Sky Harbour Group Q1 Earnings Call Highlights

Key Points

• Sky Harbour reported strong Q1 growth, with revenue up 56% year over year and 8% sequentially as new campuses opened, occupancy rose, and rents increased. The company also said it reached normalized operating cash flow breakeven.
• The company issued its first formal 2026 guidance, targeting an annualized revenue run rate of $42 million to $46 million and annualized adjusted EBITDA of $4 million to $6 million by year-end. Management said this outlook excludes contributions from Bradley and Addison Phase II, which are expected to open near year-end.
• Sky Harbour emphasized accelerating construction and a growing pipeline, with assets under construction and completed construction exceeding $352 million and liquidity totaling $368 million. Executives said the strategy is shifting toward higher-return “tier one” airports and operating leverage from larger campuses like Opa-locka and Addison.

Sky Harbour Group NYSE: SKYH reported accelerating construction investment, higher revenue and new 2026 guidance during its first-quarter earnings call, as executives said the aviation hangar developer is moving from early-stage buildout toward broader scale across its airport campus portfolio.

Chief Financial Officer Francisco Gonzalez said consolidated assets under construction and completed construction exceeded $352 million at quarter-end, up $75 million from a year earlier. He said the pace of investment and new construction is accelerating and that the related asset base “will continue to grow at a higher rate.”

Revenue increased 56% year over year and 8% sequentially, driven by new campus openings, higher occupancy and increased rental rates, Gonzalez said. Operating expenses also rose as new campuses opened and as the company added campus headcount and accrued costs tied to new ground leases signed over the past year. He said more than half of the sequential increase in operating expenses was related to new ground leases, and more than half of that amount reflected non-cash accruals for future payments.

Gonzalez said Sky Harbour has reached operating cash flow breakeven on a normalized basis, excluding items such as seasonal first-quarter compensation payments and a $5.9 million upfront payment received in the fourth quarter from a tenant lease renegotiation in Miami.

Obligated Group Revenue Rises Sharply

Gonzalez also reviewed results for Sky Harbour Capital, the company’s wholly owned subsidiary and obligated group. He said obligated group revenue rose 76% year over year and 15% sequentially in the first quarter. Cash flow from operations for the obligated group reached $2.9 million, compared with $1 million a year earlier.

The CFO said assets under construction in the obligated group will continue to grow until the completion of Opa-locka Phase II and Addison Phase II. He said the company expects revenue to increase in steps following the opening of Opa-locka Phase II and, later, Addison Phase II in early 2027.

Management emphasized expected operating leverage from second-phase projects in Miami and Addison, Texas. Gonzalez said those expansions should allow Sky Harbour to add revenue with limited incremental operating costs because the same people and fuel trucks can serve larger campuses.

Company Issues 2026 Guidance

For the first time, Sky Harbour provided formal annualized run-rate guidance. Gonzalez said the company expects to end 2026 with annualized revenue run rate between $42 million and $46 million, up from a $35 million annualized run rate in the first quarter.

The company also expects year-end annualized adjusted EBITDA run rate of $4 million to $6 million, compared with an annualized run rate of negative $6 million in the first quarter. Gonzalez said the guidance is intended to be met or exceeded and does not include revenue or EBITDA contributions from Bradley or Addison Phase II, which are expected to open near year-end.

Gonzalez said the guidance assumes Opa-locka Phase II, which opened during the week of the call at 68% occupancy, moves toward 100% occupancy. It also assumes the Phoenix Deer Valley and Denver Centennial campuses continue progressing toward full occupancy by year-end.

Leasing Trends and Rent Escalation

Chairman and Chief Executive Officer Tal Keinan said most Sky Harbour campuses are at or above 100% “economic occupancy,” with San Jose at about 132%, which he said is likely near the practical upper limit. He said economic occupancy above 100% is possible in semi-private hangars through geometric optimization, though the company does not want hangars to feel crowded or compromise safety.

Keinan said the company re-leased about 119,000 square feet of hangar space over the last 12 months. The average increase between expiring leases and new leases was 23%, up from 22% in the prior quarter. He said that increase comes after contractual annual escalators, which are tied to CPI with a 4% floor.

Keinan said Sky Harbour continues to see very low churn from residents and strong demand for longer lease terms. He described business aviation hangar space as scarce, saying the company believes that scarcity is a core driver of value because “you just cannot build new airports.”

Opa-locka Phase II marked the company’s first use of a pre-leasing strategy, with incentives offered before opening. Keinan said the campus opened 68% leased, calling that a significant result while acknowledging the company is “leaving some money on the table.” He said management expects to continue using pre-leasing going forward.

Development Pipeline and Site Strategy

Sky Harbour said it is shifting emphasis from simply adding more airport locations to maximizing net operating income per square foot. Keinan said the company is prioritizing “tier one” airports, which Sky Harbour internally defines as airports expected to generate at least $50 per square foot in revenue. Tier two airports are expected to generate $30 to $50 per square foot, while tier three airports are below $30 per square foot.

Keinan said 48% of the rentable square footage in the company’s fully funded construction pipeline is in tier one markets. He also said Sky Harbour allowed a one-year lease at Boeing Field in Seattle to lapse after determining the long-term lease terms were not attractive enough, while still viewing the airport favorably.

The company doubled its footprint at Stewart International Airport in New York during the quarter. Keinan said Sky Harbour is considering developing the entire Stewart project at once rather than in phases, reflecting management’s confidence in demand in the New York market.

Keinan said Opa-locka Phase II was delivered on time and on budget and represented a partial trial of the company’s Ascend Integrated Construction Program, which includes prototyping, in-house architecture and engineering, in-house manufacturing and increasingly in-house general contracting. He said Bradley, Addison Phase II, Salt Lake City and Hudson Valley Regional are under construction and currently on schedule and on budget.

Keinan said current guaranteed maximum prices for projects not yet delivered average $244.37 per square foot, down from a previously reported $253 per square foot. He said the company is continuing efforts to lower development costs, which could expand the number of economically viable airports in the future.

Liquidity and Q&A Highlights

Gonzalez said Sky Harbour has $368 million of available resources following a $200 million bank facility through JPMorgan and a $150 million tax-exempt bond issuance that closed in February. That includes $187 million in cash and U.S. Treasuries on the balance sheet. The company has drawn $19 million from the JPMorgan facility, leaving $181 million of committed available capacity.

During the question-and-answer session, Keinan said Sky Harbour has not seen a direct competitor offering the same model. He said the company cooperates with fixed-base operators such as Signature and Atlantic as much as it competes with them, and that Sky Harbour prefers developing from raw land rather than acquiring existing hangar assets.

Asked about fuel prices and the Middle East conflict, Keinan said the impact would likely be immaterial for Sky Harbour because its business is driven by the existence of aircraft needing storage rather than flight activity or fuel sales.

Management also said Sky Harbour is increasing investor outreach after completing recent debt financings, including participation in upcoming investor conferences. Gonzalez said the company remains focused on operating leverage and expects SG&A growth to remain limited as the company scales.

About Sky Harbour Group NYSE: SKYH

Sky Harbour Group Inc is a U.S.-based real estate development and operating company focused on private aviation infrastructure. The company specializes in the acquisition, design and management of fixed-base operations (FBOs), aircraft hangarage and private terminals that serve business and general aviation operators. By providing expedited ground handling, concierge services and state-of-the-art facilities, Sky Harbour seeks to streamline the operations of private jet owners, fractional-ownership programs and charter operators while reducing congestion at major airports.

Through strategic leases and joint-venture partnerships, Sky Harbour has established a growing presence at key regional and metropolitan airports across the United States.

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