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    SRFM
    Earnings call· Jun 2026(Q2 FY26)

    SURF AIR MOBILITY Q2 FY26 earnings call SRFM

    Aug 10, 2026 Source

    Executive summary

    Surf Air Mobility Q2 FY26 — Strong Revenue, Reduced EBITDA Loss, and First Enterprise Software Contract

    The company delivered strong Q2 FY26 results, achieving revenue targets and significantly improving adjusted EBITDA guidance despite macro headwinds like fuel volatility and adverse weather. This performance was driven by cost controls, technology efficiencies from SurfOS, and strategic balance sheet restructuring. With the foundational transformation largely complete, the company is now focused on accelerating revenue growth and profitability, particularly through the commercialization of its SurfOS platform and expansion of its on-demand charter business.

    Highlights

    5

    • Revenue came in at the high end of guidance at $29.5 million, up 8% YoY.

    • Adjusted EBITDA loss was within guidance at $10.5 million, with full-year guidance improved by 40%.

    • Secured first multi-year SurfOS enterprise contract with Wheels Up, valued at up to $12 million over the term.

    • Doubled on-demand private charter revenue in Q2 FY26 compared to prior year, reaching $12.1 million.

    • Reduced existing convertible note principal by 64% and lowered monthly cash amortization payments by up to 50%.

    Concerns

    4

    • Managed through a volatile period of elevated fuel prices, impacting operations.

    • Experienced unexpected heavy thunderstorms and flash flooding in Hawaii, affecting Mokulele operations.

    • Scheduled service revenue was down about 20% YoY to $17.4 million due to deliberate route exits.

    • Legacy commitments create some drag on overall gross margins in Surf On Demand, though decreasing quarterly.

    Guidance & targets

    11
    CategoryTargetConfidence
    Full-year 2026 Revenue
    $128 million to $138 million
    high materiality
    High
    Full-year 2026 Adjusted EBITDA Loss
    $30 million to $25 million
    high materiality
    High
    Q3 2026 Revenue
    $35.5 million and $37.5 million
    medium materiality
    High
    Q3 2026 Adjusted EBITDA Loss
    $7 million and $4 million
    medium materiality
    High
    Q4 2026 Adjusted EBITDA Loss
    narrow further
    medium materiality
    High
    Airline Profitability
    bright spot from a profitability perspective
    medium materiality
    High
    Free Cash Flow Conversion
    improve sequentially and over time converge towards adjusted EBITDA
    medium materiality
    Medium
    Additional Enterprise Software Contracts
    at least one additional enterprise contract
    high materiality
    High
    OperatorOS Commercial Launch
    Q4
    medium materiality
    High
    OwnerOS Commercial Launch
    Q4
    medium materiality
    High
    Independent Brokers Onboarded
    100 independent brokers
    medium materiality
    High

    Segment performance

    4
    SegmentRevenueYoYQoQMargin
    Scheduled Service
    Revenue decrease was deliberate as we exited routes that don't contribute to our bottom line.
    		$17.4 milliondown about 20%——
    Mokulele Airlines (Hawaii)
    Flew more in Hawaii this quarter, with 10,000+ departures, an increase of 3% compared to Q2 2025. Hawaii is the largest inter-island network by departures and airports served and it's growing.
    Departures: 10,000+
    		—up about 7%up 15%—
    Surf On Demand Private Charter
    Achieved record revenue and flight volume. Revenue per departure increased due to expansion into larger aircraft categories. New revenue lines are gross margin positive. Independent broker program is a key growth driver and gross margin positive.
    Departures growth YoY: 67%Revenue per departure growth YoY: 25%New revenue lines (cargo, wholesale, Powered by Surf On Demand) contribution to H1 2026 revenue: 14%Powered by Surf On Demand revenue since launch: $2.5 million
    		$12.1 millionnearly doubled——
    SurfOS
    Secured first multi-year enterprise contract with Wheels Up for BrokerOS. Expanded partnership with Palantir. OperatorOS and OwnerOS planned for commercial launch in Q4. OEMOS in development.
    Wheels Up contract value: up to $12 million over termWheels Up contract term: initial 2 years plus option for a thirdWheels Up expected revenue recognition FY26: $2 millionWheels Up expected revenue recognition FY27: $4 millionActive enterprise pipeline potential: tens of millions of dollars annually
    		————

    Operational metrics

    12
    Consolidated Revenue
    $29.5 millionup 8% compared to Q2 FY25, up 15% compared to Q1 FY26
    Q2 FY26

    At the high end of guidance range of $27 million to $30 million.

    Consolidated Adjusted EBITDA Loss
    $10.5 million
    Q2 FY26

    Within guidance range.

    Controllable Completion Factor
    98%
    Q2 FY26

    Reflects reliable operation.

    On-Time Arrivals
    88%
    Q2 FY26

    Reflects sustained performance.

    On-Time Departures
    83%
    Q2 FY26

    Reflects sustained performance.

    Fuel Cost Above Plan
    $0.5 million
    Q2 FY26

    Offset by structural operational savings from OperatorOS.

    Safety Management System (SMS) Deployment
    1 year ahead of FAA mandate
    Q2 FY26

    Southern is 1 of only 9 Part 135 commuter operators in the country with an operational SMS.

    Convertible Note Principal Reduction
    64%
    Q2 FY26

    Resulted from refinancing existing senior secured convertible note.

    Monthly Cash Amortization Payments Reduction
    up to 50%
    Q2 FY26

    Resulted from refinancing existing senior secured convertible note.

    Total Debt Level Reduction
    50%
    last year

    Achieved over the last year while pushing out maturity walls.

    Asset-Backed Loan Second Tranche
    $14 million
    August 2026

    Expected to occur this month, further strengthening liquidity.

    Independent Brokers Onboarded
    50halfway to year-end target of 100
    Q2 FY26

    Part of the Powered by Surf On Demand program, attracting over 500 applications globally.

    Industry KPIs

    4
    MetricValueDetails
    Fuel$0.5 millionUSD
    Fleet mro2aircraft
    Demand indicatorsnearly doubled
    Premium diverse revenue mix14%%

    Deals & partnerships

    5
    Wheels UpLaunch customer for enterprise BrokerOSup to $12 millioninitial 2-year term plus an option for a third

    Multi-year, multi-million dollar contract for BrokerOS, replacing multiple legacy software systems and improving sales team efficiency.

    PalantirExpanded partnership for SurfOS commercialization

    Substantially increased engineering team and added business development and commercial go-to-market resources with deep aviation experience to accelerate enterprise sales process for SurfOS. Palantir's team is involved in every enterprise conversation through an exclusive agreement.

    BETA TechnologiesPartnership on landmark demonstration flights of electric aircraft in Hawaii

    Supported by Hawaiian Airlines, these flights are for BETA's ALIA aircraft, flying daily cargo demonstration routes across the islands. This builds foundations for OEMOS development.

    existing noteholdersRefinancing of existing senior secured convertible noteprincipal reduced by 64%

    The new $30 million term note does not amortize or accrue interest until January 2027.

    nullNew asset-backed loan secured against new and existing aircraft$21.6 million

    Secured against new and existing aircraft.

    Risks & headwinds

    4
    Volatile Fuel PricesQ2 FY26

    Fuel came in approximately $0.5 million above plan this quarter.

    Mitigation: Offset by operational savings generated directly by OperatorOS; structural improvements make operations more resilient.

    Unexpected Heavy Thunderstorms and Flash Floodingone month in Q2 FY26

    uncommon in Hawaii, affecting our Mokulele operations

    Mitigation: Durability of operations and technology built allowed achievement of revenue and adjusted EBITDA targets under these conditions.

    Legacy Commitments Drag on Gross Marginsongoing, decreasing every quarter

    some drag on our overall gross margins

    Mitigation: Cohort of suboptimal margin products and memberships continues to decrease every quarter; not a long-term margin issue.

    NYSE Minimum Share Price Deficiencywithin 6 months of July 24, 2026

    30-day trading average share price exceeds $1

    Mitigation: Intends to cure organically by executing transformation plan; shareholder approval for reverse stock split as a risk mitigant (not required to implement); closely monitoring stock price.

    What to watch in Q3 FY26

    5

    Additional Enterprise Software Contracts

    by year-end 2026
    CurrentWheels Up contract signed
    Targetat least one additional enterprise contract

    Why it matters

    Securing more enterprise contracts for SurfOS is critical for validating the platform's market readiness and driving high-margin recurring revenue growth.

    Sales cycles for enterprise clients are typically longer and we are targeting at least one additional enterprise contract before year-end.

    Q&A highlights

    7

    Inquired about the target number of brokers to onboard by year-end and the relative importance of broker onboarding versus wholesale relationships for driving charter growth.

    Management intends to continue scaling the Powered by Surf On Demand program, balancing quality with growth. Wholesale relationships and expanding supply partnerships are equally important to ensure brokers have excellent supply for customers.

    “We definitely intend to continue to scale our Powered by Surf On Demand program. As I sort of mentioned, we've had overwhelming interest from brokers around the world in wanting to join the program. And obviously, we want to balance quality and make sure that we're bringing on brokers that have a good knowledge and understanding of the business and can really help us grow it.”

    asked by Mike Latimore · answered by Joshua Lowton

    2 min read5 chapters

    Detailed Narrative

    01

    Q2 FY26 Financial Performance

    Surf Air Mobility reported consolidated revenue of $29.5 million for Q2 FY26, hitting the high end of its guidance range and representing an 8% year-over-year increase and 15% sequential growth. The adjusted EBITDA loss was $10.5 million, within the guided range. The company reaffirmed its full-year 2026 revenue guidance of $128 million to $138 million (20-30% growth over 2025) and an improved adjusted EBITDA loss guidance of $25 million to $30 million, a 40% improvement from prior guidance.

    02

    SurfOS Platform Milestones

    The company achieved a significant milestone by securing its first multi-year enterprise contract for SurfOS with Wheels Up, valued at up to $12 million over the term. This deal serves as a launch customer for BrokerOS. The partnership with Palantir was expanded, adding engineering and business development resources to accelerate SurfOS commercialization. OperatorOS and OwnerOS are slated for commercial launch in Q4 FY26, with OEMOS in development, leveraging BETA demonstration flights in Hawaii.

    03

    On-Demand Charter Growth and Profitability

    Surf On Demand private charter business delivered record revenue of $12.1 million in Q2 FY26, nearly doubling year-over-year, with departures up 67% and revenue per departure up 25%. New revenue lines (cargo, wholesale, Powered by Surf On Demand) contributed 14% of H1 2026 revenue and are gross margin positive. The independent broker program has attracted over 500 applications, with 50 onboarded, generating over $2.5 million in revenue.

    04

    Airline Operations and Efficiency

    Scheduled service revenue was $17.4 million, down 20% YoY due to deliberate route exits. However, Mokulele Airlines' revenue was up 7% YoY and 15% QoQ, with over 10,000 departures in Hawaii. Operational performance remained strong with a 98% controllable completion factor and 88% on-time arrivals. OperatorOS generated structural operational savings, offsetting a $0.5 million fuel cost increase. The company also deployed its safety management system a year ahead of the FAA mandate.

    05

    Balance Sheet Strengthening

    Surf Air Mobility refinanced its senior secured convertible note, reducing the principal by 64% and monthly cash amortization payments by up to 50%. A new $30 million non-convertible senior secured term note was issued, and a $21.6 million asset-backed loan was secured, with $14 million expected in a second tranche. These actions reduced total debt levels by 50% over the last year and pushed out maturity walls, strengthening liquidity and reducing future dilution.

    AI-generated summary of the company’s earnings call. Not investment advice.