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Delta(DAL) - 2025 Q2 - Quarterly Results
DeltaDelta(US:DAL)2025-07-10 10:30

Delta Air Lines June Quarter 2025 Financial Results June Quarter 2025 Financial Highlights Delta delivered record revenue for the June quarter, with adjusted operating revenue up 1% year-over-year to $15.5 billion, driven by resilient high-margin streams, while adjusted pre-tax income and EPS declined 10% and 11% respectively, and adjusted operating cash flow was $1.8 billion June Quarter 2025 Key Financial Metrics (Adjusted, Non-GAAP) | Metric | Q2 2025 | Q2 2024 | % Change | | :--- | :--- | :--- | :--- | | Operating Revenue | $15.5 billion | $15.4 billion | +1% | | Operating Income | $2.0 billion | $2.3 billion | -10% | | Operating Margin | 13.2% | 14.7% | -1.5 percentage points | | Pre-tax Income | $1.8 billion | $2.0 billion | -10% | | Diluted EPS | $2.10 | $2.36 | -11% | | Operating Cash Flow | $1.8 billion | $2.5 billion | -25% | | Free Cash Flow | $733 million | $1,274 million | -42% | June Quarter 2025 Key Financial Metrics (GAAP) | Metric | Q2 2025 | Q2 2024 | % Change | | :--- | :--- | :--- | :--- | | Operating Revenue | $16.6 billion | $16.7 billion | 0% | | Operating Income | $2.1 billion | $2.3 billion | -7% | | Net Income | $2.1 billion | $1.3 billion | +63% | | Diluted EPS | $3.27 | $2.01 | +63% | - The strong performance was attributed to the outstanding contributions of Delta's employees, who continue to set a high bar for industry performance3 Full Year and Q3 2025 Guidance Delta restored its full-year 2025 guidance, projecting EPS between $5.25 and $6.25 and free cash flow of $3 to $4 billion, while Q3 revenue is expected to be flat to up 4% year-over-year with a 9-11% operating margin, alongside a 25% dividend increase Financial Guidance | Metric | Full Year 2025 | Q3 2025 | | :--- | :--- | :--- | | Earnings Per Share | $5.25 - $6.25 | $1.25 - $1.75 | | Free Cash Flow | $3 billion - $4 billion | N/A | | Total Revenue YoY | N/A | 0% - 4% | | Operating Margin | N/A | 9% - 11% | | Gross Leverage | < 2.5x | N/A | - Reflecting confidence in the business, the company restored its full-year financial guidance, consistent with long-term free cash flow targets4 - A 25% increase to the dividend payment will begin in the September quarter2 Revenue Environment and Outlook Delta achieved record June quarter adjusted revenue of $15.5 billion, up 1% year-over-year, driven by resilient high-margin streams like Premium products and Loyalty, which contributed 59% of total revenue, with international revenue growing 2% - Diverse, high-margin revenue streams (Premium, Loyalty, Cargo, MRO) contributed 59% of total revenue9 - Premium product revenue grew 5% year-over-year, outpacing main cabin performance9 - Loyalty revenue increased by 8% year-over-year, with American Express remuneration reaching $2 billion, a 10% increase9 - International revenue grew 2%, with Pacific revenue up 11% and Transatlantic revenue up 2% over record 2024 levels9 Cost Performance and Outlook Delta maintained cost discipline with a 2.7% year-over-year increase in non-fuel unit cost (CASM-Ex), while adjusted fuel expense decreased 11% to $2.5 billion due to lower fuel prices, with the company anticipating its best non-fuel unit cost performance in Q3 - June quarter non-fuel unit cost (CASM-Ex) increased 2.7% year-over-year to 13.49 cents811 - The company expects Q3 non-fuel unit costs to be flat to down compared to 2024, marking the best performance of the year8 Q2 2025 Fuel Performance | Metric | Q2 2025 | YoY Change | | :--- | :--- | :--- | | Adjusted Fuel Expense | $2.5 billion | -11% | | Adjusted Fuel Price per Gallon | $2.26 | -14% | Balance Sheet, Cash and Liquidity Delta strengthened its balance sheet by generating $2 billion in free cash flow in the first half of 2025 and reducing adjusted net debt by $1.7 billion since year-end 2024, ending the quarter with $6.4 billion in liquidity - Generated $733 million in free cash flow in Q2 and $2 billion in the first half of 20251011 - Reduced adjusted net debt by $1.7 billion from the end of 2024, ending the quarter at $16.3 billion11 - Ended the quarter with $6.4 billion in liquidity, including $3.1 billion in undrawn revolver capacity11 June Quarter 2025 Highlights Delta achieved top-tier operational reliability, expanded global partnerships, enhanced its network, invested in employees with a 4% pay raise, improved customer experience through new lounges and app updates, and advanced sustainability goals with significant fuel savings - Operations: Operated the most on-time airline in the quarter, took delivery of 10 new aircraft, and announced strengthened partnerships with WestJet and plans with IndiGo, Air France-KLM, and Virgin Atlantic15 - People & Culture: Provided a 4% base pay increase for eligible employees and was named No. 3 in Fortune's ReturnOnLeadership® ranking15 - Customer Experience: Launched Fly Delta app 7.0, opened new Delta One and Sky Club lounges in SEA and ATL, and expanded partnerships with Uber and Missoni15 - Sustainability: Achieved 1% fuel burn savings from operational improvements, saving 45 million gallons of jet fuel15 Consolidated Financial Statements (Unaudited) Consolidated Statements of Operations For Q2 2025, total operating revenue was flat year-over-year at $16.6 billion, while operating expense increased 1% to $14.5 billion, resulting in a 7% decrease in operating income to $2.1 billion, with net income up 63% to $2.1 billion due to a $735 million gain on investments Q2 2025 vs Q2 2024 Statement of Operations (GAAP) | (in millions) | Q2 2025 | Q2 2024 | % Change | | :--- | :--- | :--- | :--- | | Total Operating Revenue | $16,648 million | $16,658 million | 0% | | Total Operating Expense | $14,546 million | $14,391 million | +1% | | Operating Income | $2,102 million | $2,267 million | -7% | | Net Income | $2,130 million | $1,305 million | +63% | - A gain on investments of $735 million in Q2 2025, compared to a loss of $196 million in Q2 2024, was a primary driver of the significant increase in Net Income29 Revenue Breakdown Total passenger revenue for Q2 2025 was flat year-over-year, driven by 5% growth in premium products and 12% increase in loyalty travel awards, offsetting a 5% decline in main cabin ticket revenue, with Pacific revenue growing 11% geographically Q2 2025 Passenger Revenue by Type (in millions) | Category | Q2 2025 | Q2 2024 | % Change | | :--- | :--- | :--- | :--- | | Ticket - Main cabin | $6,347 million | $6,716 million | -5% | | Ticket - Premium products | $5,899 million | $5,633 million | +5% | | Loyalty travel awards | $1,092 million | $975 million | +12% | Q2 2025 Revenue by Geography (vs Q2 2024) | Region | Revenue Change | Unit Revenue Change | | :--- | :--- | :--- | | Domestic | -1% | -5% | | Atlantic | +2% | -2% | | Latin America | -1% | 0% | | Pacific | +11% | -1% | Statistical Summary In Q2 2025, Delta's capacity grew 4% year-over-year, outpacing 2% traffic growth, leading to a 1.8 percentage point decrease in passenger load factor to 86%, while TRASM declined 4% to 21.44 cents and CASM decreased 3% to 18.73 cents Q2 2025 Key Operating Statistics (vs Q2 2024) | Metric | Q2 2025 | Change | | :--- | :--- | :--- | | Available Seat Miles (millions) | 77,645 million | +4% | | Revenue Passenger Miles (millions) | 66,417 million | +2% | | Passenger Load Factor | 86% | -1.8 percentage points | | TRASM (cents) | 21.44 cents | -4% | | CASM (cents) | 18.73 cents | -3% | | CASM-Ex (cents) | 13.49 cents | +2.7% | | Avg. Fuel Price per Gallon | $2.21 | -16% | Consolidated Statements of Cash Flows For Q2 2025, net cash from operating activities was $1.9 billion, a decrease from $2.5 billion in the prior-year quarter, while net cash used in investing activities was $1.2 billion and financing activities used $1.1 billion, resulting in a net decrease in cash of $412 million Q2 2025 Cash Flow Summary (in millions) | Cash Flow Activity | Q2 2025 | Q2 2024 | | :--- | :--- | :--- | | Net cash provided by operating activities | $1,856 million | $2,450 million | | Net cash used in investing activities | $(1,199) million | $(809) million | | Net cash used in financing activities | $(1,069) million | $(1,512) million | | Net (Decrease)/Increase in Cash | $(412) million | $129 million | Consolidated Balance Sheets As of June 30, 2025, Delta's total assets were $78.4 billion, up from $75.4 billion at year-end 2024, while total liabilities were $60.9 billion, with a significant increase in air traffic liability to $8.9 billion, and stockholders' equity increased to $17.4 billion Balance Sheet Summary (in millions) | Category | June 30, 2025 | Dec 31, 2024 | | :--- | :--- | :--- | | Total Current Assets | $10,982 million | $9,844 million | | Total Assets | $78,395 million | $75,372 million | | Total Current Liabilities | $28,554 million | $26,670 million | | Total Liabilities | $60,955 million | $60,079 million | | Total Stockholders' Equity | $17,440 million | $15,293 million | - Air traffic liability, a measure of tickets sold for future travel, increased to $8.9 billion from $7.1 billion at the end of 202444 Note A: Non-GAAP Financial Measures Reconciliation of Non-GAAP Measures Delta uses non-GAAP measures to provide a more meaningful comparison of core operational performance by excluding items like third-party refinery sales and MTM adjustments, with key adjusted Q2 2025 metrics including a 13.2% operating margin, $1.8 billion pre-tax income, $2.10 diluted EPS, and $733 million free cash flow - The primary adjustments from GAAP to non-GAAP figures include removing the impact of third-party refinery sales, mark-to-market (MTM) adjustments on investments and hedges, and losses on debt extinguishment464748 Q2 2025 GAAP to Non-GAAP Reconciliation Highlights | Metric | GAAP | Adjusted (Non-GAAP) | | :--- | :--- | :--- | | Operating Margin | 12.6% | 13.2% | | Pre-Tax Income | $2,574 million | $1,805 million | | Diluted EPS | $3.27 | $2.10 | | CASM (cents) | 18.73 cents | N/A | | CASM-Ex (cents) | N/A | 13.49 cents | - Adjusted net debt was calculated at $16.3 billion as of June 30, 2025, a reduction of $1.7 billion from the end of 202463 - Free cash flow for Q2 2025 was $733 million, derived from $1.9 billion in operating cash flow adjusted for investing activities, pension contributions, and other items68