Delta's Q4 FY2025 earnings call showcased a strong close to a record year, with the company delivering record revenue, robust free cash flow, and a differentiated position in the industry. Management expressed an optimistic outlook for 2026, citing accelerating demand and revenue growth, while announcing a significant Boeing 787 order and planning for continued margin expansion. Record FY2025 revenue of $58.3B, EPS of $5.82, and operating margin of 10%, marking a strong centennial year.
Buzzberg readRecord cash sales and strong start to 2026Delta's Q4 FY2025 earnings call showcased a strong close to a record year, with the company delivering record revenue, robust free cash flow, and a differentiated position in the industry. Management expressed an optimistic outlook for 2026, citing accelerating demand and revenue growth, while announcing a significant Boeing 787 order and planning for continued margin expansion. Record FY2025 revenue of $58.3B, EPS of $5.82, and operating margin of 10%, marking a strong centennial year.Read full analysisCollapse analysis
Delta's Q4 FY2025 earnings call showcased a strong close to a record year, with the company delivering record revenue, robust free cash flow, and a differentiated position in the industry. Management expressed an optimistic outlook for 2026, citing accelerating demand and revenue growth, while announcing a significant Boeing 787 order and planning for continued margin expansion. Record FY2025 revenue of $58.3B, EPS of $5.82, and operating margin of 10%, marking a strong centennial year.
Management is bullish on 2026, expecting 5-7% revenue growth in Q1 and 20% EPS growth for the full year, citing record bookings and accelerating corporate and consumer demand.
The company announced an order for 30 Boeing 787-10 aircraft, with options for 30 more, to renew its widebody fleet from 2031.
Delta highlighted the strength of its diversified revenue streams, including a record $8.2B remuneration from American Express, and growth in MRO and loyalty revenue.
Revenue$16.003B
reported
EPS$1.55
reported
Gross margin22.36%
reported
Op margin9.17%
reported
What changed this quarter
01
Demand
Record cash sales and strong start to 2026
Management expresses strong optimism about 2026 demand trends, record bookings, and revenue acceleration, while acknowledging some caution about macro volatility.
02
Guidance
Revenue growth expected to outpace capacity in Q1
Guidance · revenue to $14.7B
03
Guidance
EPS growth target of 20% for 2026
Guidance · revenue to $14.7B
04
Loyalty
Amex remuneration growing high single digits in 2026
The company announced an order for 30 Boeing 787-10 aircraft, with options for 30 more, to renew its widebody fleet from 2031.
Demand & capex
Demand
Bookings & conversion
Record cash sales and strong start to 2026. Management expresses strong optimism about 2026 demand trends, record bookings, and revenue acceleration, while acknowledging some caution about macro volatility.
Capex
Investment and capacity
Delta plans 2026 CapEx of $5.5 billion, including around 50 aircraft deliveries and ongoing investment in customer experience and technology. They announced an order for 30 Boeing 787-10s with options for 30 more, starting delivery in 2031, to enhance international network and fleet efficiency.
Tone · Confident
Management expresses strong optimism about 2026 demand trends, record bookings, and revenue acceleration, while acknowledging some caution about macro volatility.
Supply-chain alpha
A1
Delta has not yet seen main cabin ticket pricing move, but expects it to in 2026, representing an unexploited upside lever.
“We have not really seen main cabin move yet, so I think when you think about the higher end of our guide that would definitely be the main cabin starting to move, and I do think that it will move in 26 we just have not seen it yet.”
The 787-10 has been selected for its 'category killer' unit cost economics, representing a step-change in margin improvement over the Boeing 767s it replaces.
Delta expects MRO revenue to more than triple in the near term, from around $1 billion to $3 billion, with margins expanding to mid-teens.
“I think this is a business that we're excited to see across the billion dollar mark. And one that we continue to hold out and see it as a two, then getting to two, then getting to $3 billion of top line, that it can continue to grow. This…”
Delta's commentary confirms continued strong momentum in the Delta-Amex co-brand partnership, with high double-digit spend growth and robust new card acquisitions supporting Amex's network volumes.
“For the year, American Express remuneration grew 11% to $8.2 billion, driven by a fourth consecutive year of more than one million new card acquisitions and double-digit year-over-year co-brand spend growth in every quarter.”
… products, while cargo revenue increased 9%, and maintenance repair and overhaul revenue grew 25%. Total loyalty revenue improved 6%, and travel products continued to grow at double-digit rates. Our loyalty ecosystem remains a powerful engine of enterprise value, anchored by the strength of the SkyMiles program, a highly engaged member base, and our exclusive co-brand partnership with American Express. For the year, American Express remuneration grew 11% to $8.2 billion, driven by a fourth consecutive year of more than one million new card acquisitions and double-digit year-over-year co-brand spend growth in every quarter. This impressive performance underscores the power of the Delta brand and the success of our integrated commercial and customer strategy. Roughly one-third of ACTA SkyMiles members carry a co-brand card, and we see significant runway ahead as member engagement and penetration continues to rise. In 2026, we expect high single digit growth and co-brand remuneration, keeping us on track to achieve our $10 billion goal within the next few years. For the December quarter, Delta delivered a record revenue of $14.6 billion, 1.2% higher than in 2024, including about …
KAL
Private company
Partners
Delta sees increased Pacific connectivity from the Korean Air-Asiana merger, enhancing the competitiveness of the Incheon hub for its joint venture network.
“We've seen really good progression as Korean and Asiana work through their merger. The Incheon hub has been a fantastic hub to connect through.”
Hey, good morning, everyone. And Glenn, another congratulations on such an amazing career. It's really been a pleasure getting to work with you. And I hope you're looking forward to a lot more time in Italy in 2026. And maybe just, you know, speaking of international destinations, maybe a shorter term one, but Could you walk us through how you're thinking through sequential trends across each of your geographies in 1Q, you know, on a RASM basis? It all sounded positive in the prepared remarks. So just, I guess, any bright spots that stand out in particular?
Management answer
Joe EspositoExecutive Vice President & Chief Commercial Officer
… in in international and domestic are both really positive as we go into 2026 that we've seen the most sequential trends international from third quarter to fourth quarter. We had identified. More of a blip for the summer of 2025 and that played out the way we wanted to as as improving those trends as we went along. I think that's going to continue, you know, especially with as we go into 2026. We look at the transatlantic. Inventive capacity looks really good as we go forward in the summer. And looking forward, our partners are well positioned. I think we're expanding conservatively, but from a position of strength. And the traveling public is very excited about new destinations. When you look at where we've added this year into, and we've put that out to our loyalty program for a vote. So we're doing some kind of unique things and some exciting things. On the Pacific side, you know, our cornerstone with the Pacific is Korean Air, and they're a great partner. And we've built our foundation around the Incheon hub and also now expanding a little bit beyond into the biggest economies. So we've seen really good progression as Korean and Asiana work through their merger. The Incheon hub has been a fantastic hub to connect through. So there's only greater upside into pushing our traffic through Incheon And also making sure we have access to some of the biggest economies out there like Taipei, Hong Kong, and there will be a few others later in the next couple of years. And, you know, finally, Latin America is kind of two different entities. You've got the short haul, which acts very much like domestic short haul in the Caribbean, Central America. And that moves with domestic and is much more of a leisure operation for us. And we've had a very good Christmas. We've had really good strength in the Christmas bookings, good strength in spring break. And so some of what you're seeing in close-in bookings and cash sales really goes to the leisure side of spring break. You've got March, April, and Easter, and that also includes the short-haul Latin America. And then with our partner, LATAM, in South America, further integration into their hubs, they just opened up. You know, the Lima Airport is fairly new in how we move traffic efficiently through South America, and they've got fantastic hubs that they continue to develop, which is only a positive for us for the future.
The successful early adoption of the Delta-Uber partnership highlights significant member engagement and a new revenue channel for Delta, while also driving user engagement for Uber.
“The response to our Delta Uber partnership has been tremendous, with over 1.5 million SkyMiles members linking their accounts since launch, demonstrating the power of our loyalty strategy.”
Okay. And then a follow-up for Glenn, and this is actually a retirement-related question, and look, maybe you don't think in these terms, but Is there anything about the industry's evolution or Delta's evolution that maybe you, let's see, regret that you won't be at the table for? I mean, you obviously have a strong view on what Delta can accomplish going forward, but is there anything in particular that you're just personally disappointed to be missing? Thanks in advance.
I think there's a couple things I'll mention here. One is the continued evolution of our partnerships. And I think these are the strongest partnerships in the world with the strongest airlines in the world. So whether it's LATAM or whether it's Korean, these are very, very deep relationships, which I think are still in their infancy. And I think one of the things that's underappreciated is also, you know, we have equity stakes in all of them. And so we are at the table with them. And I do think that, you know, one of my counsels to Julie is that continue to highlight that because those are winning carriers and their stocks are appreciating well as well. And I think that's undervalued in our valuation. So I think that the international continued expansion of international, the new fleets, like if you're an airline nerd like I am, who doesn't like to see how the new fleets perform once they get here? Another thing I think is undervalued at Delta is the fact that we've made these generational builds that can really sustain growth for Delta over the next 15 to 20 years without incremental CapEx into facilities. So, you know, seeing those, seeing the Salt Lake City facility that we've just built get used over the next 10 to 15 years, there's so much I'm going to miss. There's so much I'm not going to miss, too. You know, controlling your own calendar is key at this age, as you realize you don't have infinity left in the world. So, So there's so many exciting things at Delta, and the team is really an extraordinary team, and the people at Delta have just been, you know, amazing to get to know over the past 20 years. So there's tons I'll miss. Thanks for that interesting question. Thank you so much.
While Delta continues to take Airbus widebodies (A350/A330neo), the new 787 order diversifies its future fleet and signals a split of future widebody orders between the two OEMs, slightly diluting Airbus's share of Delta's long-haul growth.
Understood. That's helpful. And maybe also if you guys could unpack the previous response on the 787s. Again, what was the rationale for that aircraft versus a 350 or maybe some others? And also, it almost sounds like you're planning to deploy them – differently than your existing white bodies or on very specific routes. So any clarity there will be helpful, even though I know that's some way off.
Management answer
Joe EspositoExecutive Vice President & Chief Commercial Officer
Yeah, thanks. Yeah, I think it's a natural evolution in our fleet. When you think about, I think our priorities up into this point was to get critical mass into the 350 and the 339. And we're well on our way to do that. And that drives great efficiency and that efficiency is needed in the wide body category. When we look out of the future, the 787 is a great airplane. financially great airplane. We're able to do a lot with the with the 10 version of this on the on the premium seating. It's a great cargo airplane. And it also drives diversification within our fleet, both not only only on the airframe, but on the engine side. So I so. So it's a natural fit, especially when it starts to replace the 767-400, which it's slated to do. It's designed for growth and replacement, and we think about swapping a 764 or 763. to a 787-10, it's a very powerful change in a step function improvement in margin.
The 787-10 has been selected for its 'category killer' unit cost economics, representing a step-change in margin improvement over the Boeing 767s it replaces. — The 787-10's superior efficiency could support Delta's long-term cost trajectory, while Boeing benefits from a high-profile endorsement of the airframe.
… card industry. Co-brand cardholders are among our most valuable and satisfied customers, traveling more often and spending more on Delta. Building on our strong domestic foundation and loyalty success, we're expanding Delta's international footprint in 2026 and beyond, while continuing to grow our margins. To support profitable growth, for leveraging best-in-class joint ventures and investing in the renewal and expansion of our wide-body fleet. This morning, we announced an order for 30 Boeing 787-10s with options for 30 more, separate delivery starting in 2031. These aircraft will enhance our international network, deliver superior economics, and extend our long-haul capabilities. As we look ahead to our next century of flight, my optimism for Delta's future has never been brighter. Much of our strong positioning today is thanks to the leadership and the vision of Glenn Hauenstein. Glenn has not only transformed our commercial strategy, but he has been an incredible co-pilot throughout our journey to make Delta the world's best and most profitable airline. His unwavering customer focus and strategic discipline have built a world-class global network firmly establishing Delta …
Delta observes competitors like Southwest pivoting toward Delta's premium strategy, validating Delta's model and potentially crowding the premium space.
Hey, good morning and Glenn, all the best for the future. Just kind of looking at the bigger picture around the commentary that you guys have provided today, it sounds like Delta revenue is accelerating, but the main cabin isn't. And I'm just wondering if that, you know, more plainly just means that this is about, you know, Delta and the strategies you guys put into place kind of working for Delta and maybe the industry outlook is a bit more mixed. And if that's right, you know, what does that mean for like kind of competitive capacity as you're looking out at the market for 2026 particularly in relation to your hubs and where capacity is shifting in the marketplace. Is it right to think…
Thanks. Well, I think that's what 25 was a proof point on, is that the industry, if you look at it, was very challenged in 25. Dave Kuntz, delta was at the very top of the industry, and I believe when everybody reports, this is my my hypothesis that we will never have been in our past a higher percentage of the industry's total profits than we were in 25. Dave Kuntz, And so, as you think about what's working here at delta the diversification of the revenue streams, the continued focus on premium products and services. Dave Kuntz, I think, yes, we have charted a different path and. You know, we don't control what decisions are made at other airlines, but I do think that those who cater to more commoditized, you've seen them trying to change, right? You've seen Southwest going in a very different direction, talking about clubs, talking about international. So I do think we have charted our own path, and I do think there's a lot of upside. The tremendous upside for us, when the industry finally does reckon with the fact that the commodities are not making any money, And they either have to be removed or they have to be upgraded.
Hey, thanks. Good morning. And congrats, Glenn. Obviously, we haven't got to spend a lot of time together, but your reputation certainly transcends. So congrats and enjoy the next leg of the journey here. I guess I wanted to ask a question about premium versus main cabin. Obviously, the revenue growth spread has been very wide here in the back half of 25. So as we think about sort of a normalization and maybe improvement as we go through 26. What can that sort of spread look like? Obviously, capacities can be weighted towards premium, but what do you think normal looks like at that relationship?
Well, the margin spreads, as you indicated, have never been greater. And as you know, the bottom end of the industry and the commodity side of the business has been struggling greatly. And so I do think there's, you know, we saw consolidation earlier in the week where, you know, waiting to see what happens with the spirit here as it continues to try and restructure. But that sector has been unable to grow here for the last several years. And when that sector is not growing, it can't contain its chasm. Its chasm goes up significantly every quarter, more than ours. And so that's become a real challenge for that sector in the industry. I don't, you know, Scott Kirby would say it's only math, but, you know, I think that challenge continues to haunt that side of the industry and it has to rebalance itself at some point. And the only way it can do that is to get their revenue bases up because their costs aren't going down. And so it's taken longer than I would have thought, to be quite honest, but I believe it's still to come. And that is pure upside to us.
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