Surf Air Mobility (SRFM) Q2 2026 Earnings Call Summary

1Key Financial Results and Metrics

Revenue: $29.5 million, at the high end of guidance ($27 million to $30 million), representing an 8% increase year-over-year and a 15% increase from Q1 2026.

Adjusted EBITDA Loss: $10.5 million, within guidance range, with an improvement in full-year adjusted EBITDA loss guidance expected to narrow to $30 million to $25 million (40% improvement).

Scheduled Service Revenue: $17.4 million, down 20% year-over-year due to deliberate route exits, but Mokulele Airlines revenue increased by 7% compared to Q2 2025.

Private Charter Revenue: $12.1 million, nearly doubling year-over-year with a 67% increase in departures.

Debt Reduction: Convertible note principal reduced by 64%, with a new $17 million convertible note and a $30 million non-convertible term note.

2Strategic Updates and Business Highlights

Transformation Plan: Successfully completed foundational work, now entering the expansion phase through 2027, focusing on revenue growth and profitability.

SurfOS Contracts: Secured a multi-year contract with Wheels Up, expected to generate up to $12 million, marking a significant milestone for SurfOS.

Partnerships: Expanded collaboration with Palantir to enhance engineering and business development resources for SurfOS commercialization.

Electric Aircraft Demonstrations: Partnered with BETA Technologies for electric aircraft demonstration flights in Hawaii, supported by Hawaiian Airlines.

Operational Efficiency: Achieved a controllable completion factor of 98% and on-time arrivals of 88%, demonstrating resilience despite adverse weather and fuel price volatility.

3Forward Guidance and Outlook

Full-Year 2026 Guidance: Revenue expected between $128 million and $138 million (20%-30% growth over 2025) and adjusted EBITDA loss narrowing to $30 million to $25 million.

Q3 2026 Expectations: Revenue forecasted between $35.5 million and $37.5 million, with adjusted EBITDA loss projected between $7 million and $4 million.

Profitability Focus: Anticipated improvements in free cash flow conversion and profitability from airline operations in the second half of the year.

4Bad News, Challenges, or Points of Concern

Scheduled Service Revenue Decline: The deliberate exit from unprofitable routes led to a 20% decrease in scheduled service revenue.

Operational Headwinds: Elevated fuel prices and adverse weather conditions impacted operations, particularly in Hawaii.

Market Volatility: The aviation industry continues to face volatility, particularly in fuel pricing, which could affect future margins.

Compliance with NYSE Standards: The company is working to regain compliance with NYSE listing standards due to a minimum share price deficiency, with a reverse stock split authorized as a potential measure.

5Notable Q&A Insights

Broker Onboarding: The company aims to continue scaling its independent broker program, emphasizing the importance of both broker and wholesale relationships for charter growth.

Enterprise Contracts: Management is optimistic about securing additional enterprise software contracts by year-end, with a healthy pipeline across various products.

Operational Efficiency: The integration of SurfOS is expected to drive long-term efficiencies and mitigate the impact of fuel price volatility.

Future Milestones: Key milestones include the commercialization of SurfOS, growth in the Surf On Demand segment, and a focus on narrowing adjusted EBITDA losses. Overall, Surf Air Mobility demonstrated resilience in a challenging environment, achieving key financial metrics and strategic milestones while navigating operational headwinds. The focus remains on growth and profitability as the company transitions into its next phase of expansion.