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Allegiant Travel CO (ALGT)·Q1 2025 Earnings Summary

Executive Summary

  • Q1 2025 revenue was $699.1M (+6.5% YoY) and GAAP diluted EPS was $1.73; adjusted diluted EPS was $1.81, with adjusted airline-only diluted EPS of $2.11 .
  • The airline-only operating margin reached 9.3% (+3.1 pts YoY), supported by 14.2% ASM growth and 99.9% controllable completion, while non-fuel unit costs fell 9% YoY .
  • Management withdrew full-year 2025 guidance amid domestic demand volatility, removed >7.5 points of capacity May–Aug, but issued Q2 guidance (airline-only operating margin 6–8%, adjusted airline-only EPS $0.50–$1.50) .
  • Results beat Wall Street consensus: EPS $1.81 vs $1.55*, revenue $699.1M vs $695.0M*, and EBITDA $126.8M vs $121.2M*; the beat was driven by cost discipline, ancillary strength ($79.28 per pax), and lower fuel costs . Values retrieved from S&P Global*.
  • Key near-term stock narrative: guidance withdrawal and capacity cuts may temper sentiment, but cost control, ancillary monetization, and MAX integration support medium-term margin restoration .

What Went Well and What Went Wrong

What Went Well

  • Airline-only operating margin improved to 9.3% (+3.1 pts YoY) with 99.9% controllable completion on 32k departures; “Team Allegiant executed a successful first quarter…” — CEO Gregory Anderson .
  • Record ancillary revenue per passenger at $79.28 (+4.7% YoY) driven by Allegiant Extra expansion, restored bundle, travel insurance, and cobrand card strength .
  • CASM ex-fuel down 9% YoY to 8.07¢; adjusted consolidated EBITDA margin was 18.0% (EBITDA $126.1M), reflecting broad cost discipline and operating efficiency .

What Went Wrong

  • Management withdrew full-year 2025 guidance due to heightened demand volatility and macro uncertainty starting in February; >7.5 points of capacity pulled for May–Aug .
  • Yield and TRASM pressure in off-peak/shoulder periods; Q2 TRASM expected to face greater YoY pressure than Q1 despite capacity adjustments .
  • Sunseeker Q2 guide implies seasonal softness (occupancy ~55%, ADR ~$225, adjusted EBITDA ~($1)M) versus Q1’s stronger seasonal performance .

Financial Results

Consolidated and Key Airline Metrics (GAAP unless noted)

MetricQ3 2024Q4 2024Q1 2025
Total Operating Revenue ($M)$562.2 $627.7 $699.1
Operating Income ($M)$(26.3) $(264.0) $65.0
Net Income ($M)$(36.8) $(216.2) $32.1
Diluted EPS (GAAP)$(2.05) $(12.00) $1.73
Adjusted Diluted EPS$(2.02) $2.10 $1.81
Adjusted Consolidated EBITDA ($M)$46.3 $129.2 $126.1
Adjusted Consolidated EBITDA Margin (%)8.2% 20.6% 18.0%
Airline-only Adjusted Operating Margin (%)0.1% 13.2% 9.3%
Adjusted Airline-only Diluted EPS$(0.49) $3.00 $2.11

Segment Breakdown – Q1 2025

Metric ($000s)AirlineSunseekerConsolidated
Revenues from external customers668,386 30,688 699,074
Operating Expenses607,534 26,538 634,072
Operating Income (Loss)60,852 4,150 65,002
Income (Loss) Before Income Taxes49,624 (7,684) 41,940

KPIs and Operating Statistics

KPIQ3 2024Q4 2024Q1 2025
System ASMs (thousands)4,501,532 4,697,999 5,451,584
CASM (¢)12.35 11.32 11.14
CASM ex-fuel & specials (¢)8.89 8.29 8.07
Load Factor (scheduled, %)85.6% 80.2% 80.5%
Avg Fuel Cost ($/gal)$2.68 $2.50 $2.61
Ancillary Revenue per Passenger ($)$74.02 $78.43 $79.28

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Adjusted airline-only EPSFY 2025$7.75–$10.25 Withdrawn Withdrawn
System ASMs YoYFY 2025~16% >7.5 pts capacity removed May–Aug; off-peak focus Lowered near-term
Scheduled service ASMs YoYFY 2025~17% As above Lowered near-term
Fuel cost per gallonFY 2025$2.60 $2.40 (Q2 guide) Lower vs prior
Airline-only operating marginQ2 2025N/A6–8% New
Adjusted airline-only EPSQ2 2025N/A$0.50–$1.50 New
Adjusted consolidated EPSQ2 2025N/A$0.00–$1.00 New
Interest expense (consolidated)FY 2025$130–$140M $150–$160M Raised
Capitalized interestFY 2025($20)–($30)M ($15)–($25)M Reduced benefit
Interest incomeFY 2025$30–$40M $30–$40M Maintained
Aircraft-related CAPEXFY 2025$285–$315M $260–$280M Lowered
Deferred heavy maintenanceFY 2025$85–$95M $50–$70M Lowered
Other airline CAPEXFY 2025$115–$135M $95–$115M Lowered
Recurring principal paymentsFY 2025$165–$175M $165–$175M Maintained
Sunseeker occupancyQ2 2025N/A (Q1 guide ~60%) ~55% Seasonal lower
Sunseeker ADRQ2 2025N/A (Q1 guide ~$320) ~$225 Seasonal lower
Sunseeker Adjusted EBITDAQ2 2025N/A (Q1 guide ~$2M) ~($1)M Seasonal lower

Earnings Call Themes & Trends

TopicQ3 2024 (Prev-2)Q4 2024 (Prev-1)Q1 2025 (Current)Trend
Demand/TRASMTRASM turned positive late Sept; hurricanes tempered Q4 outlook Q4 TRASM down ~4.5% post-hurricanes; strong holiday peak Q2 TRASM to be more pressured YoY; booking stabilization in recent days Down in off-peak; stabilizing signs
Capacity strategyRestore peak utilization; MAX integration; cost actions 14% Q1 capacity planned; peak utilization 9.6 hours/day in Dec >7.5 points removed for May–Aug; off-peak cuts; LAX base closure Flexing down off-peak
Allegiant Extra~40% fleet retrofitted; ~$3 per pax uplift Expansion continues; expected 2/3 of departures in 2025 >50% fleet now; ~65% of Q2 departures with Extra; ~$500/dep benefit Scaling, revenue tailwind
MAX fleetFirst MAX delivered; ~26% fuel burn improvement estimate 4 MAX in service YE; strong economics, maintenance honeymoon MAX ~6% of ASMs in Q1; ~16% by YE; dispatch reliability above system Growing contribution
Cost disciplineIdentified ~$20M annual savings CASM ex down 2.5% YoY in Q4; deleveraging CASM ex down 9% YoY; more initiatives, $90M spend removed Strengthening
Sunseeker strategyHurricane impacts; ongoing review Competitive process to sell majority stake by summer Process on track; Q1 Sunseeker EBITDA +$4.8M; Q2 seasonal dip Monetization progressing

Management Commentary

  • “Team Allegiant executed a successful first quarter, delivering an airline-only operating margin of 9.3 percent… achieved a 99.9 percent controllable completion… on 14.2 percent capacity growth.” — Gregory Anderson, President & CEO .
  • “Heightened volatility is impacting domestic demand… we are therefore withdrawing our full-year 2025 guidance… we anticipate maintaining solid profitability by leveraging our flexible model.” — Gregory Anderson .
  • “We finished the quarter with $1.2 billion in available liquidity… Net leverage improved to 2.6 turns… Capital expenditures during the quarter were $83 million.” — Robert “B.J.” Neal, CFO .
  • “We removed more than 7.5 points of May through August capacity… roughly two-thirds from Tuesday, Wednesday and Saturday flying… recent booking trends are promising.” — Drew Wells, CCO .

Q&A Highlights

  • Margin trajectory: Management aims to “drive and optimize margins,” acknowledging seasonally weaker Q3; Q4 historically stronger .
  • Sunseeker transaction: Competitive process with well-capitalized counterparties remains on track for completion this summer; group/F&B mix sustainable .
  • Revenue outlook: Q2 TRASM guided to be more negative than Q1; recent bookings improved broadly, especially into summer .
  • Cost cadence: Unit costs down YoY in Q2/Q3, hardest compare in Q4 due to prior gains; several structural savings underway .
  • Allegiant Extra contribution and MAX economics: Extra outpunching its weight in seat revenue; MAX aircraft showing ~35% EBITDA per aircraft advantage vs A320 (Allegiant Extra) with superior dispatch reliability .

Estimates Context

MetricQ1 2025 Consensus*Q1 2025 ActualSurprise
Primary EPS$1.55*$1.81 +$0.26 (beat)
Revenue ($M)$695.0*$699.1 +$4.1M (beat)
EBITDA ($M)$121.2*$126.8 +$5.6M (beat)
# EPS Estimates12*——
# Revenue Estimates9*——

Values retrieved from S&P Global*.
Note: S&P “Primary EPS” aligns with adjusted diluted EPS reported ($1.81) .

Key Takeaways for Investors

  • Q1 beat vs consensus with strong cost control and ancillary monetization; non-fuel unit costs down 9% YoY, supporting margin resilience despite softer off-peak demand .
  • Guidance withdrawal is the key overhang; near-term narrative hinges on booking stabilization and execution of aggressive capacity flex, including >7.5 pts removed in shoulder months .
  • Allegiant Extra scaling (~65% of Q2 departures) and MAX integration (reliability, economics) are tangible revenue and cost tailwinds into H2 and FY26 .
  • Liquidity robust ($1.2B); deleveraging in progress, with CapEx guidance materially reduced (aircraft-related now $260–$280M) and Sunseeker sale targeted by summer .
  • Near-term trading: sensitivity to Q2 TRASM pressure and any incremental capacity actions; medium-term thesis supported by structural cost advantage, product uplifts, and fleet modernization .
  • Watch catalysts: Sunseeker transaction terms/timing; Boeing delivery cadence; pilot contract developments; continued ancillary growth from Navitaire enhancements and loyalty .