Global Crossing Airlines Group Inc.

Good morning, ladies and gentlemen. Thank you for standing by. Welcome to today's conference call to discuss Global Crossing Airlines financial results for the third quarter of 2025. At this time, all participants are in a listen-only mode. As a reminder, this conference call is being recorded. Joining us on the call today are the company's Executive Chairman, Chris Hamroz, President and CFO, Ryan Gopel, and SVP Corporate Controller, Wendy Shapiro. Please be advised that this conference call will contain statements that are considered forward-looking statements under the Private Securities Litigation Reform Act of 1995. These forward-looking statements are subject to certain known and unknown risks and uncertainties, as well as assumptions that it caused action results to differ materially from those reflected in these forward-looking statements. These forward-looking statements are also subject to other risks and uncertainties that are described from time to time in the company's filings with the SEC. Do not place on your reliance on any forward-looking statements which are being made only as of the date of this call. Except as required by law, the company undertakes no obligation to publicly update or revise any forward-looking statements. For important risks and assumptions associated with such forward-looking statements, Please refer to the company's earnings press release for the third quarter of 2025 and the company's annual report on Form 10-K for the year ended December 31, 2024. The company's presentation also includes certain non-GAAP financial measures, including EBITDA and EBITDAR, as supplemental measures of performance of the business. All non-GAAP measures have been reconciled to the most directly comparable GAAP measures in accordance with SEC rules. You will find the consolation tables and other important information in the earnings press release for the third quarter of 2025, which is currently available on the company's investor relations section of its website. And now, I will turn the call over to the company's executive chairman, Chris Hemros. Chris, please go ahead.

Thank you, operator, and good morning, everyone. Global Eggs delivered another period of strong growth and significant year-over-year improvements, with revenue up 11%, EBITDA up 25%, and EBITDA improving by nearly 5 million. We achieved some of the highest aircraft utilization rates since our inception, driven by increased demand across the full spectrum of charter and ACMI customers. I'm proud of our team's relentless work to achieve these results and strengthen the foundation of our business for the long term. While we are proud of the progress we've made, the results fell short of our own expectations. We had the opportunity to achieve net income profitability, but fell short due to the rapid pace of growth that tested our maintenance and operations functions, leading to logistics disruptions and AOG events. We saw more unplanned AOG events than anticipated, and over the past 60 days, we have taken targeted, decisive, and concerted steps to address those events and reduce our operating costs. We are a commercial organization, and going forward, we intend to obtain a higher standard of operating performance, and we must be ready to credibly perform to that standard. A record of revenue generation will never relieve us of the responsibility to remain operationally sound and a vibrant airline. Over the past 18 months, we've moved from the startup phase to scaling up our full-service charter airline with a sharp focus on efficiency, reliability, and sustainable profitability. Over the past quarter, we undertook a comprehensive overhaul of our executive and senior management teams, coupled with a reorganization of operations and maintenance. These steps were essential to meet the increasing demand of operational complexity of a business growing as quickly as Global X, and to ensure we're structurally equipped for the opportunities ahead. I'm confident the steps we've taken this quarter will enable us to capitalize on that growth and achieve profitability and continue to grow positive cash flow generation. As we look to 2026, our priorities are clear. Operate with discipline as we're scaling up and deliver profitable results across our entire platform. It's exceptionally noteworthy that we are also becoming the airline of choice for college sports teams, professional franchises, concert artists, and leisure travels across three continents. We have also become a carrier of choice to Europe's largest travel and tourism company. The continued influx of marquee clients from across the aviation spectrum validates the strength of our business platform. The robust demand not only confirms we've built the right model, but it's propelling the next phase of Global X growth and revenue acceleration. We are becoming the gold standard in the charter airline sector, and our success has not gone unnoticed. Many in the industry are taking note of what we're building, and yes, it makes some of our competitors uncomfortable. I want to reaffirm our steadfast commitment to executing with precision and accountability. With these guiding principles, we remain on track to achieve our long-term vision of becoming the largest and the most reliable narrow-body charter airline in North America. With that, I will now hand it over to our President and CFO, Ryan Gopal, to elaborate on Global X third quarter operational highlights. Ryan?

Thank you, Chris, and good morning, everyone. This quarter illustrated both the strength of our business model and the growing operational challenges that accompanied rapid scaling. While aircraft utilization reached record levels, we lost approximately 500 block hours to unscheduled maintenance across the fleet, a direct hit to revenue, crew productivity, and margins. Those lost hours and the resulting incremental maintenance expense are the primary reasons we missed the opportunity to report positive net income this quarter. As Chris mentioned, in Q3, we experienced more AOG events than we anticipated. Over the past 60 days, we have overhauled leadership across operations and maintenance, redesigned processes, strengthened controls, and invested significantly in preventative maintenance. We reduced more than $5 million in annualized office and operating costs, primarily through headcount reductions and tighter SG&A discipline. We expect a more normalized SG&A run rate beginning in December, our traditionally busiest and most profitable month, and we anticipate all aircraft to be fully operational heading into that period. Despite these temporary challenges, our charter operations continue to perform exceptionally well as we generated double-digit revenue growth and record block hours flown, underscoring the underlying strength and resilience of our growth strategy. Our revenue growth was fueled by our ACMI business, which increased 44% year-over-year to $53.2 million and represented 92% of total revenue, compared to 70% in the year-ago quarter. ACMI block hours increased 45% year-over-year to $9,527. reflecting our focus on expanding long-term agreements with key customers and government agencies. As we stated before, we continue to shift aircraft capacity from chartered ACMI to take advantage of its higher margin profile and more predictable flying. As a result, charter revenue declined to $2.3 million in Q3 2025 from $15 million in the prior year quarter, and now accounts for just 4% of total revenue compared to 29% a year ago. This shift in contract mix continues to strengthen our profitability profile through higher margin contributions and contract stability. During the quarter, we flew our record 9,901 block hours, including subservice between ACMI and charter, a 23% year-over-year increase, reflecting strong demand across our narrow-body charter operations. In Q3, we increased block hours flown for ACMI by 45% to 9,527, compared to Q3 of 2024. For Charter, we flew 178 block hours compared to 1,254 in a year-ago period, again resulting from our intentional shift from Charter to ECMI. Our average utilization for aircraft available increased 26% year-over-year to 618 block hours. As we mentioned before, ECMI typically generates lower revenue per block hour than Charter, but offers a more predictable and favorable margin profile since the customer assumes fuel, demand, and pricing. As our contract mix continues to shift towards ACMI, we expect to improve utilization and generate stronger operating margins and greater consistency in our financial performance over time. Turning to cargo operations, market conditions remain challenging through the quarter as the broader North American freight market continues to experience excess capacity and softer demand. Despite this, we maintain steady flying with our fleet of four A321 freighters, which continue to deliver attractive unit economics to our cargo clientele for improved fuel efficiency and lower operating costs. Although visibility in the cargo market remains limited, our efficient and flexible operating models enabled us to sustain activity, maintain key customer relationships, and remain well-positioned for recovery when the demand strengthens. Passenger demand remains exceptionally strong, supported by limited aircraft supply, reduced direct competition, and growing reliance on air charter by colleges and other institutional customers. These favorable market dynamics continue to drive increased demand for our services, particularly within the niche charter markets where aircraft availability remains constrained. To capture this growth, we are prioritizing passenger aircraft deliveries, allocating additional sales and operational resources to strengthen long-term customer relationships, and expanding into new markets as opportunities arise. Passenger charter operations remain the primary economic engine for Global X. As part of our long-term growth strategy, we continue to improve operational efficiencies and optimize aircraft utilization to strengthen financial performance. Our strong average revenue per block hour underscores the success of this focus. As stated earlier, for ACMI, we generated an average of $5,586 per block hour, consistent with the prior year. For charter, average revenue per block hour was $12,978 per hour, compared to $11,951 per hour and year-ago quarter, consistent with historical trends. During the third quarter, we made meaningful progress advancing several key initiatives that strengthened our fleet, customer base, and financial flexibility. We took delivery of our first of four previously announced A319s and the first purchased A320 airframe, which is expected to be in revenue service for the last month of the year. We expect to take delivery of the next three aircraft over the next three months, expanding our capacity to capitalize on the growing demand for our charter services. We also signed a strategic ACMI agreement with Sunrise Airways to provide two dedicated A320 aircraft starting in November, reinforcing our position as a leading ACMI provider and expanding our presence into key international markets. We value the trust Sunrise Airways has placed in us and look forward to growing this relationship through continued collaboration and shared success. Looking ahead, booking across all charter customer segments are at record levels, materially ahead of last year, and momentum continues to accelerate. We made meaningful progress in building a more efficient, reliable organization, and entering year-end with improved reliability and a stronger foundation for profitability. Looking to 2026, we plan to build on that momentum, continuing disciplined growth, focused on profitable expansion, and deploying additional aircraft to meet rising demand across our core charter markets. Now I'll turn the call over to SVP Corporate Controller Wendy Shapiro, who will discuss her financial results in more detail.

Thank you, Ryan, and good morning, everyone. Please note that all financial results discussed today are for the three-month period ended September 30th, 2025, and variance commentary is on a year-over-year basis and less stated otherwise. Revenue in the third quarter increased 11% to $58 million compared to $52.4 million. The increase was primarily driven by continued growth in ACMI operations. ACMI revenue increased 44%, to $53.2 million compared to $36.8 million. Charter revenue in Q3 was $2.3 million compared to $15 million. Total operating expenses increased 4% to $57 million compared to $55 million, driven primarily by higher maintenance and personnel costs associated with the ongoing expansion of the GlobalX fleet. Net loss improved to $2 million compared to $4.9 million. Loss per share also improved to negative 3 cents per basic share and diluted share compared to negative 8 cents per basic and diluted share in the year-ago period. EBITDA improved nearly 5 million to 4.3 million compared to a loss of 600,000. EBITDA increased 22% to 18.9 million compared to 15.4 million. Cash flow provided by operations improved to 600,000 compared to cash used by operations of a million in the year-ago period. The improvement primarily reflects stronger operating performance and efficiency gains across the business. Turning to our liquidity, we entered the third quarter with approximately $7.2 million in cash and restricted cash compared to $14 million at December 31, 2024. Now, I will turn the call back over to Ryan for closing remarks. Thank you, Wendy.

Our third quarter results reflect both the strength of our operating model and the actions we've taken to build a stronger, more efficient organization. As we look to 2026, we believe GlobalX is entering the next phase of its evolution with a focused platform, enhanced operational reliability, and a stronger foundation to drive profitable growth in 2026. This concludes our prepared remarks. I'd now like to open the call for Q&A. Aaron, over to you.

Thank you, Chris, Ryan, and Wendy, and thank you, everyone, for participating in the conference call. As we gather the queue for live questions, we'd first like to address a few of the questions that have come in via email over the past couple of weeks and following the issuance of our earnings press release yesterday. Our first question is related to operational execution. As you looked at 2026, how are you strengthening your internal systems and processes to keep pace with future growth?

I'll take that one, and thank you for the question. We've undertaken several process changes in combination with personnel changes, which we believe will make a significant difference in our ability to execute.

On the maintenance side, we invested in our central planning group by Forex, and subsequently transitioning from daily, weekly, and long-term planning to one central group. This allows us to be more proactive across all maintenance activities that are coordinated with our vendors, purchasing department, and frontline staff to minimize any disruptions. We have ramped up the number of internal inspections, audits, and reviews to identify issues sooner and fix them faster. We've also updated our daily tracking metrics published internally, which we believe are the most effective for tracking, tracing, and measuring to ensure the best results. We've engaged several third-party vendors to help us meet the demands of our enterprise scale and provide us with technology solutions to better utilize the data we've collected to automate the systems we use to manage our ever-growing fleet. Constant improvement is not relenting. We will continue to refine our people and processes to meet the demands of our major scale. Thank you, Brian. The next question is related to Chris's share purchase. So, Chris, you just announced that you're increasing your ownership in Global Blacks. to make the decision at this point? Thanks for the question. So I'm crazy excited because I believe deeply in the platform we've built and the trajectory we're on. Over the last 18 months, we've really executed with discipline expanding our customer base across the very wide is improving operation efficiency, increasing revenue diversification, and growing diversity of our local business, and assembling a management team that I've put up against anyone in business. The momentum at GlobalX is truly undeniable and unstoppable. We're visiting new charter customers across every major segment. Our execution is getting sharper every quarter, and the organization is more focused than it's ever been. Despite that progress, LocalX remains, objectively and in my opinion, the most undervalued airline stock I've ever seen in my career. That disconnect may be illogical to the market today, but it presents a great rational opportunity for those of us who understand the fundamentals of the business. For me, quite frankly, it's simple. I have conviction in the platform, confidence in the team, and I'm willing to back that belief with my capital. And both confidence in the future of the business and, frankly, a sound personal financial investment decision. The next question is related to profitability and cash flow generation. How are you managing this next phase of growth to ensure stronger profitability and cash flow generation? I can answer that, too. We're highly selective about where we deploy aircraft. Start using routes to ensure opportunities to deliver the strongest unit economics and consistent demand profiles. Every new contract is evaluated for margin contributions and cash flow profiles, not just top On the sales front, our team continues to expand ACMI charter relationships with long-term repeat customers. Best strategy is improving aircraft utilization, reducing seasonality, and mostly predictable higher margin revenues. We've implemented best-in-class standard operating procedures and proactive maintenance programs to reduce unplanned land down times and optimize aircraft availability. Those initiatives are lowering direct operating costs and will be translating into efficiency gains directly into stronger profitability and better energy proof . Thanks, Ryan. One more related to fleet expansion. expanding the fleet in line with demand forecasts? I'll take that one as well. We closely track upcoming charter and ACMI opportunities and plan our fleet needs internally to make sure we can cover future demand. If we had The demand is there. We just need the capacity to meet it. We're adding aircraft where the demand supports it while keeping flexibility in our fleet plans so we can adjust if the market shifts. Each addition is evaluated carefully to make sure it fits our operational needs and long-term profitability goals. As the fleet grows, we're timing lease returns and new aircraft additions to keep utilization high and scaling our cruise maintenance and support systems so the new aircraft can go straight into service efficiently. Thanks, Ryan. Looks like that concludes our pre-submitted questions. And now I pass it over to the operator to open the call up for live Q&A. Thank you, ladies and gentlemen. We will now begin the question and answer session. Should you have a question, please press the star followed by the one on your phone. Should you wish to cancel your request, please press the star followed by the one. If you are using a speakerphone, please lift your hands any keys. Once again, that is star one should you wish to ask a question. Our first question is from Ryan Fitt from Broadway Capital. Your line is now open. Good morning, gentlemen and ladies. Thank you so much for the presentation. The quarter suffered from things that seemed transitory. What I'd like to know at first Can you provide more details on the unscheduled maintenance events, the root causes? Give me the total lost block hours that you could have generated. the causation and the numerical loss, if you can, in terms of block hours, net aircraft, et cetera. Yeah, I can definitely, I'll cover that. You know, when we look at our net aircraft available, and this will be something that comes out on our queue, we talk about how many we have on the operating certificate and how many are actually available. Now, in queue, 1 or Q3 of last year was 15.2. In Q3 of this year, it's only 15.9. Now, part of that is the unscheduled maintenance, which I'll go into more detail. Part of it is scheduled. You know, when you're flying as much as we are, you definitely target scheduled maintenance to be in September and October. Because that is a lower activity month, and we had several aircraft in planned maintenance as well in September, which reduced their utilization. Even though our net aircraft available was only up about 4%, the block hours is up 31% now. Ideally, with the unscheduled maintenance, you know, one of the challenges we had specifically is operating in areas where we don't have a huge infrastructure. And that's kind of a feature of what we do, but also a risk of what we do. You know, when we're operating in Europe with so many block hours, When you have a plane that has a birth strike in Turkey, for example, ironically, you don't have a huge infrastructure to get parts and people and equipment there to get the plane fixed. What might take you one day to get fixed takes a week. You know, we had some operations out in the West Coast, in LA with hydraulic lines, and what would normally, again, we could get fixed within a base in 12 hours took three or four days. Unscheduled maintenance is a part of this business. We factor that in, we build that in. I think when we talk about where we focus and where we want our customers to be and where we want our infrastructure to be, I think we've developed a much better understanding of the risks associated with being in places where we're not well established. And I think that goes into where we fly and what we'll do going forward. We talked about in the call about 500 hours. If you look at our average HDMI rate, you know, between, you know, around $4,000 or $5,000 an hour, you know, you're looking at one and a half to two million of revenue that would have effectively... gone pretty close to the bottom, which makes, you know, as you can see, would be a pretty drastic impact to the bottom line number. Again, unstable maintenance is part of what we do. It's definitely not an excuse, but I think one of the things we've really focused on is How can we react faster? How can we have the infrastructure in place? And if we're going to places without the infrastructure, how can we better be more responsive so we can get the planes back up and green? Because, you know, planes go as they call it, AOG, or they have a main business all the time. It really comes down to how quickly you can respond as an organization through procurement, through staffing, to get the plane fixed and back on the road. And I think we were so busy this summer, we had no slack in our schedules, so anything that happened was pretty impactful. And maybe we oversold in our ambition to go hit our number. But I think what this also drives is, you know, the last 18 months, you know, we haven't taken any equity from investors since April of 2021. And so we've been effectively growing. And we took that in August of 23. And I think since March of 24, in the last 18 months, we have basically funded all of this growth. on our own cash flow. And we're talking significant year-over-year revenue profitability growth with our own cash flow. And I think as an organization, we've gotten to the point where with the amount of aircraft we have, we've kind of optimized where we are cost-wise And now going forward, the growth is going to be fast. And luckily or fortunately, we have the five aircraft coming. And that's going to be the focus going forward. Because we've now, I think, got our processes in place. We've got a company focused on what it needs to be focused on. And going forward, we're going to grow capacity, and I think that's going to drive the improved numbers going forward. Okay. And just to be more specific on the 500 hours, I mean, you say it's simply multiplied by ACNI. So the mix that you reflect in this – in the reported results, it would have carried through charter versus ACMI, and that's why I'm not sure, you know, okay. Yeah. Okay. And then on the cost-cutting initiatives, it That is a $5 million annualized thing. Yeah, so we effectively cut our overhead by 15% in people, sorry, in people, in costs. And so we really focused on how big an organization do we need to be, given the size of what we are and what we're doing. And really, I think we've got a really strong team and a strong bench. And we took a very hard look at what do we really need to operate this business and make some pretty tough decisions. That is, those are those, that's not really a trailblazer style of business. And we made this a way for the end of the quarter. This is a process we started in July and August. And part of our constant review of cost, our constant review of being efficient, our constant review of how should we be structured going forward. And so I think you can look at that as a cost assessment. to come out. I think if you look at salaries going forward, I'd say 90% or 95% of any salary going forward will be tied directly to crew and revenue generating aircraft as we add capacity. But I think we've got our overhead in the right spot where it needs to be right now. back to the mixed shift. You're now decidedly ACMI. Margins increase as a function of that, but what are the key risks that you see to maintaining this risk? Is there any concentration risk or Is the profile any riskier than it was before from any factors that you see? You've discussed the positives, but how is it all offset? Now, we say that mix, but we're going to go into Q4, where the mix is going to go, you know, if you look at all of our sports charter business, it really starts mid-November through March. That's full charter, right? So you're going to see the ECMI percent drop, and you're going to see revenue per block hour drop. operated going up because a lot of the sports charter stuff is chartered, not ACMI. And that's the seasonality of kind of the business. Q3 is always going to be very, very heavy ACMI. And then the other three quarters will have a bit more normalized charterments, and that's kind of the seasonality. I think concentration risk, you know, we talked about we have our eight aircrafts that are operating with the government exclusively. We are now going into sports charter season, which we are, I think, really well positioned. We're going to have three VIP aircrafts. which we think is a differentiated product in the marketplace. All of which, you know, I think we've got great contracts with. We've discussed our work with Sunrise. We've discussed our work with some of the other Caribbean airlines that we work with. And really... You know, I've said this over again, where we treat each aircraft almost like a restaurant or a store and focus really on the unit economics of each aircraft and how do you maximize utilization of each of those aircraft. And so I think there's a pretty broad market segment that's and untapped as far as we've gone. As I said this summer, every single hour of every day was sold. So when the plane went ahead of maintenance events, it was pretty difficult to recover. And I think that capacity is still there on the passenger side. And I think there's lots of opportunities out there for us to go still so. Great. But just on the liquidity front, $7.1 million, you are cash-centered at this point, and you're at least qualitatively talking about a much stronger fourth quarter. How do you see the cash balance shaking out across the year? What's the comfort level? Has that changed since prior conversations? Yeah, you look at our statement of cash flows, cash flow for operations are positive. We made significant investments in deposits and capex in Q3. You know, as I said, we had some heavy maintenance events. We had five aircraft coming. So we expected to have that come down. We collected significant cash after the quarter ended. which is what you would expect with the seasonality of our business as we go into the sports season, as we start collecting our deposits and payments for the fall season. So we expect that cash in December to build. Great. That's all I have for now. Thanks. Chris, congrats on the acquisition. It's good stuff. Thank you. There are no further questions at this time. I will now turn the call back over to Ryan for the closing remarks. And again, I just want to thank everyone for dialing in. We appreciate, you know, many of you have been with us for over five years since we went public for over five years, operating with revenues for over four and a half. And it's an interesting challenge as we've grown this company to where it's at. And I just want to say thank you for your time and your attention. And we're very excited about what the next quarter and the next year is going to bring. Thank you, ladies and gentlemen. The conference has now ended. Thank you all for joining me.