10-K: flyExclusive Narrows 2025 Loss Amid Revenue Growth & Merger Risks

flyExclusive reported a significantly reduced net loss in 2025, driven by strong revenue growth in fractional ownership and MRO services, despite ongoing legal challenges and internal control weaknesses.

Summary

• Net loss for the year ended December 31, 2025, narrowed to $67.114 million, a 33.9% improvement from $101.495 million in 2024.
• Total revenue increased by 14.9% to $375.877 million in 2025, up from $327.274 million in 2024.
• Fractional ownership revenue surged by 66.1% to $37.681 million in 2025, while Maintenance, Repair, and Overhaul (MRO) revenue grew by 48.2% to $10.623 million.
• Jet club and charter revenue increased by 10.2% to $325.472 million, with total flight hours rising to 74,636 in 2025 from 66,606 in 2024.
• Adjusted EBITDA improved from a loss of $56.214 million in 2024 to a loss of $6.988 million in 2025, and Adjusted EBITDAR turned positive at $12.414 million in 2025 from a loss of $36.412 million in 2024.
• The company maintained a high customer fulfillment rate, flying over 95% of its customers on its own fleet.
• Material weaknesses in internal control over financial reporting were identified as of December 31, 2025, specifically regarding formal accounting policies, procedures, and sufficient technical accounting personnel.
• flyExclusive is engaged in ongoing legal proceedings with Wheels Up Partners LLC (WUP) following the termination of a Fleet Guaranteed Revenue Program Agreement, with WUP re-filing a complaint in North Carolina.
• The proposed merger with Jet.AI, Inc. has an extended 'Outside Date' of April 30, 2026, and is subject to numerous closing conditions and risks.
• The company was not in compliance with certain financial covenants as of December 31, 2025, and 2024, but obtained waiver letters from lenders for $8.9 million and $19.4 million, respectively.
• Cash and cash equivalents stood at $29.340 million as of December 31, 2025, with total long-term debt outstanding at $108.935 million.
• The company received $9.0 million in Employee Retention Credit (ERC) payments, but uncertainty remains regarding qualification, leading to the amount being accrued as a liability.

Sentiment

Score: 6

Explanation: StockSavvy.ai views this as a moderately positive report, showing significant operational improvements and revenue growth, particularly in key segments. However, persistent net losses, ongoing legal issues, and material weaknesses in internal controls temper the overall sentiment.

Positives

• Net loss significantly narrowed by 33.9% in 2025, indicating improved financial performance.
• Total revenue increased by 14.9% year-over-year, driven by strong growth in key segments.
• Fractional ownership revenue grew by an impressive 66.1%, highlighting successful program expansion.
• MRO revenue increased by 48.2%, demonstrating the success of vertical integration efforts and third-party service offerings.
• Adjusted EBITDA and Adjusted EBITDAR showed substantial improvement, with Adjusted EBITDAR turning positive in 2025.
• Net cash provided by operating activities was $6.688 million in 2025, a positive shift from cash used in 2024.
• Total flight hours increased by 8.8%, and members contributing to revenues grew by 9.1%, reflecting increased customer engagement.
• Maintained an industry-leading customer fulfillment rate of over 95% on its own fleet, reducing reliance on costly third-party operators.
• Successfully remediated material weaknesses in information technology general controls (ITGCs) and segregation of duties (SOD) as of December 31, 2025.
• Launched an expanded Mobile Service Unit (MSU) program in 2025 to deliver faster maintenance responses and higher fleet reliability.

Negatives

• The company continues to report a net loss of $67.114 million for 2025, despite improvements.
• A working capital deficit of $195.578 million as of December 31, 2025, indicates short-term liquidity challenges.
• Non-compliance with certain financial covenants on debt obligations required waivers from lenders for $8.9 million in 2025 and $19.4 million in 2024.
• Uncertainty surrounds the company's qualification for $9.0 million in Employee Retention Credit (ERC) payments, which is currently accrued as a liability.
• Ongoing legal proceedings with Wheels Up Partners LLC (WUP) could result in significant costs and management distraction.
• The proposed merger with Jet.AI, Inc. has been delayed, with the 'Outside Date' extended to April 30, 2026, and carries risks of non-completion and associated expenses.
• Identified material weaknesses in internal control over financial reporting persist, specifically concerning formal accounting policies, procedures, and sufficient technical accounting personnel.
• Ending aircraft on certificate decreased from 89 in 2024 to 82 in 2025, although total aircraft operated (including Volato) was 82 in 2025, down from 103 in 2024.
• Experienced a $2.9 million decrease in interest income in 2025, primarily from U.S. Treasury bills and investment sales.
• Incurred a $2.468 million loss on lease termination in 2025, primarily due to increased impairment on leasehold improvements.

Risks

• The Proposed Merger with Jet.AI, Inc. might not be completed on the terms or timeline contemplated, or at all, leading to significant expenses and disruption.
• Inability to successfully implement growth strategies, including market expansion and new product/service offerings.
• Operating results are expected to be difficult to predict and may fluctuate significantly due to various factors outside management's control.
• Requirement for additional liquidity and capital resources to support projected growth, which might not be available on favorable terms.
• Failure to adequately integrate future acquisitions into the business could have a material adverse effect.
• Decrease in demand for private aviation services due to economic downturns, changes in consumer preferences, or increased competition.
• Loss of key personnel or inability to attract additional qualified personnel, particularly pilots and mechanics.
• Limited supply of pilots and pilot attrition may negatively affect operations and financial condition, increasing labor costs.
• Significant reliance on specific aircraft manufacturers (Gulfstream, Textron, Bombardier) and engine manufacturers (Pratt & Whitney, Williams, Rolls-Royce) for aircraft and spare parts.
• Operational disruptions due to maintenance issues or an unsuccessful transition to in-house MRO activities.
• Significant increases in fuel costs could materially adversely affect business, financial condition, and results of operations.
• Cybersecurity breaches and other incidents involving unauthorized disclosure of personal or confidential information could damage reputation and lead to legal actions.
• Obligations in connection with indebtedness and other contractual obligations could impair liquidity and harm the business.
• Subject to significant governmental regulations (FAA, DOT, TSA, CBP, OSHA, ICAO, EPA), and changes could increase operating costs or restrict operations.
• Potential involvement in litigation that may materially adversely affect the company.
• The company's only significant asset is its ownership interest in LGM, which might not be sufficient to pay dividends or satisfy other financial obligations.
• As a controlled company, it relies on exemptions from certain NYSE American corporate governance requirements, limiting protections for other stockholders.
• The multi-class structure of common stock concentrates voting power with the Chief Executive Officer, limiting other stockholders' influence.
• The multi-class structure might result in a lower or more volatile market price of securities or adverse publicity.
• Identified material weaknesses in internal control over financial reporting may cause failure to meet reporting obligations or result in material misstatements.
• No assurance of compliance with NYSE American continued listing standards, which could limit investor transactions and subject the company to trading restrictions.
• The Tax Receivable Agreement requires substantial cash payments to Existing Equityholders, which may exceed actual tax benefits or be accelerated.
• Increases in income tax rates, changes in income tax laws, or disagreements with tax authorities can adversely affect the business.
• Substantial future sales of Class A common stock by existing stockholders could cause the market price to decline.
• Risks associated with climate change, including increased impacts of severe weather events on operations and infrastructure.
• Vulnerability to risks associated with having geographically concentrated operations, particularly in Kinston, North Carolina.
• Failure to maintain an acceptable safety record may adversely impact the ability to obtain and retain customers.
• Damage to reputation or brand image could adversely affect business or financial results.
• Losses and adverse publicity stemming from any accident involving aircraft models operated by third parties.
• Global macroeconomic conditions, geopolitical developments, and other events outside of control could have a material adverse effect.
• Restrictions on business as a result of participation in governmental programs under the CARES Act, including potential repayment of awards.
• Failure to renew leases for corporate headquarters and operations facilities from third-party affiliates could adversely affect the business.
• It may ultimately be determined that the company did not qualify for the Employee Retention Credit, requiring repayment of received amounts.

Future Outlook

flyExclusive anticipates revenue growth driven by continued aircraft additions and forecasted membership expansion. The company plans to continue its fleet modernization efforts over the next year, expecting no material decline in revenue as newer, more efficient aircraft replace older models. It aims to increase in-house MRO capacity to 80% to enhance reliability, efficiency, reduce costs, and generate new third-party revenue streams. A new in-house pilot training facility, expected to break ground in 2028, is projected to alleviate industry bottlenecks, reduce training wait times, and lower costs. Management believes current cash, operating cash flows, and fractional program proceeds will cover operations and capital expenditures for at least 12 months, but acknowledges the potential need for additional capital through equity issuances, refinancing, or new borrowings to fund growth plans. Operating losses are expected in the near term as strategic initiatives are advanced.

Management Comments

• Our mission is to be the world's most vertically integrated private aviation company, offering a full range of industry services.
• We have had very little affiliate lift (less than 5%) since we maximize efficiency around scheduling, requiring 4 or 5 days of advance trip notice instead of hours as do many of our competitors.
• We fly more than 95% of our customers on the flyExclusive fleet, establishing what we believe is the industry-leading customer experience.
• Private aviation consistently views pilot hiring as one of the biggest bottlenecks to the industry, whereas flyExclusive management maintains that outsourcing pilot training is the largest hurdle.
• We believe that the working capital deficit is common within the private aviation industry and is primarily, but not wholly, due to the nature of our deferred revenue, primarily related to prepaid flights, which are performance obligations generally for future flights.
• We believe our cash and cash equivalents on hand, operating cash flows, and proceeds from the fractional program will be sufficient to fund operations, including capital expenditure requirements, for at least 12 months from the filing date of this Form 10-K.

Industry Context

StockSavvy.ai notes that flyExclusive's vertical integration strategy, particularly in MRO and planned in-house pilot training, positions it uniquely against competitors who often rely on third-party services. This approach aims to mitigate industry-wide challenges like maintenance shortages and pilot bottlenecks, which are common pain points for other private jet operators. The company's high customer fulfillment rate on its own fleet (over 95%) contrasts with many competitors challenged to meet demand without affiliate lift, suggesting a more controlled and potentially higher-quality customer experience. The ongoing legal dispute with Wheels Up highlights the competitive and sometimes contentious nature of partnerships in the private aviation sector, while the company's capital raising activities reflect the ongoing need for investment in fleet expansion and infrastructure within the growing private aviation market.

Comparison to Industry Standards

• flyExclusive's 95%+ customer fulfillment on its own fleet is presented as 'industry-leading' compared to competitors who 'must outsource flights to a third party, which can be costly.'
• The company's required flight notice periods for contractual members (4-5 days) are 'purposefully designed to be longer in length than industry standards' to optimize dispatch efficiency.
• Management believes outsourcing pilot training is the 'largest hurdle' in the industry, contrasting with the general view of pilot hiring as the biggest bottleneck.
• The company maintains the 'lowest customer-to-aircraft ratio among its direct competitors,' which it views as key to success and capacity planning.

Management Changes

Corporate Governance

Legal Proceedings

• Wheels Up Partners LLC v. Exclusive Jets, LLC: Exclusive Jets, LLC terminated a Fleet Guaranteed Revenue Program Agreement with WUP on June 30, 2023, due to WUP's material breaches. WUP filed a lawsuit alleging wrongful termination and other claims, seeking compensatory damages. After being dismissed and re-filed in various courts, Exclusive's motion to dismiss for lack of personal jurisdiction was granted on December 2, 2025, and all claims in the NY State Lawsuit were dismissed without prejudice on December 23, 2025. However, WUP re-filed the same complaint in North Carolina Superior Court on December 30, 2025, which is currently pending.
• Other Litigation: The company is subject to certain claims and contingent liabilities arising in the normal course of business, which are not currently expected to have a material effect on consolidated results, financial position, or cash flows, but litigation is inherently unpredictable.

Related Party Transactions

• Purchased $1.543 million in fuel from subsidiaries of LGM Ventures, LLC (LGMV), an entity owned by CEO Thomas James Segrave, Jr., in 2025.
• Incurred $4.180 million in rent expense to LGMV subsidiaries for headquarters, hangars, and vehicles in 2025.
• Outstanding accounts payable to LGMV subsidiaries totaled $887 thousand as of December 31, 2025.
• Recorded $14.837 million in charter flight revenue from owners of subsidiaries and lessor Variable Interest Entities (VIEs) at reduced rates in 2025.
• Short-term accounts receivable from related parties totaled $1.325 million as of December 31, 2025, including $371 thousand from LGMV.
• Holds notes receivable of $7.728 million from third-party buyers of Single-Asset LLC entities (SAEs), including a $4.128 million note entered in December 2025.
• The December 2023 Senior Secured Note with EGA Sponsor (a related party) had an outstanding balance of $14.614 million as of December 31, 2025, with a maturity extended to January 1, 2027.
• The January 2024 Senior Secured Note with ETG FE LLC (an affiliate of EGA Sponsor) had an outstanding balance of $25.242 million as of December 31, 2025, with a maturity extended to January 26, 2028.
• In March 2025, the EGA Sponsor Note was cancelled in exchange for 4,227 shares of Series B Preferred Stock and warrants.
• Issued 25,000 shares of Series A Non-Convertible Redeemable Preferred Stock to EnTrust Emerald (Cayman) LP (a related party) for $25.0 million in March 2024.
• Issued 25,510 shares of Series B Convertible Preferred Stock to EnTrust Emerald (Cayman) LP and EGA Sponsor (related parties) for $25.5 million in August 2024.
• The company is a guarantor for term notes of Sea Jay, LLC ($10.240 million ending principal balance in 2025) and Kinston Jet Center, LLC ($4.901 million and $1.755 million ending principal balances in 2025), both LGMV subsidiaries.
• Sold 5 trainer aircraft to Crystal Coast Training, LLC (an LGMV subsidiary) for $2.481 million in September 2023, and subsequently rents them back, paying $12,650 in 2025 for their use.

Stakeholder Impact

• Shareholders: Face potential dilution from ongoing and future capital raises, including the Jet.AI merger. Voting power is concentrated with the CEO due to the multi-class stock structure, limiting influence for other shareholders. There is a risk of lower or more volatile stock price due to the multi-class structure and potential exclusion from certain market indices. No cash dividends are anticipated in the foreseeable future.
• Employees: Subject to risks related to pilot shortages, attrition, and potential unionization, which could impact labor costs. Benefit from a 401(k) retirement savings plan with company matching contributions and stock-based compensation plans.
• Customers: Benefit from improved customer experience through fleet modernization, expanded MRO capabilities, and planned in-house pilot training. However, they face risks of decreased demand for private aviation services due to economic downturns or increased competition, and potential dissatisfaction from service disruptions.
• Creditors: Exposed to credit risk due to the company's non-compliance with certain debt covenants, although waivers have been obtained. The company has significant debt obligations and its liquidity could be impaired, affecting its ability to meet these obligations.
• Suppliers: Reliance on specific aircraft and engine manufacturers poses supply chain risks. The company's transition to in-house MRO activities could impact relationships with third-party MRO vendors.

Next Steps

• Complete the Proposed Merger with Jet.AI Inc. by the extended 'Outside Date' of April 30, 2026.
• Continue fleet modernization efforts over the next year, replacing older aircraft with newer models.
• Increase in-house MRO capacity to a targeted 80% to further improve reliability, efficiency, and reduce costs.
• Install avionics in the entire fleet on an as-needed basis.
• Break ground on a new in-house pilot training facility in 2028 to address industry bottlenecks and lower training costs.
• Continue efforts to remediate identified material weaknesses in internal control over financial reporting in fiscal year 2026.
• Refinance contractual principal payments that comprise the short-term debt liability as they become due.
• Begin quarterly principal repayments of $2.4 million on the amended Senior Secured Note starting June 30, 2026.
• Pay a $386,697.94 non-refundable 'Back End Fee' on the Senior Secured Note upon payment in full or acceleration.
• The Volato Agreement term is extended to the sooner of September 1, 2026, consummation of asset purchase agreements, or consummation of the Volato Merger.
• The flyExclusive Option under the Volato Agreement becomes exercisable starting March 31, 2026, if the Volato Merger is consummated.

Key Dates

Recommendation

flyExclusive demonstrates strong operational improvements and revenue growth in key segments, particularly fractional ownership and MRO, leading to a significantly narrowed net loss and positive Adjusted EBITDAR. The strategic focus on vertical integration and in-house capabilities is a long-term positive. However, the company faces persistent material weaknesses in internal controls, ongoing legal challenges with Wheels Up, and a working capital deficit. The proposed merger with Jet.AI, while potentially transformative, carries execution risks and has already seen delays. Recent capital raises and debt extensions indicate ongoing liquidity management. Given the mixed financial picture, the operational strengths are balanced by significant financial and operational risks, suggesting a 'hold' recommendation for investors to monitor the successful remediation of internal controls, resolution of legal matters, and the outcome of the Jet.AI merger before making further investment decisions.

Keywords

Private Aviation, Jet Charter, Fractional Ownership, MRO, Aircraft Management, SEC Filing, 10-K, Financial Results, Corporate Governance, Risk Factors, flyExclusive, FLYX, Jet.AI Merger, Debt Covenants, Internal Controls, Pilot Shortage, Fuel Costs, Airline Industry, Volato Agreement