Business Context and Reporting Period
Company: Sky Harbour Group Corp (SKYH)
Filing Type: Form 10-K (Annual Report)
Reporting Period: Fiscal year ended December 31, 2025
Business Overview: Sky Harbour is an aviation infrastructure development company building a nationwide network of "Home Base Operator" (HBO) campuses. These facilities provide private and semi-private hangars, office suites, and dedicated services for business aircraft. The company operates under long-term ground leases at major U.S. airports, targeting markets with high demand for hangar space and limited supply.
Key Financial Metrics
| Metric | 2025 (in thousands) | 2024 (in thousands) |
|---|---|---|
| Total Revenue | $27,540 | $14,761 |
| Net Income (Loss) | $7,321 | $(53,683) |
| Operating Loss | $(28,027) | $(20,414) |
| Adjusted EBITDA | $(9,643) | $(9,248) |
| Cash and Restricted Cash | $37,024 | $94,359 |
| Total Debt (Bonds & Loans) | $183,359 | $170,156 |
| Occupancy Rate (Weighted Avg) | 78.1% | N/A |
Note: Net Income for 2025 includes a non-cash unrealized gain of $35.9 million on warrant liabilities. Operating loss reflects significant ground lease expenses and depreciation.
Material Changes vs. Prior Period
- Revenue Growth: Total revenue increased 86.6% to $27.5 million, driven by a 70% increase in rental revenue and a 189% increase in fuel revenue. Growth was fueled by the full-year impact of the Camarillo (CMA) acquisition, increased occupancy at existing campuses (BNA, OPF, SJC), and the commencement of operations at DVT, ADS, and APA campuses.
- Profitability Shift: The company moved from a net loss of $53.7 million in 2024 to a net income of $7.3 million in 2025. This turnaround was primarily due to a $70.4 million swing in the fair value of warrant liabilities (from a loss to a gain), rather than operational profitability.
- Expense Increases: Total expenses rose 58% to $55.6 million. Ground lease expenses increased 57% to $13.5 million due to new leases signed at IAD, SLC, SWF, HIO, LGB, and FTW. Depreciation increased 133% to $6.3 million as new assets came online.
- Portfolio Expansion: As of December 31, 2025, the company had 61 hangars in operation across 8 locations and 74 hangars in development across 20 locations.
Guidance, Outlook, and Risks
Management Commentary and Outlook
Management expects to continue investing in construction and development, anticipating operating losses in the near future as the portfolio expands. The company plans to fund growth through private activity bonds, bank debt, and equity issuances. A $150 million Series 2026 Bond issuance was completed in February 2026 (subsequent to the reporting period) to finance new projects.
Key Risks and Contingencies
- Debt and Liquidity: The company carries substantial indebtedness, including $166.3 million in Series 2021 Bonds and a $200 million Term Loan Facility. Default risks exist if tenant leases are not renewed or if construction costs exceed budgets.
- Construction Risks: Projects are subject to delays, cost overruns, and inflation, particularly regarding steel and labor costs. Tariffs and supply chain disruptions pose ongoing threats to project timelines and budgets.
- Ground Lease Dependency: Operations rely on long-term ground leases with airport authorities. Termination or unfavorable renewal terms could materially impact the business.
- Stock Volatility: The Class A Common Stock has experienced extreme volatility, with trading prices ranging from $2.50 to $43.41 in 2025, often unrelated to operating fundamentals.
- Internal Controls: The company has identified material weaknesses in the past, though management asserts controls were effective as of December 31, 2025.
Investor Verification Checklist
- Warrant Liability Impact: Verify the sustainability of the 2025 net income, which is heavily influenced by the non-cash mark-to-market gain on warrants ($35.9 million).
- Debt Covenants: Review compliance with debt service coverage ratios (DSCR) for the Series 2021 Bonds and Term Loan Facility, especially given the high level of construction spending.
- Construction Budgets: Monitor actual vs. budgeted costs for in-development projects (e.g., APA Phase I, DVT Phase I) which have previously experienced cost overruns due to design changes and inflation.
- Occupancy Trends: Track occupancy rates at newly opened campuses (APA, ADS, DVT) to ensure they meet revenue projections required to service debt.
- Subsequent Financing: Confirm the utilization of proceeds from the February 2026 Series 2026 Bonds and the January 2026 Yorkville Promissory Notes.