SkyWest(SKYW) - 2025 Q2 - Quarterly Results

Second Quarter 2025 Summary & Highlights SkyWest reported strong Q2 2025 financial results with increased net income and EPS, supported by block hour growth and strategic fleet expansion Q2 2025 Financial Highlights SkyWest, Inc. reported strong financial results for Q2 2025, with net income increasing to $120 million and diluted EPS to $2.91, compared to $76 million and $1.82 respectively in Q2 2024, supported by a 19% year-over-year increase in block hour production Q2 2025 Key Financials | Metric | Q2 2025 | Q2 2024 | Change ($) | | :----- | :------ | :------ | :--------- | | Net Income | $120 million | $76 million | +$44 million | | Diluted EPS | $2.91 | $1.82 | +$1.09 | | Pre-tax Income | $163 million | $102 million | +$61 million | - Q2 2025 block hour production increased by 19% compared to Q2 2024 and 7% compared to Q1 2025[4] Strategic Developments & CEO Commentary SkyWest secured an agreement to purchase and operate 16 new E175 aircraft for Delta Air Lines, scheduled for delivery in 2027 and 2028, which will replace existing CRJ900s and CRJ700s, with the CEO highlighting solid demand and strategic capital deployment for long-term growth and fleet optimization - SkyWest secured an agreement to purchase and operate 16 new E175 aircraft for Delta Air Lines, expected to replace 11 CRJ900s and 5 CRJ700s, with deliveries in 2027 and 2028[2][4] - CEO Chip Childs noted solid demand for SkyWest's product and a strong position to deploy capital for long-term growth, fleet opportunities, service expansion in smaller communities, and fleet optimization[3] Financial Performance SkyWest's Q2 2025 saw revenue growth and increased net income, alongside a stable balance sheet with reduced debt and increased stockholders' equity Q2 2025 Income Statement Analysis SkyWest's Q2 2025 revenue increased by 19% to $1.0 billion, driven by higher block hour production, while operating expenses rose by 16%, resulting in a significant increase in operating income and net income compared to the prior year Condensed Consolidated Statements of Income (Three Months Ended June 30) | Metric (Thousands) | Q2 2025 | Q2 2024 | Change ($) | Change (%) | | :----------------- | :------ | :------ | :--------- | :--------- | | Total operating revenues | $1,035,227 | $867,118 | $168,109 | 19.4% | | Total operating expenses | $865,099 | $747,478 | $117,621 | 15.7% | | OPERATING INCOME | $170,128 | $119,640 | $50,488 | 42.2% | | INCOME BEFORE INCOME TAXES | $163,116 | $102,166 | $60,950 | 59.7% | | NET INCOME | $120,269 | $75,578 | $44,691 | 59.1% | | DILUTED EARNINGS PER SHARE | $2.91 | $1.82 | $1.09 | 59.9% | - The 19% revenue increase was attributed to improvements in captain availability, higher fleet utilization, and strong demand, mirroring the 19% increase in block hour production[5] - Operating expense increase was driven by higher flight production, partially offset by operating efficiencies from increased fleet utilization[6] Balance Sheet Overview As of June 30, 2025, SkyWest's total assets slightly increased to $7.17 billion, while cash and marketable securities decreased to $727 million, with total debt reduced to $2.5 billion and stockholders' equity growing to $2.58 billion Summary of Consolidated Balance Sheets (June 30, 2025 vs December 31, 2024) | Metric (Thousands) | June 30, 2025 | December 31, 2024 | Change ($) | Change (%) | | :----------------- | :------------ | :---------------- | :--------- | :--------- | | Cash and marketable securities | $727,021 | $801,628 | -$74,607 | -9.3% | | Total assets | $7,174,083 | $7,139,867 | +$34,216 | 0.5% | | Total current liabilities | $1,457,675 | $1,429,591 | +$28,084 | 2.0% | | Long-term debt, net of current maturities | $2,006,034 | $2,136,786 | -$130,752 | -6.1% | | Total debt (Current + Long-term) | $2,496,570 | $2,672,375 | -$175,805 | -6.6% | | Stockholders' equity | $2,582,420 | $2,408,781 | +$173,639 | 7.2% | Capital, Liquidity & Shareholder Returns SkyWest maintained strong liquidity, reduced debt, invested in fleet expansion, and increased its share repurchase program, demonstrating strategic capital management Cash, Marketable Securities & Debt SkyWest maintained a strong liquidity position with $727 million in cash and marketable securities as of June 30, 2025, and successfully reduced its total debt to $2.5 billion from $2.7 billion at year-end 2024 Cash and Debt Overview | Metric | June 30, 2025 | December 31, 2024 | Change ($) | | :----- | :------------ | :---------------- | :--------- | | Cash and marketable securities | $727 million | $802 million | -$75 million | | Total debt | $2.5 billion | $2.7 billion | -$0.2 billion | Capital Expenditures Capital expenditures for Q2 2025 totaled $169 million, primarily for the acquisition of two new E175 aircraft, four CRJ900 aircraft, spare engines, and other fixed assets - Capital expenditures during Q2 2025 were $169 million[7] - Purchases included two new E175 aircraft, four CRJ900 aircraft, spare engines, and other fixed assets[7] Share Repurchase Program The Board approved a $250 million increase to the share repurchase plan in May 2025, with SkyWest repurchasing 195,000 shares for $17.3 million in Q2 2025, leaving $267 million remaining under the program - In May 2025, the SkyWest Board of Directors approved a $250 million increase to its existing share repurchase plan[8] Share Repurchase Activity | Metric | Q2 2025 | Q1 2025 | Change (%) | | :----- | :------ | :------ | :--------- | | Shares repurchased | 195,000 | 141,000 | +38% | | Value of shares repurchased | $17.3 million | N/A | N/A | | Average price per share | $88.61 | N/A | N/A | - As of June 30, 2025, SkyWest had $267 million of remaining availability under its current share repurchase program[8] Fleet & Commercial Agreements SkyWest expanded its fleet with new E175 deliveries and future agreements, increasing total aircraft in service and demonstrating strong operational growth in Q2 2025 New Aircraft Agreements & Deliveries SkyWest took delivery of two new E175 aircraft for United Airlines in Q2 2025 and has secured delivery positions for 44 additional E175s from 2028 through 2032, along with purchase rights for 50 more, anticipating nearly 300 E175 aircraft by the end of 2028 - Under an agreement with United Airlines, SkyWest took delivery of two new E175 aircraft during Q2 2025[9] E175 Aircraft Deliveries | Airline | Q2 2025 | Q3-Q4 2025 | 2026 | 2027 | 2028 | Thereafter | Total | | :------ | :------ | :--------- | :--- | :--- | :--- | :--------- | :---- | | United | 2 | 5 | 8 | — | — | — | 13 | | Delta | — | — | — | 10 | 6 | — | 16 | | Alaska Airlines | — | 1 | — | — | — | — | 1 | | Unassigned | — | — | — | — | 4 | 40 | 44 | | Total | 2 | 6 | 8 | 10 | 10 | 40 | 74 | - By the end of 2028, SkyWest anticipates having nearly 300 E175 aircraft[10] - SkyWest secured delivery positions for 44 additional E175s from 2028 through 2032 and purchase rights on 50 additional E175s[10] Fleet Composition SkyWest's total aircraft in service or under contract increased to 502 as of June 30, 2025, from 492 at year-end 2024, primarily driven by an increase in E175 and CRJ700/CRJ550 aircraft Aircraft in Service or Under Contract by Type | Aircraft Type | June 30, 2025 | December 31, 2024 | June 30, 2024 | | :------------ | :------------ | :---------------- | :------------ | | E175 aircraft | 265 | 262 | 248 | | CRJ900 aircraft | 36 | 36 | 41 | | CRJ700/CRJ550 aircraft | 121 | 119 | 99 | | CRJ200 aircraft | 80 | 75 | 87 | | Total aircraft | 502 | 492 | 475 | - As of June 30, 2025, SkyWest leased 35 CRJ700/CRJ550s and five CRJ900s to third parties and had eight CRJ200s configured for service under SWC operations[20] Operational Data SkyWest experienced significant operational growth in Q2 2025, with total block hours increasing by 18.5% and passengers carried by 13.1% year-over-year, while maintaining high flight completion rates Selected Operational Data (Three Months Ended June 30) | Metric | Q2 2025 | Q2 2024 | % Change | | :----- | :------ | :------ | :------- | | Total block hours | 376,269 | 317,462 | 18.5 % | | Departures | 222,874 | 189,325 | 17.7 % | | Passengers carried | 12,092,758 | 10,691,017 | 13.1 % | | Adjusted flight completion | 99.9 % | 99.9 % | — pts | | Raw flight completion | 99.1 % | 99.0 % | 0.1 pts | | Passenger load factor | 82.8 % | 84.4 % | (1.6)pts | | Average trip length | 451 | 460 | (2.0)% | Supplemental Financial Information This section provides additional details on SkyWest's cash flow, highlighting revenue recognized in excess of fixed payments and changes in cumulative deferred revenue Supplemental Cash Flow Details SkyWest reported $23.0 million in revenue recognized in excess of fixed cash payments received for Q2 2025, a significant increase from Q2 2024, with cumulative deferred revenue decreasing to $286.5 million as of June 30, 2025 - Fixed monthly cash payments under capacity purchase agreements (CPAs) are attributed to overhead costs and aircraft ownership costs. Non-lease portions are recognized as revenue on a completed block hour basis, while lease portions are recognized on a straight-line basis[24] Revenue Recognized in Excess of Fixed Cash Payments Received (Thousands) | Period | 2025 | 2024 | | :----- | :--- | :--- | | Three Months Ended June 30, | $22,976 | $5,551 | | Six Months Ended June 30, | $35,886 | $6,414 | Cumulative Deferred Revenue (Thousands) | Metric | As of June 30, 2025 | As of December 31, 2024 | | :----- | :------------------ | :-------------------- | | Cumulative fixed cash payments received in excess of revenue recognized ("deferred revenue") | $286,483 | $322,369 | Company Information This section provides an overview of SkyWest, Inc.'s business structure and operations, along with details for its upcoming Q2 2025 earnings conference call About SkyWest, Inc. SkyWest, Inc. is a holding company for SkyWest Airlines, SkyWest Charter, and SkyWest Leasing, operating a fleet of approximately 500 aircraft and serving over 240 destinations across North America through partnerships with major airlines - SkyWest, Inc. is the holding company for SkyWest Airlines, SkyWest Charter ("SWC"), and SkyWest Leasing, an aircraft leasing company[11] - SkyWest Airlines has a fleet of approximately 500 aircraft connecting passengers to over 240 destinations throughout North America[11] - SkyWest Airlines operates through partnerships with United Airlines, Delta Air Lines, American Airlines, and Alaska Airlines, carrying more than 42 million passengers in 2024[11] Conference Call Details SkyWest will host a conference call on July 24, 2025, at 2:30 p.m. Mountain Time to discuss its second quarter 2025 results, with details provided for domestic and international callers and a live internet webcast - SkyWest will host its conference call to discuss its second quarter 2025 results on July 24, 2025, at 2:30 p.m. Mountain Time[12] - Conference call numbers are 1-888-330-2455 for domestic callers and 1-240-789-2717 for international callers. A live webcast will be available at https://events.q4inc.com/attendee/794666333[12](index=12&type=chunk) Forward-Looking Statements This section outlines the inherent risks and uncertainties associated with forward-looking statements, emphasizing factors that could materially impact future results Disclaimer and Risk Factors This section contains forward-looking statements subject to various risks and uncertainties, including economic conditions, demand for air travel, operational challenges, regulatory issues, and geopolitical factors, which could cause actual results to differ materially from expectations - Forward-looking statements are identified by words such as "forecasts," "expects," "intends," "believes," "anticipates," "estimates," "should," "likely" and similar expressions[13] - Factors that could cause actual results to vary materially include challenges of competing in a rapidly changing industry, economic fluctuations, uncertainty regarding infectious diseases, ability to secure new aircraft agreements, timing and performance of third-party service providers, pilot retention, regulatory issues, aircraft financing, financial stability of major airline partners, fuel costs, global instability, and tariffs[13][14] - Readers are directed to SkyWest's filings with the SEC, including its most recent Annual Report on Form 10-K, Quarterly Reports on Form 10-Q, and Current Reports on Form 8-K, for additional risk factors[14]