Surf Air Mobility Inc. reported third quarter 2025 financial results showing continued progress on its Transformation Plan, with revenue reaching $29.2 million alongside adjusted EBITDA of negative $9.9 million and adjusted EPS of negative $0.64. The company's performance reflects strengthened operational reliability supported by an enhanced systems operations center and more experienced aviation team, positioning the air mobility company for its next phase of development.
The company executed significant capital structure improvements following the quarter, refinancing higher-cost debt and reducing annual cash interest expenses. These financial maneuvers create a more sustainable capital foundation as Surf Air Mobility prepares to begin Phase 3 of its transformation plan in fiscal year 2026. The combination of operational improvements and financial restructuring provides a clearer pathway toward achieving scale in the evolving air mobility market.
Air mobility operations delivered both operational and commercial gains during the quarter, with revenue increasing modestly year-over-year and sequentially. Strong growth in On Demand services more than offset planned reductions in unprofitable scheduled flying. The On Demand segment benefited from higher aircraft utilization, a strategic shift toward larger-cabin aircraft, and increased international activity. Meanwhile, Scheduled Service operations saw a measured pullback as management prioritized routes with more attractive unit economics.
Airline operations achieved profitability on an adjusted EBITDA basis, supported by improved operational metrics including higher on-time departure and arrival rates and better controllable completion factors. This operational efficiency demonstrates the company's ability to execute its strategic shift toward more profitable service offerings while maintaining service quality.
Software development continues as a core strategic focus, with Surf Air Mobility advancing SurfOS, its cloud-based operating system built on Palantir's Foundry platform. During the quarter, the company expanded internal deployment of SurfOS, rolling out aircraft and crew scheduling tools across key regions and enhancing the Crew App with capabilities that improve safety, maintenance visibility, and productivity. External beta usage broadened to a growing set of brokers and operators, supported by additional letters of intent that expand the future customer pipeline and validate product-market fit.
The company's five-year agreement with Palantir further reinforces software as a strategic pillar, providing a foundation for continued technological advancement in air mobility operations. This partnership represents a significant commitment to digital transformation in the aviation sector.
Electrification remains a key component of Surf Air Mobility's long-term strategy, with management reiterating a 2027 FAA Supplemental Type Certificate target for its electric powertrain program for the Cessna Grand Caravan. The company continues to evaluate partnership and joint venture structures that can share development risk while preserving upside potential. Surf Air Mobility leverages its scale as a leading Caravan operator and its exclusive agreement with Textron Aviation to advance its electrification initiatives.
For the fourth quarter of 2025, the company expects revenue between $25.5 million and $27.5 million with an adjusted EBITDA loss ranging from $8.0 million to $6.5 million. This guidance reflects the ongoing impact of exiting unprofitable scheduled routes and a continued mix shift toward higher-value On Demand flying. Management continues to anticipate full-year profitability in airline operations on an adjusted EBITDA basis, supported by operational improvements and strategic realignment.
Stonegate Capital Partners' valuation analysis indicates Surf Air Mobility currently trades at a fiscal year 2026 enterprise value to revenue multiple of 1.9x compared to comparable companies at a median of 4.1x. Using an expected revenue multiple range of 4.0x to 5.0x with a midpoint of 4.5x, the analysis arrives at a valuation range of $6.11 to $7.99 with a midpoint of $7.05, suggesting potential upside from current trading levels as the company executes its transformation strategy.
