Azul SA (AZUL) Q1 2025 Earnings Call Highlights: Strong Revenue Growth Amid Operational Challenges

GuruFocus News

Thu, May 15, 2025, 4:02 PM 3 min read

Release Date: May 14, 2025

For the implicit transcript of the net call, delight notation to the full net telephone transcript.

• Azul SA (NYSE:AZUL) reported a beardown archetypal 4th with gross of 5.4 cardinal reais and an EBITDA borderline of 26%.

• The institution has a unsocial competitory vantage with nary nonstop contention successful 82% of its routes, representing 77% of its revenue.

• Azul's loyalty programme has grown significantly, boasting 19 cardinal members and a grounds precocious successful monthly progressive users.

• The logistics business, Azulargo, reported a 20% year-over-year summation successful full revenue, with planetary gross up 62%.

• Azul SA (NYSE:AZUL) has improved operational efficiency, expanding craft utilization by astir 5% and productivity by 18.9% twelvemonth implicit year.

• Azul SA (NYSE:AZUL) faced important challenges owed to the devaluation of the section currency and irregular operations, impacting fiscal results.

• The institution had to suspend work to 14 cities successful effect to precocious substance costs and underperforming gross successful those markets.

• Azul SA (NYSE:AZUL) experienced disruptions from OEM challenges, including unscheduled motor removals, affecting ASK generation.

• The institution is dealing with accrued costs from irregular operations and lawsuit litigation, impacting fiscal performance.

• Azul SA (NYSE:AZUL) is facing challenges successful raising further equity superior owed to marketplace conditions and existing anti-dilution clauses.

• Warning! GuruFocus has detected 7 Warning Signs with AZUL.

Q: Could you speech astir however you're feeling astir EBITDA for the year, and however it should advancement fixed the improvements successful costs, operations, FX, and fuel? A: (CFO) Q1 was worse than expected, but we spot important improvements going forward. Fuel expenses were implicit 200 cardinal reais higher than expected, and FX added different 100 million. However, each these factors are improving, and we are seeing beardown demand. We judge we person capable clip to present beardown EBITDA procreation contempt Q1 impacts.

Q: Could you elaborate connected what you're seeing connected the request broadside betwixt firm and leisure? A: (Chief Revenue Officer) Demand has been strong, particularly successful Brazil. We haven't seen overmuch interaction from macroeconomic headlines. Our planetary web is high-end leisure-focused, which insulates america somewhat. Corporate question successful Brazil remains steady, and we are seeing maturation successful gross from planetary sales.

Q: Can you remark connected the $200 cardinal equity rise timeline and talks with existent investors? A: (CFO) We had an equity connection successful April arsenic portion of our statement with bondholders and OEMs. The marketplace timing wasn't favorable, but we successfully equitized a important magnitude of debt. We are evaluating the close clip to bring successful further equity capital, considering marketplace sound and restructuring understanding.