Surf Air Mobility Q2 Earnings Call Highlights

Key Points

• Q2 revenue reached $29.5 million, up 8% year over year and 15% sequentially, despite higher fuel costs, weather disruptions and route reductions. Surf Air reaffirmed its full-year revenue outlook of $128 million to $138 million and expects adjusted EBITDA losses to narrow.
• SurfOS secured its first multiyear enterprise contract with Wheels Up, potentially worth up to $12 million over three years. The company is targeting another enterprise agreement before year-end and plans to commercially launch additional software products in Q4.
• Charter growth offset declines in scheduled service: Surf On Demand departures rose 67% year over year, while scheduled-service revenue fell 20% as unprofitable routes were eliminated. Surf Air also reduced convertible debt principal by 64% through refinancing and secured a $21.6 million asset-backed loan to fund charter aircraft supply.

Surf Air Mobility NYSE: SRFM reported second-quarter revenue at the high end of its guidance range as growth in private charter operations and early software commercialization helped offset pressure from fuel costs, weather disruptions and deliberate route reductions.

Revenue for the second quarter of 2026 totaled $29.5 million, up 8% from the prior-year period and 15% from the first quarter, Chief Financial Officer Oliver Reeves said. The company recorded an adjusted EBITDA loss of $10.5 million, within its previously issued guidance range.

Chief Executive Officer Deanna White said the company achieved its targets despite elevated fuel prices and heavy thunderstorms and flash flooding in Hawaii that affected Mokulele operations. She said the company’s cost controls and technology initiatives have created what management considers permanent operational improvements.

Surf Air reaffirmed its full-year outlook for revenue of $128 million to $138 million, representing growth of 20% to 30% over 2025. It also maintained guidance for an adjusted EBITDA loss of $25 million to $30 million, which management said reflects a roughly 40% improvement from its earlier outlook. For the third quarter, the company projected revenue of $35.5 million to $37.5 million and an adjusted EBITDA loss of $4 million to $7 million.

SurfOS lands Wheels Up contract

A key second-quarter development was the company’s first multiyear enterprise software agreement for SurfOS, its aviation operating software platform. Co-Founder Liam Fayed said Wheels Up will serve as the launch customer for Enterprise BrokerOS under an initial two-year agreement with an option for a third year.

The contract could generate up to $12 million over its term. Fayed said Surf Air expects to collect about $2 million during 2026 and approximately $4 million in 2027, as Wheels Up is integrated onto the platform.

Chairman Shawn Pelsinger said securing a multiyear, multimillion-dollar agreement with Wheels Up as SurfOS’ first enterprise customer supports management’s view that the software is ready for commercial use. He noted that Surf Air is pursuing a platform strategy spanning private aviation, software and electrification.

Fayed said the company has an enterprise pipeline involving operators, brokerages and aircraft manufacturers that it believes could be worth tens of millions of dollars in annual revenue. Management is targeting at least one additional enterprise contract before year-end, though it did not identify which SurfOS product might be involved.

The company expanded its partnership with Palantir during the quarter, adding engineering, business development and go-to-market resources. Fayed said Palantir personnel are involved in Surf Air’s enterprise sales discussions. During the quarter, Surf Air also deployed SurfOS features including crew reserve optimization, fuel tracking, AI-assisted charter pricing recommendations and AI charter supply sourcing.

Management said OperatorOS and OwnerOS are planned for commercial launch in the fourth quarter. OEM OS remains in development, according to Fayed.

Charter growth offsets scheduled-service reductions

Surf On Demand, the company’s private charter business, generated second-quarter revenue of $12.1 million, with departures increasing about 67% from a year earlier. Revenue per departure rose approximately 25%, which President of Surf On Demand Joshua Lowton attributed to a growing mix of larger aircraft and longer flights.

Lowton said private charter revenue nearly doubled in the first half compared with the same period in 2025. Cargo, wholesale and the company’s Powered by Surf On Demand independent broker program accounted for about 14% of first-half revenue and were gross-margin positive.

The Powered by Surf On Demand program has received more than 500 applications globally and has generated more than $2.5 million in revenue since launch, Lowton said. The company had onboarded 50 independent brokers by the end of the second quarter, halfway toward its target of 100 brokers by year-end.

Management said it intends to improve charter margins by using additional working capital to secure aircraft inventory in advance at negotiated wholesale rates, rather than sourcing flights in the open market. It also expects increased use of BrokerOS, additional supply partnerships and further broker onboarding to support growth and profitability.

Scheduled Service revenue totaled $17.4 million, down about 20% year over year. President of Airline Operations Louis Saint-Cyr said the decline was intentional, reflecting the company’s exit from routes that did not contribute to profitability.

Mokulele Airlines revenue increased about 7% from the second quarter of 2025 and 15% sequentially. The Hawaii operation flew more than 10,000 departures during the quarter, a 3% increase from a year earlier, while Surf Air added two Cessna Caravans as part of its fleet-renewal program.

• Controllable completion factor was 98%.
• On-time arrivals were 88%.
• On-time departures were 83%.

Saint-Cyr said fuel expense was approximately $500,000 above plan during the quarter, but savings from OperatorOS helped offset the increase. He said those technology-driven savings are structural rather than temporary. The company also completed deployment of its safety management system one year ahead of the Federal Aviation Administration’s mandate, according to management.

Refinancing reduces convertible principal

Reeves said Surf Air refinanced its senior secured convertible note by splitting it into a new $17 million convertible note due in 2027 and a $30 million non-convertible senior secured term note due in 2028. The transaction reduced existing convertible-note principal by 64% and lowered monthly cash amortization payments by up to 50%, he said.

The company also secured a $21.6 million asset-backed loan supported by new and existing aircraft. Proceeds are intended to provide working capital for charter supply agreements. Reeves said the loan is funded in two tranches, with a second $14 million funding expected during the month of the call.

According to Reeves, Surf Air has reduced total debt by 50% over the past year while extending its maturity profile. Management expects adjusted EBITDA losses to continue narrowing in the fourth quarter and said the airline business should be a profitability bright spot in the second half of 2026.

About Surf Air Mobility (NYSE:SRFM)

Surf Air Mobility Inc operates as an electric aviation and air travel company in the United States. The company offers an air mobility platform with scheduled routes and on demand charter flights operated by third parties. Surf Air Mobility Inc is headquartered in Hawthorne, California.

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