Surf Air Mobility Inc. Q2 FY2025 earnings call

Airline Operation - Substantially augmented leadership team. - Moved systems operations center to Dallas. - Hired talent, implemented new tech-powered processes. - Improved on-time departure, arrival, and controllable completion factor. - Signed interline agreement with Japan Airlines. - Renewed Essential Air Service contracts for Kalaupapa and Waimea, totaling $14M over 4 years. ### On-demand Business - Relaunched brand and product portfolio using BrokerOS. - Signed volume purchase agreements with 2 operators. - Achieved positive margins in June, and July was the highest sales month since inception. ### SurfOS Platform - Advancing commercialization, introduced BrokerOS, OperatorOS, OwnerOS. - Secured LOI agreements with 6 clients. - Partnership with Palantir, software replacing spreadsheets, rolling out OperatorOS flight and crew scheduling tool. ### Electrification - Bilateral agreement with Electra, participated in flight demo of Electra's EL2 prototype, secured preferred delivery positions for 90 Electra ultra short aircraft.

In the second quarter, Surf Air Mobility's revenue was $27.4 million, exceeding guidance. Airline operation: Substantially improved key operating metrics like on-time departure and arrival, achieved profitability in Q2, signed interline agreement with Japan Airlines, and renewed Essential Air Service contracts. On-demand business: Relaunched brand and product portfolio, used BrokerOS, saw positive margins in June, and July was the highest sales month since inception. Revenue from scheduled service rose 20% and on-demand rose 5% sequentially from Q1.

Q3 - Expected revenue in range of $27 million to $28.5 million. - Expected adjusted EBITDA loss in range of $8.5 million to $10 million. ### Full Year - Reaffirmed revenue in excess of $100 million. - Aim for airline operations profitability (positive adjusted EBITDA). ### 2026 - Expand scheduled service network with new Tier 1 routes. - Scheduled delivery of 2 new Cessna Grand Caravan aircraft in first and second quarters of 2026, and pursuing future deposits for second half of 2026.

Q: Congrats on all the progress. With respect to the SurfOS product guys, can you talk a little bit more about sort of the go-to-market strategy?

A: We are currently focusing on product development during the beta phase, working with participants to find real use cases. Once finished, we'll move to monetization strategies, likely a take rate against efficiencies gained.

Q: What percentage of revenues in the quarter were connected to Essential Air Service? And how much was the Jet Card a factor in the revenue growth for on-demand service?

A: EAS was about 46% of scheduled service revenue. Jet Card contributed little to the increase in on-demand so far as redemptions are waiting to be realized over time.

Q: Just kind of wanted to start with maybe asking for a little more color on the Palantir agreement. That feels like a pretty big deal to me. But I wanted to see if you had any further thoughts on kind of what this -- what kind of opportunities this opens up for you all going forward?

A: The agreement names us as Palantir's exclusive partner with respect to the configuration and sale of software to Part 135 operators and brokers. We have the right to sublicense some rights to client third parties and contemplate teaming with Palantir on software development projects for larger players.