10-K: Sky Harbour Reports Strong Revenue Growth, Positive Net Income

Sky Harbour Group Corporation reported a significant increase in revenue for fiscal year 2025, achieving positive net income driven by operational expansion and non-operating gains, despite rising expenses and a worsening operating loss.

Summary

• Total revenue for the year ended December 31, 2025, increased by 86.6% to $27.540 million, up from $14.761 million in 2024.
• Rental revenue grew by 70% to $21.588 million in 2025, primarily due to a full year of operations at Camarillo (CMA) and increased occupancy at BNA, OPF, and SJC, along with new operations at DVT, ADS, and APA.
• Fuel revenue surged by 189% to $5.952 million in 2025, largely from increased fuel sales at CMA, ADS, and APA, and higher fuel gallons uplifted at BNA and OPF.
• The company achieved a net income of $7.321 million in 2025, a substantial improvement from a net loss of $53.683 million in 2024, primarily driven by a $70.4 million unrealized gain on warrants.
• Operating loss widened to $28.027 million in 2025 from $20.414 million in 2024, reflecting increased operating expenses.
• Adjusted EBITDA worsened slightly to a loss of $9.643 million in 2025, compared to a loss of $9.248 million in 2024.
• Total assets increased to $593.176 million in 2025 from $556.556 million in 2024, with constructed assets, net, growing to $267.687 million from $110.302 million.
• Total liabilities increased to $421.210 million in 2025 from $396.738 million in 2024, including an increase in loans payable and finance lease liabilities to $20.544 million from $7.535 million.
• Cash and restricted cash decreased to $37.024 million at year-end 2025 from $94.359 million at year-end 2024.
• The weighted-average occupancy rate for properties in operation was 78.1% as of December 31, 2025.
• The company has 85 tenant leases with a weighted-average lease term of approximately 5.6 years (contractual payments) and 2.8 years (rentable square footage).
• As of December 31, 2025, 15,798,155 warrants remain outstanding, exercisable at $11.50 per share and expiring on January 25, 2027.
• The company had 112 employees as of December 31, 2025, none subject to collective bargaining agreements.

Sentiment

Score: 6

Explanation: StockSavvy.ai views this filing with a moderately positive sentiment. While the company demonstrates strong revenue growth and significant asset expansion, the worsening operating loss and negative Adjusted EBITDA indicate ongoing challenges in achieving core profitability. The positive net income is largely due to non-operating gains, and substantial capital raises highlight continued reliance on external financing for ambitious growth plans, which carry inherent risks.

Positives

• Significant revenue growth of 86.6% year-over-year, indicating strong market demand and successful expansion.
• Achieved positive net income of $7.321 million in 2025, a substantial turnaround from a $53.683 million net loss in 2024.
• Successful commencement of operations at DVT, ADS, and APA hangar campuses, contributing to rental revenue growth.
• Increased occupancy at BNA, OPF, and SJC hangar campuses, demonstrating effective tenant attraction and retention.
• Expansion of the property portfolio with new ground leases at Long Beach Airport (LGB) and Fort Worth Meacham International Airport (FTW) in 2025.
• Secured $150 million in Series 2026 Bonds financing and a $200 million Term Loan Facility, providing capital for future development.
• Maintained compliance with all debt covenants as of December 31, 2025.
• Implemented an interest rate swap for the Term Loan Facility, effectively fixing the SOFR component at approximately 2.65% to mitigate interest rate risk.
• The company's business model is designed to capitalize on the growing U.S. business aviation fleet and demand for larger aircraft hangar space.

Negatives

• Operating loss widened to $28.027 million in 2025 from $20.414 million in 2024, indicating increased operational costs relative to operating revenue.
• Adjusted EBITDA worsened slightly to a loss of $9.643 million in 2025 from a loss of $9.248 million in 2024, reflecting ongoing operational cash burn.
• Total expenses increased by 57.9% to $55.567 million in 2025, outpacing revenue growth in absolute terms.
• Cash and restricted cash significantly decreased by $57.335 million from $94.359 million in 2024 to $37.024 million in 2025.
• Net cash used in investing activities increased by $18.4 million, reflecting substantial capital expenditures for construction.
• Net cash provided by financing activities decreased by $67.8 million, indicating less capital raised from financing in 2025 compared to 2024.
• The company expects to continue generating operating losses in the near future due to ongoing construction projects and business development activities.
• The company has a substantial amount of indebtedness outstanding, exposing it to default risk and operational restrictions.

Risks

• Limited operating history makes it difficult to predict future revenues and operating results.
• Business is subject to economic downturns and financial market volatility, which could decrease demand for private airport hangar space and negatively impact rental rates.
• Growth depends on the ability to enter into new ground leases at airports, which may be unsuccessful due to competition, high lease rates, significant evaluation costs, and difficulty obtaining financing.
• Ability to meet obligations under ground leases and indebtedness is dependent on collecting lease payments from tenants, with current tenant leases not extending past the final maturity date of the majority of indebtedness.
• Substantial indebtedness exposes the company to default risk, foreclosure, and restrictive covenants that may limit business activities.
• Growth depends on access to external capital, which may be limited by debt levels, liquidity, credit status, market conditions, and economic factors.
• Increases in market interest rates or unavailability of additional indebtedness could make it difficult to finance or refinance debt, increasing borrowing costs.
• Required to record impairment charges to future earnings if long-lived assets become impaired, negatively impacting results of operations.
• Significant competition in the hangar space rental segment could materially and adversely affect business and results of operations.
• Future success is subject to the ability to market, attract, and retain tenants, which can be affected by tenant preferences, economic conditions, and fuel prices.
• Capital projects are subject to uncertainties, including delays, cost overruns, and inflation, which could harm business, results of operations, and market reputation.
• Production of hangar buildings is subject to design and construction defects, product liability, and other claims that could be significant and costly.
• Failure to adequately maintain home base operator campuses or fuel supplies could negatively impact revenue or market share.
• Dependent on the continued service of key employees and the ability to recruit and retain new employees in a highly competitive market.
• Past material weaknesses in internal controls may recur, affecting reporting obligations and financial statements.
• Operations are conducted under ground leases, granting significant rights to airport authorities, with risks of non-renewal, unfavorable terms, or termination.
• Inability to liquidate real estate investments due to ground lease structure could impact liquidity.
• Failure to succeed in new markets due to lack of market knowledge or understanding of local requirements.
• Tenant credit risk, including financial failure or default, could significantly reduce operating cash flow.
• Default under a ground lease or bankruptcy of a subsidiary could materially adversely affect business and results of operations.
• Lack of accurate and reliable industry data can lead to unfavorable strategic planning and pricing decisions.
• Extensive governmental regulations could require significant expenditures and new regulations could decrease demand for services.
• Potential limitation of tax-exemption of interest on private activity bonds could impact debt funding or increase costs.
• Uninsured losses or losses exceeding insured limits could adversely affect business and results of operations, especially from catastrophic weather events.
• Major health or safety incidents could adversely affect business and reputation.
• Inability to rebuild properties to existing specifications after substantial loss due to zoning, building codes, or environmental restrictions.
• Epidemics, pandemics, or similar public threats could materially and negatively impact business and results of operations.
• Properties are subject to environmental risks, including those related to jet fuel storage and firefighting regulations, potentially leading to substantial losses, fines, or remediation obligations.
• Exposure to potential impacts of future climate change and climate change-related risks, including extreme weather events and increased operating costs.
• Cybersecurity risks and incidents may disrupt operations, compromise confidential information, or damage business relationships.
• Use of artificial intelligence presents risks such as inaccuracy, bias, intellectual property infringement, and enhanced cyber threats.
• Dual class structure may negatively impact the market price of Class A Common Stock and limit index inclusion.
• Exercise of outstanding warrants and redemption of common units will increase shares eligible for resale and result in dilution.
• Substantial sales of Class A Common Stock by large investors may suppress stock price and cause dilution.
• No intention to pay cash dividends for the foreseeable future.
• Lack of analyst coverage or unfavorable research could cause stock price and trading volume to decline.
• Securities litigation is expensive and could divert management attention.
• Controlled company status means stockholders do not have the same protections as those in companies subject to all corporate governance requirements.
• Existing Sky Equityholders control the direction of the business, and their interests may differ from other stockholders.
• Provisions in Bylaws and Delaware law may discourage lawsuits against directors and officers.
• Senior management holding economic interest in Sky through other entities may create conflicts of interest.
• Requirements of being a public company may strain resources and divert management attention.

Future Outlook

The company anticipates continued investment in construction projects and business development, expecting operating losses in the near future. It plans to issue additional debt to finance future site developments and refinance existing obligations, including the Term Loan Facility and Series 2026 Bonds. Proceeds from the Term Loan Facility and Series 2026 Bonds are expected to fund an additional 1.2 million rentable square feet of construction projects at seven airport locations. The long-term business plan targets 50 airport sites with an estimated cost of $3.0 billion, largely funded by private activity bonds and equity. The company intends to mitigate inflationary pressures, reduce construction costs, and pursue compressed development schedules, expecting operating expenses as a percentage of its portfolio to decrease over time due to efficiencies and economies of scale. The Federal Reserve has indicated potential for further interest rate cuts in 2026, which could impact borrowing costs.

Management Comments

• "We believe our scalable, real estate-centric business model is uniquely positioned to capture this market opportunity and address the increased imbalance between the supply and demand for private jet storage."
• "We intend to capitalize on the existing hangar supply constraints at major U.S. airports by targeting high-end tenants in markets where there is a shortage of private and FBO hangar space, or where such hangars are or are becoming obsolete."
• "We expect to realize economies of scale in construction through prototype hangar designs replicated at our HBO campuses across the United States through our in-house construction management and general contracting."
• "Unlike a service company, our revenues are mostly derived from long-term rental agreements, offering stability and forward visibility of revenues and cash flows."
• "We believe demand for HBO hangar campuses will be driven broadly by the growing size of the business aviation fleet in the United States and the delivery of larger aircraft with taller tail heights, as well as the privacy and security inherent at our hangar campuses in comparison to operations focused on transient and commercial aircraft."
• "The discovery by first-time flyers in the convenience, control and comfort of general aviation has caused a shift in consumer behavior which we believe will also support increasing demand for HBO hangar campuses."
• "We believe that our estimates of construction costs and timelines are subject to variability based on various factors including, but not limited to, changes in anticipated site plans, hangar mix, hangar specifications, executed guaranteed maximum price construction contracts, and general market conditions."
• "We believe we may continue to experience such pressures [inflationary and supply chain] in future quarters, as well as delays in our subsidiaries and contractors ability to requisition such materials."
• "We have made limited sales under the ATM Facility to date and will only do so when our stock price is at prices our Board deems appropriate."

Industry Context

StockSavvy.ai notes that Sky Harbour Group Corporation operates within a rapidly growing segment of the aviation industry, driven by a 73% increase in the U.S. business aircraft fleet's physical footprint between 2010 and 2025, and a 120% increase in larger private jets. The industry faces a significant supply-demand imbalance for hangar space, with new aircraft deliveries exceeding retirements and a projected 8,500 new business jet deliveries worth over $283 billion between 2025 and 2034. The company's focus on 'Home Base Operator' (HBO) campuses addresses the specific needs of larger, modern private jets that do not fit existing infrastructure, positioning it to capitalize on this market gap. Competition is intense from national, regional, and local Fixed-Base Operators (FBOs) and other hangar real estate companies, some with greater resources or longer operating histories. The industry is also subject to extensive governmental regulations from the FAA, DHS, DOT, and EPA, alongside environmental risks and the potential impacts of climate change.

Comparison to Industry Standards

• The filing highlights that the U.S. business aviation fleet's physical footprint grew by almost 46 million square feet in the past sixteen years, with hangar supply lagging dramatically, especially for larger private jets (over 24-foot tail height, which saw a 120% increase in square footage between 2010 and 2025). This indicates Sky Harbour is operating in a market with strong underlying demand and supply constraints, potentially offering a favorable environment compared to more saturated real estate sectors.
• A business aircraft manufacturer forecasted up to 8,500 new business jet deliveries worth over $283 billion between 2025 and 2034, with over two-thirds being larger private jets. This robust forecast suggests a sustained growth trajectory for the company's target market, potentially outperforming general aviation growth rates if it can capture market share.
• The current order backlog for new business aviation aircraft as of December 31, 2025, is over $57 billion, a 10% increase over the prior year. This backlog provides a strong indicator of future demand for hangar space, suggesting that Sky Harbour's development pipeline is aligned with industry expansion.
• The company's strategy of developing HBO campuses with features like private hangar space, climate control, and no-foam fire suppression aims to differentiate it from traditional FBOs and community hangars, which often face 'stacking challenges' and cannot accommodate modern, larger aircraft with winglets. This specialized offering could command premium pricing and higher occupancy rates compared to general FBO services.
• While the filing mentions competition from 'national, regional and local FBOs and other hangar real estate companies' and notes that some competitors 'may have greater financial or other resources and/or lower cost structure,' it does not provide specific comparable company names, projects, or financial metrics (e.g., revenue per square foot, occupancy rates, development costs per square foot) to allow for a direct, quantitative comparison against industry benchmarks or specific competitors like Signature Aviation, Atlantic Aviation, or Jet Aviation.

Management Changes

Corporate Governance

Legal Proceedings

• Not currently subject to any material legal proceedings.
• Not aware of any pending or threatened material litigation against the company or its officers/directors in their corporate capacity.

Related Party Transactions

• Entered into a revolving line of credit loan and security agreement on December 6, 2024, with a company controlled by the former owner of CloudNine and Sky 805 (who is also an independent contractor). The company loaned $1.1 million as of December 31, 2025, under this $3.0 million facility.
• Terminated a non-exclusive agreement with Echo Echo, LLC (related party to the Founder and CEO) for a Beechcraft Baron G58 aircraft on July 30, 2025. A new non-exclusive agreement with Echo Echo, LLC for an Epic E1000GX aircraft was entered on September 19, 2024, resulting in $0.5 million of expense in 2025 and $0.4 million in 2024.
• Recognized less than $0.1 million of expense in 2025 for consulting services from a company that employed the Chief Financial Officer until prior to July 1, 2021.
• An individual hired on June 1, 2025, as Head of Construction and President of Ascend Aviation Services, previously employed by and holds a financial interest in a General Contractor providing services to the company. Incurred $9.4 million in construction costs with this General Contractor at the APA Phase I project and $0.1 million for architectural/engineering consulting at the ADS Phase II project in 2025. Allocated costs from the General Contractor to Ascend were approximately $0.1 million in 2025.

Stakeholder Impact

• Shareholders: Face potential dilution from warrant exercises, Sky Common Unit redemptions, and future equity capital raises. The dual-class structure and concentrated ownership by Existing Sky Equityholders limit the influence of other stockholders on significant decisions. The stock price has been volatile, and no cash dividends are expected in the foreseeable future.
• Employees: The company is dependent on key employees and faces a highly competitive market for talent in aviation and real estate. Compensation programs are designed to attract and retain talent, and the Sky Harbour Academy provides training and career development opportunities.
• Customers (Tenants): Benefit from high-demand hangar space and long-term rental agreements. However, they are exposed to the company's ability to maintain facilities and fuel integrity. The company's growth strategy aims to meet the increasing demand for specialized hangar space.
• Suppliers/Contractors: The company engages various contractors for construction, including a related-party General Contractor. Delays and cost overruns due to inflation and supply chain issues could impact these relationships.
• Creditors: The company has substantial secured indebtedness (Series 2021 Bonds, Term Loan Facility, Series 2026 Bonds, Yorkville Promissory Notes, Vista Loan). Creditors face risks of default, cross-defaults, and potential foreclosure on properties. Debt covenants impose restrictions on the company's operations and distributions.
• Airport Authorities: Act as direct or ultimate landlords through ground leases. They have significant rights, including lease renewal decisions and periodic rent increases to market value. The company's business model relies heavily on securing and maintaining these long-term ground leases.

Next Steps

• Continue to develop properties across the United States, targeting high-end tenants in markets with high hangar demand.
• Issue additional debt to finance future site developments and refinance existing indebtedness, including the Term Loan Facility and Series 2026 Bonds.
• Fund an additional 1.2 million rentable square feet of construction projects at seven airport locations using proceeds from the Term Loan Facility and Series 2026 Bonds.
• Pursue the cumulative 50 airport site business plan, estimated to cost approximately $3.0 billion.
• Mitigate inflationary pressures, reduce construction costs, and pursue compressed development schedules for capital projects.
• Monitor and improve the cybersecurity risk management program, with ongoing oversight from the Board and Audit Committee.
• Comply with financial and non-financial covenants under various debt agreements, including maintaining debt service coverage ratios.
• Begin repaying the Yorkville Promissory Notes starting July 8, 2026.
• Commence construction for various development phases, including ORL Phase I (Q1 2026), POU Phase I (Q2 2026), SLC Phase I (Q1 2026), TTN Phase I (Q2 2026), SJC Phase II (Q1 2027), CMA Phase I (Q2 2027), FTW Phase I (Q1 2027), HIO Phase I (Q4 2026), IAD Phase I (Q4 2026), and PWK Phase I (Q4 2026).

Key Dates

Recommendation

Sky Harbour Group Corporation demonstrates strong revenue growth and significant expansion of its asset base, indicating a robust market for its specialized aviation infrastructure. The positive net income, while largely driven by non-operating gains, is a notable improvement. However, the worsening operating loss and negative Adjusted EBITDA highlight ongoing challenges in achieving sustainable operational profitability. The company's aggressive growth strategy is capital-intensive, relying heavily on debt and future equity raises, which introduces substantial financial risk and potential dilution for existing shareholders. Given the mixed financial performance, the high capital requirements, and the inherent risks associated with a controlled company structure and market volatility, a 'hold' recommendation is appropriate. Investors should monitor the company's ability to improve operational efficiency, manage debt, and execute its ambitious development plans without further significant dilution or operational setbacks.

Keywords

Aviation Infrastructure, Hangar Development, Business Aviation, SEC Filing, 10-K, Financial Results, Real Estate, Ground Leases, Debt Financing, Equity Capital, Cybersecurity, Risk Management, Corporate Governance, Private Jets, Airport Operations, Construction Costs, Market Volatility, Warrants, Tax Receivable Agreement, Operating Losses, Revenue Growth