Surf Air Mobility Reports Q3 Progress on Transformation Plan, Positions for Electric Aviation Future

Stonegate Capital Partners has updated its coverage of Surf Air Mobility Inc. (NYSE: SRFM), highlighting the company's continued progress on its transformation plan during the third quarter of 2025. SRFM reported revenue of $29.2 million with adjusted EBITDA of negative $9.9 million and adjusted EPS of negative $0.64, reflecting ongoing operational improvements and strategic repositioning.

The company's performance demonstrates meaningful progress in its airline operations, supported by enhanced operational reliability through a strengthened systems operations center and more experienced aviation team. Following the quarter, Surf Air Mobility executed significant capital structure improvements that refinanced higher-cost debt and reduced annual cash interest expenses. These financial maneuvers, combined with operational enhancements, create a more sustainable capital structure and clearer path toward scaling the business.

In its air mobility segment, the company delivered another quarter of operational and commercial gains. Revenue increased modestly year-over-year and sequentially, driven by strong growth in On Demand services that more than offset planned reductions in unprofitable scheduled flying. The On Demand business benefited from higher aircraft utilization, a strategic shift toward larger-cabin aircraft, and increased international activity. Meanwhile, Scheduled Service saw a measured pullback as management prioritized routes with attractive unit economics. Airline operations remained profitable on an adjusted EBITDA basis, supported by improved on-time departure and arrival rates and better controllable completion factors.

The company continues to advance SurfOS, its cloud-based operating system built on Palantir's Foundry platform. During the third quarter, Surf Air 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 of SurfOS 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. A five-year agreement with Palantir further reinforces software as a core strategic pillar for the company.

Surf Air Mobility remains committed to its electric powertrain program for the Cessna Grand Caravan, with management reiterating a 2027 FAA Supplemental Type Certificate target for the electrified propulsion system. The company continues to evaluate partnership and joint venture structures that can share development risk while preserving upside, leveraging its scale as a leading Caravan operator and its exclusive agreement with Textron Aviation.

For the fourth quarter of 2025, the company expects revenue in the range of $25.5 million to $27.5 million and an adjusted EBITDA loss of $8.0 million to $6.5 million, reflecting the impact of exiting unprofitable scheduled routes and 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 ongoing operational improvements.

Stonegate Capital Partners' valuation analysis indicates Surf Air Mobility is currently trading at a fiscal year 2026 enterprise value to revenue multiple of 1.9x compared to comparable companies at a median of 4.1x. Using their fiscal year 2026 expected revenue and an EV/Revenue range of 4.0x to 5.0x with a midpoint of 4.5x, Stonegate arrives at a valuation range of $6.11 to $7.99 with a midpoint of $7.05 per share.