Sky Harbour Group Corporation

Good evening. My name is Tiffany, and I will be your conference operator today. At this time, I would like to welcome everyone to the Sky Harbor 2025 Third Quarter Earnings Call and Webinar. All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question and answer session. If you would like to ask a question during this time, Simply submit a question online using the webcast URL posted on our website. Thank you. Francisco Gonzalez, you may begin your conference.

Thank you, Tiffany, and a long welcome to the 2025 Third Quarter Investor Conference Call and Webcast for Sky Harbor Group Corporation. We have also invited our bondholder investors and our parents of series Sky Harbor Capital to join and participate in this call. Before we begin, I've been asked by council to note that on today's call, the company will address certain factors that may impact this and next year's earnings. Some of the information that will be discussed today contains forward-looking statements. These statements are based on management assumptions, which may or may not come true, and you should refer to the language on slides one and two of this presentation, as well as our SEC filings for a description of the factors that may cause actual results to differ from our forward-looking statements. All forward-looking statements are made as of today, and we assume no obligation to update any such statements. So now let's get started. The team with us this afternoon, you know from our prior webcast, our CEO and chair of the board, Tal Kanan, our treasurer, Tim Herr, our chief accounting officer, Mike Smith, our accounting manager, Tori Petro, and Andreas Frank, our assistant treasurer. We have a few slides we want to review with you before we open it to questions. These were filed with the SEC an hour ago in Form 8K, along with our 10-Q, and will also be available on our website later this evening. We also filed our third quarter on Arita Sky Harbor Capital Obligated Group Financials with MSRB, EMA, an hour ago. As the operator stated, you may submit written questions during the webcast using the Q4 platform, and we'll address them shortly after our prepared remarks. Let's get started. In the third quarter, on a consolidated basis, assets in the construction and completed construction continue to increase, reaching over $300 million on the back of construction activity at the recently completed campuses at Phoenix, Dallas, and Denver. Please note this graph is soon to accelerate its upward trajectory as we break ground in Bradley International, Salt Lake City, Addison Phase II, and other campuses. Consolidated revenues experienced an increase of 78% year over year, and 11% sequentially, reaching $7.3 million for the quarter, reflecting the acquisition of Camarillo Campus last December and higher revenues from existing and new campuses. Operating expenses in Q3 actually dropped slightly, as some of the one-time non-recurring startup expenses and new campuses that we experienced in Q2 did not carry to the last quarter. SG&A had a one-time non-cash expense in the quarter, related to the recognition of investing of our former COO's equity award compensation. We are working hard to keep SG&A stable, and as indicated in prior public discussions, we look for this line item not to exceed $20 million on a cash basis when it reaches its peak. This line item has many non-cash elements, which Mike, our Chief Accounting Officer, will review shortly. Most importantly, on the lower right-hand quadrant, we are only less than $1 million away from breakeven on a cash reform operation basis and expect to reach that goal next month on a run rate basis as discussed in prior calls and part of our formal guidance. Next slide, please. This is a summary of the financial results of our wholly owned subsidiary, Sky Harbor Capital, and its operating subsidiaries that formed the obligated group. This basically incorporates the results of our Houston, Miami, and Nashville campuses, along with the newly opened campuses in Phoenix, Dallas, and Denver. Revenues in Q3 increased 25% year-over-year and 8% sequentially. We expect a continuing increase in Q4 and the first quarter of next year as the new campuses continue to be leased, and Phase 2 at Opa-Loca in Miami is expected to open around early April of next year. Operating expenses decrease moderately, as I just discussed, while the operating leverage is shown in the strong cash flow generation coming from operating activities, as you can see in the lower right-hand quadrant. Let's turn now to our Chief Accounting Officer, Michael Smith, for a breakdown of adjusted EBITDA.

Thank you, Francisco. Adjusted EBITDA is a measurement tool utilized by management to evaluate our operating and financial performance. and it is not calculated in accordance with US GAF. We have provided a reconciliation from our GATT and ATLAS results to the three months ended September 30th, 2025. Amongst the most significant items that are components of our reconciliation to adjusted EBITDA are the non-cash portion of our ground lease expense. As we discussed in prior quarters, Most of virtually all of our new ground lease signed do not actually require us to make cash payments until we receive certificate of occupancy. Nonetheless, under US GAAP, we are required to recognize straight line expense. We show in this chart the effect of adding back that non-cash expense to adjusted EBITDA. Another significant component this particular quarter was share-based compensation, which totaled approximately $2 million, inclusive of certain non-recurring charges previously addressed by Francisco. With that, I will pass it over to Tal.