEAP 1A and then soon on 1B as we look forward to 2028. All those things are what gives us confidence about the trajectory that we have on LEAP. Thank you. The next question comes from the line of Miles Walton from Wolff Research. Please proceed.

Operator: Thank you. The next question comes from the line of Myles Walton from Wolfe Research. Please proceed.

Technology, you know, that reduces that reduces the cost of the shop visit in addition to, uh, you know, unlocking, our uh, shop visit output. So all those things are helping and durability is kind of hanging in there. I think, with with the introduction of the durability kit, we are very confident of getting to cfm56 levels of performance, um, on leap 1 a and then soon on 1 b, as we look forward to 2028. So all those things are, what gives us confidence about the trajectory that we have on leap?

Larry Culp: The next question comes from the line of Miles Walton from Wolfe Research. Please proceed. Thanks. Good morning. Good morning, Miles. I was hoping to touch on capital deployment. The operations are all going fantastic. You're generating a ton of cash. The stock price is reflecting it. Where and how do you balance capital deployment, share purchase in particular at this point vis-à-vis your stock price? You haven't slowed down your pace. So I imagine that gives us good indication that you still think there's good value there. But is the dial going to turn towards M&A at any point, do you think, in the near future? Miles, I would say that the capital allocation approach that we and the board have taken since the spin is very much intact. And I don't really see that changing materially anytime soon, right?

Thank you.

Myles Walton: Thanks. Good morning.

The next question comes from the line of Mouse Walton from Wolfe Research.

[Analyst 2]: Thanks. Good morning.

Larry Culp: Good morning, [crosstalk]

Please proceed.

Larry Culp: Good morning, Miles.

Rahul Ghai: Myles.

Myles Walton: I was hoping to touch on capital deployment. The operations are all going fantastic. You're generating a ton of cash. The stock price is reflecting it. Where and how do you balance capital deployment, share purchase in particular at this point vis-à-vis your stock price? You haven't slowed down your pace. So I imagine that gives us good indication that you still think there's good value there. But is the dial going to turn towards M&A at any point, do you think, in the near future?

Thanks, good morning.

[Analyst 2]: I was hoping to touch on capital deployment. The operations are all going fantastic. You're generating a ton of cash. The stock price is reflecting it. Where and how do you balance capital deployment, share repurchase in particular at this point vis-à-vis your stock price? You haven't slowed down your pace. I imagine that gives us a good indication that you still think there's good value there. Is the dial going to turn towards M&A at any point, do you think, in the near future?

Good morning miles.

Larry Culp: Myles, I would say that the capital allocation approach that we and the board have taken since the spin is very much intact. And I don't really see that changing materially anytime soon, right? We've talked about what we've described as a balanced approach, first and foremost, making sure we're reinvesting in the business to drive the technology improvements we've talked about here already on this call, which you know well, and the footprint required to support the growth. Of course, we are going to return capital to shareholders and reserve some when those M&A opportunities, large or small, come along that make sense. We're proud of the fact that we've increased our shareholder returns since the spin-off, what, 4x. As we said back in the summertime, we've increased our return of cash to shareholders to $24 billion in the 2024 to 2026 period, which is, I think, up 20% from where we were at the spin-off. From an M&A perspective, we want to make sure we're looking at anything and everything that might make sense in the neighborhood.

Larry Culp: Miles, I would say that the capital allocation approach that we and the board have taken since the spin is very much intact. I don't really see that changing materially anytime soon, right? We've talked about what we've described as a balanced approach. First and foremost, making sure we're reinvesting in the business to drive the technology improvements we've talked about here already on this call, which you know well, and the footprint required to support the growth. Of course, we are going to return capital to shareholders and reserve some when those M&A opportunities, large or small, come along that make sense. We're proud of the fact that we've increased our shareholder returns since the spin up, what, 4X.

Reflecting on where and how you balance capital deployment, particularly around share purchases at this point with Visa (V), your stock price hasn't slowed down your pace. So, I imagine that gives us a good indication that you still think there's good value there. But is the dial going to turn towards M&A at any point? Do you think in the near future?

Miles. I, I would

Larry Culp: We've talked about what we've described as a balanced approach, first and foremost, making sure we're reinvesting in the business to drive the technology improvements we've talked about here already on this call, which you know well, and the footprint required to support the growth. Of course, we are going to return capital to shareholders and reserve some when those M&A opportunities, large or small, come along that make sense. We're proud of the fact that we've increased our shareholder returns since the spin-off, what, 4x. As we said back in the summertime, we've increased our return of cash to shareholders to $24 billion in the 2024 to 2026 period, which is, I think, up 20% from where we were at the spin-off. From an M&A perspective, we want to make sure we're looking at anything and everything that might make sense in the neighborhood.

Location approach that we and the Board have taken. Since the spin is very much intact, I don’t really see that changing materially anytime soon. Right? We’ve talked about what we’ve described as a bounce approach.

First and foremost, making sure we're reinvesting in the business to drive technology improvements. We've talked about this here already on this call, which you know well, and the footprint required to support the growth.

Of course, we are going to return capital to shareholders and reserve some.

When those M&A opportunities weren't or small, come along with it, that makes sense.

Uh,

Larry Culp: As we said back in the summertime, we've increased our return of cash to shareholders to $24 billion in the 2024 to 2026 period, which is, I think, up 20% from where we were at the spin. From an M&A perspective, we want to make sure we're looking at anything and everything that might make sense in the neighborhood. Investors should continue to see from us a disciplined approach where we really look to strategic fit, then operational value add, and in turn, financial returns. Your question, I think, recognizes the tremendous capacity that we have. Again, organic reinvestment, return of capital to shareholders will be the first two priorities. That gives us still, I think, ample room, given the cash flow projections that we have here, to look at things that fortify our existing positions.

We're proud of the fact that we've increased our shareholder returns since the spin-off.

Uh, and as we said back in the summertime,

We've increased our return of cash to shareholders to $24 billion in the 2024-2026 period, which is, I think, up 20% from where we were at the spin.

Larry Culp: But investors should continue to see from us a disciplined approach where we really look to strategic fit, then operational value add, and in turn, financial returns. So your question, I think, recognizes the tremendous capacity that we have. But again, organic reinvestment, return of capital to shareholders will be the first two priorities. But that gives us still, I think, ample room, given the cash flow projections that we have here, to look at things that fortify our existing positions. You saw here in the quarter something that we're really excited about, our $300 million investment in BETA Technologies, a company that some people are well aware of, others maybe not so much. But we really like the team. We like the underlying technology and our collaboration to co-develop a hybrid electric turbo generator.

But investors should continue to see from us a disciplined approach where we really look to strategic fit, then operational value add, and in turn, financial returns. So your question, I think, recognizes the tremendous capacity that we have. But again, organic reinvestment, return of capital to shareholders will be the first two priorities. But that gives us still, I think, ample room, given the cash flow projections that we have here, to look at things that fortify our existing positions. You saw here in the quarter something that we're really excited about, our $300 million investment in BETA Technologies, a company that some people are well aware of, others maybe not so much. But we really like the team. We like the underlying technology and our collaboration to co-develop a hybrid electric turbo generator.

So from an M&A perspective, I mean we want to make sure we're looking at anything and everything that might make sense in the neighborhood.

But investors should continue to see from us a disciplined approach.

Where we really look to strategic fit?

Then operational value ad.

Larry Culp: You saw here in the quarter something that we're really excited about, our $300 million investment in Beta Technologies, a company that some people are well aware of, others maybe not so much. We really like the team. We like the underlying technology and our collaboration to co-develop a hybrid electric turbo generator we think will yield benefit to both of us, both in defense applications and ultimately in the commercial space.

And in turn, financial returns. So your question, I think, recognizes the tremendous capacity that we have, but again, organic reinvestment and return of capital to shareholders will be the first two priorities. But that gives us still, I think, ample room, given the cash flow projections that we have here, to look at things that fortify our existing positions.

Uh, you saw here in the quarter.

Larry Culp: We think will yield benefit to both of us, both in defense applications and ultimately in the commercial space. Thank you. The next question comes from the line of Seth Seifman from JPMorgan. Please proceed. Thanks very much. And good morning, everyone. Morning, Seth. Wanted to zero in on the spares performance a little bit within services, and kind of given our, I think, our usual starting point for how to think about spares is departure growth. And so outpacing that by a bit, and also dramatically outpacing the outlook that you had for 2025 at the start of the year. So when we think about what's driving that, is it all material availability? Is there a part of that that comes from outfitting LEAP shops out in the network?

We think will yield benefit to both of us, both in defense applications and ultimately in the commercial space.

Operator: Thank you. The next question comes from the line of Seth Seifman from JPMorgan. Please proceed.

Something that we're really excited about our hundred million dollar investment in Beta Technologies. Uh, a company that some people are are, well aware of others, maybe not so much. Uh, but we really like the team. We like the underlying technology and our collaboration to co-develop, a hybrid electric turbo generator, we think will yield benefits to both both of us. Uh, both in defense applications and ultimately in the commercial space,

[Company Representative]: Thank you. The next question comes from the line of Seth Seifman from JPMorgan. Please proceed.

Seth Seifman: Thanks very much. And good morning, everyone.

Thank you. The next question comes from the line of September from JP Morgan.

[Analyst 2]: Thank you very much. Good morning, everyone.

Please proceed.

Rahul Ghai: Morning, Seth.

Larry Culp: Morning, Seth.

Larry Culp: Morning, Seth

Seth Seifman: Wanted to zero in on the spares performance a little bit within services, and kind of given our, I think, our usual starting point for how to think about spares is departure growth. And so outpacing that by a bit, and also dramatically outpacing the outlook that you had for 2025 at the start of the year. So when we think about what's driving that, is it all material availability? Is there a part of that that comes from outfitting LEAP shops out in the network?

[Analyst 2]: I wanted to zero in on the spares performance a little bit within services, given our, I think, our usual starting point for how to think about spares is like departure growth. Outpacing that by a bit, and also dramatically outpacing the outlook that you had for 2025 at the start of the year. When we think about what's driving that, is it all material availability? Is there a part of that that comes from outfitting LEAP shops out in the network? If so, what's the tail on that that allows spares growth to exceed that underlying departure level? Also, given the mix of engines that do internal shop visits versus the mix of engines that are not on internal plans, should we think about CFM56 being the main driver of spares growth?

Thanks very much. And good morning, everyone. Um,

Larry Culp: And if so, what's kind of the tail on that that allows spares growth to kind of exceed that underlying departure level? And also, given the mix of engines that do internal shop visits versus the mix of engines that are not on internal plans, should we think about CFM56 being the main driver of spares growth? Yeah. So Seth, let me start here. I think you had a lot of the data points that actually drove the performance kind of in your question here. So if you start unpacking that, I think if you look at the spare parts performance, obviously, we spoke to the orders growth. Orders has remained really strong. And what's driving the orders growth besides the increase in departures where you started is a lot of pent-up demand.

And if so, what's kind of the tail on that that allows spares growth to kind of exceed that underlying departure level? And also, given the mix of engines that do internal shop visits versus the mix of engines that are not on internal plans, should we think about CFM56 being the main driver of spares growth?

Rahul Ghai: Yeah. So Seth, let me start here. I think you had a lot of the data points that actually drove the performance kind of in your question here. So if you start unpacking that, I think if you look at the spare parts performance, obviously, we spoke to the orders growth. Orders has remained really strong. And what's driving the orders growth besides the increase in departures where you started is a lot of pent-up demand.

[Company Representative]: Yeah. Seth, let me start here. I think you had a lot of the data points that actually drove the performance in your question here. If you start unpacking that, I think if you look at the spare parts performance, obviously, we spoke to the orders growth. Orders have remained really strong. What's driving the orders growth besides the increase in departures where you started is a lot of pent-up demand. If you look at the number of shop visits that will be done in 2025 globally, worldwide shop visits, that's still below where we were in 2019. The worldwide shop visits still have not recovered the 2019 level. There's a lot of pent-up demand here on volume, and that's a big piece on why the total demand is outpacing the departures growth. The second is the increase in work scopes.

I wanted to zero in, on the, the spares performance, uh, a little bit within services and kind of, you know, given our, I think our usual starting point for how to think about spares is like departure growth and and so, uh, you know, outpacing that buy a bit. Um, and also, you know, dramatically outpacing, uh, the Outlook that you had for 2025, at the start of the year. So, when we think about what's driving that, um, you know, is it is it all material availability? Uh, is there a part of that that comes from outfitting? Leap shops out in the network and if so, what kind of the tail on that that allows stairs growth to kind of, you know, exceed that underlying part of your level and also, given the given, the mix of engines that do internal shop visits versus the mix of engines that are, you know, not on internal plans. Should we think about cfm56 being the main driver of of spares growth?

Larry Culp: If you look at the number of shop visits that will be done in 2025 globally, worldwide shop visits, that's still below where we were in 2019. So the worldwide shop visits still have not recovered to the 2019 level. So there's a lot of pent-up demand here on volume. And that's a big piece on why the total demand is kind of outpacing the departures growth. The second is the increase in work scopes. So we've been talking about increase in work scopes both internally and externally. So if you look at GE90 as an example, the GE90 is now going like 70% of the shop visits haven't gone in for a second shop visit. So we're beginning to see the second shop visits come through, and that could be 60 to 70% heavier than the first shop visit.

If you look at the number of shop visits that will be done in 2025 globally, worldwide shop visits, that's still below where we were in 2019. So the worldwide shop visits still have not recovered to the 2019 level. So there's a lot of pent-up demand here on volume. And that's a big piece on why the total demand is kind of outpacing the departures growth. The second is the increase in work scopes. So we've been talking about increase in work scopes both internally and externally. So if you look at GE90 as an example, the GE90 is now going like 70% of the shop visits haven't gone in for a second shop visit. So we're beginning to see the second shop visits come through, and that could be 60 to 70% heavier than the first shop visit.

[Company Representative]: We've been talking about increase in work scopes both internally and externally. If you look at GE 90 as an example, the GE 90 is now going, like 70% of the shop visits haven't gone in for a second shop visit. We're beginning to see the second shop visits come through, and that could be 60% to 70% heavier than the first shop visit. The increase in work scopes is a big piece. The same thing's happening on LEAP. The same thing's happening on GEnx. You spoke about material availability. I think that's an unlock here as well because we've spoken about a delinquency continuing to increase. Our output has been increasing, but we are still behind on meeting demand. That continued even into this quarter, even with the spare parts growth we've had. I think all of that is driving this.

Larry Culp: So that's the increase in work scopes is a big piece. And the same thing's happening on LEAP. The same thing's happening on GEnx. You spoke about material availability. I think now that's an unlock here as well because we've spoken about a delinquency continuing to increase. And our output has been increasing, but we are still behind on meeting demand. And that continued even into this quarter, right, even with the spare parts growth we've had. So I think all of that is kind of driving this. And as we look forward into 2026, we still expect that we expect departures growth of where we have been in 2025, kind of 3% to 4%. But the number of engines that will come off wing are going to be up double digits.

So that's the increase in work scopes is a big piece. And the same thing's happening on LEAP. The same thing's happening on GEnx. You spoke about material availability. I think now that's an unlock here as well because we've spoken about a delinquency continuing to increase. And our output has been increasing, but we are still behind on meeting demand. And that continued even into this quarter, right, even with the spare parts growth we've had. So I think all of that is kind of driving this. And as we look forward into 2026, we still expect that we expect departures growth of where we have been in 2025, kind of 3% to 4%. But the number of engines that will come off wing are going to be up double digits.

Office. So, we're beginning to see that the second shop has come through, and that could be 60% to 70% heavier than the first shot with it. So, that's the increase in work. Scopes is a big piece, and the same thing is happening on Leave; the same thing is happening on NX.

[Company Representative]: As we look forward into 2026, we still expect that, we expect departures growth of where we have been in 2025, kind of 3% to 4%. The number of engines that will come off wing are going to be up double digits. We do expect this difference between departure growth and spare parts demand to continue for a while, just given everything I've said, plus the engines that are going to come off wing. Hopefully, that answers the question. Thank you. The next question comes from the line of Scott Deutschel from Deutsche Bank. The line's open.

Larry Culp: So we do expect this kind of difference between departure growth and spare parts demand to continue for a while, just given everything I've said, plus the engines that are going to come off wing. So hopefully that answers the question. Thank you. The next question comes from the line of Scott Deuschle from Deutsche Bank. The line is open. Hey, good morning. Good morning, Scott. Rahul, would you be able to share any of your current thinking on 2026 at this point, particularly as it relates to CES revenue growth, then margins as well, but also, I guess, just more broadly on anything you think is important for us to keep in mind as we sharpen the pencil on 2026? Okay. Let me start, and Larry, please jump in here.

So we do expect this kind of difference between departure growth and spare parts demand to continue for a while, just given everything I've said, plus the engines that are going to come off wing. So hopefully that answers the question.

Uh, you spoke about material availability. I think that's that. Now, that is that, that's an unlock here as well, because we've spoken about a delinquency continuing to increase and, you know, our output has been increasing but we are still behind on meeting demand and that continued even into into this quarter, right, even with the spare parts we have. So I think all of that is kind of, you know, driving this. And as we look forward into 26, we still expect that, you know, we expect departures growth of where we have been in 2025, you know, kind of 3 to 4%, but the number of engines that will come off weighing are going to be up double digits. So we do expect this kind of difference between departure growth and spare parts demand to continue for a while just giving everything I've said. Plus uh the engines that are going to come off wind

Operator: Thank you. The next question comes from the line of Scott Deuschle from Deutsche Bank. The line is open.

So hopefully that answers the question.

Thank you.

Scott Deuschle: Hey, good morning.

The next question comes from the line of Scott Doyle from Deutsche Bank.

[Analyst 2]: Hey, good morning.

Larry Culp: Good morning, Scott.

The lines open.

Larry Culp: Good morning, Scott.

Scott Deuschle: Rahul, would you be able to share any of your current thinking on 2026 at this point, particularly as it relates to CES revenue growth, then margins as well, but also, I guess, just more broadly on anything you think is important for us to keep in mind as we sharpen the pencil on 2026?

Hey, good morning.

[Analyst 2]: Rahul, would you be able to share any of your current thinking on 2026 at this point, particularly as it relates to CES revenue growth, then margins as well? Also, I guess, just more broadly on anything you think is important for us to keep in mind as we sharpen the pencil on 2026.

Good morning, Scott.

Rahul Ghai: Okay. Let me start, and Larry, please jump in here. As we think about 2026, Scott, firstly, and especially on the commercial side, the environment today feels better than where we were three months ago, right? I mean, three months ago, we were expecting second-half departures growth to be kind of flat to maybe low single digits. Now it's solidly in the 3% to 4% range. So I think the air traffic growth has stabilized. So 2026 feels a little bit better than where we were a couple of months back. But the more important part here, and this goes partially back to Seth's question a minute ago, is the basic algorithm of the demand and performance on the CES business has not changed. Installed base is growing, right, both on the wide body and on the narrow body side.

[Company Representative]: Okay. Let me start and Larry, please jump in here. As we think about 2026, Scott, firstly, and especially on the commercial side, the environment today feels better than where we were three months ago, right? Three months ago, we were expecting second-half departures growth to be kind of flat to maybe low single digits. Now it's solidly in the 3% to 4% range. I think the air traffic growth has stabilized. 2026 feels a little bit better than where we were a couple of months back. The more important part here, and this goes partially back to Seth's question a minute ago, is the basic algorithm of the demand and performance on the CES business has not changed. Install base is growing, right, both on the wide body and on the narrow body side.

Rahul, would you be able to share any of your current thinking on 2026 at this point? Particularly as it relates to CES revenue growth and then margins as well. But also, I guess just more broadly. And anything you think is important for us to keep in mind as we sharpen the pencil on 2026.

Larry Culp: As we think about 2026, Scott, firstly, and especially on the commercial side, the environment today feels better than where we were three months ago, right? I mean, three months ago, we were expecting second-half departures growth to be kind of flat to maybe low single digits. Now it's solidly in the 3% to 4% range. So I think the air traffic growth has stabilized. So 2026 feels a little bit better than where we were a couple of months back. But the more important part here, and this goes partially back to Seth's question a minute ago, is the basic algorithm of the demand and performance on the CES business has not changed. Installed base is growing, right, both on the wide body and on the narrow body side.

Okay, let me start and let you please jump in here. Um, you know, as we as we think about 26 Scott, um, first the and especially on the, on the commercial side, the environment today, feels better than where we were 3 months ago, right? I mean, 3 months ago, you know, the we were expecting second out of Departures. Go to be kind of flat to maybe low single digits. Now, it's soldered in the 3 to 4% range. So I think the air traffic growth has stabilized. So 26, feels a little bit better than where we were a couple of months back.

[Company Representative]: As I said in response to Seth's question, the number of engines that need a shop visit is projected to be up double digits in 2026, just based on the number of cycles that they've already flown. That'll add to the demand that's out there. The work scopes on wide body, you know, low single digit kind of net price increase that we are expecting, which seems reasonable. We do expect the services business to continue to our overall growth. As we think about specifically on the 2026 growth, we don't expect a repeat of the 2025 performance. We don't expect 2025 growth to be, you know, 2026 growth to be kind of at the 2025 levels. It'll start normalizing towards our double-digit levels that we had projected over the medium term. On the new business, the new equipment business, obviously, the backlog is very strong.

Larry Culp: As I said in response to Seth's question, the number of engines that need a shop visit is projected to be up double digits in 2026 just based on the number of cycles that they've already flown. And that'll add to the demand that's out there. And then the work scopes on wide body, low single digit kind of net price increase that we are expecting, which seems reasonable. So we do expect the services business to continue to our overall growth. And then, as you think about specifically on the 2026 growth, we don't expect a repeat of the 2025 performance. We don't expect 2026 growth to be kind of at the 2025 levels, but it'll start normalizing towards our double digit levels that we had projected over the medium term.

As I said in response to Seth's question, the number of engines that need a shop visit is projected to be up double digits in 2026 just based on the number of cycles that they've already flown. And that'll add to the demand that's out there. And then the work scopes on wide body, low single digit kind of net price increase that we are expecting, which seems reasonable. So we do expect the services business to continue to our overall growth. And then, as you think about specifically on the 2026 growth, we don't expect a repeat of the 2025 performance. We don't expect 2026 growth to be kind of at the 2025 levels, but it'll start normalizing towards our double digit levels that we had projected over the medium term.

But the more important part here and it goes partially back to a set question. A minute ago is the basic algorithm of the of the demand and and performance on the CES business has not changed its all bases growing, right? Both on the wide body and on the narrow body side. Um as I said in response to that question, the number of uh, engines that need a shop. Visit is projected to be up double digits in 26. Just based on the number of cycles that they've already flown, um, and that'll add to the demand that's out there and then the work scopes on white body. You know, low single digit kind of a net price increase that we are expecting, which seems reasonable. So we do expect a Services business to continue.

Larry Culp: And then on the new business, new equipment business, obviously, the backlog is very strong. We expect, call it 2,000 LEAP engine shipments and then incremental 9X shipments here because our volume assumptions on 9X have not changed since we were together back in July. And we do expect 9X losses to kind of double on a year-over-year basis or more than double on a year-over-year basis as we think about 2026. So that'll offset some of the positive drop through that we will see from services. And then DPT, I think we expect continued kind of mid-single-digit revenue growth, some margin expansion that we outlined back in July. So you put all that together, productivity is a plus, but we're facing inflation. We have the 9X losses, so we expect kind of margin expansion opportunities to be limited here.

And then on the new business, new equipment business, obviously, the backlog is very strong. We expect, call it 2,000 LEAP engine shipments and then incremental 9X shipments here because our volume assumptions on 9X have not changed since we were together back in July. And we do expect 9X losses to kind of double on a year-over-year basis or more than double on a year-over-year basis as we think about 2026. So that'll offset some of the positive drop through that we will see from services. And then DPT, I think we expect continued kind of mid-single-digit revenue growth, some margin expansion that we outlined back in July. So you put all that together, productivity is a plus, but we're facing inflation. We have the 9X losses, so we expect kind of margin expansion opportunities to be limited here.

[Company Representative]: We expect, call it, 2,000 LEAP engine shipments and then incremental GE 9X shipments here because our volume assumptions on GE 9X have not changed since we were together back in July. We do expect GE 9X losses to kind of double on a year-over-year basis or more than double on a year-over-year basis as we think about 2026. That'll offset some of the positive drop through that we will see from services. DPT, I think we expect continued kind of mid-single-digit revenue growth, some margin expansion that we outplayed back in July. You put all that together, productivity is a plus, but we're facing inflation. We have the GE 9X losses. We expect kind of margin expansion opportunities to be limited here. We are optimistic as we look at 2026. We expect revenue growth, strong revenue growth, profit growth, cash.

To our overall, um, growth. Uh, and then as we get into, um, you know, as you think about specifically on, on the 26th we don't expect a repeat of the 25th. We don't expect, you know, 25, uh, growth to be, you know, 26 growth to be kind of at the 25th, but it'll start normalizing towards our double digit levels that we, we had projected over the medium term. Um, and then, on the new new business new equipment business, obviously the backlog is, is, is very strong and uh, we expect call it 2,000 leap engine shipments and then incremental 9x shipments here because our volume assumptions are 9x have not changed since we were together back in July, and we do expect 9x losses to kind of double on a year-over-year basis, but more than doubled on a year-over-year basis as we think about 26. So that'll offset some of the positive

To that, we will see from Services. Um,

Larry Culp: But we are optimistic as we look at 2026. We expect revenue growth, strong revenue growth, profit growth, cash, and we think of 2026 kind of as a step along the way to 2028. So that's our current thinking. Obviously, we've put a sharper point on it. Larry, anything to add? No, just maybe that, right? We're just in the process of wrapping up our strategy reviews. We'll spend the fourth quarter working through the details of the 2026 budget. I think Rahul did a nice job there providing the general contours of that work that is underway. We'll take the board through it at the end of the year, and then we'll come back at earnings and talk about 2026 in more detail is basically our practice here.

But we are optimistic as we look at 2026. We expect revenue growth, strong revenue growth, profit growth, cash, and we think of 2026 kind of as a step along the way to 2028. So that's our current thinking. Obviously, we've put a sharper point on it. Larry, anything to add?

[Company Representative]: We think of 2026 kind of as a step along the way to 2028. That's our current thinking. Obviously, we'll put a sharper point on it. Larry, anything to add?

So, and then DPT, I think we expect continued kind of mid-single digit revenue growth, some margin expansion that we outlined back in July. So you put all that together, you know, productivity is a plus, but we are facing inflation. We have the 9x losses. We expect kind of margin expansion opportunities to be limited here, but we are optimistic as we look at 2026. We expect revenue growth, strong revenue growth, profit growth, cash. And we think of 2026 kind of as a step along the way to 2028.

Larry Culp: No, just maybe that, right? We're just in the process of wrapping up our strategy reviews. We'll spend the fourth quarter working through the details of the 2026 budget. I think Rahul did a nice job there providing the general contours of that work that is underway. We'll take the board through it at the end of the year, and then we'll come back at earnings and talk about 2026 in more detail. It's basically our practice here. I think net-net, we're more or less in line with the 2028 framework we talked about back in July, with a lot of good tailwinds in terms of the environment and clearly operational momentum building with FlightDeck. Put those two dynamics together, I think that's what you're going to see come January.

So that's, that's a good I'm thinking. Obviously, we put a sharper point on it already anything to add. No, just just, you know, maybe that right. We're, uh, we're just in the process of wrapping up our strategy reviews. Uh, we'll spend the fourth quarter working through the details of the 26 budget. I think, uh, Rahul did a nice job there, providing the, uh, the general Contours of that work. That is uh, underway. We'll take the board through it at the end of the year and then we'll come back. Uh,

Larry Culp: But I think net net, we're more or less in line with the 28 framework we talked about back in July with a lot of good tailwinds in terms of the environment and clearly operational momentum building with Flight Deck. Put those two dynamics together, I think that's what you're going to see come January. Thank you. The next question comes from the line of Ron Epstein from Bank of America. Please go ahead. Yeah. Hey, good morning, everyone. Good morning, Ron. Maybe just changing gears a little bit. You called out the work you all are doing on the hybrid electric turbo generator and implications that might have for defense. And your defense business grew quite well during the quarter and also last quarter.

But I think net net, we're more or less in line with the 28 framework we talked about back in July with a lot of good tailwinds in terms of the environment and clearly operational momentum building with Flight Deck. Put those two dynamics together, I think that's what you're going to see come January.

At earnings, we talked about Q3. In more detail, this is basically our practice here, but I think net, net, net, we're more or less in line with the Q2 framework we discussed back in July, with a lot of good.

But those two dynamics together, um,

I think that's

Operator: Thank you. The next question comes from the line of Ron Epstein from Bank of America. Please go ahead.

What you're going to see, uh, see come January.

[Company Representative]: Thank you. The next question comes from the line of Ronald Epstein from Bank of America. Please go ahead.

Thank you.

Ron Epstein: Yeah. Hey, good morning, everyone.

The next question comes from the line of Ronald Epstein from Bank of America.

[Analyst 2]: Yeah, hey, good morning, everyone.

Please go ahead.

Larry Culp: Good morning, Ron.

Ron Epstein: Maybe just changing gears a little bit. You called out the work you all are doing on the hybrid electric turbo generator and implications that might have for defense. And your defense business grew quite well during the quarter and also last quarter.

[Analyst 2]: Maybe just changing gears a little bit. You called out the work you all are doing on the hybrid electric turbo generator and the implications that might have for defense. Your defense business grew quite well during the quarter and also last quarter. Can you speak to maybe, you know, can we pull back and get some detail on kind of what you all are doing in defense and maybe what, you know, from an R&D perspective? Maybe more importantly, and this is just really a question you'd ask the other way around, what lessons have you all learned in commercial, given the size of the fleet and all the experience you have with commercial engines that you can then apply in the defense world where most other defense contractors just don't have that experience base?

Yeah. Hey, hey, good morning, everyone. Um, good morning, Ron.

Maybe just changing gears a little bit. Um, you know, you called out the work you all are doing on the hybrid electric.

Turbo generator and, you know, implications that might have for defense and your defense business grew.

Larry Culp: Can you speak to maybe can we pull back and get some detail on kind of what you all are doing in defense and maybe what from an R&D perspective? And then maybe more importantly, and this is really a question you'd ask the other way around, but what lessons have you all learned in commercial, given the size of the fleet and all the experience you have with commercial engines that you can then apply in the defense world where most other defense contractors just don't have that experience base? Well, Ron, I maybe take those in reverse order. A lot of the work that you see, or a lot of the work that we've referenced vis-à-vis supply chain with our team and Flight Deck courses through the results both on the commercial side and on the defense side, right?

Can you speak to maybe can we pull back and get some detail on kind of what you all are doing in defense and maybe what from an R&D perspective? And then maybe more importantly, and this is really a question you'd ask the other way around, but what lessons have you all learned in commercial, given the size of the fleet and all the experience you have with commercial engines that you can then apply in the defense world where most other defense contractors just don't have that experience base?

Larry Culp: Well, Ron, I maybe take those in reverse order. A lot of the work that you see, or a lot of the work that we've referenced vis-à-vis supply chain with our team and Flight Deck courses through the results both on the commercial side and on the defense side, right?

Quite well during the quarter. And also, the last quarter can, can you speak to maybe, you know, um, can we pull back and get some detail on kind of what you all are doing in the defense sector and maybe what, you know, from an R&D perspective? And then maybe more importantly, and this is just really a question you'd ask the other way around, but what lessons have you all learned in commercial? Given the size of the fleet and all the experience you have in commercial engines that you can then apply in the defense world, where most other defense contractors just don't have that experience base.

Larry Culp: Ron, if I maybe take those in reverse order, a lot of the work that you see or a lot of the work that we've referenced vis-à-vis supply chain with our team at FlightDeck courses through the results both on the commercial side and on the defense side, right? We talk about a quarter where you've got revenues up 26%, profit up 75%. Of note, the defense engine output was up 83%. We hung an eight-handle on that for the second quarter in a row, I believe. That really speaks, I think, to the strength of the backlog there, maybe some of the underperformance a year ago, but the just outstanding work that the teams have done, leveraging a lot of what we've done in commercial and in turn, the shared supply base.

Well.

Right away, I may be taking those in reverse order.

A lot of the work.

That you see?

For a lot of the work that we've referenced, music beats supply.

Larry Culp: Talk about a quarter where you've got revenues up 26%, profit up 75%. Of note, the defense engine output was up 83%. We hung an eight-handle on that for the second quarter in a row, I believe. That really speaks, I think, to the strength of the backlog there. Maybe some of the underperformance a year ago, but the just outstanding work that the teams have done, leveraging a lot of what we've done in commercial, and in turn the shared supply base.

Talk about a quarter where you've got revenues up 26%, profit up 75%. Of note, the defense engine output was up 83%. We hung an eight-handle on that for the second quarter in a row, I believe. That really speaks, I think, to the strength of the backlog there. Maybe some of the underperformance a year ago, but the just outstanding work that the teams have done, leveraging a lot of what we've done in commercial, and in turn the shared supply base.

Chain with our team and Flight Deck courses, through the results, both on the commercial side and on the defense side.

Right? Talk about a quarter where you've got revenues up 26% and profit up 75%. Of note, the defense engine output was up 83%.

Hung in the 8 handle on that. So, for the second quarter in a row, I believe.

Larry Culp: When we look at what we could do, if you will, more commercially, I think we are keen to take advantage of the moment at the Pentagon to share some of our best practices with respect to moving at pace through development cycles, perhaps in how we think about sustainment models to be creative and be responsive to some of the investment and budgetary realities that are out there. Ron, you know well that the investment that we've seen that we've put into the business, both government-funded and our own, has been concentrated on next-gen platforms, be they sixth-gen propulsion in conjunction with the NGAP program with an eye toward both the opportunities with the Air Force and the Navy, but everything that we're doing to upgrade the Apaches and the Blackhawks with the ITAP, the T901 engine. There's a lot that's in progress with respect to future platforms.

Larry Culp: When we look at what we could do, if you will, more commercially, I think we are keen to take advantage of the moment at the Pentagon to share some of our best practices with respect to moving at pace through development cycles, perhaps in how we think about sustainment models to be creative and be responsive to some of the investment and budgetary realities that are out there. Ron, you know well that the investment that we've seen that we've put into the business, both government-funded and our own, has been concentrated on next-gen platforms, be they 6th-gen propulsion in conjunction with the NGAP program with an eye toward both the opportunities with the Air Force and the Navy, but everything that we're doing to upgrade the Apaches and the Black Hawks with the ITEP, the T901 engine.

When we look at what we could do, if you will, more commercially, I think we are keen to take advantage of the moment at the Pentagon to share some of our best practices with respect to moving at pace through development cycles, perhaps in how we think about sustainment models to be creative and be responsive to some of the investment and budgetary realities that are out there. Ron, you know well that the investment that we've seen that we've put into the business, both government-funded and our own, has been concentrated on next-gen platforms, be they 6th-gen propulsion in conjunction with the NGAP program with an eye toward both the opportunities with the Air Force and the Navy, but everything that we're doing to upgrade the Apaches and the Black Hawks with the ITEP, the T901 engine.

That really speaks to the strength of the backlog there, maybe some of the underperformance a year ago, but the outstanding work that the teams have done leveraging a lot of what we've done in commercial, and in turn, the shared supply base.

When we look at what we...

Could do if you will more commercially. Uh, I think we are.

Keen to take advantage of the moment at the Pentagon to share some of our best practices with respect to moving at PACE through development cycles, perhaps, and how we think about sustainment models.

To, uh, be creative and be responsive to some of the, uh, investment and budgetary realities that are out there.

Ron, you know, well, that the investment that we've seen that we've put into the business, both government-funded and our own.

Has been concentrated on next-gen platforms. Be they, uh,

6G propulsion in conjunction with the End Gap program, with an eye toward both the opportunities with the Air Force and the Navy.

Larry Culp: There's a lot that's in progress with respect to future platforms. I think some real opportunities not only to fulfill this incredible backlog that we have in defense, but at the same time, rethink some of the business models, either internal to our customers or in collaboration with them. Here and now, making sure that we are reducing the delinquency, servicing the backlog, as Rahul mentioned a moment ago. Fortunately, the good work that's driving the results on the commercial side are helping us out a great deal on the defense side as well. Thank you. Our next question comes from the line of Robert Stallard from Vertical Research. Please proceed. Thanks so much. Good morning. Good morning, Robert. Quick question for Larry. You mentioned durability a number of times in your initial comments.

There's a lot that's in progress with respect to future platforms. I think some real opportunities not only to fulfill this incredible backlog that we have in defense, but at the same time, rethink some of the business models, either internal to our customers or in collaboration with them. Here and now, making sure that we are reducing the delinquency, servicing the backlog, as Rahul mentioned a moment ago. Fortunately, the good work that's driving the results on the commercial side are helping us out a great deal on the defense side as well.

Larry Culp: I think some real opportunities not only to fulfill this incredible backlog that we have in defense, but at the same time, rethink some of the business models, either internal to our customers or in collaboration with them. Here and now, making sure that we are reducing the delinquency, servicing the backlog, as Rahul mentioned a moment ago. Fortunately, the good work that's driving the results on the commercial side are helping us out a great deal on the defense side as well.

But everything that we're doing to upgrade the Apaches and the Blackhawks, with the T901 engine, there's a lot that's in progress with respect to future platforms. I think there are some real opportunities only to fulfill.

Operator: Thank you. Our next question comes from the line of Robert Stallard from Vertical Research. Please proceed.

This incredible backlog that we have in defense, uh, but at the same time, rethink some of the business models, either internal to our customers or in collaboration with them. But here and now, making sure that we are reducing the delinquency and servicing the backlog. As for our home mentioned a moment ago, fortunately, the uh, the good work that's driving the results on the commercial side are helping us out a great deal.

On the, uh, defense side as well.

[Company Representative]: Thank you. Our next question comes from the line of Robert Stoller from Vertical Research. Please proceed.

Robert Stallard: Thanks so much. Good morning.

[Analyst 2]: Thanks so much. Good morning.

Thank you. Our next question comes from the line of Robert Stallard from Vertical Research.

Larry Culp: Good morning.

Larry Culp: Good morning, Robert.

Rahul Ghai: Robert.

Robert Stallard: Quick question for Larry. You mentioned durability a number of times in your initial comments. I just want to follow up from that, how the initial performance has been on that new blade on the LEAP-1A, and how long is it going to take to roll that blade out across the installed base? Thank you.

Please proceed. Thanks. Thanks so much. Good morning.

[Analyst 2]: Quick question about Larry. You mentioned durability a number of times in your initial comments. I just wondered, following up from that, how the initial performance has been on that new blade on the LEAP 1A, and how long is it going to take to roll that blade out across the install base. Thank you.

Good morning.

Larry Culp: I just want to follow up from that, how the initial performance has been on that new blade on the LEAP-1A, and how long is it going to take to roll that blade out across the installed base? Thank you. Well, we're very pleased with the performance of the durability kit on the LEAP-1A, the new blade of which is at the heart of that durability kit. We think that will drive a 2x improvement. Think 8,000 cycles in harsh environments. Think 17,000 cycles in neutral environments. So far, so good. No surprises in that regard given the testing. We're in the certification process on the LEAP-1B equivalent and are expecting to see that come through the pipeline in the first half of next year. So I think, again, we're encouraged by what we are seeing in that regard.

Larry Culp: Well, we're very pleased with the performance of the durability kit on the LEAP-1A, the new blade of which is at the heart of that durability kit. We think that will drive a 2x improvement. Think 8,000 cycles in harsh environments. Think 17,000 cycles in neutral environments. So far, so good. No surprises in that regard given the testing. We're in the certification process on the LEAP-1B equivalent and are expecting to see that come through the pipeline in the first half of next year. So I think, again, we're encouraged by what we are seeing in that regard.

Larry Culp: We're very pleased with the performance of the durability kit on the LEAP 1A, the new blade of which is at the heart of that durability kit. We think that will drive a 2X improvement. You know, think 8,000 cycles in harsh environments, think 17,000 cycles in neutral environments. So far, so good. No surprises in that regard given the testing. We're in the certification process on the LEAP 1B equivalent and are expecting to see that come through the pipeline in the first half of next year. I think, again, we're encouraged by what we are seeing in that regard. It's probably a multi-year effort, Robert, to upgrade the install base. Certainly, having the LEAP 1A durability kit in production helps in that regard. We're tending to the aftermarket now and we'll do the same thing with Boeing once we're on the other side of certification.

Um, quick question for Larry. You mentioned durability a number of times in your initial comments. I just want to follow up on that. How has the initial performance been on that new blade on the LEAP 1A, and how long is it going to take to roll that blade out? Of course, the install base. Thank you.

Well, we're uh, we're very pleased with the performance of the durability kit on the, um, the leaf 1A, the, the new blade, which is at the heart of that durability kit. Uh, we think that will drive a, a 2X Improvement.

You know, think 8,000 cycles in harsh environments. Think.

17,000 cycles in neutral environments.

So, uh,

So far, so good. No surprises in that regard, given the testing.

Larry Culp: It's probably a multi-year effort, Robert, to upgrade the installed base. Certainly, having the LEAP-1A durability kit in production helps in that regard. We're tending to the aftermarket now, and we'll do the same thing with Boeing once we're on the other side of certification. So I'd say no surprises to date. A lot of work still ahead of us, but fundamentally encouraged by the impact that will have on durability and in turn the performance for our customers. Thank you. Our next question comes from the line of Gautam Khanna from TD Cowen. The line's open. Thanks. Good morning, guys. Morning, Gautam. Good morning.

It's probably a multi-year effort, Robert, to upgrade the installed base. Certainly, having the LEAP-1A durability kit in production helps in that regard. We're tending to the aftermarket now, and we'll do the same thing with Boeing once we're on the other side of certification. So I'd say no surprises to date. A lot of work still ahead of us, but fundamentally encouraged by the impact that will have on durability and in turn the performance for our customers.

Process on the leaf 1B equivalent and are expecting to, uh, to see that, uh, come through the, the pipeline in the first half of of next year. So I think again, we're, uh, we're encouraged by what we are seeing in that regard. It's probably a multi-year effort, Robert to upgrade the uh, the installed base. Certainly having the, the leaf 1A durability kit in production helps in that regard. We're tending to the aftermarket now.

Larry Culp: I'd say no surprises to date. A lot of work still ahead of us, but fundamentally encouraged by the impact that we'll have on durability and, in turn, the performance for our customers.

Operator: Thank you. Our next question comes from the line of Gautam Khanna from TD Cowen. The line's open.

Um, and we'll do the same thing with bowing once we're on the other side of certification. So, I'd say there are no surprises to date. A lot of work is still ahead of us, but I am fundamentally encouraged by the impact that will have on durability, and in turn, the performance for our customers.

[Company Representative]: Thank you. Our next question comes from the line of Gautam Khanna from TD Cowen. The line's open.

Thank you.

Gautam Khanna: Thanks. Good morning, guys.

Our next question comes from the line of Ghana from the TD account.

[Analyst 2]: Thanks. Good morning, guys.

The lines open.

Rahul Ghai: Morning, Gautam.

[Company Representative]: Morning, Gautam.

Larry Culp: Good morning.

Larry Culp: Hey, I was wondering if you could elaborate on where you're seeing the greatest improvement in supply chain material availability because it's been pretty consistent year to date, and just, has it been any breakthroughs, or if you could just give us some color, inside baseball, please. Thanks. Yes. Well, it's hard to say that we have seen a breakthrough. I really think it is the cumulative and compounding effect of all the good work that's been underway with intensity and urgency over the last 18-plus months, particularly with the supply base. If you segment where we're seeing that improvement, wide body versus narrow body, legacy platforms versus new platforms, large suppliers that you would know by name, some of them call my own, versus smaller companies you may have never heard of, I can't pull any major theme out because we depend on all of them.

Gautam Khanna: Hey, I was wondering if you could elaborate on where you're seeing the greatest improvement in supply chain material availability because it's been pretty consistent year to date, and just, has it been any breakthroughs, or if you could just give us some color, inside baseball, please. Thanks.

[Analyst 2]: I was wondering if you could elaborate on where you're seeing the greatest improvement in supply chain material availability because it's been pretty consistent year to date. Has it been any breakthroughs? If you could just give us some color inside baseball, please. Thanks.

Good morning.

Hey, I was wondering if you could elaborate on where you're seeing the greatest improvement in supply chain material availability, because it's been pretty consistent here today.

Larry Culp: Yes. Well, it's hard to say that we have seen a breakthrough. I really think it is the cumulative and compounding effect of all the good work that's been underway with intensity and urgency over the last 18+ months, particularly with the supply base. If you segment where we're seeing that improvement, wide body versus narrow body, legacy platforms versus new platforms, large suppliers that you would know by name, some of them call my own, versus smaller companies you may have never heard of, I can't pull any major theme out because we depend on all of them.

Has there been any breakthroughs, or could you just give us some color—inside baseball, please?

Larry Culp: It's hard to say that we have seen a breakthrough. I really think it is the cumulative and compounding effect of all the good work that's been underway with intensity and urgency over the last 18-plus months, particularly with the supply base. If you segment where we're seeing that improvement, wide body versus narrow body, legacy platforms versus new platforms, large suppliers that you would know by name, some of them they call my own, versus smaller companies you may have never heard of, I can't pull any major theme out because we depend on all of them. This has been a universal challenge as the airframers have been ramping, the aftermarket, given airline demand doing the same, and again, a third stream in the form of defense demand pulling on us and our supply chain.

Yes. Well,

It is hard to say that we have seen a breakthrough. I really think it is the cumulative, the compounding effect.

Of all the good work that's been underway with intensity and urgency over the last 18 plus months, particularly with the supply base.

If you segment where we're seeing that improvement: wide body versus narrow body.

Um, legacy platforms versus new platforms.

Large suppliers that you would know by name, some on the call, my own versus smaller companies you may have never heard of.

I can't pull any major theme out.

Larry Culp: And this has been a universal challenge as the airframers have been ramping, the aftermarket, given airline demand, doing the same, and again, a third stream in the form of defense demand pulling on us and our supply chain. I think the common denominator is where we've been able to go in around these priority suppliers, which are either current constraints or anticipated bottlenecks, and really getting out on the factory floor, staring down a problem on a machine, an assembly line, whether it be throughput, whether it be yields, what have you, and really driving deep problem-solving that's truly collaborative. Our best engineers with our suppliers' best engineers, not trying to negotiate there on the factory floor, but to identify the problem, contain it in the short term, and put it in permanent corrective action going forward.

And this has been a universal challenge as the airframers have been ramping, the aftermarket, given airline demand, doing the same, and again, a third stream in the form of defense demand pulling on us and our supply chain. I think the common denominator is where we've been able to go in around these priority suppliers, which are either current constraints or anticipated bottlenecks, and really getting out on the factory floor, staring down a problem on a machine, an assembly line, whether it be throughput, whether it be yields, what have you, and really driving deep problem-solving that's truly collaborative. Our best engineers with our suppliers' best engineers, not trying to negotiate there on the factory floor, but to identify the problem, contain it in the short term, and put it in permanent corrective action going forward.

Because we depend on all of them, and this has been a universal challenge as the airframe has been ramping.

The aftermarket, given airline demand, is doing the same and again.

Larry Culp: I think the common denominator is where we've been able to go in around these priority suppliers, which are either current constraints or anticipated bottlenecks, and really getting out on the factory floor, staring down a problem on a machine, an assembly line, whether it be throughput, whether it be yields, what have you, and really driving deep problem solving that's truly collaborative, our best engineers with our supplier's best engineers, not trying to negotiate there on the factory floor, but to identify the problem, contain it in the short term, and put it in permanent corrective action going forward. There are fits and starts that we manage in that regard every day, every week. I think we've gotten better at that.

A third stream in the form of defense demand is pulling on us and our supply chain.

I think the common denominator.

Is where we've been able to go in.

Around.

These priority suppliers.

Which are either current constraints or anticipated bottlenecks.

And really getting out on the factory floor, staring down a problem on a machine, uh, an assembly line.

Whether it be throughput, whether it be yields, what have you.

And really driving deep problem solving, it's truly collaborative—our best engineers with our suppliers' best engineers. Not trying to negotiate their on the factory floor.

Larry Culp: There are fits and starts that we manage in that regard every day, every week, but I think we've gotten better at that. And going forward, we want to be not just excellent in that near-term problem-solving, but we want to make sure we're investing time and talent in getting out ahead of those sorts of issues, both in the medium and long term. So as we look at readiness going into 2026, let alone some of the longer-term conversations that we might have, say, with Airbus as they talk about rate 75 and the path there as Boeing now has the latitude to go up to the next rate break, making sure that we've got visibility and that we're communicating the same with our airframer partners. It's just critical, right, for our planning purposes and theirs.

There are fits and starts that we manage in that regard every day, every week, but I think we've gotten better at that. And going forward, we want to be not just excellent in that near-term problem-solving, but we want to make sure we're investing time and talent in getting out ahead of those sorts of issues, both in the medium and long term. So as we look at readiness going into 2026, let alone some of the longer-term conversations that we might have, say, with Airbus as they talk about rate 75 and the path there as Boeing now has the latitude to go up to the next rate break, making sure that we've got visibility and that we're communicating the same with our airframer partners. It's just critical, right, for our planning purposes and theirs.

But to identify the problem, contain it in the short term, and put in permanent corrective action going forward.

There are fits and starts that we manage in that regard every day, every week.

Larry Culp: Going forward, we want to be not just excellent in that near-term problem solving, but we want to make sure we're investing time and talent in getting out ahead of those sorts of issues, both in the medium and long term. As we look at readiness going into 2026, let alone some of the longer-term conversations that we might have, say, with Airbus as they talk about rate 75 and the path there as Boeing now has the latitude to go up to the next rate break, making sure that we've got visibility and that we're communicating the same with our airframer partners is just critical, right, for our planning purposes and theirs. No one breakthrough other than just the relentless application with urgency of our FlightDeck tools deep into the supply base wherever we have a constraint or bottleneck. It's that simple and that hard.

But I think we've gotten better at that.

And going forward, we want to be not just excellent.

In that near-term, problem solving. But we want to

make sure we're investing time and talent and getting out ahead of.

Those sorts of issues, both in the medium and long term.

So as we look at readiness going into 2026, let alone some of the longer-term conversations that we might have, say with Airbus, as they talk about rate 75 and the path.

Uh, there is Boeing now has, uh, latitude to go up to the next rate break.

Larry Culp: So no one breakthrough other than just the relentless application with urgency of our Flight Deck tools deep into the supply base wherever we have a constraint or bottleneck. It's that simple and that hard. That's it. We have time for one last question. Thank you. The next question comes from the line of Scott Mikus from Melius Research. Please go ahead. Good morning, Larry and Rahul. Good morning. Quick question on commercial aftermarket revenue growth. I mean, historically, for the industry, it's been strongly correlated with flight activity and ASK growth, but the commercial services revenue growth has continued to re-accelerate despite the deceleration in ASK growth.

So no one breakthrough other than just the relentless application with urgency of our Flight Deck tools deep into the supply base wherever we have a constraint or bottleneck. It's that simple and that hard.

Making sure that we have visibility and that we're communicating the same with our airframe partners is just critical, right? For our planning purposes and theirs.

so,

No. 1 breakthrough, other than just the Relentless application. Uh,

With urgency, our flight deck tools deep into the supply base wherever.

We, uh, we have a constrained model net.

Blaire Shoor: That's it. We have time for one last question.

It's that simple.

Blaire Shoor: Dustin, we have time for one last question.

And that hard.

Operator: Thank you. The next question comes from the line of Scott Mikus from Melius Research. Please go ahead.

Dustin, we have time for one last question.

[Company Representative]: Thank you. The next question comes from the line of Scott Mikas from Melius Research. Please go ahead.

Thank you.

Scott Mikus: Good morning, Larry and Rahul.

The next question comes from the line of Scott. Mike is from Melius Research.

[Analyst 2]: Morning, Larry and Rahul.

Larry Culp: Good morning.

Please go ahead.

Larry Culp: Good morning.

Scott Mikus: Quick question on commercial aftermarket revenue growth. I mean, historically, for the industry, it's been strongly correlated with flight activity and ASK growth, but the commercial services revenue growth has continued to re-accelerate despite the deceleration in ASK growth.

[Analyst 2]: Quick question on commercial aftermarket revenue growth. Historically, for the industry, it's been strongly correlated with flight activity and ASK growth. The commercial services revenue growth has continued to reaccelerate despite the deceleration in ASK growth. Has anything structurally changed about the business model that could cause your aftermarket growth to decouple or sustainably outperform ASK growth over the long term? Is it simply just strength driven by heavier work scopes, better throughput because of a healthier supply chain and the FlightDeck productivity?

Larry Culp: So just has anything structurally changed about the business model that could cause your aftermarket growth to decouple or sustainably outperform ASK growth over the long term, or is it simply just strength driven by heavier work scopes, better throughput because of a healthier supply chain, and the flight deck productivity? Yeah, Scott, so I think Seth had a similar question earlier in the call. So I think some of the things that I said earlier, I'll kind of touch upon. A lot of this, the disconnect that we're seeing with our demand outlook and the departures goes fundamentally back to the pent-up demand on kind of shop visits, right? As I said earlier, shop visits in 2025 are going to be below 2019 levels.

So just has anything structurally changed about the business model that could cause your aftermarket growth to decouple or sustainably outperform ASK growth over the long term, or is it simply just strength driven by heavier work scopes, better throughput because of a healthier supply chain, and the flight deck productivity?

Just continue to react despite the deceleration and ask for growth.

Rahul Ghai: Yeah, Scott, so I think Seth had a similar question earlier in the call. So I think some of the things that I said earlier, I'll kind of touch upon. A lot of this, the disconnect that we're seeing with our demand outlook and the departures goes fundamentally back to the pent-up demand on kind of shop visits, right? As I said earlier, shop visits in 2025 are going to be below 2019 levels.

[Company Representative]: Yeah, Scott. I think Seth had a similar question earlier in the call. I think some of the things that I said earlier, I'll kind of touch upon. A lot of this, with the disconnect that we're seeing with our demand outlook and the departures growth, goes fundamentally back to the pent-up demand on shop visits, right? As I said earlier, shop visits in 2025 are going to be below 2019 levels. The increase in work scopes that we are seeing, especially on the widebody side, both on GE90, on GEnx, as those migrate to the next level of shop visit, that's a big piece of that. The growth of our external LEAP channel, we spoke earlier about LEAP channel, LEAP external shop visits being up 2X in the quarter, right?

Has anything structurally changed about the business model that could cause your aftermarket growth to decouple or sustainably outperform, ask growth over the long term? Or is it simply just strength driven by heavier work scopes, better throughput because of a healthier supply chain, and the flight deck productivity?

Yeah, Scott. So, I think Seth had a similar question earlier in the call. Um, so.

I think some of the things that I said earlier, I'll kind of touch upon.

Larry Culp: The increase in work scopes that we are seeing, especially on the wide body side, both on GE90, on GEnx, as those migrate to the next level of shop visit. So that's a big piece of that. The growth of our external LEAP channel. We spoke earlier about LEAP channel, LEAP external shop visits being up 2x in the quarter, right? As we think longer term for the year, we expect LEAP external shop visits to be kind of in the mid-teens, slightly above that range. And as we project that for 2030, we expect that to be 30%, right? So that will drive a huge amount of spare parts growth, not only do the LEAP shop visits ramp, but also the participation of external channel grows. And then you combine that with a little bit of price increase that we drive every year.

The increase in work scopes that we are seeing, especially on the wide body side, both on GE90, on GEnx, as those migrate to the next level of shop visit. So that's a big piece of that. The growth of our external LEAP channel. We spoke earlier about LEAP channel, LEAP external shop visits being up 2x in the quarter, right? As we think longer term for the year, we expect LEAP external shop visits to be kind of in the mid-teens, slightly above that range. And as we project that for 2030, we expect that to be 30%, right? So that will drive a huge amount of spare parts growth, not only do the LEAP shop visits ramp, but also the participation of external channel grows. And then you combine that with a little bit of price increase that we drive every year.

[Company Representative]: As we think longer term for the year, we expect LEAP external shop visits to be in the mid-teens, slightly above that range. As we project that for 2030, we expect that to be 30%, right? That will drive a huge amount of spare parts growth as not only do the LEAP shop visits ramp, but also the participation of external channel grows. You combine that with a little bit of price increase that we drive every year. I think those are the fundamental reasons why we are seeing this increase in demand. It's pent-up demand, work scopes, and then growth of the external channel.

You know, a lot of this, you know what the disconnect that we're seeing with our demand Outlook and uh and the departures growth goes, fundamentally back to the pent up Demand on on kind of shop visits, right? As I said earlier, shop is in 25 are going to be below, 2019 levels. The increase in work Scopes that we are seeing, especially on the wide body side. Both on g90 on GNX, um, as those like, with the next level of shop, visit, you know? So that's that's a big piece of that. The growth of our external leap Channel. We, we spoke earlier about leap Channel leap external shop as being up to X in the quarter, right? As we think longer term for the year, we expect deep external shops is to be kind of in the mid teens slightly above that range. And as we project that to 2030, we expect that to be 30%, right? So that will drive,

Huge amount of spare parts growth.

Larry Culp: So I think those are the fundamental reasons why we are seeing this increase in demand. It's pent-up demand, work scopes, and then growth of external channel. Larry, any final comments? Blaire, thank you. Yeah, just to close, GE Aerospace is an exceptional franchise with enduring competitive strengths and a clear path for continued value creation. Our updated outlook today reflects growing confidence in that trajectory as we deliver for our customers, our shareholders, and the flying public. We appreciate your time this morning and your interest in GE Aerospace. Thank you, ladies and gentlemen. This concludes today's conference. Thank you for participating. You may now disconnect. Speakers, please stand by for your post-conference.

So I think those are the fundamental reasons why we are seeing this increase in demand. It's pent-up demand, work scopes, and then growth of external channel.

Blaire Shoor: Larry, any final comments?

And not only do the Leap Shop with its ramp, but also the participation of external channel growth. And then, you know, you combine that with a little bit of price increase that we drive every year. So I think those are the fundamental reasons why we are seeing this increase in demand. It's pent-up demand, work scopes, and then growth of external channels.

Larry Culp: Blaire, thank you. Yeah, just to close, GE Aerospace is an exceptional franchise with enduring competitive strengths and a clear path for continued value creation. Our updated outlook today reflects growing confidence in that trajectory as we deliver for our customers, our shareholders, and the flying public. We appreciate your time this morning and your interest in GE Aerospace.

Larry, any final comments.

Blaire, thank you. Yeah, just to close, Geo. Space is an exceptional franchise with enduring competitive strengths and a clear path for continued value creation.

Our updated outlook today reflects growing confidence in that trajectory as we deliver for our customers and our shareholders.

And the flying public.

Operator: Thank you, ladies and gentlemen. This concludes today's conference. Thank you for participating. You may now disconnect. Speakers, please stand by for your post-conference.

We appreciate your time this morning and your interest in GE Aerospace.

[Company Representative]: Thank you, ladies and gentlemen. This concludes today's conference. Thank you for participating. You may now disconnect. Speakers, please stand by for your post-conference.

Thank you, ladies and gentlemen. This concludes today's conference.

Thank you for participating. You may proceed. Now, this can...

Speakers, please stand by for your post-conference.

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