Street Calls of the Week
Flyexclusive Inc (FLYX) reported its Q2 2025 earnings, showcasing significant improvements in revenue and operational efficiency. The company experienced a 16% year-over-year increase in revenue, reaching $91.3 million, consistent with its trailing twelve-month revenue growth of 17.1%. Despite an adjusted EBITDA loss of $5.2 million, this marked a 67% improvement from the previous year. The stock price remained stable, with a slight increase of 1.16% to close at $4.37, trading near its InvestingPro Fair Value. With a market capitalization of $96.62 million, FLYX has shown strong momentum, delivering a 43% return over the past six months.
Key Takeaways
- Revenue increased by 16% year-over-year to $91.3 million.
- Adjusted EBITDA loss improved by 67% compared to the previous year.
- Gross margin doubled from the previous year, reaching nearly 15%.
- Fleet modernization continued with the addition of Challenger 350 jets.
- Fractional active membership grew by 32% year-over-year.
Company Performance
Flyexclusive demonstrated robust performance in Q2 2025, driven by strategic initiatives and operational efficiencies. The company’s revenue grew by 16% year-over-year, amounting to $91.3 million. This growth was supported by a 12% increase in flight hours, despite operating 10 fewer aircraft. According to InvestingPro analysis, which offers 10+ additional insights about FLYX, the company maintains a FAIR overall financial health score despite current profitability challenges. The company’s vertically integrated strategy and strong membership growth in its fractional and jet club programs contributed to its competitive position in the private aviation market.
Financial Highlights
- Revenue: $91.3 million (16% increase YoY)
- Adjusted EBITDA Loss: $5.2 million (67% improvement YoY)
- Gross Margin: Nearly 15% (doubled from the previous year)
- SG&A Expenses: Reduced to 22% of revenue (from 27% last year)
Outlook & Guidance
Flyexclusive remains optimistic about its future performance, expecting to achieve positive adjusted EBITDA by 2025. The company anticipates a strong Q4 2025 due to bonus depreciation and is on track to finalize its merger with Jet.ai this year. Additionally, Flyexclusive is a potential candidate for inclusion in the Russell 2000 Index. InvestingPro data reveals the company’s current ratio of 0.25 and gross profit margin of 14.4%, metrics that investors should monitor as the company pursues its growth objectives. For detailed analysis and more comprehensive insights, investors can access the full Pro Research Report, available exclusively to InvestingPro subscribers.
Executive Commentary
CEO Jim Siegraves stated, "Our strategy is delivering results," highlighting the company’s successful execution of its strategic initiatives. CFO Brad Garner added, "2025 is and will be a leapfrog year for Flyexclusive," emphasizing the company’s transformation efforts and the goal of achieving positive adjusted EBITDA by 2025.
Risks and Challenges
- Supply Chain Issues: Potential disruptions could impact fleet modernization efforts.
- Market Saturation: Increased competition in the private aviation sector may challenge market share.
- Macroeconomic Pressures: Economic downturns could affect demand for private aviation services.
Flyexclusive’s Q2 2025 results reflect its strategic focus on innovation and operational efficiency, setting a positive tone for the remainder of the year.
Full transcript - Flyexclusive Inc (FLYX) Q2 2025:
John, Conference Operator: Greetings, and welcome to the FLY Exclusive Second Quarter twenty twenty five Earnings Call. At this time, all participants are in a listen only mode. As a reminder, this conference is being recorded. It is now my pleasure to introduce to you Sloane Bohlen with Investor Relations. Thank you, Sloane.
You may begin.
Sloane Bohlen, Investor Relations, FLY Exclusive: Thank you, John. Good afternoon, and thank you for joining Fly Exclusive’s second quarter twenty twenty five earnings conference call. Joining me on the call today is Jim Siegraves, Fly Exclusive’s Founder and Chief Executive Officer and Brad Garner, our Chief Financial Officer. We announced first quarter or sorry, second quarter financial results yesterday after our market close along with the filing of Form 10 Q on the quarter ended 06/30/2025. We will be providing certain non GAAP information during today’s discussion.
Important disclosures about this information and reconciliation of the non GAAP information to comparable GAAP information is included in our Form 10 Q filed with the SEC and is available on our Investor Relations website. In addition, this discussion might include forward looking statements. Actual results may differ materially from any number for any number of reasons, including risk factors described in our annual report on Form 10 ks and our quarterly reports on Form 10 Q and in the press release covering forward looking statements. Rather than rereading this information, we are going to incorporate it by reference in our prepared remarks. And with that, let me turn over the call to Jim.
Jim Siegraves, Founder and Chief Executive Officer, FLY Exclusive: Thank you, Sloane. I appreciate everyone joining us today. FLY Exclusive had another strong quarter, continuing to advance the successful transformation of our company. We have added a supplemental presentation this quarter that provides some visuals to go along with our message. But to summarize all the numbers, what is completely clear is our strategy is delivering results.
I’ll begin with an update on our fleet modernization, which continues to be a significant driver of our EBITDA improvement. We have reduced our nonperforming aircraft to just 13, down from 37 when we launched the initiative to remove them last year. We expect the remaining pool of nonperforming aircraft to be in the mid single digits by year end. And to that end, we have already eliminated two more of these aircraft since the end of the second quarter, and a third is under contract. On the other side of that equation, we now have five Challenger 350s in operation and will add the sixth in the next few weeks as it completes the conformity process with the FAA.
It will contribute to third quarter revenue and gross profit starting later this month. By year end, we expect FLY Exclusive to have a fleet of challengers in the low double digits. As a reminder, the power of this effort is meaningful for all stakeholders, our fractional owners, our jet club members, and our shareholders. The challenger provides our fractional owners and jet club members with a larger and more reliable jet with more range than the aircraft it is replacing. The members have taken advantage by flying longer leg trips and enjoying the confidence that comes with the increased reliability of the Challenger, which has substantially reduced mechanical disruption.
It is clear from our pipeline of prospective fractional owners that the Challenger three fifty has strong demand. As we’ve noted, the impact of the Challengers is also significant for our financial results. The Challenger has approximately 2.5x better uptime efficiency compared to the underperforming much older Gulfstream and Citation super mid fleet we’ve been eliminating. And every 1% improvement in our fleet wide availability equates to approximately $3,000,000 in EBITDA improvement. At peak, our underperforming fleet had an annual run rate EBITDA drag near $36,000,000 That impact is now less than $500,000 per month.
Better yet, each Challenger added to the fleet represents annual revenue in the $8,000,000 to $10,000,000 range and at margins that well exceed our fleet average. The fleet refresh has been one of the most impactful strategic priorities for company. This has translated to much better utilization, efficiency, reliability and bottom line financial performance. As we view 2024 and 2025 as transformational and evaluate the results of our strategy, we have even stronger conviction and clear momentum that the FLY exclusive of 2026 will be one running much more efficient, reliable and profitable. Let me now speak to our operating performance in the second quarter.
Our charter flight hours grew 12% year over year and 7% quarter over quarter to 18,605, which speaks to the continued improved efficiency of a fleet that now totals 86 revenue generating jets, down by design and plan from 96 a year ago and 108 at our peak. Let me say that another way. We flew 12% more total flight hours as a company with 10% fewer total aircraft comparing 2Q twenty four to 2Q twenty five. We also generated 16% more revenue on 10 fewer jets and 119% more gross profit, an incredible overall performance improvement. Of the flight hours flown during the quarter, our membership hours, which comes from the fractional, club and partner programs, also increased 32% compared to Q2 twenty twenty four.
Strong demand continues for our fractional program. We saw a 21% increase year over year in the number of fractional shares sold during the quarter, and our pipeline is stronger than ever. We also believe the clarity on bonus depreciation tax treatment will be a very positive catalyst for activity over the 2025, which is always our strongest sales period historically. Comparing the second quarter to the same quarter last year, retail members were up 9%, retail sales were up 26% and fractional sales were up 24%. Also, as a reminder, while we recognize 100% of the cash from these fractional transactions upfront, only 20% of the revenue under GAAP is recognized per year on our P and L statement over a five year period.
Year to date, revenue is up 13% compared to this time in 2024, and our gross profit is up 109%. We are extremely happy with this rapid upward trend and, of course, the performance we expect over the rest of 2025 based on these results. Across the eighteen thousand six hundred and five hours flown in the quarter, we increased effective hourly rates by 3%, while our fuel cost has dropped by 6.6%. This demonstrates continued strength in the demand for private aviation, our pricing power, and more specifically, demand for our best in class service. Our maintenance and repair organization also grew, generating $2,900,000 in revenue, which is up 28% compared to a year ago.
This is an acceleration compared to the 18% year over year growth we produced last quarter at the MRO. We’ve spoken to it before, but I will reiterate that our vertically integrated strategy is a valuable differentiator, both in terms of expense efficiency, service to our customers and now also through incremental revenue opportunities outside of our fleet. And we have lots more capacity to continue growing this business as well. Moving to our margins and profitability, the second quarter performance was also strong across the board. Our fleet performed well from an operating perspective and the ongoing fleet refresh continued to improve our overall cost efficiency.
Additionally, we continue to drive improvement in our corporate overhead. SG and A costs declined by nearly $1,200,000 compared to the second quarter twenty twenty four and now stands at just 22% of our revenue compared to 27% a year ago. This 5% improvement at our current size approaching $400,000,000 in revenue represents nearly a $20,000,000 cost improvement, and we are not done yet as we expect this ratio to continue to improve as a better position and more efficient fleet is realized. One of the primary drivers for the cost efficiency is a reduction in SG and A headcount. Our revenue per SG and A employee also increased to $157,000 per employee, a 29% increase compared to the second quarter twenty twenty four.
In total, our adjusted EBITDA loss for the quarter improved 67 over last year to $5,200,000 In aggregate dollar terms, that is nearly an $11,000,000 positive swing, which we are proud of and represents the cumulative impact of our overall strategic transformation. Lastly, let me touch on our jet.ai transaction and the Russell two thousand. We continue to work through the close process for our Jet dot ai merger and expect the transaction to close before the end of the year. This transaction will benefit FLY Exclusive through the assumption of cash and assets that will strengthen our balance sheet as well as add customers and additional aircraft. Regarding the Russell two thousand Index, we have eliminated the remaining lockup restrictions.
And as a result, we should be included in the index at the end of the third quarter. Let me conclude like I usually do with a thank you to all our fractional owners, our partners and Jet Club members for trusting us with your flying, to our shareholders for believing in our vision and to our employees for making this all possible. Your support and hard work make FLY Exclusive a great organization and business that it is. Special thanks to our pilots, technicians, dispatchers, customer service, administrative and sales and marketing teams for another great quarter. It is very rewarding to see the tangible results of your efforts and our financial results.
With that, I’ll turn it over to Brad to walk through the financials.
Brad Garner, Chief Financial Officer, FLY Exclusive: Thank you, Jim. I’ll start by quickly echoing how proud we are of our progress year to date. As I said last quarter, it’s personally rewarding to see the results of our plan become real and impactful in such a short period of time. We have a great team here at Fly Exclusive all across the board and they’re only getting better. With that, let me start with our second quarter financial highlights.
Fly Exclusive reported Q2 twenty twenty five revenues of $91,300,000 an increase of nearly 16% from the $79,000,000 in Q2 twenty twenty four and a 4% increase over first quarter of this year. For the 2025, our revenues grew to over $179,000,000 an increase of 13% compared to the first six months of last year. The result is even more impressive given our smaller operating fleet as a part of our fleet modernization program. I’d note that the growth we’re seeing is increasingly becoming more broad based. During the quarter, each piece of our business contributed positively to the top line from wholesale and retail charter, new growth in our fractional ownership and Jet Club membership programs as well as ramping growth from our MRO capability.
Our total fractional active membership grew to a combined ten seventy seven owners and members, a 32% increase year over year, highlighting the competitive strength of our programs and offerings and their reception in the marketplace. This increase was an acceleration over our strong growth last quarter. The fractional program drove the increase with a 54% gain in the number of owners. Our Jet Club membership maintained a healthy and steady growth profile, increasing 8% compared to prior year. Fractional program activity during the quarter generated $11,000,000 in sales, up 24% compared to prior year, bolstered by our maturing fractional program and clarity around tax policy with the passage of the Big Beautiful Bill.
Jet Club new and renewal business topped $26,000,000 in Q2, up 26% year over year. We continue to see a positive shift in our revenue mix to the contractually committed longer term demand of our fractional and Jet Club programs, now representing about 46% of our flight revenue. To underscore it again, our top line growth was impressively achieved while implementing the strategic decision to rationalize our fleet as a part of our modernization initiative. As a result of our execution on the fleet refresh plan, as Jim noted, we operated 10 fewer planes in the period compared to prior year. Flight hours during Q2 twenty twenty five were 18,605, up 12% year over year from 16,570 hours in 2024.
As we’ve highlighted in previous quarters, our MRO business is a key differentiator in the competitive marketplace and continues to gain momentum. MRO revenue was up 28% in Q2 to $2,900,000 from $2,200,000 in second quarter twenty twenty four and up 63% from first quarter of this year. Moving to profitability, the fleet refresh and operational improvements drove gross margin expansion to nearly 15%, roughly double that of last year and a 200 basis point increase over first quarter of this year. With the expansion of the Challenger fleet coupled with the execution on operational efficiencies, we saw a 400 basis point improvement in dispatch availability during the quarter. It is clear that we have transformed the FLY exclusive operating model and we expect the continued progress on the fleet refresh, operational efficiency and cost initiatives to result in sustained margin expansion.
Moreover, the ongoing effort to optimize our SG and A footprint continues to drive scale for the company. Our SG and A for the quarter was $20,300,000 a decrease to 22% of sales in Q2 from 27% of sales a year ago. In absolute terms, we saved $1,200,000 compared to 2024. Our decisive actions to streamline internal processes and reduce outside consulting fees, effectively deployed marketing resources and reduced SG and A headcount by 28% resulted in a 6% decrease in SG and A compared to last year. We expect to see continued scale and improvement in our SG and A relative to our sales as we grow the top line.
With combined top line strength and continued expense efficiency, our adjusted EBITDA loss was $5,200,000 for second quarter, an improvement of $11,000,000 compared to a year ago and sequential improvement compared to first quarter twenty twenty five’s adjusted EBITDA loss. Year to date, our adjusted EBITDA loss improved 67% to $11,600,000 That represents an unprecedented $24,000,000 improvement in adjusted EBITDA over the first six months of twenty twenty five compared to prior year. We have increased conviction that our continued transformation of the business will result in our being able to generate positive adjusted EBITDA by the 2025 and put us in a position to compound profitable growth in 2026. From our perspective, we have a wide number of profit drivers that are all trending positively and exceeding our base case scenario plans. We continue to onboard additional challengers with the sixth challenger being added to the fleet now.
And with the reinstitution of 100% bonus depreciation to tax law, we have seen significant momentum in fractional sales and pipeline and accordingly expect the back half of 2025, particularly fourth quarter to be very strong. Our Jet Club membership continues to expand with the benefits of our simplified JC-twenty five contract introduced in early Q2 and we have both the capacity and expertise to continue to drive growth through our MRO. As I noted last quarter, we firmly believe 2025 is and will be a leapfrog year for Fly Exclusive. Lastly, I’ll conclude with three key updates on Fly Exclusive’s ongoing effort to improve our liquidity and balance sheet flexibility. First, we announced in Q1 of this year our merger agreement with Jet dot ai.
We continue to work through the merger administrative process having recently filed an amended S-four and anticipate closing that transaction in the back half of this year. The JetAI merger will not only capitalize on our operational synergies with JetAI’s aviation operations, but also provide growth capital as we continue to execute on our aggressive growth plan. During the quarter, we filed an S-three shelf offering authorizing the company to issue up to $250,000,000 in stock. We are in the process of finalizing an at the market sales facility affording us the benefit of accessing the capital markets. Second, as Jim highlighted, the lockup restriction on EG sponsors, common shares and warrants acquired during the de SPAC process prevented our inclusion in the Russell indices for the June 30 inclusion date.
Effective in July, the company waived the lockup, which we believe now makes the company eligible for consideration for inclusion in the Russell indices. We believe that inclusion on the Russell two thousand Index would enhance the company’s visibility and trading volume, which provide greater liquidity for both the company and its stockholders. This increased market activity would be expected to support the company’s capital raising efforts and facilitate access to its ATM sales program. Third, we view the recent increase in our accounts payable balance as a strategic lever, enabling us to navigate a period of significant fleet expansion and operational investment. This allowed us to capitalize on emerging opportunities and sustain momentum in our growth initiatives.
As market conditions strengthen and our internal efficiencies accelerate, we are proactively managing payables and expect to return to a normalized level promptly, further reinforcing our disciplined approach to financial stewardship and positioning us for continued success. As we conclude, I want to emphasize how far we’ve come as an organization. Our collective efforts from every department and every individual have propelled us into a new era of growth and capability By modernizing our fleet, sharpening our operational focus, expanding our market presence and driving efficiencies across the board, we’ve laid the foundation for lasting success that we’ll continue to build upon for the coming quarters and years. The commitment and collaboration of our entire team has been instrumental in this transformation and our dedication to safety and delivering exceptional service remains unwavering. While there’s still plenty of work ahead, the energy and momentum we’ve generated gives me great confidence in our trajectory.
I’m inspired by what we’ve already achieved and I look forward to the operation the opportunities that await us as we continue to set new standards of excellence in the industry. Thank you all for joining and now I’ll turn it back to the operator.
John, Conference Operator: Thank you everyone. That does conclude today’s teleconference. We thank you for your participation. You may disconnect your lines at this time.
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