Surf Air Mobility Inc. (NYSE: SRFM) has demonstrated a significant turnaround in its second-quarter performance for 2025, reporting revenues of $27.4 million, Adj. EBITDA of ($9.5) million, and Adj. EPS of ($1.34), all of which exceeded the company's guidance. This marks a pivotal moment for Surf Air Mobility, attributed to enhanced airline operations, optimization of its On Demand services, and the growing adoption of its SurfOS software platform. Notably, the airline operations achieved profitability on an Adj. EBITDA basis, a testament to the company's improved operational efficiency and strategic initiatives.
The quarter was also significant for Surf Air Mobility's financial strategy, with $44.7 million in equity capital raised and a subsequent reduction in debt through the equitization of $29.9 million of convertible notes in July. A key development was the expansion of the company's partnership with Palantir, securing a five-year exclusive agreement for the configuration and sale of software, further solidifying its position in the aviation technology sector.
Operational achievements in the air mobility segment included a 20% year-over-year improvement in on-time departure and arrival metrics, the highest since January 2023. The renewal of an Essential Air Service contract in Hawaii, valued at $4.2 million over four years, and investments in fleet refurbishment underscore the company's commitment to reliability and customer satisfaction.
The SurfOS platform, built on Palantir's Foundry platform, continues to evolve, with the introduction of new features such as a flight and crew scheduling module and FlightDocs for maintenance process streamlining. The platform's expansion was further evidenced by six new LOI agreements with charter brokers and operators, broadening its beta user base.
Surf Air Mobility remains a pioneer in aviation electrification, with its proprietary electric powertrain program for the Cessna Caravan targeting FAA certification by 2027. The company's strategic approach to joint ventures aims to advance electrification efforts while maintaining capital efficiency.
Looking ahead, management remains optimistic about achieving its full-year revenue target of $100.0 million and reaching positive Adj. EBITDA by year-end, despite potential tariff impacts. For the third quarter of 2025, the company anticipates revenues between $27.0 million and $28.5 million, with an Adj. EBITDA loss of $10.0 million to $8.5 million.
Stonegate Capital Partners' valuation of Surf Air Mobility, based on an EV/Revenue framework, suggests a potential upside, with a valuation range of $5.50 to $8.90 and a midpoint of $7.20, reflecting confidence in the company's growth trajectory and market position.
