What Sky Harbour Group (SKYH) Said on Its Q3 Earnings Call

Key Points

• Revenue outlook increased to a $44 million–$48 million annualized year-end run rate, but adjusted EBITDA guidance fell to break-even–$4 million as opening costs are expected before rental income ramps up.
• Revenue rose 45% year over year, and construction activity reached a record $439 million in assets. Sky Harbour is targeting higher-revenue airports and has signed its first three third-party hangar contracts, representing about $38 million in revenue.
• Leasing and costs remain challenges: about 826,000 square feet needs to be leased in 2027, while steel and labor inflation is offsetting some construction savings. The company ended the quarter with nearly $200 million in cash and Treasuries.

Sky Harbour Group NYSE: SKYH raised its year-end revenue run-rate outlook but lowered its adjusted EBITDA forecast, as the hangar developer expects new campus expenses to precede rental income from upcoming openings.

On its 2026 third-quarter earnings call, the company said revenue rose 45% from a year earlier and 7% from the prior quarter, helped by new campus openings and higher occupancy and rental rates at existing locations. Adjusted EBITDA improved to approximately negative $0.5 million for the quarter, Chief Accounting Officer Mike Schmitt said.

The company also outlined plans to expand at higher-revenue airports and build hangars for third parties, while acknowledging construction cost pressures and a substantial leasing task ahead.

Revenue Outlook Rises as EBITDA Guidance Falls

Chief Financial Officer Francisco Gonzalez said Sky Harbour now expects to exit the year with an annualized revenue run rate of $44 million to $48 million, up from its previous range of $42 million to $46 million. He attributed the increase to higher-than-expected rental rates at Opa-locka phase II and improved occupancy at other campuses, particularly San Jose.

At the same time, the company lowered its year-end annualized adjusted EBITDA run-rate guidance to between break-even and $4 million, from $4 million to $6 million. Gonzalez said the Addison phase II opening is now scheduled for February, delaying its revenue, while the planned December opening at Bradley will temporarily weigh on the measure as the company takes on operating costs with limited initial lease revenue.

“This is a timing thing, and our stabilized operating margin targets remain intact,” Gonzalez said.

Gonzalez said operating expenses increased ahead of new openings, including campus staffing and expenses associated with ground leases for sites not yet constructed or operating. Consolidated operating cash flow was slightly negative in the quarter, which he attributed to a nearly $1 million payment in July for six months of accrued interest on the Yorkville loan.

Construction and Campus Expansion

Assets under construction and completed construction reached $439 million at the end of the third quarter, an increase of $46 million during the period and $111 million year to date. Gonzalez called it the highest level of construction activity in the company’s history.

Sky Harbour’s first portfolio of campuses, known as the Obligated Group, generated an 87% year-over-year revenue increase and $3.2 million in operating cash flow, up from $2.9 million in the previous quarter. Gonzalez said it marked the group’s 12th consecutive quarter of positive operating cash flow.

The company expects Addison phase II to provide another increase in revenue after opening. Gonzalez said the expanded campus can use the same personnel and equipment, limiting additional operating costs.

CEO and Board Chair Tal Keinan said Sky Harbour is focusing its acquisition efforts on “tier 1” airports, which the company defines as offering available revenue of at least $50 per square foot. He highlighted Van Nuys in Los Angeles and a third phase added at Dulles International Airport, while noting that some lower-cost tier 2 locations can produce comparable yields.

Third-Party Contracts and Leasing Challenges

Keinan said the company has announced its first three contracts to manufacture or build hangars for others, representing approximately $38 million in revenue. He described third-party construction as a continuing business line that could increase use of the company’s steel manufacturing capacity.

Keinan declined to provide profitability figures for the new business until the projects are further along. He said Sky Harbour remains optimistic about its economics.

Leasing remains a challenge as the development pipeline grows. Keinan said the company is looking at approximately 826,000 square feet that needs to be filled in 2027 and acknowledged that it had built its leasing team too slowly. He said pre-leasing tends to accumulate in the final two months before a campus opens.

Asked about longer-than-expected leasing at Denver and Phoenix, Keinan said lease-up times vary by market. He added that an initial campus in a market where Sky Harbour is less known may take longer to fill than a later expansion.

Keinan also said rising steel and labor costs have offset some of the company’s construction cost savings. Sky Harbour is seeking efficiencies through measures including in-house labor, steel inventory and additional manufacturing equipment, he and Gonzalez said.

Liquidity and 2027 Guidance

Treasurer Tim Herr said Sky Harbour ended the quarter with nearly $200 million in cash and Treasuries and had almost $130 million available under its committed JPMorgan bank facility. The company is working with lenders to increase that facility to $300 million and remains optimistic that public warrant exercises in January could provide more than $90 million in equity capital, he said.

Gonzalez said the company plans to introduce 2027 guidance in early March alongside its annual filing, rather than on the third-quarter call, to gain more visibility into results and upcoming openings.

About Sky Harbour Group (NYSE:SKYH)

Sky Harbour Group Corporation develops, owns and operates hangar campuses for business aviation in the United States. Its facilities are designed to provide private aircraft owners and operators with dedicated hangar space and related services. The company describes its campuses as “Home Base Operator” facilities, distinguishing them from traditional fixed-base operators that primarily serve transient aircraft. Sky Harbour's business includes selecting airport sites and developing, leasing and managing hangar facilities.

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