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]

Financial Data and Key Metrics Changes - As of the end of the first quarter, assets under construction and completed construction reached over $275 million, driven by construction activities in Phoenix, Dallas, and Denver [7] - Revenues increased by 133% year-over-year and 20% sequentially, attributed to the acquisition of the Camarillo Campus [7] - Operating expenses increased moderately, with a notable rise in fuel expenses and startup costs due to increased headcount and operations at the Camarillo Hangar Campus [9][11] - Cash flow from operating activities improved, with expectations to reach cash flow breakeven by the end of the year [8][9] Business Line Data and Key Metrics Changes - The financial results of the wholly owned subsidiary Sky Harbor Capital showed flat revenues in recent quarters, but a significant increase is expected in Q2, Q3, and Q4 as new campuses are leased [11] - Operating expenses rose due to onboarding personnel in anticipation of new campus operations [12] Market Data and Key Metrics Changes - The company is expanding its ground lease pipeline, with new leases in Seattle and Portland, indicating growth in the Pacific Northwest [13] - The average rent per square foot has increased to $35.75, which is 23% higher than previous estimates, reflecting strong demand and inflation in airport land [16][18] Company Strategy and Development Direction - The company is focusing on vertical integration in construction to manage costs, improve build quality, and speed up project timelines [21][23] - The strategy includes enhancing the service offering and building strong self-sufficient teams at each campus to improve operational efficiency [51][52] - The company aims to maintain its competitive advantage through effective site acquisition, construction, leasing, and operations integration [59][61] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the demand for business aviation services, noting that macroeconomic uncertainties have not impacted their operations [88] - The company is prepared for potential construction slowdowns and is focused on maximizing the benefits of its operational scale [88] - Management acknowledged the concern of new competition but believes their established skills in site acquisition and integrated operations provide a sustainable competitive edge [59][65] Other Important Information - The company has approximately $97.5 million in cash, focusing on short-term investments for future construction [27] - The next debt issuance is being prepared, with expectations of raising between $150 million to $175 million [55][56] Q&A Session All Questions and Answers Question: Can you provide more color on your plans to raise debt this year? - The company is preparing for a financing of $150 million to $175 million for new projects, monitoring market conditions closely [55][56] Question: Could you speak to the prospect for increased competition over time from operators that would seek to replicate your model versus FBOs? - Management expressed concern about new competition but believes their lead is increasingly sustainable due to their unique skills in site acquisition and integrated operations [59][65] Question: What is the expected interest rate and timing on the expected term financing and or bond issuance in 2025? - The company anticipates a bond deal with an average yield of approximately 5.50% and is exploring bank facilities with proposals in the SOFR plus 200 area [96][98] Question: Are you seeing any impacts to lease term negotiations given the uncertainty in the markets? - Management indicated that there have been no significant impacts on lease term negotiations due to market uncertainties [89] Question: Can you provide details on Nashville occupancy? - Nashville occupancy is reported at 92%, with actual occupancy exceeding 100% in leased areas due to the nature of semi-private hangars [90][92]