FlyExclusive's Q3 2025: Contradictions Emerge on Fleet Modernization, Pricing Strategy, and Delivery Schedules

Date of Call: None provided

Financials Results

• Revenue: $92.1M, up 20% YOY (Q3 2025 vs Q3 2024)
• Gross Margin: 14%, up ~500 basis points year-to-date; year-to-date gross profit increased 82% YOY

Guidance:

• Q4 2025 expected to be a record quarter; October was the highest revenue month and November month-to-date is positioned to exceed it.
• Reduce nonperforming aircraft to mid-single digits by end-2025 and fully eliminate them in 2026.
• Plan significant fleet growth in 2026, adding Challenger/CJ3/XLS to increase utilization, revenue and margins.
• Expect to sustain positive adjusted EBITDA into 2026 and beyond.
• Continue scaling Jet Club/fractional programs and MRO/mobile service units; merger with Jet AI and ATM facility expected to improve liquidity.

Business Commentary:

* Fleet Modernization and Utilization: - FLY Exclusive eliminated 26 nonperforming aircraft over the past year, reducing the operational drag by roughly 85% and decreasing monthly losses to under $0.5 million. - The fleet refresh has driven dispatch availability improvements by 650 basis points year-over-year, contributing approximately $3 million to annual EBITDA per percentage point of improvement. - High-performing aircraft like the Challenger 350 and CJ3+ have increased the fleet's utilization, with each aircraft generating between $8 million and $10 million in annual revenue.

• Revenue Growth and Contractually Committed Hours:
• Total company revenue rose 20% year-over-year to $92 million, with about half of this revenue now contracted through Jet Club, fractional, and partner programs.
• Contractually committed hours grew 30% compared to Q3 '24, enhancing the company's revenue visibility and stability.

• The shift towards more contractually committed demand and recurring revenue streams is aimed at achieving more predictability, pricing power, and stable margin profiles.

• Expansion in MRO and Retail Membership:

• MRO revenue grew 103% year-over-year in Q3, reflecting both external demand and expanded internal throughput.
• Retail membership grew 51% year-over-year, with Jet Club sales increasing 17% year-to-date and fractional sales up 68% year-to-date.
• The growth in MRO and retail membership is driven by a modernized fleet, increased reliability, and tax advantageous ownership benefits, such as 100% bonus depreciation.

• Profitability and Margin Expansion:
• Gross margin expanded by roughly 500 basis points year-to-date, with adjusted EBITDA improving 72% and adjusted EBITDA to EBITDAR increasing 104% year-over-year.
• SG&A expenses declined 9% year-to-date, resulting in $7 million in savings, and revenue per SG&A head count rose 19%.
• Profitability improvements are attributed to fleet mix, better utilization, higher dispatch availability, and disciplined cost control measures.

Sentiment Analysis:

Overall Tone: Positive

• Revenue rose 20% YOY to $92.1M; flight revenue up 17% YOY. Adjusted EBITDA loss narrowed to $1.9M from a $13M loss a year ago. Retail membership grew 51% YOY and MRO revenue grew 103% YOY. October was the company's highest revenue month and November is on pace to break that record.

Contradiction Point 1

Fleet Modernization and Efficiency Improvement

It involves the company's strategy and progress in fleet modernization and efficiency improvements, which are critical for operational performance and financial results.

Are there any specific factors driving the current general discussion? - General

20251113-2025 Q3: FlyExclusive had another strong quarter, adjusting the fleet and improving efficiency. The fleet modernization reduced nonperforming aircraft. Challenger 350s are added, enhancing reliability and demand. EBITDA improvement is evident, with a reduction in aircraft-related EBITDA drag. Component performance shows increased utilization and profitability. - Thomas Segrave(CEO)

Can you provide more details on the general discussion topics? - General

2025Q2: FlyExclusive reported Q2 2025 revenues of $91.3 million, up nearly 16% year-over-year. Revenue growth was broad-based across all business segments. Fractional and Jet Club membership increased, with 1,077 owners and members, up 32% year-over-year. MRO revenue grew 28% compared to last year. - Bradley Garner(CFO)

Contradiction Point 2

Revenue Growth Strategy and Segment Performance

It involves the company's revenue growth strategy and the performance of different business segments, which are crucial for understanding the company's financial trajectory and strategic focus.

What is management's outlook for the company's strategic direction in the current market environment? - General

20251113-2025 Q3: As we continue to modernize and diversify, we are focused on generating consistent and sustainable growth. Our efforts to drive revenue growth continue to be grounded in our ongoing commitment to operational excellence and customer satisfaction. - Thomas Segrave(CEO)

Can you provide more details on the general discussion topics? - General

2025Q2: Our Q2 results reflect the strength of our strategy to grow through a combination of organic and inorganic initiatives. The one-two punch of a successful integration and innovation strategy delivered strong financial results in the quarter. - Thomas Segrave(CEO)

Contradiction Point 3

Pricing Strategy and Pricing Power

It reflects differing perspectives on the company's ability to raise prices and offset increasing costs, which directly impacts revenue and profit margins.

Not specified in the transcript. - General

20251113-2025 Q3: We have been able to increase our pricing, certainly on the light and the mid sections of the business to offset some of the additional cost drivers that come in every year from engine programs and parts programs, but we've had some pricing power, which has been fairly nice as well. - Thomas Segrave(CEO)

What is your current pricing outlook? - Marvin Fong (BTIG)

2024Q4: We have been able to increase our pricing, certainly on the light and the mid sections of the business to offset some of the additional cost drivers that come in every year from engine programs and parts programs, but we've had some pricing power, which has been fairly nice as well. - Jim Segrave(CEO & Chairman)

Contradiction Point 4

Acquisition and Delivery Schedule

It highlights a discrepancy in the company's reported timeline for acquiring and delivering aircraft, which could affect operational planning and customer satisfaction.

Can you provide more details on the company's revenue guidance for the next quarter? - General

20251113-2025 Q3: We expect we'll take 15 Challengers in the year, 15 appears to be the number. We'll probably be about mid-year is what we're thinking on delivering that. - Thomas Segrave(CEO)

Will the acquisition of 15 Challengers by the end of the year be spread evenly? - Marvin Fong (BTIG)

2024Q4: We have ordered 15 Challengers this year, and we expect to take delivery of 9 of those, and another 9 in the next year. - Jim Segrave(CEO & Chairman)