SkyWest, Inc. Q4 FY2025 earnings call

• Net income for Q4 2025 was $91 million ($2.21 per diluted share) and full year 2025 was $428 million ($10.35 per diluted share).
• Extended 40 E175s with United and 13 with Delta, strengthening partnerships and demonstrating long-term demand.
• Achieved over 250 days of 100% controllable completion in 2025, with over 2,500 daily scheduled departures.
• Challenged in Q4 due to government shutdown and peak holiday travel, but team remained dedicated.
• Reduced debt by $1 billion over three years, with no major E175 contract expirations until late 2028.
• Plan to receive nearly 300 E175s by 2028, investing in fleet and future growth.

For the 2025 fourth quarter, SkyWest reported GAAP net income of $91 million or $2.21 earnings per share. Total Q4 revenue was $1 billion, down seasonally from Q3 2025 but up 8% from Q4 2024. Contract revenue was $803 million, pro rate and charter revenue was $167 million, and leasing and other revenue was $54 million. For the full year 2025, net income was $428 million or $10.35 per diluted share. Pretax income was up 31% on a 15% increase in block hours, EBITDA was $982 million, free cash flow was over $400 million, and debt was reduced by $1 billion. Revenue contribution: Contract revenue was the largest segment, followed by pro rate/charter and then leasing/other.

• 2026 block hours expected mid single digit percentage growth over 2025.
• 2026 EPS anticipated in the mid $11 area, up from prior expectation.
• Sharper quarterly seasonality expected, with Q1 2026 EPS flat to down from Q4 2025, and Q2/Q3 as strongest quarters.
• Maintenance activity to continue at current rates, effective tax rate ~24% in 2026.
• Focus areas: growth in underserved communities, pro rate product demand, and E175 deliveries for partners.

• Challenges in third-party MRO network including labor and parts issues.
• Impact of government shutdown on flights, leading to canceled flights and reduced results.
• Actual results may vary materially from forward-looking statements due to various risks and uncertainties.

Q: About FAA cuts in Q4, why was there that level of impact?

A: Chip Childs said it was like a government shutdown, with extensive cancellation relative to industry, but worked with partners to mitigate and get through challenges.

Q: Update on unencumbered assets and their trend?

A: Rob Simmons said there's a strong portfolio of unencumbered assets, around $1.5 billion, and it increases as E175s are paid off.

Q: How are discussions evolving around placement of new aircraft?

A: Wade Steele said orders are mostly spoken for with major partners, but ongoing conversations to place remaining aircraft.

Q: Maintenance on aircraft under contract vs parked?

A: Wade Steele said 20 dual-class aircraft in heavy maintenance ready for contracts, and 40 CRJ200s parked with opportunities to return to service.

Q: Thoughts on use of balance sheet and buybacks?

A: Rob Simmons said in an all-of-the-above position, continuing to invest in fleet, delever, and use share repurchase as value creation.