Surf Air Mobility (US:SRFM)2025-03-19 03:29Financial Data and Key Metrics Changes - Revenues for Q4 2024 reached $28,050,000, exceeding the upper end of guidance [5][22] - Adjusted EBITDA loss improved by $11,500,000 or 63% to $6,900,000 for Q4 2024 [6][22] - Full year revenue rose by $6,500,000 or 6% year over year to $119,400,000 [6][23] - Full year adjusted EBITDA loss improved by $6,800,000 or 13% to $44,100,000 [6][23] Business Line Data and Key Metrics Changes - Scheduled service revenue decreased by 6% due to the elimination of unprofitable routes [22] - On-demand service revenue increased by 58% driven by higher sales and flight completions [22] - Full year on-demand service revenue increased by 28% primarily due to improved charter sales [23] Market Data and Key Metrics Changes - The company has exited several unprofitable routes, focusing on profitable operations [9][24] - The Essential Air Service (EAS) business is expected to benefit from the FAA Reauthorization Act, enhancing competitive positioning [9] Company Strategy and Development Direction - The transformation plan consists of four phases: transformation, optimization, expansion, and acceleration, with the transformation phase completed in 2024 [7][8] - The company aims for profitable airline operations defined as positive adjusted EBITDA for the full year of 2025 [8][20] - The relocation of the operations center to Dallas, Texas is intended to attract talent and reduce costs [12] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving profitability in airline operations for 2025, driven by process improvements and exiting unprofitable routes [20][25] - The company anticipates achieving at least $100,000,000 in revenue and profitability in airline operations for the full year 2025 [26] - Management highlighted strong momentum entering 2025 with a focus on executing the transformation plan and electrification initiatives [33] Other Important Information - A $50,000,000 term loan was secured in November 2024 to support the transformation plan [5][25] - The company has reduced liabilities by over $42,000,000, exceeding the targeted reduction [25] Q&A Session Summary Question: Does a full year continuing resolution being passed by Congress impact when you can receive new contracts or renewals on the essential air service flights? - Management indicated that the DOT has several awards and bids pending, which could positively impact revenue through higher subsidy rates [34][36] Question: Do you plan to shift more of the fleet's airframes over to flying on-demand flights from scheduled air service? - Management clarified that the current fleet is primarily used for scheduled service, with operators servicing most on-demand business [37] Question: Could you provide additional color on the recently announced SurfOS customers and monetization? - Management stated that the offerings are currently in pre-revenue testing with beta customers [41] Question: Should we assume operating costs will be roughly flat in 2025 compared to 2024? - Management confirmed a focus on reducing operating costs to achieve profitability in airline operations [44] Question: Are you comfortable with the balance sheet to execute this plan and initiate growth strategies in 2025 and 2026? - Management expressed intent to be strategic with capital raises to create shareholder value [45] Question: Any early feedback on the SurfOS beta launch? - Management reported positive early feedback from beta customers regarding the unique offerings of SurfOS [50][51] Question: Is there any runway or cadence for addressing the maintenance backlog? - Management indicated that a substantial amount of the maintenance backlog is expected to be resolved in the first quarter [54]