Sky Harbour Group Corp's Earnings Call Contradictions: Shifting to NOI Metrics and Uncertain Construction Timelines Clash

Date of Call: Mar 19, 2026

Financials Results

• Revenue: $27.5M, up 87% YOY

Guidance:

• Revenues expected to increase moderately in Q1 2026, then step up in Q2 and Q3 2027 with phase two openings.
• Construction spend to accelerate in 2026 with multiple projects breaking ground.
• Expect to be above breakeven in operating cash flow and Adjusted EBITDA by Q2 2026, turning positive by year-end.
• Delivery schedule includes Miami phase two (late April 2026), Bradley (September 2026), Addison phase two (end of 2026), with more ramping through 2027.
• Targeting higher efficiencies in operating expenses in 2026.

Business Commentary:

Asset and Revenue Growth:

• Sky Harbour Group Corporation reported that assets under construction and completed construction reached over $328 million, driven by construction activities at phase two in Miami, Bradley International, and phase two in Addison.
• Revenues increased by 87% year-over-year to a record $27.5 million for 2025, reflecting the acquisition of Camarillo and higher revenues from new campuses.
• The growth in assets and revenues is attributed to strategic construction activities and acquisitions.

Cash Flow and EBITDA Trends:

• The company achieved positive cash flow from operations for the first time, largely due to a $5.9 million rent realization from a lease extension.
• Adjusted EBITDA reached a negative value of approximately $1 million in Q4, showing improvement for the third consecutive quarter.
• The improvements were driven by increased occupancy and rental rates at the campuses, particularly in the latter half of Q4.

Development and Construction Outlook:

• Sky Harbour's development program is ramping up, with rentable square feet under construction expected to increase significantly in 2026 and 2027.
• Plans include breaking ground on new projects in Salt Lake City, Poughkeepsie, Orlando Executive Airport, Trenton, and Dallas International later in the year.
• The upward trajectory in construction is due to strategic planning and secured financing, including a 5-year tax-exempt drawdown facility.

Operational Efficiencies and SG&A Management:

• SG&A expenses showed a slight dip in Q4 due to a reduction in the cash component of senior management compensation.
• The company aims to keep SG&A stable, targeting a maximum of $20 million on a cash basis to achieve operating leverage.
• Efforts to reduce SG&A are part of a broader strategy to enhance operational efficiencies, particularly as second phases in Miami and Dallas open.

Sentiment Analysis:

Overall Tone: Positive

• Management highlighted record revenue growth, breakeven cash flow and EBITDA, positive outlook with multiple openings, strong pre-leasing activity, and confidence in cost reduction and NOI growth. Statements include: 'We reached positive territory on a consolidated basis for the first time in our history' and 'We are in a very strong position to deliver on our schedule.'

Q&A:

• Question from Ryan Meyers (Lake Street): Should we be expecting the signing of any new ground leases in 2026?
  Response: Yes, but guidance will focus on NOI capture metrics, not number of airports.

• Question from Ryan Meyers (Lake Street): How should we be thinking about operating cash flows/Adjusted EBITDA breakeven in 2026?
  Response: Q1 will be relatively flat, then move above breakeven in Q2 with campus openings, becoming positive by year-end.

• Question from Michael Tompkins (BTIG): How can we think about construction spend ramping in 2026 and beyond?
  Response: Construction spend is ramping up with new projects and strong liquidity; acceleration expected in coming quarters.

• Question from Michael Tompkins (BTIG): What are expectations for stabilization of the three 2025 assets?
  Response: Stabilization expected within the next two quarters for the 2025 assets, with ongoing pre-leasing improving future speed.

• Question from Gaurav Mehta (Alliance Global Partners): How many additional ground leases do you expect in 2026?
  Response: Guidance will be provided at next earnings call, focusing on NOI metrics, not number of leases.

• Question from Gaurav Mehta (Alliance Global Partners): Why is the average rent at pre-leasing campuses higher than others?
  Response: Targeting better airports now, with precise selection leading to higher pre-leasing rents.

• Question from Timothy D’Agostino (B. Riley): Why were phase two start/completion dates changed to TBD?
  Response: Flexibility to optimize based on phase one performance and market conditions, aided by new financing.

• Question from Pranav Mehta: Can you explain the unit economic slide with $36 NOI per sq ft?
  Response: Illustration based on current leases and better airports; rents and NOI expected to trend higher in new campuses.

• Question from Patrick McCann (Noble Capital Markets): How much of a new campus do you ideally want pre-leased before construction?
  Response: Aiming for about 50% pre-leasing about nine months before opening, balancing early visibility with future rent upside.

• Question from Don Kedyk: What is the actual IRR or yield on cost achieved for the first Obligated Group?
  Response: Initial yield on cost lower than hoped due to inflation and design issues, but rents and renewals are higher; detailed vintage calculations pending completion.

• Question from Gaurav Mehta (AGP): Can you provide details on interest in selling hangars?
  Response: Sales considered as ultra-long prepaid leases, but only if it maximizes shareholder value and provides cost of capital benefits.

• Question from Alex Bossert: What are primary drivers of reduced build costs to ~$250/sq ft?
  Response: Vertical integration and economies of scale from repeated construction; further cost compression targeted.

• Question from Christian Solberg: What % of operating airports have wait lists?
  Response: Not traditional wait lists, but dynamic interested parties lists exist, reflecting strong demand and market leverage.

• Question from Alan Jackson: Is gestation period shorter for expansions vs. new leases? Do you need larger door thresholds?
  Response: Expansions offer advantages in market knowledge, efficiency, and OpEx. Prototype adjusted to 34 ft door height to accommodate future aircraft.

• Question from Alan Berlow: Might NetJets/Flexjet rent entire hangars for clients?
  Response: Yes.

• Question from David Storms: How sustainable is the 22% re-leasing step up? What OpEx efficiency levers are being pulled?
  Response: Step-up may not be 22% ongoing, but reflects real estate value. Easy wins include enforcing triple-net leases. Inflation is a key model sensitivity.

Contradiction Point 1

Focus on Future Guidance Metrics

Shift from airport count to NOI capture metrics for guidance.

Ryan Meyers (Lake Street) - Ryan Meyers (Lake Street)

2025Q4: future guidance will focus on metrics related to NOI capture rather than the number of airports. - Tal Keinan(CEO)

Are there plans to sign new ground leases in 2026? - Philip

20251113-2025 Q3: The goal is to establish a strong portfolio before broader competition arrives. - Tal Keinan(CEO)

Contradiction Point 2

Construction Spend Ramp Timeline

Inconsistency on when construction spend acceleration begins.

Michael Tompkins (BTIG) - Michael Tompkins (BTIG)

2025Q4: Construction expenditures are ramping up... This will lead to an acceleration of construction spend in the coming quarters. - Francisco Gonzalez(CFO)

How should we expect construction spend to ramp in 2026 and beyond? - Ryan Meyers (Lake Street Capital Markets)

20251113-2025 Q3: Scale is evident in the accelerated construction pipeline... 2026: A step-function increase to 10 campuses under construction. - Tal Keinan(CEO)

Contradiction Point 3

Stabilization Timeline for New Campuses

Contradiction on how quickly new campuses reach full, stabilized occupancy.

Michael Tompkins (BTIG) - Michael Tompkins (BTIG)

2025Q4: Stabilization for the three 2025 assets is expected within the next two quarters. - Francisco Gonzalez(CFO)

Given the lower Q4 construction spend, what are your expectations for stabilization across the three 2025-delivered assets? - Andy Binner

2025Q2: The company estimates that Dallas (DVT) Phase 1, Addison (ADS) Phase 1, and Bradley (BFI will be fully leased within the next 6 months. - Michael Weber Schmitt(CEO)

Contradiction Point 4

Breakeven Operating Cash Flow Timeline

Contradiction on when cash flows will consistently be above breakeven.

Ryan Meyers (Lake Street) - Ryan Meyers (Lake Street)

2025Q4: The company reached breakeven on a run-rate Adjusted EBITDA basis in December 2025. For 2026... Q2 2026 should move above breakeven if the Miami phase two campus opens on schedule. - Francisco Gonzalez(CFO)

How should we be thinking about operating cash flows and Adjusted EBITDA run rate breakeven in 2026, and will breakeven be sustained going forward? - Ryan Meyers (Lake Street)

2025Q2: The opening of the three new campuses... is expected to create a step-function increase in revenues and cash flows over the next few quarters. - Tal Keinan(CEO) & Francisco Gonzalez(CFO)

Contradiction Point 5

Construction Start Schedules for Non-Obligated Group Assets

Inconsistent guidance on when construction will begin for leases outside the Obligated Group.

Timothy D’Agostino (B. Riley) - Timothy D’Agostino (B. Riley)

2025Q4: The changes to TBD for Phase Two start dates provide flexibility... The decision to proceed with a Phase Two depends on the performance of Phase One... The new tax-exempt draw-down facility with JPMorgan also provides this flexibility... - Francisco Gonzalez(CFO)

What caused the quarter-over-quarter changes to projected construction start and completion dates for multiple facilities, as reported in the 10-K? - Ezra (Unidentified Analyst)

2025Q1: Construction schedules for leases outside the obligated group are detailed in page 24 of the 10-Q filing. The company has enhanced its construction capabilities to accelerate starts and completions. Accelerating construction is valuable as it generates revenue faster. - Francisco Gonzalez(CFO)