Southwest Airlines (LUV) Q4 2025 earnings summary

Executive summary

• Achieved record operating revenues of $7.4B in Q4 and $28.1B for the full year, with full-year adjusted EBIT of $574M, exceeding prior guidance.

• Full year 2025 net income was $441M ($0.79 EPS) and adjusted net income was $512M ($0.93 adjusted EPS).

• Implemented major business model changes, including bag fees, basic economy, assigned and extra legroom seating, and loyalty program optimization.

• Returned $2.9B to shareholders via dividends and share repurchases, representing 14% of shares outstanding.

• Recognized as the top US airline by The Wall Street Journal for 2025, with industry-leading operational reliability.

Financial highlights

• Q4 EBIT reached $386M; full-year adjusted EBIT was $574M, both above guidance.

• Q4 operating revenue was $7.4B, up 1.7% year-over-year; full-year revenue hit $28.1B, up 2.1%.

• Q4 CASM-ex rose 0.8% year-over-year; full-year CASM-X was 12.32 cents, up 3.1%.

• Repurchased $2.6B in shares and paid $399M in dividends in 2025.

• Ended 2025 with $3.2B in cash and a leverage ratio of 2.4x.

Outlook and guidance

• 2026 adjusted EPS guided at least $4.00, up from $0.93 in 2025; Q1 2026 adjusted EPS at least $0.45, versus a loss of $0.13 in Q1 2025.

• Q1 2026 RASM expected to increase at least 9.5% year-over-year; capacity to grow 1–2% despite a smaller fleet.

• Full-year net capital spending projected at $3–3.5B; 66 new Boeing 737-8 deliveries and 60 retirements planned.