SKYW earnings analysis
What we found in SKYW's 10-Q: the parts that mattered, the offsets in the same document, and what the company said about what comes next.
Our reading of the filing · Free to read, no account needed
SkyWest delivered Q2 2026 revenue of $1.103 billion, up 6.5% year over year and above Q1's $1.013 billion, but diluted EPS fell 12.7% year over year to $2.54 as operating expenses increased 9.5%. Operating margin improved sequentially to 14.1% from 12.2% in Q1 but remained below 16.4% a year ago, with higher fuel, labor and pilot-training costs outweighing robust prorate and charter growth. Six-month free cash flow was approximately $183.4 million, though liquidity declined $105.9 million from year-end to $601.0 million as the company funded $149.9 million in repurchases and fleet investment.
The parts that mattered.
Pulled out of the filing itself, with the figures the company reported.
- Revenue grew 6.5%, led by prorate/charter
- Q2 operating revenue rose $67.5 million, or 6.5% year over year, to $1.103 billion, and increased from $1.013 billion in Q1 2026. Growth was led by $55.4 million, or 38.1%, growth in prorate and charter revenue to $200.8 million.
- Sequential margin recovery, year-over-year pressure
- Operating income was $155.8 million, producing a 14.1% operating margin, up from 12.2% in Q1 2026 but down from 16.4% in Q2 2025. Diluted EPS of $2.54 increased from $2.50 sequentially but fell from $2.91 a year ago.
- Operating cash flow remained strong
- Six-month operating cash flow increased $8.3 million to $436.3 million. Less $253.0 million of cash aircraft, equipment and deposit spending, six-month free cash flow was approximately $183.4 million, equal to 8.7% of $2.116 billion revenue.
- Liquidity supports fleet investment
- Liquidity remained substantial at $601.0 million of cash and marketable securities and $79.0 million available under the credit line. Total debt declined $97.4 million from year-end to $2.311 billion.
- Leasing profit offset operating weakness
- SkyWest Leasing segment profit increased $7.8 million, or 10.7%, to $80.7 million, helped by new E175 aircraft economics, lower maintenance expense and lower interest expense.
- Capital returns accelerated
- The company repurchased 1,615,756 shares for $149.9 million in the first six months, and the Board added $250 million to the authorization in July 2026, leaving approximately $313 million authorized after the increase.
And the other side of it.
The offsets in the same document — the things a summary that only listed the good news would have left out.
- Cost inflation compressed year-over-year margin
- Expenses grew $81.8 million, or 9.5%, faster than revenue growth of 6.5%, cutting operating income $14.3 million, or 8.4%, to $155.8 million. Fuel expense more than doubled, rising $33.1 million, or 120.6%, as fuel cost per gallon increased from $2.88 to $4.45.
- Core operating segment profit declined sharply
- SkyWest Airlines and SWC segment profit fell $32.1 million, or 35.5%, to $58.2 million despite 8.2% revenue growth. Management attributes labor pressure in part to higher pilot attrition and related training costs; salaries, wages and benefits rose $36.6 million, or 9.4%.
- Working-capital deficit widened
- Working capital weakened to negative $776.2 million at June 30, 2026 from negative $576.4 million at December 31, 2025. Receivables rose $29.2 million and inventories rose $25.1 million, while accounts payable and accrued liabilities increased $119.6 million.
- Large fleet commitments require debt financing
- The company has $2.164 billion of firm aircraft and spare-engine commitments and $2.311 billion of debt principal maturities. It intends to finance its 67 firm E175 purchase commitments with approximately 75% to 85% debt, increasing execution and financing sensitivity.
- Prorate growth increases fuel-price exposure
- No new or revised standalone risk factors were added in Item 1A; it incorporates the 2025 Form 10-K risks. However, fuel exposure is rising with prorate and charter operations at 18.9% of Q2 flying-agreement revenue; a hypothetical 25% fuel-price increase would add $15.1 million in quarterly fuel expense.
- Passenger utilization softened
- Load factor declined 2.2 points year over year to 80.6%, while passengers carried fell 1.3% to 11.9 million despite a 5.4% increase in block hours. This indicates weaker passenger utilization alongside expanded production.
What they reported.
What the company itself reported, taken out of the document.
- Earnings per share
- $2.54
- Operating margin
- 14.1%
- Segment
- SkyWest Airlines and SWC: revenue $940.7 million, up $71.3 million or 8.2% year over year; segment profit $58.2 million, down $32.1 million or 35.5%.
- Segment
- SkyWest Leasing: revenue $162.1 million, down $3.8 million or 2.3% year over year; segment profit $80.7 million, up $7.8 million or 10.7%.
What they said about what is next.
No quantitative revenue or EPS guidance was provided in the 10-Q. Management expects seven United E175 deliveries in 2026, 11 American E175 deliveries during 2026-2027, 16 Delta E175 deliveries during 2027-2028, and approximately 50 CRJ200-to-CRJ450 conversions by 2028; timing is stated to be subject to change.
The filing reads about the same as the one before it.
What came before.
- 10-Q · April 24, 2026
- SkyWest reported Q1 2026 revenue of $1,013,177,000 and diluted EPS of $2.50, up versus Q1 2025 revenue of $948,455,000 and diluted EPS of $2.42. Operating income declined to $123,686,000 from $139,377,000 a year earlier…
- 10-K · February 17, 2026
- SkyWest positions itself as the largest U.S. regional airline, operating 2,260 daily departures for major partners and a 637-aircraft fleet (487 in scheduled service or under contract) while growing flying activity…
- 10-Q · October 31, 2025
- SkyWest reported Q3 operating revenues of $1,050,029,000 (up $137,243,000 vs. Q3 2024) and diluted EPS of $2.81 (vs. $2.16 in Q3 2024), beating consensus. Operating income rose to $174,143,000 (operating margin ~16.6%)…
- 10-Q · July 25, 2025
- SkyWest beat Q2 consensus with operating revenues of $1,035,227 (in thousands) and diluted EPS of $2.91, driven by higher flying-agreements revenue and margin expansion. Operating income rose to $170,128 (in thousands)…
This is our reading of a public filing, not the filing. Read the original on SEC.gov · Educational only. Nothing here is investment advice.
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