Financial Data and Key Metrics Changes - Consolidated revenues increased by 78% year over year and 11% sequentially, reaching $7.3 million for the quarter, driven by the acquisition of the Camarillo campus and higher revenues from existing and new campuses [5][6] - Operating expenses dropped slightly due to the absence of one-time non-recurring startup expenses from new campuses experienced in Q2, with SG&A expected to remain stable and not exceed $20 million on a cash basis [6][7] - The company is less than $1 million away from break-even on a cash reform operation basis and expects to achieve this goal next month [6] Business Line Data and Key Metrics Changes - Revenues from the wholly-owned subsidiary, Sky Harbour Capital, increased by 25% year over year and 8% sequentially, with expectations for continued growth in Q4 and the first quarter of next year as new campuses are leased [7] - The company has 19 airports in operation or development, with guidance to reach 23 by the end of the year [11] Market Data and Key Metrics Changes - The company is focusing on tier-one airports for site acquisition, indicating a strategic shift towards high-potential markets [36] - The leasing strategy emphasizes achieving 100% occupancy quickly through short-term leases, followed by establishing market rents [31][36] Company Strategy and Development Direction - The company is transitioning to a pre-leasing model for all future airports, starting with Bradley, Connecticut, to secure leases well in advance of construction [39][65] - A comprehensive quality assurance program has been instituted to enhance construction quality across campuses [29] - The company aims to maximize revenue capture at tier-one airports and expand existing operations rather than establishing new ground leases [36] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving investment-grade ratings by next summer, contingent on completing leasing of new campuses and demonstrating cash flow generation [69] - The company anticipates significant revenue growth as it scales operations, with a notable increase in the number of campuses under construction from three in 2025 to ten in 2026 [48] Other Important Information - A $200 million tax-exempt drawdown facility was finalized with J.P. Morgan to fund upcoming projects, with an expected drawdown over the next two years [22][25] - The company is exploring additional private activity bonds and has not issued equity due to low share prices [25][26] Q&A Session Summary Question: How will Sky Harbour manage the potential risk of locking in lease economics before full construction costs are determined? - Management noted that risks are mitigated through guaranteed maximum price contracts and a systematic approach to site acquisition, aiming for occupancy rates above 50% but not necessarily 100% [44][46] Question: Are any properties in operation over 100% occupancy? - Management confirmed that properties like San Jose are significantly above 100% occupancy, particularly those with a higher ratio of semi-private hangars [47] Question: What highlights early signs of scale in the business? - Management indicated that the increase in the number of campuses under construction and the expected revenue growth from these developments are clear indicators of scale [48][49] Question: What are the details on the potential tax-exempt bond? - Management stated that the bond could come to market as early as next month, with expected rates around 6%, subject to market conditions [50][51] Question: Is the valuation of the hangar indicative of value across the portfolio? - Management clarified that while the valuation is not necessarily indicative of the entire portfolio, it reflects the high demand for aviation hangar space in a static supply environment [57][58] Question: What are the thoughts on more hangars similar to the 75% in Miami? - Management indicated that while this financing model is repeatable, it is not the new business model, focusing instead on cost of capital and not relying solely on equity issuance [61][62] Question: Is there an opportunity to do pre-leasing at more airports? - Management confirmed that pre-leasing is the strategy going forward, starting with Bradley, Connecticut [65] Question: Can you provide a status update on investment-grade ratings? - Management aims to achieve investment-grade ratings by next summer, focusing on demonstrating cash flow generation from new campuses [68][69]

Financial Performance & Construction - Sky Harbour's construction is accelerating, leading to increasing revenues[23] - Sky Harbour Capital LLC raised capital through a municipal bond offering[8] - As of Q3 2025, Sky Harbour has approximately $247.9 million in US Treasuries and cash, including $36.473 million in cash and $11.447 million in treasuries, along with a $200 million warehouse facility[69] - A $200 million JP Morgan draw down facility is funding construction of BDL, SLC, POU1, ORL1, and TTN, swapped to a fixed interest rate of 4.73%[65, 66] Site Acquisition & Development - Sky Harbour reaffirms guidance of 4 new airport announcements by year-end 2025, targeting a total of 23 airports[51] - Sky Harbour is expanding into the Tier 1 LA market with the Long Beach Airport (LGB) project, featuring a 196k SF campus across 2 phases, with potential stabilized revenue of $10 million[54, 56] - Sky Harbour has 19 airport ground leases and is pursuing same-field expansion opportunities, targeting Tier-1 Airports[76] - The company has commenced construction on new sites and is preparing for a surge in development in 2026 and 2027[76, 82] Leasing & Operations - Stabilized campuses are showing revenue growth post-stabilization[76] - Sky Harbour has adopted a preleasing strategy, starting with BDL, to enhance long-term revenue[76, 82] - The company is focused on bringing new campuses to 100% occupancy and establishing market rents[82]

Core Viewpoint - Sky Harbour Group Corporation reported significant growth in Q3 2025, with a 78.2% increase in consolidated revenues compared to Q3 2024, and reiterated its guidance for reaching operating cash-flow breakeven by year-end 2025 [5][12]. Financial Highlights - Constructed assets and construction in progress reached over $308 million, an increase of $108 million year-over-year [5]. - Q3 2025 consolidated revenues increased by 78.2% year-over-year and 10.8% compared to the prior quarter [5]. - Net cash used in operating activities was approximately $0.9 million for Q3 2025, down from $1.2 million in Q3 2024 [5]. - As of September 30, 2025, consolidated cash and US Treasuries totaled $47.9 million, with access to a $200 million construction warehouse bank facility [5]. - Q3 2025 Obligated Group revenues increased approximately 8.2% over the prior quarter, with net cash generated from operating activities reaching approximately $4.2 million, a 92.2% increase from the prior quarter [5]. Update on Construction and Development Activities - Miami Opa Locka Phase 2 is expected to be completed by Q2 2026, adding 111,720 rentable square feet [9]. - Bradley International Airport broke ground in October 2025, expected to be completed in Q4 2026 [9]. - Site work has commenced at Salt Lake City International Airport, with full construction permit expected soon [9]. - Dallas Addison Phase 2 demolition work is nearing completion [9]. Update on Leasing Activities - Dallas Addison Phase 1 and Phoenix Deer Valley Phase 1 have surpassed 50% occupancy [9]. - A preleasing pilot program has been adopted as a permanent program, with binding leases in place at Bradley International Airport and Dulles International Airport [9]. - A binding Letter of Intent has been executed with a JV Partner for a hangar at Miami Opa Locka, involving a $30.75 million cash payment [9]. Update on Airport Operations - The company currently operates campuses at nine airports and plans to reach a total of 23 airports in operation or development by the end of 2025 [9]. - Surveys indicate that Sky Harbour's HBO service offering is well-received, providing a distinct value proposition for residents [9]. Update on Capital Formation - The company entered into a $200 million construction warehouse facility with JPMorgan Chase Bank, with a fixed interest rate of 4.73% locked in through an interest rate swap [15]. - The facility is expandable to $300 million subject to credit approval, with no funds drawn yet [15]. - The company is exploring financing options to minimize capital costs as its development pipeline grows [15].

Financial Performance - Q3 2025 consolidated revenues increased 78.2% compared to Q3 2024, reaching a total of approximately $X million[4] - Net cash generated from operating activities reached approximately $4.2 million in Q3 2025, a 92.2% increase from the prior quarter[8] - Constructed assets and construction in progress reached over $308 million at quarter-end, an increase of $108 million year-over-year[4] Liquidity and Financial Guidance - The company has a strong liquidity position with consolidated cash and US Treasuries totaling $47.9 million as of September 30, 2025[4] - The company reiterates guidance to reach operating cash-flow breakeven on a consolidated run-rate basis by year-end 2025[4] Operational Expansion - Miami Opa Locka (OPF) Phase 2 is expected to be completed by Q2 2026, adding 111,720 rentable square feet to the portfolio[9] - As of Q3, the company is conducting flight operations at nine airports, with Dallas Addison (ADS) Phase 1 and Phoenix Deer Valley (DVT) Phase 1 surpassing 50% occupancy[12] - The company expects to add four additional airports by the end of 2025, totaling 23 airports in operation or development[8] Strategic Partnerships and Financing - The company has executed a binding Letter of Intent with a JV Partner for a $30.75 million cash payment to lease a hangar at Miami OPF Phase 2[12] - The company is exploring financing options to minimize the cost of capital, including the potential issuance of $75-100 million in additional tax-exempt Put bonds[12]

Business Aircraft Market - The cumulative square footage of the U.S. business aircraft fleet increased by 61% from 2010 to 2023, with a 102% increase in larger private jets over the same period [133]. - A forecast predicts up to 8,500 new business jet deliveries worth over $285 billion between 2025 and 2034, with over two-thirds expected to be larger private jets [133]. - The physical footprint of the U.S. business aviation fleet grew by almost 36 million square feet in the past fourteen years, highlighting the demand for hangar space [133]. Company Operations and Strategy - The company operates a portfolio of ground leases across various U.S. airports, with a total rentable square footage of 1,024,318 square feet as of September 30, 2025 [144]. - The occupancy rate across the company's properties in operation is 71.3% as of September 30, 2025 [144]. - The company expects to realize economies of scale in construction through a prototype hangar design, enhancing capital efficiency and mitigating refinance risk [137]. - The company targets high-end tenants in markets with a shortage of private and FBO hangar space, addressing the imbalance between supply and demand [136]. - The company has long-term ground leases at key airports, with lease expirations extending as far as 2097 [140]. - The company is developing home basing hangar campuses to capitalize on existing hangar supply constraints at major U.S. airports [136]. Financial Performance - Rental revenue for Q3 2025 was approximately $5.7 million, a 61% increase from $3.5 million in Q3 2024, driven by operations at CMA and increased occupancy at multiple hangar campuses [179]. - Fuel revenue for Q3 2025 reached approximately $1.6 million, a 193% increase from $0.5 million in Q3 2024, primarily due to fuel sales at the CMA hangar campus [180]. - Total revenue for Q3 2025 was approximately $7.3 million, up $3.2 million or 78% from $4.1 million in Q3 2024 [178]. - Total expenses for Q3 2025 increased by $6.0 million, or 67%, to approximately $15.0 million from $9.0 million in Q3 2024 [178]. - Operating loss for Q3 2025 was approximately $7.7 million, compared to a loss of $4.9 million in Q3 2024, reflecting increased operating expenses [178]. Cost Management - The anticipated retrofitting costs for design defects in hangar buildings are estimated to be between $26 million and $28 million, extending construction timelines by three to five months for affected projects [153]. - Construction material costs, particularly for steel and concrete, are subject to inflationary pressures and tariffs, impacting overall project costs [152]. - The company aims to mitigate inflationary pressures and reduce construction costs through shared savings clauses in contracts with general contractors [155]. Capital and Financing - A Credit Agreement was entered into in September 2025, providing a term loan facility of up to $200 million, with the potential to increase to $300 million [147]. - The company plans to access capital markets through various agreements and facilities to fund additional airport campuses [159]. - The company has the ability to fund up to $50 million in new projects outside the original five locations, contingent on approvals and consultant reports [158]. Cash Flow and Liquidity - As of September 30, 2025, total cash, restricted cash, investments, and restricted investments amounted to approximately $47.9 million, a decrease from $127.2 million as of December 31, 2024 [209]. - Net cash used in operating activities was approximately $6.9 million for the nine months ended September 30, 2025, compared to $6.6 million for the same period in 2024 [227]. - Net cash used in investing activities was approximately $44.3 million for the nine months ended September 30, 2025, a decrease of $52.7 million compared to the same period in 2024 [229]. - Net cash used in financing activities was approximately $6.7 million for the nine months ended September 30, 2025, compared to a net cash provided of $0.2 million for the same period in 2024 [231]. Employee and Operational Expenses - Employee compensation and benefits expenses rose by approximately $1.9 million, or 61%, to $5.0 million in Q3 2025, driven by increased headcount and equity compensation [186]. - Ground lease expenses increased by approximately $1.0 million, or 42%, to approximately $3.5 million in Q3 2025, influenced by new ground leases signed and those assumed from the CMA transaction [183]. - Depreciation and amortization expenses increased by approximately $1.1 million, or 175%, for Q3 2025, primarily due to the acquisition of CMA and the commencement of operations at new campuses [184]. - Campus operating expenses rose by approximately $1.0 million, or 87%, to approximately $2.1 million in Q3 2025, driven by increased personnel costs and operational expenses [181]. Debt and Compliance - The company is required to maintain a debt service coverage ratio of at least 1.25 for each applicable test period, commencing with the quarter ending December 31, 2024 [219]. - As of September 30, 2025, the company was in compliance with all debt covenants [221].

Core Viewpoint - Sky Harbour Group Corporation is set to release its Third Quarter 2025 financial results on November 12, 2025, and will host a webcast investor call to discuss these results and provide a business update [1][2]. Company Overview - Sky Harbour Group Corporation is an aviation infrastructure company focused on developing a nationwide network of Home-Basing campuses for business aircraft, offering general aviation hangars across the United States [3]. Upcoming Events - The financial results will be filed with the SEC after market close on November 12, 2025, followed by a webcast at 5:00 pm ET, which will include a Q&A session with company leadership [1][2]. Financial Instruments - The company has executed a floating-to-fixed interest rate swap with J.P. Morgan, locking in a fixed rate of 4.73% on a $200 million tax-exempt warehouse facility [7].

Core Viewpoint - The market anticipates that Sky Harbour Group Corporation (SKYH) will report flat earnings compared to the previous year, with revenues expected to increase significantly [1][3]. Earnings Expectations - The consensus EPS estimate for Sky Harbour Group is a loss of $0.10 per share, unchanged from the year-ago quarter, while revenues are projected to be $8.63 million, reflecting a 110.5% increase year-over-year [3]. - The earnings report could lead to a stock price increase if actual results exceed expectations, but a miss could result in a decline [2]. Estimate Revisions - Over the last 30 days, the consensus EPS estimate has been revised down by 25%, indicating a bearish sentiment among analysts regarding the company's earnings prospects [4][12]. - The Most Accurate Estimate for Sky Harbour Group is lower than the Zacks Consensus Estimate, resulting in an Earnings ESP of -10.00% [12]. Historical Performance - In the last reported quarter, Sky Harbour Group was expected to post a loss of $0.12 per share but actually reported a loss of $0.10, achieving a surprise of +16.67% [13]. - The company has beaten consensus EPS estimates three times over the last four quarters [14]. Comparative Analysis - Rocket Lab Corporation (RKLB), another player in the aerospace-defense equipment industry, is expected to report a loss of $0.05 per share, with revenues projected at $149.82 million, a 42.9% increase year-over-year [18][19]. - Rocket Lab's consensus EPS estimate has remained unchanged, but a higher Most Accurate Estimate gives it an Earnings ESP of +25.00%, indicating a likely beat of the consensus EPS estimate [19][20].

Core Insights - Sky Harbour Group Corporation has signed a ground lease agreement with the City of Long Beach, California, to develop a Home Base Operator (HBO) campus at Long Beach Airport (LGB), enhancing its nationwide network for business aircraft [1][2]. Development Details - The Long Beach campus will span approximately 17 acres and is designed to provide state-of-the-art hangars for corporate and private jets, with dedicated line services for based tenants, aiming for the shortest time to wheels-up in business aviation [2][4]. - The project is expected to create or sustain hundreds of local jobs and generate significant economic benefits for Southern California [2]. Existing and Future Campuses - Long Beach Airport becomes the 19th home-base airport for Sky Harbour, joining existing campuses in locations such as Houston, Nashville, Miami, and others, with additional campuses planned for cities like Chicago, New York, and Orlando [3]. Leadership and Community Impact - CEO Tal Keinan emphasized Long Beach's role as a hub for innovation in aerospace technology and the importance of business aviation in driving economic growth in the region [4]. - Long Beach Airport Director Cynthia Guidry highlighted the agreement's significance in reinforcing Long Beach as a key business aviation hub, contributing to local investment, job creation, and revenue [4].

Summary of Sky Harbour Conference Call Company Overview - **Company**: Sky Harbour - **Industry**: Aviation Real Estate - **Business Model**: Develops private hangar campuses at major U.S. airfields, leasing to high-net-worth individuals and corporations [4][5] Key Points Business Strategy - Sky Harbour aims to secure land at key airfields, develop hangar campuses of approximately 200,000 square feet, and lease them to private jet owners [4][5] - The company targets a goal of 50 airfields, with potential to exceed this as operations become more efficient [5] - Sky Harbour is positioned as the largest hangar developer in the U.S. [5] Market Dynamics - The U.S. business aviation fleet has significantly increased over the past 15 years, with a notable rise in larger jets that require specialized hangar space [6][28] - Legacy hangar supply is becoming obsolete as newer, larger jets cannot fit into older hangars [6] - The constrained supply of hangar space in major metropolitan areas creates a favorable market for Sky Harbour [9] Competitive Landscape - Sky Harbour differentiates itself from Fixed-Base Operators (FBOs) by focusing on long-term leases and private hangar solutions rather than transient traffic [15][16] - FBOs primarily generate revenue from fuel sales, while Sky Harbour's revenue model is heavily based on rental income [23] Financial Metrics - Sky Harbour targets stabilized yield on cost in the mid-teens and aims for a return on equity close to 30% [4][18] - Construction costs are approximately $300 per square foot, with expected rental revenue around $39 per square foot and additional fuel sales [17] - The company has secured financing through tax-exempt municipal bonds, pricing debt roughly 200 basis points below market rates [18][21] Growth Projections - The company anticipates a year-over-year growth rate of approximately 7-8% in the business aviation market [28] - Sky Harbour's operational footprint includes 18 ground leases signed, with nine operational and nine in development [10] Recent Developments - In August, Sky Harbour secured a $200 million drawdown facility with JPMorgan to fund construction and stabilization of projects [21] - The company is transitioning to fixed-rate swaps to manage interest rate exposure [22] Customer Base - Approximately 60% of Sky Harbour's customers are high-net-worth individuals, 30% are charter operators, and 10% are government tenants [25] Lease Management - Ground leases with airports average around 50 years, with options to extend [25][26] - Tenant leases are staggered from one to ten years to capitalize on potential land value appreciation [25] Additional Insights - The aviation real estate market is characterized by limited new airport construction, particularly in high-demand areas like New York and Los Angeles [9] - Sky Harbour's unique positioning allows it to capture a niche market that is underserved by traditional FBOs [15][16]

Core Viewpoint - Sky Harbour Group Corporation has announced a floating-to-fixed interest rate swap with JPMorgan Chase Bank, resulting in a fixed interest rate of 4.73% on its $200 million tax-exempt warehouse facility [1] Group 1 - The company is focused on building the first nationwide Home Base Operator (HBO) network for business aircraft [1] - The interest rate swap is for a duration of 5 years [1] - The tax-exempt warehouse facility is associated with Sky Harbour Capital II LLC [1]