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]