Stonegate Capital Partners has updated its coverage on Surf Air Mobility Inc. (NYSE: SRFM), highlighting the company's continued execution under its transformation plan. In the first quarter of 2026, Surf Air reported revenue of $25.6 million, at the high end of its guidance range and a 9% increase year-over-year. The adjusted EBITDA loss of $12.3 million outperformed the company's guidance of a loss between $15.5 million and $13.5 million. These results were supported by improved margins in the On Demand private charter segment, cost controls across airline operations, and faster, more cost-efficient development and deployment of its SurfOS platform.
The transformation plan is beginning to show operating leverage. Key drivers include route rationalization, On Demand margin expansion, and tighter cost controls. Surf On Demand revenue surged 77% year-over-year to $10.1 million, with revenue per flight up 38% and gross margin improving by approximately 340 basis points. Additionally, traction with BrokerOS and OperatorOS indicates that SurfOS is evolving into a commercial software platform, which could become a core growth and margin driver.
Management maintained its full-year 2026 revenue guidance of $128 million to $138 million and improved its adjusted EBITDA loss guidance by approximately 40%, reflecting de-risked expectations. Despite these positive developments, Surf Air Mobility trades at a discounted valuation of 1.3 times forward EV/Revenue for fiscal year 2027, compared to peers at 2.4 times. This discount suggests potential for a multiple re-rating if the company continues to execute on its plan.
For more details, the full announcement can be viewed here.