United(UAL) - 2025 Q3 - Quarterly Results

Executive Summary Q3 2025 Performance Highlights United Airlines reported Q3 2025 profit and Q4 outlook exceeding Wall Street expectations, driven by brand-loyal customers and operational excellence Q3 2025 Key Financial Metrics | Metric | Value | YoY Change | Guidance | | :-------------------------------- | :---------- | :--------- | :---------------- | | Diluted EPS | $2.90 | - | - | | Adjusted Diluted EPS | $2.78 | - | $2.25 to $2.75 (above top end) | | Pre-tax earnings | $1.3 billion | - | - | | Pre-tax margin | 8.2% | - | - | | Adjusted pre-tax earnings | $1.2 billion | - | - | | Adjusted pre-tax margin | 8.0% | - | - | | Total operating revenue | $15.2 billion | +2.6% | - | | Premium cabin revenue | - | +6% | - | | Basic Economy revenue | - | +4% | - | | Cargo revenue | - | +3% | - | | Loyalty revenue | - | +9% | - | - The company attributes its resilience in an economically volatile year to brand-loyal customers and diverse revenue sources[1] - United flew its largest summer mainline schedule ever in 2025 and achieved its lowest third-quarter cancel rate in history, demonstrating operational excellence[1] Q4 2025 Outlook United anticipates a strong Q4 2025, with adjusted diluted EPS guidance of $3.00 to $3.50 and expects to achieve the highest total operating revenue for a single quarter in company history Q4 2025 Outlook Metrics | Metric | Guidance | | :-------------------------- | :---------------- | | Adjusted Diluted EPS | $3.00 to $3.50 | | Total Operating Revenue | Highest for a single quarter in company history | | Unit Revenue (YoY vs Q3) | Meaningful improvement | - The strong Q4 outlook is fueled by a growing base of brand-loyal customers and an improving economic and demand environment[1][3] Strategic Priorities and Customer Investments United continues to make significant customer investments, totaling over $1 billion this year and an additional $1 billion planned for 2026, focusing on enhancing the experience, product, and service - Over $1 billion invested in customer experience in 2025, with another $1 billion planned for 2026[1][3] - Enhancements include Starlink installations (free for MileagePlus members by 2027), seatback screens (over half of narrowbody fleet updated, 15-point increase in customer satisfaction since Q3 2022), and 25% more on food[2][3][9] - These investments aim to win and retain brand-loyal customers, providing economic resilience and upside as demand improves[3] Third-Quarter Financial Results Key Financial Metrics United's Q3 2025 financial performance included a 2.6% increase in total operating revenue to $15.2 billion, with capacity up 7.2% Key Financial Metrics Summary | Metric | Value | YoY Change (vs Q3 2024) | | :-------------------------------- | :---------- | :------------------------ | | Capacity | - | +7.2% | | Total operating revenue | $15.2 billion | +2.6% | | TRASM | - | (4.3%) | | CASM | - | (2.8%) | | CASM-ex | - | (0.9%) | | Pre-tax earnings | $1.3 billion | - | | Pre-tax margin | 8.2% | - | | Adjusted pre-tax earnings | $1.2 billion | - | | Adjusted pre-tax margin | 8.0% | - | | Net income | $0.9 billion | - | | Adjusted net income | $0.9 billion | - | | Diluted EPS | $2.90 | - | | Adjusted diluted EPS | $2.78 | - | | Average fuel price per gallon | $2.43 | - | | Ending available liquidity | $16.3 billion | - | | Total debt, finance lease obligations and other financial liabilities | $25.4 billion | - | | Trailing twelve months net leverage | 2.1x | - | | Shares repurchased in Q3 2025 | $19 million | - | | Shares repurchased YTD (as of Sep 30, 2025) | $612 million | - | - Prepaid the remaining $1.5 billion balance of MileagePlus bonds, fully repaying all debt secured by the MileagePlus business[9] Consolidated Statements of Operations For Q3 2025, total operating revenue increased by 2.6% to $15,225 million, primarily driven by passenger revenue growth of 1.9% Consolidated Statements of Operations Data | Metric | 3 Months Ended Sep 30, 2025 (Millions) | 3 Months Ended Sep 30, 2024 (Millions) | % Increase/(Decrease) | | :------------------------------------ | :------------------------------------- | :------------------------------------- | :-------------------- | | Operating revenue: | | | | | Passenger revenue | $13,815 | $13,561 | 1.9 | | Cargo revenue | $431 | $417 | 3.2 | | Other operating revenue | $979 | $865 | 13.2 | | Total operating revenue | $15,225 | $14,843 | 2.6 | | Operating expense: | | | | | Salaries and related costs | $4,555 | $4,323 | 5.4 | | Aircraft fuel | $2,997 | $2,993 | 0.1 | | Landing fees and other rent | $1,002 | $866 | 15.7 | | Aircraft maintenance materials and outside repairs | $779 | $765 | 1.8 | | Depreciation and amortization | $730 | $742 | (1.6) | | Regional capacity purchase | $686 | $651 | 5.3 | | Distribution expenses | $555 | $574 | (3.3) | | Aircraft rent | $54 | $65 | (16.7) | | Special charges (credits) | $(73) | $(5) | NM | | Other operating expenses | $2,546 | $2,304 | 10.5 | | Total operating expense | $13,830 | $13,278 | 4.2 | | Operating income | $1,395 | $1,565 | (10.8) | | Income before income taxes | $1,255 | $1,286 | (2.4) | | Income tax expense | $306 | $321 | (4.7) | | Net income | $949 | $965 | (1.7) | | Diluted earnings per share | $2.90 | $2.90 | — | Passenger Revenue and Operating Statistics Consolidated passenger revenue increased by 1.9% in Q3 2025, with domestic revenue up 3.1% and Middle East/India/Africa showing significant growth of 30.8% Passenger Revenue and Operating Statistics Summary | Region | 3Q 2025 Passenger Revenue (Millions) | Passenger Revenue vs 3Q 2024 | PRASM vs 3Q 2024 | ASMs vs 3Q 2024 | | :-------------------- | :----------------------------------- | :--------------------------- | :--------------- | :-------------- | | Domestic | $8,099 | 3.1% | (3.3%) | 6.6% | | Europe | $2,933 | (1.3%) | (7.3%) | 6.5% | | Middle East/India/Africa | $347 | 30.8% | 6.1% | 23.3% | | Atlantic (Total) | $3,280 | 1.3% | (6.2%) | 8.0% | | Pacific | $1,359 | 1.8% | (3.9%) | 5.9% | | Latin America | $1,078 | (4.8%) | (13.5%) | 10.1% | | International (Total) | $5,717 | 0.2% | (7.1%) | 7.9% | | Consolidated | $13,815 | 1.9% | (5.0%) | 7.2% | Passenger Revenue and Operating Statistics Summary | Metric | 3 Months Ended Sep 30, 2025 | 3 Months Ended Sep 30, 2024 | % Increase/(Decrease) | | :------------------------------------ | :-------------------------- | :-------------------------- | :-------------------- | | Passengers (thousands) | 48,382 | 45,559 | 6.2 | | RPMs (millions) | 73,769 | 69,549 | 6.1 | | ASMs (millions) | 87,417 | 81,541 | 7.2 | | Passenger load factor (Consolidated) | 84.4% | 85.3% | (0.9) pts. | | PRASM (cents) | 15.80 | 16.63 | (5.0) | | TRASM (cents) | 17.42 | 18.20 | (4.3) | | Average yield per RPM (cents) | 18.73 | 19.50 | (4.0) | | Cargo revenue ton miles (millions) | 890 | 881 | 1.0 | | Aircraft in fleet at end of period | 1,486 | 1,381 | 7.6 | | Employee headcount (thousands) | 111.9 | 106.5 | 5.1 | | CASM (cents) | 15.82 | 16.28 | (2.8) | | CASM-ex (cents) | 12.15 | 12.26 | (0.9) | | Average aircraft fuel price per gallon | $2.43 | $2.56 | (5.1) | | Fuel gallons consumed (millions) | 1,233 | 1,170 | 5.4 | Operational and Customer Achievements Customer Experience United continues to enhance customer experience through technology and infrastructure, leading to the highest customer satisfaction rate for a third quarter since 2022 - Launched collaboration with Apple TV, offering free streaming on 130,000+ seatback screens[9] - Received FAA certification for the first mainline Starlink-equipped aircraft, with free access for MileagePlus customers[13] - Expanded TSA PreCheck Touchless ID to 12 airports, including Denver and Newark hubs[13] - Opened a new two-story, 33,000 sq ft United Club at Denver hub and the United Globe Club at Capital One Arena[13] - Achieved the highest customer satisfaction rate for a third quarter since 2022 across key drivers, supported by an $85 million investment in food and beverage[9] Operations United demonstrated strong operational reliability in Q3 2025, achieving its highest third-quarter completion factor in company history and carrying over 48 million customers, a quarterly record - Operated the largest daily mainline schedule in a quarter, carrying over 48 million customers (a record)[9] - Achieved the highest third-quarter completion rate in company history[13] - United Express achieved 43 days with a 100% completion rate in Q3, setting a company record of 92 days year-to-date[13] - Newark hub achieved its best operational performance for a summer in the airline's history[13] - Connection Saver saved 290,000 potential missed customer connections, the highest for a third quarter in company history[13] Network United expanded its network significantly, resuming flights to Tel Aviv, adding new domestic and international routes, and launching a codeshare program with ITA Airways - Resumed flights to Tel Aviv from Chicago O'Hare and Washington Dulles, starting early November[13] - Announced summer 2026 flights to new destinations like Split, Croatia; Glasgow, Scotland; Santiago de Compostela, Spain; and Bari, Italy, while bringing back all six new Atlantic destinations from summer 2025[4] - Expanded winter schedule with additional flights to 15 U.S. cities and new routes from Newark to Columbia, SC and Chattanooga, TN[16] - Launched a codeshare program with ITA Airways, providing access to more Italian destinations[16] - United is the largest carrier across the Atlantic, with service to 46 cities planned for 2026[4] Corporate Initiatives and Recognition Employees, Communities and Investments United engaged in extensive community and employee initiatives, including its fifth annual September of Service, disaster relief transport, and funding for wildfire-impacted schools - Over 3,500 employees volunteered 11,000+ hours in September of Service, packaging over 497,000 meals[16] - Supported transport of over 117 responders and 221,000 pounds of cargo for 25 non-profit organizations in disaster relief efforts[16] - Committed $250,000 in funding to 24 schools impacted by California wildfires[16] - Launched a Campus Ambassador Program to recruit future talent and hosted 18 Girls in Aviation Day events[16] - United Airlines Ventures invested in supersonic aircraft startup Astro Mechanica[16] Awards United and its leadership received multiple recognitions, including being named one of America's Most Admired Workplaces by Newsweek and a Best Employer for Women by Forbes - Recognized in Newsweek's 2026 list of America's Most Admired Workplaces, America's Greatest Workplaces for Parents and Families, and America's Greatest Companies[16] - Named in Forbes' 2025 list of Best Employers for Women[16] - CEO Scott Kirby received APEX International's Lifetime Achievement award[16] - CFO Mike Leskinen was named a Notable Leader in Finance by Crain's Chicago Business[16] Financial Statements (Unaudited) Condensed Consolidated Balance Sheets As of September 30, 2025, total assets increased to $76,313 million from $74,083 million at December 31, 2024, primarily driven by an increase in operating property and equipment, net, and operating lease right-of-use assets Condensed Consolidated Balance Sheets Summary | (in millions) | Sep 30, 2025 | Dec 31, 2024 | Change | | :---------------------------------------------------- | :----------- | :----------- | :------- | | ASSETS | | | | | Cash and cash equivalents | $6,730 | $8,769 | $(2,039) | | Short-term investments | $6,599 | $5,706 | $893 | | Total current assets | $18,094 | $18,883 | $(789) | | Operating property and equipment, net | $44,968 | $42,908 | $2,060 | | Operating lease right-of-use assets | $4,821 | $3,815 | $1,006 | | Total assets | $76,313 | $74,083 | $2,230 | | LIABILITIES AND STOCKHOLDERS' EQUITY | | | | | Advance ticket sales | $9,338 | $7,561 | $1,777 | | Current maturities of long-term debt, finance leases, and other financial liabilities | $4,621 | $3,453 | $1,168 | | Total current liabilities | $27,119 | $23,314 | $3,805 | | Long-term debt, finance leases, and other financial liabilities | $20,807 | $25,203 | $(4,396) | | Long-term obligations under operating leases | $5,331 | $4,510 | $821 | | Total liabilities | $61,995 | $61,407 | $588 | | Total stockholders' equity | $14,309 | $12,675 | $1,634 | Condensed Statements of Consolidated Cash Flows For the nine months ended September 30, 2025, net cash provided by operating activities was $7,145 million, a slight decrease from $7,221 million in the prior year Condensed Statements of Consolidated Cash Flows Summary | (in millions) | 2025 | 2024 | | :---------------------------------------------------- | :----------- | :----------- | | Net cash provided by operating activities | $7,145 | $7,221 | | Net cash used in investing activities | $(4,785) | $(936) | | Net cash used in financing activities | $(4,436) | $(3,591) | | Net increase (decrease) in cash, cash equivalents and restricted cash | $(2,075) | $2,694 | | Cash, cash equivalents and restricted cash at end of the period | $6,871 | $9,028 | - Investing activities saw a substantial increase in cash outflow, largely due to purchases of short-term and other investments ($6,454 million in 2025 vs $4,057 million in 2024)[67] - Financing activities included significant payments of long-term debt ($4,196 million) and repurchases of common stock ($610 million)[67] Non-GAAP Financial Information Explanation of Non-GAAP Measures United Airlines uses various non-GAAP financial measures to provide supplemental information that management believes enhances understanding of the company's underlying financial performance and trends - Non-GAAP measures are used to supplement GAAP financial measures, offering additional insights into performance and trends[29][44] - Exclusions typically include special charges, unrealized gains/losses, and other items not related to ordinary course of business[30][47] - Changes in methodology for Adjusted EBITDAR and Free Cash Flow were implemented effective January 1, 2025, with prior periods recast for comparability[48][50] Reconciliation of Non-GAAP Measures CASM-ex Reconciliation For Q3 2025, CASM (GAAP) was 15.82 cents, decreasing by 2.8% YoY, while CASM-ex (Non-GAAP) was 12.15 cents, a 0.9% decrease compared to Q3 2024 CASM-ex Reconciliation Table | (in cents) | 3 Months Ended Sep 30, 2025 | 3 Months Ended Sep 30, 2024 | % Increase/(Decrease) | | :-------------------------- | :-------------------------- | :-------------------------- | :-------------------- | | CASM (GAAP) | 15.82 | 16.28 | (2.8) | | Fuel expense | 3.43 | 3.68 | (6.8) | | Profit sharing | 0.26 | 0.28 | (6.8) | | Third-party business expenses | 0.07 | 0.07 | (3.5) | | Special charges | (0.08) | (0.01) | NM | | CASM-ex (Non-GAAP) | 12.15 | 12.26 | (0.9) | Adjusted EBITDA and Adjusted EBITDAR Reconciliation Adjusted EBITDA for Q3 2025 was $2,081 million, down from $2,327 million in Q3 2024, and Adjusted EBITDAR was $2,302 million, a decrease from $2,559 million in the prior year Adjusted EBITDA and EBITDAR Reconciliation Table | (in millions) | 3 Months Ended Sep 30, 2025 | 3 Months Ended Sep 30, 2024 | | :---------------------------------------------------- | :-------------------------- | :-------------------------- | | Net income (GAAP) | $949 | $965 | | Depreciation and amortization | $730 | $742 | | Interest expense, net of capitalized interest and interest income | $136 | $139 | | Income tax expense | $306 | $321 | | Special charges (credits) | $(73) | $(5) | | Nonoperating unrealized losses on investments, net | $13 | $90 | | Nonoperating debt extinguishment and modification fees | $20 | $75 | | Adjusted EBITDA (non-GAAP) | $2,081 | $2,327 | | Adjusted EBITDA margin (non-GAAP) | 13.7% | 15.7% | | Fixed portion of operating lease expense | $221 | $232 | | Adjusted EBITDAR (non-GAAP) | $2,302 | $2,559 | Adjusted Capital Expenditures Reconciliation Adjusted capital expenditures for Q3 2025 were $1,881 million, an increase from $1,510 million in Q3 2024, primarily driven by operating leases converted to finance leases Adjusted Capital Expenditures Reconciliation Table | (in millions) | 3 Months Ended Sep 30, 2025 | 3 Months Ended Sep 30, 2024 | | :---------------------------------------------------- | :-------------------------- | :-------------------------- | | Capital expenditures, net of flight equipment purchase deposit returns (GAAP) | $1,464 | $1,410 | | Property and equipment acquired through the issuance or modification of debt, finance leases and other financial liabilities | — | $48 | | Operating leases converted to finance leases | $417 | $52 | | Adjusted capital expenditures (Non-GAAP) | $1,881 | $1,510 | Free Cash Flow Reconciliation Free cash flow for Q3 2025 was negative $153 million, compared to negative $10 million in Q3 2024, with the nine months ended September 30, 2025, showing $3,289 million Free Cash Flow Reconciliation Table | (in millions) | 3 Months Ended Sep 30, 2025 | 3 Months Ended Sep 30, 2024 | | :---------------------------------------------------- | :-------------------------- | :-------------------------- | | Net cash provided by operating activities (GAAP) | $1,218 | $1,498 | | Net cash provided by (used in) investing activities (GAAP) | $(1,743) | $(2,511) | | Net change in short-term investments | $337 | $968 | | Net change in restricted cash | $35 | $35 | | Free cash flow (Non-GAAP) | $(153) | $(10) | Adjusted Total Debt, Adjusted Net Debt and Net Leverage Reconciliation As of September 30, 2025, Adjusted total debt was $32,296 million, a decrease of $2,687 million YoY, resulting in a net leverage ratio of 2.1x Adjusted Debt and Leverage Reconciliation Table | (in millions) | Sep 30, 2025 | Sep 30, 2024 | Increase/(Decrease) | | :---------------------------------------------------- | :----------- | :----------- | :------------------ | | Debt, finance lease obligations and other financial liabilities - current and noncurrent (GAAP) | $25,428 | $28,436 | $(3,008) | | Operating lease obligations - current and noncurrent | $5,894 | $4,923 | $971 | | Pension and postretirement liabilities - noncurrent | $974 | $1,624 | $(650) | | Adjusted total debt (Non-GAAP) | $32,296 | $34,983 | $(2,687) | | Less: Cash and cash equivalents | $6,730 | $8,812 | $(2,082) | | Short-term investments | $6,599 | $5,352 | $1,247 | | Adjusted net debt (Non-GAAP) | $18,967 | $20,819 | $(1,852) | | Net leverage (Non-GAAP) | 2.1x | 2.4x | (0.3) pts. | Adjusted Operating Expenses, Income, and EPS Reconciliation Adjusted operating expenses for Q3 2025 increased by 6.2% to $10,619 million, while adjusted diluted EPS decreased by 16.5% to $2.78 Adjusted Operating Metrics and EPS Reconciliation Table | (in millions, except per share data) | 3 Months Ended Sep 30, 2025 | 3 Months Ended Sep 30, 2024 | % Increase/(Decrease) | | :---------------------------------------------------- | :-------------------------- | :-------------------------- | :-------------------- | | Operating expenses (GAAP) | $13,830 | $13,278 | 4.2 | | Adjusted operating expenses (Non-GAAP) | $10,619 | $9,998 | 6.2 | | Operating income (GAAP) | $1,395 | $1,565 | (10.8) | | Adjusted operating income (Non-GAAP) | $1,322 | $1,560 | (15.2) | | Operating margin | 9.2% | 10.5% | (1.4) pts. | | Adjusted operating margin (Non-GAAP) | 8.7% | 10.5% | (1.8) pts. | | Pre-tax income (GAAP) | $1,255 | $1,286 | (2.4) | | Adjusted pre-tax income (Non-GAAP) | $1,215 | $1,446 | (16.0) | | Pre-tax margin (GAAP) | 8.2% | 8.7% | (0.4) pts. | | Adjusted pre-tax margin (Non-GAAP) | 8.0% | 9.7% | (1.8) pts. | | Net income (GAAP) | $949 | $965 | (1.7) | | Adjusted net income (Non-GAAP) | $909 | $1,110 | (18.1) | | Diluted earnings per share (GAAP) | $2.90 | $2.90 | — | | Adjusted diluted earnings per share (Non-GAAP) | $2.78 | $3.33 | (16.5) | Notes to Financial Statements Special Charges (Credits) and Unrealized Losses In Q3 2025, United recorded net gains on sale of assets and other special charges of $73 million, primarily from aircraft sale-leaseback transactions Special Charges and Unrealized Losses Summary | (in millions) | 3 Months Ended Sep 30, 2025 | 9 Months Ended Sep 30, 2025 | | :------------------------------------------------------------------------------------ | :-------------------------- | :-------------------------- | | Operating: | | | | Labor contract ratification bonuses | $— | $561 | | (Gains) losses on sale of assets and other special charges | $(73) | $(295) | | Total operating special charges (credits) | $(73) | $266 | | Nonoperating: | | | | Nonoperating unrealized losses on investments, net | $13 | $8 | | Nonoperating debt extinguishment and modification fees | $20 | $20 | | Total nonoperating special charges and unrealized losses on investments, net | $33 | $28 | - The $73 million net gain in Q3 2025 operating special charges was primarily due to $75 million in gains from aircraft sale-leaseback transactions[69] - A significant $561 million special charge was recorded in the nine months ended September 30, 2025, related to a labor contract ratification bonus for flight attendants[70] Effective Tax Rate United's effective tax rate for Q3 2025 was 24.4%, a slight decrease from 25.0% in Q3 2024, primarily due to a release of valuation allowance related to realized capital gains Effective Tax Rate Summary | Period | 2025 | 2024 | | :-------------------------- | :----- | :----- | | Three Months Ended Sep 30 | 24.4% | 25.0% | | Nine Months Ended Sep 30 | 22.5% | 24.4% | - The decrease in the effective tax rate is mainly attributed to the release of a valuation allowance linked to realized capital gains[71] Additional Company Information Earnings Call and Investor Update United Airlines will host a conference call on October 16, 2025, to discuss Q3 2025 financial results and Q4 2025 outlook - Conference call scheduled for October 16, 2025, at 9:30 a.m. CST/10:30 a.m. EST[18] - Live webcast and replay available at ir.united.com[18] - Investor Update with additional business outlook and guidance is furnished on Form 8-K and available at ir.united.com[20] About United United Airlines, headquartered in Chicago, operates the most comprehensive global route network among North American carriers and is currently the largest airline in the world - United operates the most comprehensive global route network among North American carriers[22] - Currently the largest airline in the world[22] - Traded on Nasdaq under the symbol "UAL"[22] Website and Social Media Information United routinely posts important news and information on its corporate and investor relations websites, which serve as primary channels for disclosing key information to investors - Corporate website: www.united.com; Investor relations website: ir.united.com[24] - Investor relations website is a primary channel for disclosing key information, including financial guidance and SEC filings, to comply with Regulation FD[24] - Social media channels (e.g., X, LinkedIn) may also be used for company updates and could be deemed material information[24] Cautionary Statement Regarding Forward-Looking Statements The press release contains forward-looking statements regarding future financial results, goals, plans, and strategies, which are subject to inherent risks, assumptions, and uncertainties - Forward-looking statements are based on current expectations and involve inherent risks and uncertainties[25] - Actual results could differ materially due to factors such as execution risks, fleet strategy changes, competitive industry, reliance on suppliers, economic/political conditions, operational disruptions, and regulatory actions[28] - The company undertakes no obligation to publicly update or revise any forward-looking statement, except as required by law[27]