Executive Summary / Key Takeaways

• Bridger Aerospace is strategically transforming into a year-round aerial firefighting and surveillance provider, capitalizing on the escalating and prolonged global wildfire threat through specialized assets and advanced technology.
• The company reported record financial performance in Q3 2025, with revenue increasing 5% year-over-year to $67.9 million and net income rising 26% to $34.5 million, driven by favorable Super Scooper rates and increased surveillance flight hours.
• A significant balance sheet transformation, including a $49.3 million sale-leaseback and a new $331 million debt facility, provides substantial financial flexibility for future fleet expansion and organic growth.
• Bridger's core investment thesis is strengthened by its unique technological differentiators, such as the Super Scooper aircraft and sensor-enhanced multi-mission aircraft, which offer superior effectiveness and real-time intelligence in initial attack and surveillance.
• The company is well-positioned to benefit from favorable policy shifts, including increased federal funding and a focus on aggressive wildfire suppression, while actively mitigating risks like seasonality and debt through long-term, exclusive-use contracts.

A New Era for Aerial Wildfire Management

Bridger Aerospace Group Holdings, Inc. (NASDAQ:BAER), founded in 2014 and headquartered in Belgrade, Montana, has emerged as a pivotal player in aerial wildfire surveillance, relief, and suppression. The company's core mission is to protect lives, property, and the environment from the increasing devastation of wildfires, a threat that has evolved from seasonal to year-round. This strategic shift is driven by undeniable climate trends, including warmer springs, longer summers, and decreasing humidity, which contribute to a higher frequency and severity of wildfires globally.

Bridger's overarching strategy centers on leveraging its specialized aircraft fleet, integrating advanced technology, and securing long-term, exclusive-use contracts. This approach aims to build revenue resiliency and expand its operational footprint, moving beyond traditional seasonal dependencies. The company operates a fleet of thirteen aircraft, including six Viking CL-415EAF Super Scoopers, four Daher Kodiak 100s, one Twin Commander surveillance platform, one Pilatus PC-12, and one Beechcraft King Air 350, as of September 30, 2025.

The industry landscape is undergoing a significant transformation, with government agencies recognizing the need for proactive and aggressive wildfire suppression. Initiatives like the Wildland Fire Service Plan and the Fire Ready Nation Act, coupled with a proposed threefold increase in funding for the U.S. Wildland Fire Service to $3.7 billion in the 2026 budget, signal a robust and supportive policy environment. This legislative and executive focus on preparedness and rapid response creates a compelling market opportunity for companies like Bridger Aerospace, whose assets are uniquely positioned for initial attack and comprehensive wildfire management.

Technological Edge: Precision, Speed, and Intelligence

Bridger Aerospace's competitive advantage is deeply rooted in its differentiated technology and continuous innovation. The company's fleet of Viking CL-415EAF Super Scoopers stands as a cornerstone of its fire suppression capabilities. These specialized amphibious aircraft are recognized for their effectiveness as "ideal initial attack assets," capable of rapidly dropping large volumes of water directly on wildfires. This capability has translated into tangible operational benefits, with Super Scoopers seeing "nearly a 9% increase in average flight hours year-to-date" in Q3 2025 and one scooper logging over 400 contract hours in 2024, a record for the company.

Beyond suppression, Bridger's aerial surveillance services leverage multi-mission aircraft (MMAs) and surveillance platforms equipped with advanced sensors. These aircraft provide "real-time infrared imagery" and critical situational awareness, enhancing the effectiveness of wildfire response. The integration of these sensor-enhanced aircraft with the Ignis app, a mobile platform for firefighters, creates a "seamless data flow from air to ground." This technological synergy is "unlocking new levels of situational awareness, supporting multi-mission aviation contracts and enhancing both operational effectiveness and safety." Furthermore, the capabilities of Flight Test Mechanical Solutions, Inc. (FMS), acquired in June 2024, enable advanced "night mapping missions," significantly enhancing Bridger's aerial intelligence capabilities.

Looking to the future, Bridger is actively engaged in research and development initiatives to maintain its technological leadership. The company has entered into a memorandum of understanding with Positive Aviation to become the exclusive North American launch customer for the FF72 aircraft, a next-generation amphibious water scooping firefighting platform derived from an ATR 72-600. With the first delivery scheduled for 2029, Bridger has the opportunity to purchase 10 FF72 aircraft with an option for an additional 10 units. This initiative aims to expand Bridger's program with "unique next-generation firefighting technology" to address "global demand" and the "scarcity of assets" in the aerial firefighting market.

For investors, these technological differentiators translate into a robust competitive moat. The superior performance and rapid response capabilities of the Super Scoopers drive higher utilization rates and favorable contract terms. The advanced sensor technology and data integration enhance the value proposition of Bridger's surveillance services, leading to increased demand for high-margin contracts. The strategic investment in the FF72 positions Bridger for long-term fleet modernization and potential market leadership in next-generation aerial firefighting platforms, contributing to sustained revenue growth, margin expansion through efficiency and premium services, and market share gains in a growing industry.

Financial Strength and Strategic Expansion

Bridger Aerospace's strategic initiatives have translated into a period of robust financial performance and a strengthened balance sheet. For the third quarter of 2025, the company reported record revenue of $67.9 million, a 5% increase over the prior year. This growth was primarily fueled by favorable rate increases for its Super Scoopers and a significant 43% surge in aerial surveillance revenue to $10.8 million, driven by increased flight hours. Net income for the quarter also saw a substantial 26% increase, reaching $34.5 million, while Adjusted EBITDA grew 4% to $49.1 million.

The nine months ended September 30, 2025, further underscore this positive trajectory, with total revenue climbing 38% year-over-year to $114.3 million. Fire suppression revenue increased 24% to $76.5 million, and aerial surveillance revenue rose 42% to $16.5 million. Notably, Maintenance, Repair and Overhaul (MRO) revenue experienced a remarkable 168% increase to $17.8 million, largely due to return-to-service work on the Spanish Scoopers and contributions from the FMS acquisition. This strong performance led to a net income of $19.3 million for the nine-month period, a significant turnaround from a net loss of $2.7 million in the comparable period of 2024.

Bridger's operational efficiency is also evident in its cost management. For Q3 2025, total cost of revenues decreased 8% to $21.1 million, primarily due to lower depreciation and salaries in flight operations, partially offset by increased maintenance expenses related to the Spanish Scoopers and FMS. Selling, General and Administrative (SG&A) expenses also declined 11% to $7.7 million, reflecting reduced stock-based compensation and depreciation.

Liquidity and capital resources have been significantly enhanced through strategic financial maneuvers. As of September 30, 2025, Bridger held $55.1 million in cash and cash equivalents. A pivotal development occurred on October 28, 2025, when the company completed a sale-leaseback transaction of its Bozeman campus facilities for approximately $49.3 million. Concurrently, Bridger executed a new $331 million debt facility, comprising $210 million in Initial Term Loans, a $21.5 million Revolving Credit Facility, and a $100 million Delayed Draw Term Loan (DDTL) available until October 28, 2027. These proceeds were strategically deployed to refinance existing debt, including the $160 million Series 2022 Bonds, and to provide substantial capacity for future aircraft acquisitions and organic growth. Management anticipates that existing cash, expected operating cash flows, and the new credit facility will adequately meet liquidity needs for the foreseeable future.

Competitive Positioning and Market Leadership

Bridger Aerospace operates in a specialized yet increasingly vital segment of the aerospace industry, facing competition from both large defense contractors and niche players. While larger entities like Lockheed Martin (LMT) and Boeing (BA) possess vast resources and diversified portfolios, Bridger differentiates itself through its focused expertise and agility in aerial wildfire management. The company's "world's largest private Super Scooper fleet" provides a distinct advantage in direct fire suppression, a capability that larger, less specialized competitors may not match in terms of immediate deployment and operational focus.

Bridger's strategic emphasis on securing long-term, exclusive-use contracts with federal and state governments further solidifies its market position. These contracts, such as the five-year, $20.1 million IDIQ agreement with the U.S. Department of the Interior for air attack and surveillance aircraft in Alaska, and an exclusive-use contract with Montana for wildfire detection, commit a significant portion of its fleet to guaranteed revenue streams. This strategy helps to mitigate the inherent unpredictability of wildfire seasons, a vulnerability for businesses heavily reliant on variable demand.

In the realm of aerial intelligence, Bridger's integration of advanced sensors with the Ignis app positions it favorably against competitors. This seamless data flow from air to ground enhances situational awareness, a critical factor in effective wildfire response. While companies like Kratos Defense & Security Solutions (KTOS) are leaders in unmanned systems, Bridger's manned, sensor-enhanced aircraft offer proven operational effectiveness and safety in real-time, high-stakes environments. The acquisition of FMS Aerospace further bolsters Bridger's in-house modification and integration capabilities, allowing it to incorporate leading-edge sensor technologies and pursue Department of Defense (DoD) contracting opportunities, diversifying its revenue base beyond wildfire suppression.

Despite its specialized strengths, Bridger faces competitive vulnerabilities stemming from its smaller scale compared to industry giants, which could lead to higher operating costs or longer lead times for certain fleet maintenance. Its dependence on government funding, while a strategic focus, also exposes it to potential budget fluctuations. However, the company's proactive approach to securing multi-year contracts and its recent balance sheet optimization efforts are designed to build resilience against these challenges.

Outlook and Growth Trajectory

Bridger Aerospace's outlook for 2025 and beyond is marked by continued growth and strategic expansion, underpinned by a favorable market environment and strengthened financial position. The company has already surpassed its initial 2025 revenue guidance, now expecting revenue between $118 million and $123 million. Management anticipates reaching the higher end of its Adjusted EBITDA guidance range of $42 million to $48 million. This optimistic forecast is based on strong fleet utilization, record task orders for Super Scoopers, and the observed lengthening of the wildfire year, which supports year-round demand for its services.

The company expects continued improvement in cash provided by operating activities in 2025, building on the over $9 million generated in 2024, which marked its first year of positive operating cash flow. This positive cash generation, combined with the financial flexibility provided by the new $331 million debt facility, will be instrumental in funding future fleet expansion and organic growth initiatives.

Strategic initiatives, such as the return-to-service of the four Spanish Scoopers, are expected to contribute to future revenue, with the first two aircraft already flying on contract in Portugal. While the return-to-service revenue for these aircraft is projected to be lower in 2025 compared to 2024, this pass-through revenue's decrease is expected to contribute to expanding adjusted EBITDA margins. Bridger is actively exploring options to bring these high-margin assets onto its balance sheet, further enhancing its operational capacity.

Risks to this positive outlook include the inherent seasonality and unpredictability of wildfire activity, reliance on a limited supply chain for aircraft and parts, and potential delays in federal budgeting. The company is also actively remediating material weaknesses in its internal control over financial reporting. However, management's focus on long-term contracts, cost rationalization, and leveraging its technological advantages is designed to mitigate these factors. The OBBBA (One Big Beautiful Bill Act), signed July 4, 2025, which made permanent 100% bonus depreciation and other tax benefits, is also expected to support the company's financial health, although its U.S. deferred tax assets are currently subject to a full valuation allowance.

Conclusion

Bridger Aerospace is strategically positioned at the forefront of a critical and expanding industry, transforming its business model to meet the escalating, year-round threat of wildfires. The company's compelling narrative is built upon its specialized fleet, advanced technological differentiators, and a proactive approach to securing long-term government contracts. Recent record financial performance, coupled with a significant balance sheet transformation, underscores its operational effectiveness and enhanced capacity for future growth.

As global climate trends continue to intensify wildfire seasons, Bridger's commitment to innovation, strategic acquisitions like FMS, and the development of next-generation platforms like the FF72, solidify its competitive moat. The supportive policy environment, marked by increased federal funding and a focus on aggressive initial attack, provides a strong tailwind for the company's expansion. While challenges such as seasonality and debt management persist, Bridger's strategic initiatives and robust financial health position it to capitalize on these opportunities, driving sustained revenue growth, improved profitability, and positive cash flows for its stakeholders.