DALLAS, TX -- March 20th, 2026 -- Sky Harbour Group Corporation (NYSE: SKYH): Stonegate Capital Partners Updates Coverage on Sky Harbour Group Corp. (NYSE: SKYH): For FY25, Sky Harbour reported consolidated revenue of $27.5 million, up 87% year over year, including $21.6 million of rental revenue and $6.0 million of fuel revenue. Revenue growth was driven by a full year of contribution from CMA, increased occupancy at BNA, OPF, and SJC, and the commencement of operations at DVT, ADS, and APA during 2025. On leasing, management noted Phoenix and Dallas were progressing somewhat faster than expected, while Denver was slower initially but improving. It was noted that early lease-up activity can include short-term leases at lower rates to drive occupancy before recycling those tenants into longer-term leases at target pricing. For future campuses, management highlighted an active pre-leasing strategy, particularly at Bradley, with pre-leasing rents running above existing campus averages due to long term leases signed.
Construction and Development: Constructed assets and construction-in-progress exceeded $328 million as of December 31, 2025, reflecting continued investment across the portfolio. During 2025, first-phase campuses at DVT, ADS, and APA were completed and began operations. At year-end, Sky Harbour remained in active construction on OPF Phase II, ADS Phase II, BDL, and SLC, while POU, ORL, and TTN were expected to begin construction in the coming months. Management also highlighted that the Company has significantly increased development and construction resources ahead of an expected surge in activity and noted that its in-house construction capabilities should support faster execution as 2026 progresses. We also note that the Company is leaning into a phased construction process as it works judiciously to build and lease at a steady pace. We think this reinforces the Company’s strategy of land accumulation as airport real estate becomes more and more scarce, while also monetizing in new markets, backfilling as needed.
Margins and Profitability: On a consolidated basis, GPM was 7.6%, driven by contributions from recently opened campuses and higher occupancy across the network. Profitability continued to improve on an operating run-rate basis as leasing and rental rates increased, with management noting that adjusted EBITDA reached run-rate breakeven in December. Operating expenses remained elevated as the Company continued to absorb ground lease expense and infrastructure costs associated with scaling the platform, and we expect the Company to begin cost-cutting initiatives in the coming quarters.
Balance Sheet and Guidance: Sky Harbour ended FY25 with approximately $48 million of consolidated cash and U.S. Treasuries, alongside $200 million of undrawn capacity under its J.P. Morgan term facility at year-end. The Company subsequently drew on that facility in 1Q26 and, on February 12, 2026, closed a $150 million tax-exempt financing carrying a 6.00% fixed rate with a mandatory tender in 2031. Management stated that the proceeds from the 2026 bond issuance, combined with expected draws under the JPMorgan facility and other available cash, are expected to fully fund the next six projects, totaling more than 1.0 million rentable square feet, and bring total funded projects to more than 2.1 million rentable square feet. We are encouraged by the significant leverage that this new offering affords the Company, shifting our focus to execution and debt management from near and mid-term funding needs.
Valuation: We use a Discounted Cash Flow Analysis to guide our valuation of SKYH. Our DCF analysis produces a valuation range of $12.34 to $19.31 with a mid-point of $15.21. This analysis relies on a range of discount rates between 8.75% and 9.25% with a midpoint of 9.00% and accounts for SKYH's debt being assumable, which has an estimated blended interest rate of 4.25%.
