- Record Revenue and Earnings: Delta achieved $58.3 billion revenue, $5.82 EPS, and a 10% operating margin in Q4 2025, with free cash flow of $4.6 billion, the highest in its history.
- 2026 Guidance: Full-year EPS projected to grow 20% YoY to $6.50–$7.50, with Q1 operating margin of 4.5%–6% and revenue growth of 5%–7% in March.
- Fleet Expansion: Ordered 30 Boeing 787-10s (with 30 options) for 2031+ delivery, enhancing cargo efficiency and wide-body fleet diversity, with $3B+ MRO revenue growth goals.
- Revenue Diversification: Non-main cabin revenue mix expected to reach 65–70% by 2026, driven by premium cabins and loyalty programs, outperforming industry peers.
- Financial Targets and Shareholder Returns: Aims for one-turn leverage by 2026, with potential share repurchases, and maintains disciplined CapEx, focusing on margin-driven free cash flow ($3B–$4B in Q1 2026).
Financial Performance
The company's financial performance was robust, with a significant increase in revenue and profitability. The earnings per share (EPS) of $5.82 exceeded expectations, and the free cash flow generation was a highlight, driven by margins and operating cash flow. With a P/E Ratio of 8.99 and an EV/EBITDA of 6.44, the company's valuation metrics indicate a reasonable pricing.
Guidance for 2026
For 2026, Delta expects earnings per share growth of 20% year over year, with revenue growth of 5% to 7%. The company forecasts free cash flow of $3 billion to $4 billion and an operating margin of 4.5% to 6% in the first quarter. Full-year EPS is expected to be $6.50 to $7.50, representing 20% year-over-year growth. Analysts estimate next year's revenue growth at 5.6%, slightly below the company's guidance.
Fleet Expansion and Efficiency
Delta has ordered 30 Boeing 787-10s with options for 30 more, set for delivery starting in 2031. This move is expected to boost the diversity of Delta's wide-body order book and create cost-efficient scale. The company's focus on fleet expansion and efficiency is likely to drive future growth and profitability.
Operational Reliability and Recoverability
CEO Ed Bastian noted that while Delta has a strong foundation in operational reliability, there is still work to be done, particularly in terms of recovery from irregular operations. The company is working to improve its recoverability and maintain its leadership in reliability.
MRO Business
Delta's MRO business is expected to experience revenue growth and margin expansion, with a goal of reaching $3 billion in top-line revenue. The company's unique capability in MRO is seen as a strong growth opportunity.
Revenue Diversification
Delta's revenue diversification has led to a higher non-main cabin revenue mix, expected to continue growing, potentially reaching 65-70% in the coming years. The company's product segmentation strategy is producing results above internal projections and is expected to be a multibillion-dollar opportunity in the future.
Shareholder Returns
As Delta gets closer to its two-turn leverage goal, it will explore opportunities to increase shareholder returns, including potential share repurchases. The company's focus on financial discipline and cash flow generation is expected to drive shareholder value.