Surf Air Mobility outlines $100M+ 2025 revenue target and 2026 software rollout as operational turnaround accelerates

Earnings Call Insights: Surf Air Mobility Inc. (SRFM) Q2 2025

MANAGEMENT VIEW

* CEO Deanna White reported "exceptional progress" in transforming Surf Air Mobility, highlighting that the company has "substantially augmented our leadership team; moved our systems operations center to the aviation hub of Dallas; hired amazing talent throughout the organization; implemented new processes, benchmarks and standards powered by technology; and successfully aligned our organization around focused execution."
* White indicated that the company "substantially improved all our key operating performance metrics, including on-time departure, on-time arrival and controllable completion factor by double-digit percentages as compared with the prior year."
* The airline operation achieved "profitability in our airline operations for the second quarter, keeping us on track toward our goal of profitability in our airline operations for the full year."
* Surf Air Mobility signed an interline agreement with Japan Airlines and renewed Essential Air Service (EAS) contracts for two Hawaiian markets, totaling $14 million over four years.
* The on-demand business was relaunched with a focus on product profitability, the introduction of a Jet Card, and a shift to larger cabin sales. White stated, "July being our highest sales month since the inception of this business."
* Strategic progress on the SurfOS software platform, powered by Palantir, includes real beta users, the launch of BrokerOS and OperatorOS features, and a five-year exclusive partnership with Palantir for the configuration and sale of software to Part 135 operators and charter brokers. Six clients have signed LOIs to purchase SurfOS flagship products ahead of the commercial launch.
* White emphasized, "Second quarter revenue of $27.4 million exceeded the company's guidance of $23.5 million to $26.5 million and rose 17% sequentially versus the first quarter."
* CFO Oliver Reeves highlighted, "The company raised $44.7 million in equity capital through a combination of registered direct offerings, private placements and draws under our share subscription facility."
* Reeves added, "Adjusted EBITDA loss of $9.5 million in the second quarter exceeded our guidance of a loss of $10 million to $13 million. As compared with the first quarter, adjusted EBITDA improved by $4.8 million, driven by profitability in the airline operations."

OUTLOOK

* Reeves stated, "For the third quarter, we expect revenue to remain in line with the strong results of the second quarter and within a range of $27 million to $28.5 million. Similarly, we expect our adjusted EBITDA loss to remain in line with the improved results achieved in Q2 and within a range of $8.5 million to $10."
* For the full year, the company continues to "expect to achieve revenue in excess of $100 million and airline operations profitability defined as positive adjusted EBITDA."

FINANCIAL RESULTS

* Second quarter revenue reached $27.4 million, surpassing the prior quarter and the company’s guidance range.
* Scheduled service revenue increased 20% quarter-over-quarter, linked to improvement in controllable completion factor from 82% to 95%.
* On-demand revenue rose 5% quarter-over-quarter, aided by the BrokerOS software and a focus on profitable bookings.
* Adjusted EBITDA loss was $9.5 million, improving $4.8 million sequentially.
* The company raised $44.7 million in equity capital and converted $29.9 million of convertible notes into common stock, reducing balance sheet leverage and resulting in annualized interest savings of at least $2.9 million.

Q&A

* Amit Dayal, H.C. Wainwright: Asked about SurfOS go-to-market strategy and remaining development. Reeves: "We are currently focusing on product development during the beta phase... Once we finish that, we'll move to the monetization strategies... We believe that this market is large and the opportunity is equally large... regional air mobility will grow into a $75 billion to $115 billion market globally by 2035."
* Dayal: Requested update on electrification certification. Sudhin Shahani: "We are still on track for a 2027 -- late 2027 kind of time frame for our electrification initiative."
* Dayal: Asked about further improvement in airline operations. White: "I would call us in the middle innings... There is still more upside to the business and the profitability from those endeavors."
* Austin Moeller, Canaccord Genuity: Asked about EAS revenue and Jet Card impact. Reeves: "It's about 46%" of revenue for EAS; Jet Card "contributed little to the increase in on-demand that we have seen so far."
* Moeller: Asked about SurfOS rollout and monetization. Reeves: Rollout will "start seeing potential rollouts in the first half of the year, and it will build as we scale the number of customers." Monetization is likely to include "a take rate against the efficiencies that we create."
* David Storms, Stonegate Capital Partners: Asked about Palantir agreement. Shahani: "The agreement names us as Palantir's exclusive partner... It also provides for us to have the right to sublicense some of our rights to our client third parties."
* Storms: Inquired about controllable completion factor. White: "Our completion factor is running around 95%, 96% right now, and it is consistently performing that way, and we have stabilized that, which is great."

SENTIMENT ANALYSIS

* Analysts maintained a positive and inquisitive tone, focusing on execution, milestones, and strategic partnerships rather than expressing skepticism or concern.
* Management’s tone was confident and forward-looking in both prepared remarks and responses, with frequent use of phrases such as "we are winning," and "we are uniquely qualified to win."
* Compared to the prior quarter, management’s tone shifted from cautious optimism to a more assertive and upbeat posture, while analysts appeared more encouraged by recent results and progress.

QUARTER-OVER-QUARTER COMPARISON

* Revenue for Q2 2025 increased from $23.5 million in Q1 to $27.4 million, with scheduled service revenue up 20% and on-demand revenue up 5% sequentially.
* Adjusted EBITDA loss improved from $14.4 million in Q1 to $9.5 million in Q2.
* Management’s outlook language evolved from "on track" and "optimizing" in Q1 to "outperforming guidance" and "on track toward our goal" in Q2.
* Strategic focus shifted from stabilizing operations and exiting unprofitable routes in Q1 to software commercialization, network expansion plans for 2026, and scaling SurfOS in Q2.
* Analyst questions in Q2 concentrated more on the commercial potential of SurfOS and execution of airline operational gains, compared to Q1’s focus on regulatory risk and route rationalization.

RISKS AND CONCERNS

* Management acknowledged the company is "still in early innings" of its transformation and that full network rollout of OperatorOS will not be completed until year-end.
* Reeves noted the need to "finish...product development during the beta phase" for SurfOS before monetization strategies can be finalized.
* Ongoing execution risk remains as new software products, network expansion, and electrification initiatives are still in progress.
* No new regulatory or funding risks were highlighted this quarter.

FINAL TAKEAWAY

Surf Air Mobility’s second quarter marked a significant step forward in its transformation, with revenue and adjusted EBITDA outperforming guidance, airline operations reaching profitability, and continued progress toward commercializing its SurfOS software platform. Management reaffirmed its 2025 targets of over $100 million in revenue and airline operations profitability, while outlining network expansion and software commercialization plans for 2026. The company’s balance sheet was strengthened by successful capital raises and debt conversion, positioning it to execute on ambitious technology and growth initiatives in the months ahead.

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

MORE ON SURF AIR MOBILITY

* Surf Air Mobility Inc. (SRFM) Q2 2025 Earnings Call Transcript [https://seekingalpha.com/article/4812836-surf-air-mobility-inc-srfm-q2-2025-earnings-call-transcript]
* Surf Air Mobility: On The Cusp Of Profitability, But Remains Risky [https://seekingalpha.com/article/4801194-surf-air-mobility-cusp-of-profitability-remains-risky]
* Surf Air Mobility: Extremely Overvalued With Huge AI And Electrification Growth Opportunities [https://seekingalpha.com/article/4800586-surf-air-mobility-extremely-overvalued-huge-ai-electrification-growth-opportunities]
* Surf Air Mobility GAAP EPS of -$1.34 misses by $0.25, revenue of $27.4M beats by $2.34M [https://seekingalpha.com/news/4484170-surf-air-mobility-gaap-eps-of-1_34-misses-by-0_25-revenue-of-27_4m-beats-by-2_34m]
* Surf Air Mobility highlights key operational progress as it moves toward profitability [https://seekingalpha.com/news/4458750-surf-air-mobility-highlights-key-operational-progress-as-it-moves-toward-profitability]