DALLAS, TX -- November 13th, 2025 -- Surf Air Mobility Inc. (NYSE: SRFM): Stonegate Capital Partners updates their coverage on Surf Air Mobility Inc. (NYSE: SRFM). SRFM reported revenue, Adj. EBITDA, and Adj. EPS of $29.2M, ($9.9)M, and ($0.64), respectively. This performance reflects continued progress on the Transformation Plan, driven by improved airline operations. Operational reliability continued to improve, supported by a strengthened systems operations center and a more experienced aviation team. Subsequent to the quarter SRFM made significant capital structure improvements, which refinanced higher-cost debt and reduced annual cash interest. Collectively, these capital actions and operating improvements position SRFM with a more sustainable capital structure and a clearer path toward scale. We believe the Company is now better positioned to begin Phase 3 of its transformation plan which we expect will begin in FY26.
Company Updates:
Air Mobility: Air mobility delivered another quarter of operational and commercial gains in 3Q25, with revenue up modestly y/y and sequentially as strong growth in On Demand more than offset planned reductions in unprofitable scheduled flying. On Demand benefited from higher utilization, a shift toward larger-cabin aircraft, and increased international activity, while Scheduled Service saw a measured pullback as management prioritized routes with attractive unit economics. Airline operations were again profitable on an Adj. EBITDA basis, supported by higher on-time departure and arrival rates and better controllable completion factors.
Software: RFM continues to advance SurfOS, its cloud-based operating system built on Palantir’s Foundry platform. During 3Q25, 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. Externally, SurfOS beta usage broadened to a growing set of brokers and operators, supported by additional LOIs that expand the future customer pipeline and validate product-market fit. A five-year agreement with Palantir, further reinforces software as a core strategic pillar.
Electrification: SRFM remains committed to its electric powertrain program for the Cessna Grand Caravan, with management reiterating a 2027 FAA STC target for the electrified propulsion system. The Company continues to evaluate partnership and JV structures that can share development risk while preserving upside, leveraging its scale as a leading Caravan operator and its exclusive agreement with Textron Aviation.
Outlook: For 4Q25, the Company expects revenue in the range of $25.5M- $27.5M and an Adj. EBITDA loss of ($8.0)M to ($6.5)M, reflecting the 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.
Guidance and Valuation: We are using an EV/Revenue framework to inform our SRFM valuation. Currently SRFM is trading at a FY26 EV/Revenue of 1.9x compared to comps at a median of 4.1x. We are using our F26 expected Revenue, and an EV/Revenue range of 4.0x to 5.0x with a midpoint of 4.5x. This arrives at a valuation range of $6.11 to $7.99 with a mid-point of $7.05.
Stonegate Capital Partners is a leading capital markets advisory firm providing investor relations, equity research, and institutional investor outreach services for public companies. Our affiliate, Stonegate Capital Markets (member FINRA) provides a full spectrum of investment banking services for public and private companies.
