Surf Air Mobility Reports Progress on Transformation Plan with Improved Airline Operations and Capital Structure

Surf Air Mobility Inc. reported third quarter 2025 financial results showing continued progress on its Transformation Plan, with revenue of $29.2 million, adjusted EBITDA of negative $9.9 million, and adjusted EPS of negative $0.64. The company's performance reflects improved airline operations supported by enhanced operational reliability through a strengthened systems operations center and more experienced aviation team.

Following the quarter, Surf Air Mobility implemented significant capital structure improvements that refinanced higher-cost debt and reduced annual cash interest expenses. These capital actions, combined with operational improvements, position the company with a more sustainable capital structure and clearer path toward scale. Stonegate Capital Partners believes these developments better position the company to begin Phase 3 of its transformation plan in fiscal year 2026.

The air mobility segment delivered another quarter of operational and commercial gains in the third quarter, with revenue increasing modestly year-over-year and sequentially. Strong growth in On Demand services more than offset planned reductions in unprofitable scheduled flying. On Demand operations benefited from higher utilization rates, a shift toward larger-cabin aircraft, and increased international activity, while Scheduled Service saw a measured pullback as management prioritized routes with attractive unit economics.

Airline operations remained profitable on an adjusted EBITDA basis, supported by higher on-time departure and arrival rates and improved controllable completion factors. This operational efficiency demonstrates the company's ability to maintain service quality while optimizing its route network for better financial performance.

In software development, Surf Air Mobility continues to advance SurfOS, its cloud-based operating system built on Palantir's Foundry platform. During the third quarter, the company expanded internal deployment of SurfOS, rolling out aircraft and crew scheduling tools across key regions and enhancing the Crew App with capabilities that improve safety, maintenance visibility, and productivity. External beta usage of SurfOS broadened to a growing set of brokers and operators, supported by additional letters of intent that expand the future customer pipeline and validate product-market fit.

The company's five-year agreement with Palantir further reinforces software as a core strategic pillar, potentially creating additional revenue streams beyond traditional air mobility services. This software development represents a significant competitive advantage in the evolving aviation technology landscape.

Surf Air Mobility remains committed to its electric powertrain program for the Cessna Grand Caravan, with management reiterating a 2027 FAA Supplemental Type Certificate target for the electrified propulsion system. The company continues to evaluate partnership and joint venture structures that can share development risk while preserving upside, leveraging its scale as a leading Caravan operator and its exclusive agreement with Textron Aviation.

For the fourth quarter of 2025, the company expects revenue in the range of $25.5 million to $27.5 million and an adjusted EBITDA loss of $8.0 million to $6.5 million. This guidance reflects the impact of exiting unprofitable scheduled routes and a continued mix shift toward higher-value On Demand flying. Management continues to anticipate full-year profitability in airline operations on an adjusted EBITDA basis, supported by ongoing operational improvements.

Stonegate Capital Partners' valuation analysis uses an enterprise value to revenue framework, noting that Surf Air Mobility currently trades at a fiscal year 2026 EV/Revenue multiple of 1.9x compared to comparable companies at a median of 4.1x. Using expected fiscal year 2026 revenue and an EV/Revenue range of 4.0x to 5.0x with a midpoint of 4.5x, the analysis arrives at a valuation range of $6.11 to $7.99 with a midpoint of $7.05.