Stonegate Capital Partners Updates Coverage On Surf Air Mobility Inc. (NYSE: SRFM) 2Q26

Key Takeaways:

• Revenue increased 8% y/y and 15% q/q to $29.5M, reaching the high end of guidance despite elevated fuel costs and weather disruption, while the adjusted EBITDA loss narrowed sequentially to $10.5M from $12.3M. We believe the quarter supports the view that SRFM is moving beyond restructuring, with route-exit headwinds beginning to moderate and structural operating efficiencies providing a stronger foundation for earnings improvement in 2H26.
• Surf On Demand remains the primary growth engine, with revenue increasing 101% y/y to $12.1M, departures up approximately 67%, and revenue per flight increasing 25% as mix shifted toward larger aircraft and longer flights. At the same time, SurfOS reached an important commercialization milestone with Wheels Up becoming the first Enterprise BrokerOS customer under a contract worth up to $12M, creating an initial software revenue stream and validating the broader third-party opportunity.
• Management reaffirmed FY26 revenue and adjusted EBITDA guidance while 3Q26 guidance implies a meaningful sequential earnings improvement, supported by On Demand growth, improving airline economics, and initial SurfOS revenue. Post-quarter financing also reduced convertible principal by 64% and monthly cash amortization by up to 50%, which we believe lowers financing pressure and gives SRFM greater flexibility to deploy working capital into charter supply and improve On Demand margins as free cash flow conversion strengthens.