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SURF AIR MOBILITY INC. (SRFM)·Q1 2025 Earnings Summary

Executive Summary

  • Q1 2025 revenue was $23.5M, at the high end of guidance ($21–$24M), with adjusted EBITDA loss of $14.4M within guidance ($12–$15M); GAAP net loss improved year over year to $(18.5)M driven by lower tech and compensation costs and favorable fair-value changes .
  • Management issued Q2 2025 guidance of $23.5–$26.5M revenue and adjusted EBITDA loss of $10–$13M and reaffirmed full-year 2025 targets: revenue >$100M and airline operations profitability (positive adjusted EBITDA) .
  • Versus S&P Global consensus for Q1 2025: revenue slightly missed ($23.506M vs $23.869M), EPS beat ($(1.09) vs $(1.44)), and EBITDA missed ($(16.42)M vs $(11.47)M). Bolded in Estimates Context section below.*
  • Operational catalysts: execution on the Optimization phase (re-fleeting, SOC relocation to Dallas/Fort Worth, SurfOS efficiencies), new interline agreement with Japan Airlines expanding access to 435M consumers, and EAS renewals; management reiterated tariffs are not expected to significantly impact 2025 results .

What Went Well and What Went Wrong

What Went Well

  • Q1 revenue delivered at the high end of guidance ($23.5M vs $21–$24M), supporting trajectory to >$100M FY revenue; adjusted EBITDA loss within guidance ($14.4M) .
  • Transformation progress: SOC relocation to Dallas/Fort Worth, five older aircraft returned to lessors, and addition of senior aviation leaders to strengthen operations .
  • Strategic access and distribution: interline agreement with Japan Airlines (fifth interline; first foreign carrier) to extend booking reach across Hawaii; “expanding our access to 435 million consumers across our interline agreements” .
    • Quote: “Our momentum is strong, and our operating metrics continue to improve as we optimize our aircraft fleet, implement new technologies and drive efficiencies.” – Deanna White .

What Went Wrong

  • YoY declines: scheduled service revenue down 23% YoY (route exits, January service interruption), on-demand revenue down 25% YoY (profitability focus), weighing on top line despite guidance delivery .
  • Q1 service interruption: FAA program compliance issues tied to corrosion/interiors required temporary schedule reduction (not planned), though resolved in-quarter .
  • EBITDA vs consensus: adjusted EBITDA loss of $(16.42)M (GAAP EBITDA proxy) worse than S&P consensus (approx. $(11.47)M), reflecting continued investment in maintenance backlog clearance and R&D .*

Financial Results

Core Financials vs Prior Periods

MetricQ1 2024Q4 2024Q1 2025
Revenue ($USD Millions)$30.6M*$28.0M*$23.5M*
Net Income ($USD Millions)$(37.0)M*$1.3M*$(18.5)M*
Diluted EPS ($USD)$(3.35)*$0.08*$(1.09)*
EBITDA ($USD Millions)$(32.5)M*$10.3M*$(16.4)M*
EBITDA Margin (%)(106.10%)*36.68%*(69.85%)*
EBIT ($USD Millions)$(34.5)M*$8.1M*$(18.6)M*
EBIT Margin (%)(112.56%)*28.91%*(78.99%)*
Net Income Margin (%)(120.71%)*4.51%*(78.56%)*
Total Operating Expenses ($USD Millions)$65.1M*$19.9M*$42.1M*

Notes and sources: Q1 2025 statement of operations and reconciliation ; Q4 2024 press release and annual financials ; Q1 2024 quarterly comparatives .
*Values retrieved from S&P Global.

Segment Trends (YoY change)

SegmentQ3 2024Q4 2024Q1 2025
Scheduled Service Revenue YoY+2% −4% −23%
On Demand Revenue YoY−13% +39% −25%

Q1 2025 OpEx Mix (GAAP)

MetricQ1 2025
Cost of revenue (ex-D&A) ($USD Millions)$24.7M
Technology & development ($USD Millions)$2.7M
Sales & marketing ($USD Millions)$1.7M
General & administrative ($USD Millions)$10.9M
Depreciation & amortization ($USD Millions)$2.1M

Actuals vs Wall Street Consensus (S&P Global) – Q1 2025

MetricConsensus MeanActualResult vs Consensus
Revenue ($USD Millions)$23.9M*$23.5M*Miss by ~$0.4M*
Primary EPS ($USD)$(1.44)*$(1.09)*Beat by ~$0.35*
EBITDA ($USD Millions)$(11.5)M*$(16.4)M*Miss by ~$4.9M*
# of Estimates (EPS / Revenue)1 / 3*—Coverage thin*

*Values retrieved from S&P Global.

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
RevenueQ1 2025$21–$24M Actual $23.5M (at high end) Met high end
Adjusted EBITDAQ1 2025$(12)–$(15)M Actual $(14.4)M (within) Met within
RevenueQ2 2025—$23.5–$26.5M New
Adjusted EBITDAQ2 2025—$(10)–$(13)M New
Full-Year RevenueFY 2025>$100M >$100M (reaffirmed) Maintained
Airline Ops Profitability (Adj EBITDA)FY 2025Positive (reaffirmed) Positive (reaffirmed) Maintained
Tariff ImpactFY 2025Not specified“Tariffs will not have a significant impact” New clarification

Earnings Call Themes & Trends

TopicPrevious Mentions (Q3 2024, Q4 2024)Current Period (Q1 2025)Trend
SurfOS / AI techPlan to form Surf Air Technologies; Palantir-powered OS; development continued Self-service chat reduced call volume ~20%; crew app; weight & balance tool; 6 beta users; ATC-related modules discussed with DOT/FAA Accelerating deployment and early external engagement
Operations/CompletionQ3: completion factor hit by unplanned maintenance ; Q4: re-fleeting and maintenance integrations (CAMP/Veryon) Q1: brief January interruption resolved; Q2 first 6 weeks completion factor >92%, target 96% Improving reliability post-maintenance
EAS/RegulatoryFAA Reauthorization: equal cost weighting; EAS as major tailwind EAS ≈40% of revenue; renewals (DuBois, Kalaupapa); monitoring budget reconciliation risks Stable with cost-advantaged positioning
Tariffs/MacroNot a key focus in Q3/Q4Minimal impact expected given domestic ops and Textron supply chain Neutral risk
Route strategyQ3/Q4: exiting unprofitable routes Exited routes; some “held in” by DOT with additional subsidy; next Tier 1 route expansion planned for 2026 Profitability-first, measured expansion
Electrification R&DSTC target 2027; supplier selection; MOUs signed Late-stage JV/partner discussions; timeline unchanged Building toward 2027 certification

Management Commentary

  • “We continued to make strong progress across multiple initiatives in our Transformation Plan… keeping us on track to achieve profitability in our airline operations in 2025.” – Deanna White .
  • “Our EAS business, which represents approximately 40% of our revenue… long-term EAS contracts contain price escalators that act as mitigation to inflationary pressures.” – Oliver Reeves .
  • “The interline agreement with JAL… expands our potential access to over 435 million of their customers.” – Deanna White .
  • “We estimate that our electric powertrains… will potentially reduce the direct cost of flying by 50%, and our hybrid… by 25%.” – Oliver Reeves .
  • “We exited several charter products to focus on profitability… launched a new Jet Card.” – Deanna White .

Q&A Highlights

  • EAS budget risk: Management believes low-cost position and DOT “hold-in” practices, with higher subsidy rates, mitigate risk; exploring alternatives if subsidies were reduced .
  • Core network: Hawaii and EAS routes are core; clusters in central and East Coast; route decisions based on profitability and footprint fit .
  • Route exits and timing: DOT has held the company in some EAS routes longer than planned, with additional subsidies; new Tier 1 routes targeted for 2026 .
  • January service interruption: Unplanned; FAA program compliance on interiors/corrosion required schedule reductions; resolved with FAA collaboration .
  • SurfOS commercialization: Beta user feedback being integrated; target commercial rollout of modules in 2026 with internal use already driving efficiencies .

Estimates Context

  • Coverage remains thin for Q1 2025 (EPS estimates: 1; revenue estimates: 3), limiting robustness of consensus.*
  • Q1 2025 comparison:
    • Revenue: $23.506M actual vs $23.869M consensus – small Miss.*
    • EPS: $(1.09) actual vs $(1.44) consensus – Beat due to reduced tech and compensation costs and favorable fair-value changes .*
    • EBITDA: $(16.42)M actual vs $(11.47)M consensus – Miss, reflecting maintenance backlog clearance and continued R&D investment .*
  • Implication: Street models likely need lower near-term EBITDA expectations while acknowledging sequential improvement targeted by management (Q2 EBITDA loss guided narrower at $(10)–$(13)M) .*

*Values retrieved from S&P Global.

Key Takeaways for Investors

  • Execution credibility: Company delivered Q1 at guided ranges and reaffirmed FY 2025 revenue >$100M and airline operations profitability, a potential stock catalyst if sustained .
  • Profitability-first strategy: Exiting unprofitable scheduled routes and recalibrating on-demand (Jet Card, pre-buys) support margin expansion, albeit at the expense of near-term revenue growth .
  • Operational reliability improving: Maintenance backlog clearance and re-fleeting are raising completion factors (target 96%), key to sustained profitability .
  • Distribution leverage: JAL interline adds international connectivity in core Hawaii market; broader interline network now touches 435M customers, supporting load factor and revenue opportunities .
  • Regulatory positioning: EAS (~40% of revenue) benefits from equal cost consideration; management is proactive amid budget reconciliation noise .
  • Technology optionality: SurfOS modules are reducing costs and may open 2026 commercialization revenue streams; Palantir partnership deepens strategic moat .
  • Near-term trading lens: Expect focus on Q2 delivery vs guidance (revenue $23.5–$26.5M; EBITDA loss $(10)–$(13)M) and continued evidence of airline ops profitability path; watch capital raises and JV progress on electrification/software .