Southwest Airlines Company · NYSE:LUV
Southwest Airlines — Q2 2026 Earnings Presentation
17 slides from Southwest Airlines's earnings presentation, Jul 23, 2026
Slide 1: Southwest Airlines Reports Second Quarter 2026 Results
Southwest Airlines Co. Investor Relations investor.relations@wnco.com SOUTHWEST AIRLINES REPORTS SECOND QUARTER 2026 RESULTS; EARNINGS POWER ON FULL DISPLAY Strong year-over-year margin expansion despite fuel expense up nearly $900 million All-time record operating and managed business revenues Reco
Slide 2: Highlights
Highlights: • Net income of $233 million, or $0.47 diluted EPS, adjusted net income¹ of $465 million, or $0.94 adjusted EPS¹ • Record operating revenues of $8.4 billion, up 16.4%, the highest in Company history; adjusted operating revenues¹ of $8.7 billion, up 20.3% • Unit revenues increased 16.2%;
Slide 3: Guidance and Outlook
Guidance and Outlook: The following tables provide guidance for third quarter and full-year 2026. The Company's guidance is based on the forward fuel curve as of July 17, 2026 and assumes the current fare environment and demand trends remain broadly intact. The Company is guiding adjusted EPS1,2 for
Slide 4: Revenue Results and Outlook
Revenue Results and Outlook: • Record second quarter 2026 operating revenues of $8.4 billion, up 16.4 percent year-over-year; adjusted operating revenues¹ of $8.7 billion, a 20.3 percent increase year-over-year • Second quarter 2026 RASM increased 16.2 percent year-over-year, and adjusted RASM¹ incr
Slide 5: Capacity, Fleet, and Capital Spending
Capacity, Fleet, and Capital Spending: • Second quarter 2026 capacity increased 0.2 percent year-over-year • Received 13 Boeing 737-8 aircraft and retired 10 aircraft in second quarter 2026, ending the quarter with 803 aircraft (retirements included the sale of four Boeing 737-800 aircraft and one B
Slide 6: Conference Call
Conference Call: Southwest will discuss its second quarter 2026 results on a conference call at 10:00 a.m. Eastern Time on July 23, 2026. To listen to a live broadcast of the conference call, please go to https://www.southwestairlinesinvestorrelations.com. Footnotes 1See Note Regarding Use of Non-GA
Slide 7: Risk Factors and Contacts
efficiently maintain its operations and execute the Company's plans, strategies, and initiatives; (xiii) the cost and effects of the actions of activist shareholders; and (xiv) other factors, as described in the Company's filings with the Securities and Exchange Commission, including the detailed fa
Slide 8: Condensed Consolidated Statement of Income
Southwest Airlines Co. Condensed Consolidated Statement of Income (in millions, except per share amounts) (unaudited) Three months ended Six months ended June 30, June 30, Percent Percent 2026 2025 Change 2026 2025 Change OPERATING REVENUES: Passenger $ 7,745 $ 6,627 16.9 $ 14,337 $ 12,438 15.3 Frei
Slide 9: Reconciliation of Reported Amounts to Non-GAAP Financial Measures
Southwest Airlines Co. Reconciliation of Reported Amounts to Non-GAAP Financial Measures (excluding special items) (See Note Regarding Use of Non-GAAP Financial Measures) (in millions, except per share and per ASM amounts) (unaudited) Three months ended Six months ended June 30, Percent June 30, Per
Slide 10: Non-GAAP Financial Measures
Add: Impairment of long-lived assets — 8 — 8 Income before income taxes, excluding special items $ 606 $ 300 102.0 $ 892 $ 203 339.4 Provision for income taxes, as reported $ 73 $ 67 $ 132 $ 24 Add: Net income tax impact of fuel and special (d) items 68 3 69 26 Provision for income taxes, net, exclu
Slide 11: Non-GAAP Operating Metrics
Operating expenses per ASM, excluding Aircraft fuel and related taxes expense, special items, and profit sharing (cents) 12.45 ¢ 12.04 ¢ 3.4 12.76 ¢ 12.40 ¢ 2.9 (a) Represents a change in breakage revenue estimate related to non-expiring flight credits the Company issued to Passengers between July 2
Slide 12: Comparative Consolidated Operating Statistics
Southwest Airlines Co. Comparative Consolidated Operating Statistics (unaudited) Relevant comparative operating statistics for the three and six months ended June 30, 2026 and 2025 are included below. The Company provides these operating statistics because they are commonly used in the airline indus
Slide 13: Condensed Consolidated Balance Sheet
Southwest Airlines Co. Condensed Consolidated Balance Sheet (in millions) (unaudited) June 30, 2026 December 31, 2025 ASSETS Current assets: Cash and cash equivalents $ 3,791 $ 3,231 Accounts and other receivables 1,218 1,149 Inventories of parts and supplies, at cost 917 775 Prepaid expenses and ot
Slide 14: Condensed Consolidated Statement of Cash Flows
Southwest Airlines Co. Condensed Consolidated Statement of Cash Flows (in millions) (unaudited) Three months ended Six months ended June June 30, 30, 2026 2025 2026 2025 CASH FLOWS FROM OPERATING ACTIVITIES: Net income $ 233 $ 213 $ 460 $ 64 Adjustments to reconcile net income to net cash provided b
Slide 15: Note Regarding Use of Non-GAAP Financial Measures
NOTE REGARDING USE OF NON-GAAP FINANCIAL MEASURES The Company's unaudited Condensed Consolidated Financial Statements are prepared in accordance with GAAP. These GAAP financial statements include (i) unrealized noncash reclassifications, as a result of accounting requirements and elections previousl
Slide 16: Non-GAAP Return on Invested Capital
Southwest Airlines Co. Non-GAAP Return on Invested Capital (ROIC) (in millions) (unaudited) Twelve months ended Twelve months ended June 30, 2026 June 30, 2025 Operating income, as reported $ 1,041 $ 318 Breakage revenue adjustment 285 116 Severance and related costs 15 62 Voluntary Employee program
Slide 17: Gross Leverage
The Company has also provided gross leverage, which is calculated as adjusted debt divided by trailing twelve month adjusted EBITDAR. Leverage, adjusted debt, and adjusted EBITDAR are non-GAAP measures of financial performance. Management believes these supplemental measures can provide a more accur
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