Alaska Air Group (ALK) Q4 2025 earnings summary

Executive summary

• Achieved Q4 2025 adjusted EPS of $0.43 and full-year adjusted EPS of $2.44, both surpassing guidance, with GAAP net income of $21M for Q4 and $100M for FY25; strong execution despite macro headwinds and integration challenges.

• Completed major integration milestones post-merger with Hawaiian, including a single operating certificate and unified loyalty program, positioning as the fourth global U.S. airline.

• Generated $1.2B in operating cash flow for FY25, supporting investments and capital returns.

• Announced the largest aircraft order in company history, expanding the order book to 261 aircraft, supporting long-term growth and international expansion.

• Premium, cargo, and loyalty revenues grew 7%, 22%, and 12% year-over-year in Q4, respectively.

Financial highlights

• Q4 2025 revenue was $3.6B, up 2.8–3% year-over-year on 2.2% capacity growth; full-year revenue reached $14.2B, up 3.3% year-over-year on 1.9% capacity growth.

• Q4 GAAP net income was $21M ($0.18 per share); adjusted net income was $50M ($0.43 per share).

• Full-year GAAP net income was $100M ($0.83 per share); adjusted net income was $293M ($2.44 per share).

• Adjusted pre-tax margin for FY25 was 2.8%.

• Repurchased $570M in stock, reducing diluted share count to 117M from 129M.

Outlook and guidance

• FY26 adjusted EPS guidance is $3.50–$6.50, reflecting margin expansion and harvesting of 2025 investments.

• Q1 FY26 adjusted EPS expected to be a loss of $1.50–$0.50, roughly flat year-over-year.

• Full-year capacity projected to grow 2–3%, with 100% of net growth from new long-haul international routes.

• Capital expenditures for 2026 projected at $1.4–$1.5B.

• Targeting $10 EPS by 2027, contingent on macro recovery and execution of $1B profit unlock.