Surf Air Mobility outlines $105M revenue target for 2025 with SurfOS commercialization set for 2026

Earnings Call Insights: Surf Air Mobility (SRFM) Q3 2025

MANAGEMENT VIEW

* CEO Deanna White highlighted the execution of a four-phase transformation plan, emphasizing, "We are executing and demonstrating improvements in all areas of the business. Financially, operationally and strategically. Financially, over the past year, we have improved our capital structure and deleveraged our balance sheet through a series of debt and equity transactions." She detailed a $50 million credit facility, $50 million in additional equity capital, and a $52 million debt reduction over the past year.
* White announced a pivotal $100 million strategic financing post-quarter, stating, "This financing includes $26 million of new capital to drive development and commercialization of SurfOS. The remaining $74 million structured as a 0 coupon convertible notes will be used to refinance debt, reducing cash interest expense and allowing for further deleveraging of the balance sheet."
* Third quarter revenue reached $29.2 million, surpassing guidance and marking the seventh consecutive quarter of meeting or exceeding revenue and adjusted EBITDA guidance. The airline operations achieved a second consecutive quarter of profitability in this segment.
* Operational advances included a 40% increase in on-demand revenue, a 14% rise in revenue per flight due to a shift from turboprops to jet aircraft and from domestic to international flights, and a 36% reduction in on-demand team expenses since adopting SurfOS.
* White also highlighted an expanded five-year agreement with Palantir, granting exclusivity for products developed for charter brokers and operators, and providing the ability to team on enterprise solutions. "We intend to launch our 3 flagship SurfOS products in 2026, BrokerOS, OperatorOS and OwnerOS."
* CFO Oliver Reeves added, "On November 10, 2025, Surf Air Mobility announced a $100 million strategic transaction that will continue to enable us to achieve our transformation plan... This capital will be used to fund the continued development of SurfOS's 3 flagship products... and to enable the scaling of our engineering and sales capabilities."

OUTLOOK

* For Q4 2025, the company expects revenue in the range of $25.5 million to $27.5 million, and adjusted EBITDA loss between $6.5 million and $8 million. These ranges reflect ongoing efforts to exit unprofitable routes and improve profitability.
* Full-year 2025 revenue guidance has been raised to at least $105 million, with reaffirmed guidance for full-year airline operations profitability defined as positive adjusted EBITDA.
* Management stated, "We intend to announce our commercialization plan with milestones in the coming months."

FINANCIAL RESULTS

* Third quarter revenue of $29.2 million exceeded the company's guidance range and increased 6% sequentially, driven by a 42% increase in on-demand revenue and a 4% decrease in scheduled service revenue.
* On a year-over-year basis, revenue increased 3%, with a 40% increase in on-demand revenue offset by a 7% decrease in scheduled service revenue.
* Adjusted EBITDA loss for the third quarter was $9.9 million, within guidance, and remained relatively flat compared to the second quarter and the same quarter of the prior year.
* Airline operations achieved positive adjusted EBITDA for the second consecutive quarter.
* The company significantly reduced liabilities in Q3, including the elimination of a $35 million liability and repayment of $8.2 million in convertible securities principal.

Q&A

* Amit Dayal, H.C. Wainwright: Asked about the cash run rate for SurfOS commercialization. Reeves responded that the financing provides "a runway of between 18 and 24 months."
* Dayal inquired about partnerships with Palantir and Beta Technologies. CEO White explained the company is positioned to partner with multiple technology providers and that SurfOS is being developed to integrate a variety of products and operators into its platform.
* Dayal asked about operating cost reductions after exiting unprofitable routes. White stated, "There are still more benefits to receive once we do have all of those tools in place... we do see the opportunity for increased levels of profitability and even operational performance in the future."
* Austin Moeller, Canaccord Genuity: Inquired about exclusivity of SurfOS features. White clarified, "Our intention is to have all the features available to third parties."
* Moeller asked about scheduled business route exits and new route additions. White said, "We have a few more -- a couple more exits in the fourth quarter... that will be the end of it and all of the exiting of the unprofitable routes will be complete by the end of this year."
* David Storms, Stonegate: Sought more on the path to being debt free. Reeves replied, "The convertible was designed with features that would allow us to gradually delever our balance sheet... we have a great path to becoming debt-free."
* Storms asked about SurfOS commercialization timeline. White said, "We do plan in the first half of 2026 to start generating revenue with that product."
* Storms inquired about government shutdown impacts. White stated, "None of those traffic reductions targeted us or any of our operations... we did not have any capacity reductions."

SENTIMENT ANALYSIS

* Analysts expressed positive sentiment, focusing on commercialization timelines, cost optimization, and strategic partnerships. There were frequent congratulations and constructive questions regarding execution.
* Management maintained a confident and constructive tone throughout, with White highlighting milestone achievements and Reeves emphasizing successful financing and deleveraging steps. Language such as "We are executing and demonstrating improvements" and "We have a great path to becoming debt-free" signaled strong confidence.
* Compared to the previous quarter, both analysts and management maintained a similarly positive tone, with an increased emphasis on commercialization progress and financial stability.

QUARTER-OVER-QUARTER COMPARISON

* Guidance for full-year revenue was raised from "in excess of $100 million" in Q2 to "at least $105 million" in Q3, reflecting improved confidence.
* The transformation plan advanced from operational stabilization to preparation for commercial rollout of SurfOS.
* Q3 saw an expanded partnership with Palantir, including exclusivity and deeper integration, compared to Q2's initial five-year license agreement.
* The company continued to reduce debt, while the previous quarter focused on equity raises and initial debt conversion.
* Both quarters reported consecutive profitability in airline operations and continued rollout of SurfOS features.
* Analysts' questions in Q3 focused more on commercialization, partnerships, and operational optimization, while Q2 centered on performance metrics and early-stage commercialization strategies.

RISKS AND CONCERNS

* Management noted potential risks from further government shutdowns, specifically regarding Essential Air Service subsidies, but stated that "we would continue to operate until the government came back up."
* The company is still reliant on successful commercialization of SurfOS and continued operational performance improvements.
* Analysts highlighted the importance of cost control and the execution of the transformation plan as ongoing concerns.

FINAL TAKEAWAY

Surf Air Mobility's Q3 2025 call emphasized continued operational and financial improvements, a strengthened balance sheet, and a clear path toward commercialization of SurfOS in 2026, underpinned by a $100 million strategic financing and expanded partnership with Palantir. With raised full-year revenue guidance and a focus on profitable growth, the company aims to complete its route optimization and transition to a technology-driven revenue model, positioning itself for future expansion in the air mobility sector.

Read the full Earnings Call Transcript [https://seekingalpha.com/symbol/srfm/earnings/transcripts]

MORE ON SURF AIR MOBILITY

* Surf Air Mobility Inc. (SRFM) Q3 2025 Earnings Call Transcript [https://seekingalpha.com/article/4842791-surf-air-mobility-inc-srfm-q3-2025-earnings-call-transcript]
* Surf Air Mobility: Real Flights, Big Losses, Electrification Dreams [https://seekingalpha.com/article/4826829-surf-air-mobility-real-flights-big-losses-electrification-dreams]
* Surf Air Mobility: Not Everything Palantir Touches Turns Into Gold [https://seekingalpha.com/article/4826807-surf-air-mobility-not-everything-palantir-touches-turns-into-gold]
* Surf Air Mobility GAAP EPS of -$0.64 misses by $0.04, revenue of $29.17M beats by $1.29M [https://seekingalpha.com/news/4520857-surf-air-mobility-gaap-eps-of-0_64-misses-by-0_04-revenue-of-29_17m-beats-by-1_29m]
* Surf Air Mobility enters $100M transaction to enhance SurfOS software [https://seekingalpha.com/news/4519324-surf-air-mobility-enters-100m-transaction-to-enhance-surfos-software]