Surf Air Mobility Inc. Q4 FY2025 earnings call

• In 2025, the company was in the midst of transforming, strengthening core business, recalibrating on-demand charter, and developing SURF OS. Met or exceeded revenue and adjusted EBITDA guidance for eight consecutive quarters. - In 2026, increased 2026 revenue guidance by 20 - 30% compared to prior year. - Strengthened financial position by raising over $100 million in equity in 2025. - Operate regional airline and on-demand charter business safely, reliably, and efficiently, building digital infrastructure with AI - enabled software powered by Palantir. - Hawaii operation and partnership with Beta Technologies are central, with $22 million investment in Hawaii infrastructure and firm fleet order for 25 Beta electric aircraft with option for 75 more. - Launched new initiatives in on-demand charter business like SURF OnDemand and SURF On-Demand Cargo in fourth quarter of 2025. - Extended partnership with Palantir for SurfOS initiative with five-year exclusive agreement and teaming agreement.

In 2025, airline operations achieved four-year profitability with positive adjusted EBITDA. Revenue for the fourth quarter of 2025 was $26.4 million, within guidance range, a 9% sequential decrease due to unprofitable route exits but offset by 8% increase in on-demand charter revenue. Year-over-year, fourth quarter revenue decreased 6% with 19% decrease in scheduled service revenue offset by 36% increase in on-demand charter revenue. 2025 full-year revenue was $106.6 million, meeting guidance, an 11% decrease from 2024 driven by 15% scheduled service revenue decrease offset by 3% on-demand charter revenue increase. On-demand charter business saw revenue growth and margin expansion in 2025, with initiatives like SURF OnDemand and SURF On-Demand Cargo launching and generating profitable revenue. SURF OS remained an investment priority with tools like crew and aircraft scheduling tools integrated.

• 2026 full-year revenue expected to be in range of $128 - $138 million, adjusted EBITDA loss in range of $40 - $50 million. - 2026 revenue growth heavily weighted to back half, with acceleration in on-demand charter business and partial year revenue contribution for SurfOS. - 2026 first quarter revenue expected to be in range of $24 - $26 million, adjusted EBITDA loss in range of $15.5 - $13.5 million, with revenue guidance not reflecting SurfOS contribution.

Q: With respect to the surf OS spend and commercial rollout, could you clarify what is being spent on software development, product development, and what is being potentially spent on building the sales pipeline?

A: Servo remains a significant investment priority. Starting with broker OS product, which is effective and generating profitable revenue, and is a big contributor to on-demand business and higher revenue target for 2026. Also working on OperatorOS, targeting enterprise clients with enterprise solutions using five-year teaming agreement with Palantir, and bulk of SurfOS revenue in 2026 to occur in second half.

Q: With respect to the beta partnership, is any of that going to come through in 2026? So are these aircraft purchases, et cetera, happening in periods like 2027 and beyond? Just any clarity on how these electric aircrafts are going to be incorporated into your fleet and timelines for these developments?

A: The BANA aircraft order can satisfy deliveries across their entire product portfolio. CTOL variant can be certified soon. Will start with CTAL cargo in 2026 for revenue generation, then move to passenger using CTOL and later VTOL once certified. Will do demo flights of cargo version in 2026 in anticipation of certification.

Q: Any color on sort of the improvement in economics from the beta aircraft versus legacy aircrafts?

A: Anticipate 30% more improvement in operating costs from fuel and maintenance. Electric aircraft will mitigate fuel risk, and beta electric aircraft will have much less maintenance downtime compared to traditional caravan.

Q: At the end of 2026, how will the balance sheet look like? Any sense of where cash and debt levels could be post investments in Surf OS and other initiatives?

A: Difficult to comment specifically, but pivoting to growth with guidance reflecting significant investments. Believe investments will generate ROI and create shareholder value. Will continue to opportunistically refine balance sheet as market conditions allow.

Q: In order for airline operations to become operating level positive, what will that take? Is that volume growth? Is there more room here to exit unprofitable routes? Are there cost takeouts?

A: Continued adding of technology from SurfOS platform for optimization and cost reduction. Adoption of electric aircraft will be biggest thing with 30% operating margins improvement. Also, going into cargo market using beta aircraft and being factory authorized MRO in electric aircraft space will be opportunities.

Q: Thinking beyond Hawaii, what seems like the logical next steps for geographic expansion?

A: Can easily adopt electric aircraft into existing network where they already have short haul routes, which is ideal for electric aircraft. Excited about beta partnership and order for being a leader in adopting electrification within network and industry.

Q: When, timing-wise, should we think about BrokerOS, SurfOS being able to generate revenues both from new customers and from the demo customers?

A: Planned to have in first half of 2026, with more revenue in second half. Broker OS already generating revenue in on-demand business through Powered by Surf On Demand program. Plan to use information from enterprise side with Palantir and have big opportunity to close deals this year.

Q: Given your statement that you no longer plan to invest the $50 to $100 million in caravan electrification project, what is the plan here?

A: Intend to continue to pursue partnership opportunities for caravan program. Do not intend to fund it ourselves but believe in assets created and see place for electrified caravan in future, will continue to explore that.

Q: How should investors think about long-term economic ownership in the model shifted from in-house electrification to partnerships?

A: Electrification strategy is to make money from operating efficiencies of electrified aircraft and providing electrification services. Partnership with Beta solves for first and improves operating efficiencies. Allocate capital towards SurfOS initiative. Continue to explore monetizing caravan program assets.

Q: What are the remaining technical hurdles before the first commercial flight of an electrified aircraft can take place?

A: Speed of certification is largest hurdle, and FAA's EIPP program helps address this. Beta's participation in EIPP program will allow certification sooner. Plan to launch demonstration flights in 2026 in Hawaii to prepare network for first aircraft from order.

Q: What is the expected timeline for SRF Air Mobility to reach sustainable profitability, and which revenue segments, regional air operations, electrification, or software platform, can drive the majority of that profitability?

A: Regional airline operations are profitable today. Introduction of Beta electric aircraft will improve profitability in scheduled service and on-demand charter business. Majority of 2026 revenue growth from on-demand charter business. Later years, profitability will increase due to software's higher margins.

Q: Are there active discussions with OEMs and eVTOL manufacturers to integrate SURF-OS as a native aircraft operating platform?

A: Yes, actively in discussions with stakeholders in aviation community, particularly for enterprise customers using Palantir teaming agreement for exclusivity in Part 135 world to develop software solutions for large enterprise customers like OEMs, large operators, or large brokers.

Q: How quickly is the on-demand charter segment growing and what percent of revenue could it represent over the next two years?

A: On-demand charter business is fastest growing part, primary contributor to revenue guidance. Achieved through deployment of software technology and new programs like broker OS powered by Surveillance Demand Program. Real opportunities to deploy electric aircraft in on-demand platform as well.