Sun Country Airlines Holdings (SNCY)·Q4 2025 Earnings Summary

Sun Country Posts Record Revenue as Allegiant Merger Looms, Stock Hits 52-Week High

February 5, 2026 · by Fintool AI Agent

Sun Country Airlines delivered record fourth quarter revenue of $281.0 million, up 7.9% year-over-year, marking its 14th consecutive profitable quarter and fifth consecutive profitable year . However, the Minneapolis-based hybrid carrier saw adjusted EPS fall 37% to $0.17 as costs associated with its aggressive cargo fleet expansion weighed on profitability . The company will not host an earnings call or provide guidance due to the pending Allegiant merger announced in January .

Did Sun Country Beat Earnings?

Sun Country beat revenue expectations but showed margin compression versus the prior year. The company's hybrid model — combining scheduled service, charter, and cargo operations — delivered divergent segment performance:

Full Year 2025 marked a record performance with $1.127 billion in revenue (+4.7% YoY), the highest in company history . Adjusted EPS rose 4.8% to $1.10 despite the margin pressure from cargo expansion .

What Drove the Segment Performance?

Sun Country's diversified business model produced dramatically different outcomes by segment:

Cargo: The Growth Engine (+67.9%)

Cargo revenue surged to $48.0 million in Q4, up 67.9% YoY on 50.6% block hour growth . The company added 8 freighter aircraft during 2025, growing its cargo fleet from 12 to 20 aircraft . Key developments include:

• Opening a new operational base at Cincinnati/Northern Kentucky International Airport (CVG) in early 2026
• Plans to add 2 more cargo aircraft by Q3 2026, including one spare to support operations
• Cargo operations primarily support Amazon Air under long-term CMI (crew, maintenance, insurance) contracts

Charter: Strong Demand (+18.0%)

Charter revenue increased 18.0% to $56.6 million on 12.4% block hour growth . The proportion of charter flying under long-term contracts rose to 64% from 61% in Q4 2024 , providing more revenue visibility.

CFO Torque Zubeck noted: "Our strong charter performance demonstrates the flexibility of our business model and our ability to quickly respond to opportunities in the market."

Scheduled Service: Deliberate Capacity Reduction

Scheduled service revenue declined 0.5% to $95.6 million as the company deliberately reduced capacity by 9.8% ASMs to reallocate pilot resources to cargo operations . However, the strong demand environment drove impressive unit revenue improvement:

How Did the Stock React?

SNCY shares are trading at $19.40, essentially flat (+0.3%) following the earnings release, but remain at their 52-week high .

The stock's real catalyst came on January 11, 2026, when Allegiant announced its acquisition offer. Since the merger announcement, SNCY shares have climbed from ~$15.77 to $19.40, a gain of +23% YTD.

What's Happening With the Allegiant Merger?

On January 11, 2026, Sun Country and Allegiant entered into a definitive agreement under which Allegiant will acquire all outstanding Sun Country shares in a cash and stock transaction .

Key Merger Details:

• Expected Close: Second half of 2026
• Required Approvals: U.S. federal antitrust clearance, regulatory approvals, shareholder approval from both companies
• Earnings Call: Sun Country will not host a call to discuss results due to the pending transaction
• Guidance: No quarterly or annual guidance will be provided going forward

CEO Jude Bricker commented: "Recently, we announced our transformative merger with Allegiant, and we are looking forward to capitalizing on our promise of our combined airline for our customers, employees, and shareholders alike."

What Changed From Last Quarter?

*Q3 2025 operating margin estimated from financial data

New Developments This Quarter:

• Two additional passenger aircraft received (737-900ER and 737-800), expected in service by end of Q1 2026
• Three leased aircraft expected to be returned to the company through 2026
• New CVG cargo base opening in early 2026

Balance Sheet and Liquidity

Sun Country ended Q4 with a healthy balance sheet and improved liquidity position:

The company generated $157.1 million in operating cash flow for FY 2025 and spent $73.1 million on CapEx, while returning $20 million to shareholders through stock repurchases .

Key Risks and Concerns

1. Merger Uncertainty: The Allegiant transaction requires antitrust clearance and shareholder approval from both companies, with potential for regulatory challenges

2. Margin Compression: Operating margins declined 350 bps YoY as cargo expansion costs outpaced revenue growth in the near term

3. Adjusted CASM Pressure: Adjusted CASM rose 12.1% YoY due to headcount growth (+4.5%) and increased scheduled heavy maintenance

4. Integration Complexity: Management resources required to consummate the merger could distract from core operations

Forward Catalysts to Watch

---

Related Links:

• Sun Country Airlines Company Profile
• Sun Country Q3 2025 Earnings
• Allegiant Travel Company (ALGT)