Stonegate Capital Partners Updates Coverage On Surf Air Mobility Inc. (SRFM) 2025 Q3November 13, 2025 4:11 PM EST | Source: Reportable, Inc.Dallas, Texas--(Newsfile Corp. - November 13, 2025) - Surf Air Mobility Inc. (NYSE: SRFM): Stonegate Capital Partners updates their coverage on Surf Air Mobility Inc. (NYSE: SRFM). SRFM reported revenue, Adj. EBITDA, and Adj. EPS of $29.2M, ($9.9)M, and ($0.64), respectively. This performance reflects continued progress on the Transformation Plan, driven b ...

Financial Data and Key Metrics Changes - Consolidated revenue for the quarter was $1.24 billion, a 9% increase compared to the same quarter last year [10] - Adjusted segment operating income rose to $155.3 million, up 4% from $149 million in the previous year [10] - Adjusted EPS decreased to $0.23 from $0.24 year-over-year [10] - Net finance expense increased to $56.9 million from $52.9 million, primarily due to additional financing costs related to acquisitions and lease expenses [10] - Net cash from operating activities increased to $214 million from $162.1 million [11] - Free cash flow rose by 44% to $201 million compared to $140 million in the same quarter last year [11] - Capital expenditures totaled $87.6 million, with approximately 85% allocated to growth initiatives [12] Business Line Data and Key Metrics Changes - Civil segment revenue grew 5% year-over-year to $670 million, but adjusted segment operating income decreased 6% to $108.7 million, resulting in a margin of 16.2% [14] - Defense segment revenue increased 14% year-over-year to $566.6 million, with adjusted segment operating income rising 41% to $46.6 million, achieving an 8.2% margin [15] Market Data and Key Metrics Changes - Civil training center utilization dropped to 64% from 70% in the prior year [14] - The civil adjusted backlog increased by 27% year-over-year to $8.5 billion, indicating a strong foundation for future growth [37] - The defense adjusted backlog reached $11.2 billion, with a robust pipeline of $6.1 billion in pending orders [39] Company Strategy and Development Direction - The company is focusing on a transformation plan that includes sharpening its portfolio, disciplined capital management, and operational excellence [5][8] - The defense business is highlighted as a key growth area, especially with increased government spending on defense [7] - The company aims to leverage its technology and customer relationships to improve cash flow and return on assets [17] - Organizational changes have been made to streamline operations and enhance performance [24][26] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's strategic advantages and the potential for growth in both civil aviation and defense markets [16][43] - The outlook remains strong, with expectations for improved performance as market conditions normalize [43] - The company is committed to disciplined execution and operational efficiency as it advances its transformation [43] Other Important Information - The company is reducing capital expenditures by approximately 10% year-over-year, reflecting a disciplined approach to capital allocation [12][61] - The leadership team is focused on aligning the organization for better performance and accountability [31][34] Q&A Session Summary Question: Changes in capital approval thresholds - Management indicated that the threshold for capital approval has become more disciplined, reflecting current market conditions and performance expectations [51][52] Question: Surprises encountered during the transition - Management noted positive surprises in organizational energy and customer relevancy, emphasizing the depth of technology available [56] Question: CapEx reduction drivers - The reduction in CapEx is driven by market conditions and a disciplined approach, with a significant portion allocated to maintenance and growth [61] Question: Return on invested capital outlook - Management is focused on maximizing returns on current investments and is evaluating how to improve future capital allocation [62][80] Question: Timeline for margin and free cash flow improvement - Management stated that some initiatives will yield immediate results while others may take longer, with guidance expected at the end of the year [84]