Copa S A : Earnings Release Financial Results (41bb5c29 6d88 4672 959a 4ba32138c9c2)

About this update from Copa Holdings, S.a.

Copa Holdings Reports First-Quarter Financial Results Panama City, Panama --- May 13, 2026. Copa Holdings1, S.A. (NYSE: CPA), today announced financial results for the first quarter of 2026 (1Q26), reflecting continued industry-leading profitability, disciplined execution, and the resilience of its business model amid a higher jet fuel price environment. Key highlights include: Net profit of US$212.5 million or US$5.16 per share, a 20.5% year - over - year increase in earnings per share. Operating margin of 24.6% and net margin of 20.2%, increases of 0.8 and 0.5 percentage points, respectively, compared to 1Q25. Capacity, measured in available seat miles (ASMs), grew by 14.0% year over year, and passenger traffic in RPMs increased by 15.0%. As a result, load factor increased by 0.8 percentage points to 87.2%. Revenue per available seat mile (RASM) of 11.8 cents, an increase of 2.7% compared to 1Q25. Operating cost per available seat mile (CASM) increased 1.6% year over year to 8.9 cents, while CASM excluding fuel (Ex-fuel CASM) decreased 1.0% to 5.8 cents. The Company ended the quarter with approximately US$1.5 billion in cash, short-term and long-term investments, representing 40% of the last-twelve-months' revenues. Adjusted Net Debt to EBITDA ratio ended 1Q26 at 0.7 times. The Company repurchased US$45 million worth of shares during the quarter under the Company's current US$200 million repurchase authorization. This represents approximately 1% of total outstanding shares as of the end of the quarter. In 1Q26, the Company took delivery of 2 Boeing 737-MAX 8 aircraft to end the quarter with a total fleet of 127 aircraft. Copa Airlines had an on-time performance for the quarter of 91.6% and a flight completion factor of 99.7%, once again positioning itself among the very best in the industry. Subsequent events On May 13, 2026, the Board of Directors of Copa Holdings ratified its second dividend payment for the year of US$1.71 per share, payable on June 15, 2026, to shareholders of record as of May 29, 2026. In April, at an event held in Panama, the Company publicly announced a Boeing 737 MAX aircraft order consisting of 40 firm orders and 20 purchase options. Deliveries are expected between 2030 and 2034, supporting long - term capacity growth while preserving flexibility within the Company's existing fleet plan. During the second quarter, the Company took delivery of two additional Boeing 737 MAX 8 aircraft, increasing its total fleet to 129 aircraft. ‌1 The terms "Copa Holdings" and the "Company" refer to the consolidated entity. The financial information presented in this release, unless otherwise indicated, is presented in accordance with International Financial Reporting Standards (IFRS). See the accompanying reconciliation of non-IFRS financial information to IFRS financial information included in the financial tables section of this earnings release. Unless otherwise stated, all comparisons with prior periods refer to the first quarter of 2025 (1Q25). Management's comments on 1Q26 results Copa Holdings reported another quarter of strong financial results and operational performance, reaffirming the strength and resilience of its business model, particularly as the industry entered a higher jet fuel price environment in March. In 1Q26, the Company once again delivered industry - leading profitability, with an operating margin of 24.6% and a net margin of 20.2%, while increasing earnings per share by 20.5% year over year. These results reflect a strong and resilient demand environment across the region, continued discipline in lowering unit costs, a passenger - friendly product, and its relentless focus on operational excellence. For the first quarter, operating revenues increased 17.0% year over year to US$1.1 billion, while capacity, measured in available seat miles (ASMs), grew 14.0%. Unit revenue (RASM) reached 11.8 cents, representing a 2.7% increase compared to 1Q25. Copa's revenue performance was driven by a 0.8 percentage - point increase in load factor to 87.2% and 1.6% higher yields, reflecting strong regional demand. Operating expenses during the quarter increased 15.8% year over year to US$793.8 million, primarily driven by capacity growth and higher jet fuel prices. Cost per available seat mile excluding fuel (CASM Ex-fuel) declined 1.0% year over year to 5.8 cents, reflecting the Company's continued cost discipline, while CASM increased 1.6% year over year to 8.9 cents in 1Q26 due to the jet fuel price increase. During the quarter, all-in jet fuel prices increased 7.5% year over year, from US$2.54 to US$2.73 per gallon. Although the average fuel price increase for the quarter was moderate, higher prices in the second half of March drove an approximately US$20 million year-over-year net impact on the Company's first-quarter results. Copa Holdings continues to maintain a strong liquidity and balance - sheet position, ending the quarter with US$1.5 billion in cash, short - term and long - term investments, representing 40% of the last-twelve-months' revenues and an adjusted net debt - to - EBITDA ratio of 0.7 times. The Company also ended the quarter with 45 unencumbered aircraft and 15 unencumbered spare engines, providing significant financial flexibility. The Company remains focused on leveraging its Hub of the Americas® to deliver the most comprehensive and convenient intra - Americas network. Continued strong demand trends, combined with structurally low unit costs, best - in-class operational performance, and a superior passenger-friendly product, position the Company well to navigate the current higher jet fuel price environment while sustaining industry-leading profitability and disciplined long - term growth. Outlook for 2026 The Company continues to see a robust demand environment across the region. In addition, Copa's effective business model and continued cost discipline positions the Company to sustain strong financial performance. For 2Q26, the Company expects an operating margin between 8% to 12% with capacity growth in ASMs of 16% year over year. These results are impacted by a projected year-over-year increase in the all-in jet fuel price per gallon in the range of 80% to 90%, for which the Company expects to recover ~50% via higher revenues. This partial pass-through is a result of the already advanced booking levels. The Company continues to expect full-year 2026 capacity growth, measured in ASMs, within the range of 11% to 13% year over year , a load factor of approximately 87% , and unit costs excluding fuel (Ex-Fuel CASM) of approximately 5.7 cents . Based on the current fuel curve and assuming that recent yield improvements are sustainable, the Company expects to recover a substantial portion of its increased fuel price expenses for the full year, reaching up to 100% by the end of the year. Conference Call and Webcast The Company will hold its financial results conference call tomorrow at 11am ET (10am local). Details follow: Date: May 14, 2026 Time: 11:00 AM US ET (10:00 AM Local Time) Join by phone: Click here Webcast (listen-only): ir.copaair.com/events-and-presentations About Copa Holdings Copa Holdings is a leading Latin American provider of passenger and cargo services. The Company, through its operating subsidiaries, provides service to countries in North, Central, and South America and the Caribbean. For more information, visit: copaair.com. Investor Relations [email protected] Cautionary statement regarding forward-looking statements This release includes "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. Such forward-looking statements are based on current plans, estimates, and expectations, and are not guarantees of future performance. They are based on management's expectations that involve several business risks and uncertainties, any of which could cause actual results to differ materially from those expressed in or implied by the forward-looking statements. The Company undertakes no obligation to update or revise any forward-looking statement. The risks and uncertainties relating to the forward-looking statements in this release are among those disclosed in Copa Holdings' filed disclosure documents and are, therefore, subject to change without prior notice. Consolidated Operating and Financial Statistics 1Q26 1Q25 % Change 4Q25 % Change Revenue Passengers Carried (000s) 4,096 3,512 16.6 % 3,935 4.1 % Revenue Passengers OnBoard (000s) 6,007 5,208 15.3 % 5,834 3.0 % RPMs (millions) 7,755 6,743 15.0 % 7,359 5.4 % ASMs (millions) 8,892 7,801 14.0 % 8,513 4.5 % Load Factor 87.2 % 86.4 % 0.8 p.p 86.4 % 0.8 p.p Yield (US$ Cents) 12.9 12.7 1.6 % 12.4 4.3 % PRASM (US$ Cents) 11.3 11.0 2.6 % 10.7 5.2 % RASM (US$ Cents) 11.8 11.5 2.7 % 11.3 4.6 % CASM (US$ Cents) 8.9 8.8 1.6 % 8.8 0.9 % CASM Excl. Fuel (US$ Cents) 5.8 5.8 (1.0)% 5.9 (2.9)% Fuel Gallons Consumed (millions) 102.7 91.0 12.9 % 98.6 4.1 % Avg. Price Per Fuel Gallon (US$) 2.73 2.54 7.5 % 2.50 9.2 % Average Length of Haul (miles) 1,893 1,920 (1.4)% 1,870 1.2 % Average Stage Length (miles) 1,260 1,260 - % 1,236 1.9 % Departures 43,033 37,829 13.8 % 41,942 2.6 % Block Hours 138,479 121,611 13.9 % 133,488 3.7 % Average Aircraft Utilization (hours) 12.2 12.1 1.3 % 11.9 3.1 % Consolidated statement of profit or loss (In US$ thousands) Unaudited Unaudited % Unaudited % 1Q26 1Q25 Change 4Q25 Change Operating Revenues Passenger revenue 1,004,173 859,025 16.9% 913,623 9.9% Cargo and mail revenue 29,760 25,694 15.8% 32,036 (7.1%) Other operating revenue 18,490 14,462 27.8% 17,228 7.3% Total Operating Revenue 1,052,423 899,181 17.0% 962,888 9.3% Operating Expenses Fuel 282,462 232,160 21.7% 249,177 13.4% Wages, salaries, benefits and other employees' expenses 137,670 117,517 17.1% 137,906 (0.2%) Passenger servicing 28,135 25,024 12.4% 27,523 2.2% Airport facilities and handling charges 79,184 65,657 20.6% 68,996 14.8% Sales and distribution 54,812 50,261 9.1% 55,604 (1.4%) Maintenance, materials and repairs 46,612 39,434 18.2% 46,075 1.2% Depreciation and amortization 100,726 86,284 16.7% 97,385 3.4% Flight operations 41,104 33,749 21.8% 38,413 7.0% Other operating and administrative expenses 23,083 35,274 (34.6%) 32,221 (28.4%) Total Operating Expense 793,787 685,360 15.8% 753,300 5.4% Operating Profit/(Loss) 258,636 213,822 21.0% 209,588 23.4% Operating Margin 24.6 % 23.8 % 0.8 p.p 21.8 % 2.8 p.p Non-operating Income (Expense): Finance cost (25,837) (23,233) 11.2% (27,478) (6.0%) Finance income 16,083 15,792 1.8% 16,545 (2.8%) Gain (loss) on foreign currency fluctuations 1,518 1,370 10.8% (6,021) nm Net change in fair value of derivatives (1,066) (2,434) (56.2%) 178 nm Other non-operating income (expense) (2,279) 1,428 nm (857) 166.0% Total Non-Operating Income/(Expense) (11,581) (7,077) 63.6% (17,633) (34.3%) Profit before taxes 247,054 206,744 19.5% 191,955 28.7% Income tax expense (34,588) (29,978) 15.4% (19,332) 78.9% Net Profit/(Loss) 212,467 176,766 20.2% 172,623 23.1% Net Margin 20.2 % 19.7 % 0.5 p.p 17.9 % 2.3 p.p EPS Basic Earnings Per Share (EPS) 5.16 4.28 20.5% 4.18 23.3% Shares used for calculation: Shares for calculation of Basic EPS (000s) 41,183 41,292 -0.3% 41,248 -0.2% Operating revenue Consolidated revenue for 1Q26 totaled US$1.1 billion, a 17.0% increase compared to 1Q25 on 14.0% capacity growth, measured in ASMs. Passenger revenue totaled US$1,004.2 million, an increase of 16.9% year-over-year, driven by a 15.0% increase in RPMs and a 1.6% increase in passenger yield. Cargo and mail revenue totaled US$29.8 million, an increase of 15.8%, due to higher cargo volumes. Other operating revenue totaled US$18.5 million, a 27.8% increase compared to 1Q25, mostly due to an increase in ConnectMiles revenues from non-air partners. Operating expenses Consolidated operating costs for 1Q26 totaled US$793.8 million, a 15.8% increase year-over-year, primarily due to capacity growth and higher fuel costs. Fuel totaled US$282.5 million, an increase of US$50.3 million or 21.7%, driven by a 12.9% increase in gallons consumed and a 7.5% higher average fuel price. Wages, salaries, benefits, and other employee expenses totaled US$137.7 million, up 17.1%, mostly reflecting additional operational staff to support capacity growth and performance-based variable compensation. Passenger servicing totaled US$28.1 million, an increase of 12.4%, driven by a 15.3% increase in onboard passengers. Airport facilities and handling charges totaled US$79.2 million, a 20.6% year-over-year increase, mainly driven by increased departures and higher fees in certain airports as well as the impact of currency exchange. Sales and distribution totaled US$54.8 million, a 9.1% increase mostly due to higher sales driven by capacity growth and higher yields, partially offset by higher penetration of both direct sales and lower-cost NDC travel agency channels. Maintenance, materials, and repairs totaled US$46.6 million, an 18.2% increase compared to 1Q25, mainly driven by an increase in flight hours, as well as the timing of events related to component repairs and materials consumption. Depreciation and amortization totaled US$100.7 million, a 16.7% year-over-year increase, due to higher amortization of aircraft and maintenance events. Flight operations totaled US$41.1 million, a 21.8% year-over-year increase, mainly driven by a 13.9% increase in block hours, route mix, and higher overflight rates in certain countries, including the impact of currency exchange rates. Other operating and administrative expenses totaled US$23.1 million, a 34.6% decrease compared to the same period in 2025, mainly due to realized gains from engine exchange transactions. Non-operating Income (Expense) Consolidated non-operating income (expense ) totaled US$(11.6) million in 1Q26. Finance cost totaled US$(25.8) million, comprised of US$17.9 million related to loan interest expenses, US$4.4 million in interest charges related to operating leases, and US$3.5 million related to the discount rate utilized for the calculation of leased aircraft charges. Finance income totaled US$16.1 million, related to proceeds from investments. Gain (loss) on foreign currency fluctuations totaled US$1.5 million, mainly driven by the appreciation of the Brazilian real. Net change in fair value of derivatives totaled US$(1.1) million, due to mark-to-market losses on hedge positions related to the Brazilian real. Other non-operating income (expense) totaled US$(2.3) million in 1Q26, due to an unrealized mark-to-market loss related to changes in the value of financial investments. Consolidated statement of financial position (In US$ thousands) March 2026 December 2025 ASSETS (Unaudited) (Audited) Cash and cash equivalents 374,223 382,554 Short-term investments 959,457 955,604 Total cash, cash equivalents and short-term investments 1,333,680 1,338,159 Accounts receivable, net 204,725 194,425 Accounts receivable from related parties 3,019 3,217 Expendable parts and supplies, net 152,247 148,127 Prepaid expenses 89,588 55,209 Prepaid income tax 4,836 6,172 Other current assets 29,291 32,769 483,706 439,919 TOTAL CURRENT ASSETS 1,817,386 1,778,078 Long-term investments 190,157 248,579 Long-term prepaid expenses 5,991 5,434 Property and equipment, net 4,461,063 4,120,055 Right of use assets 279,918 296,761 Intangible, net 104,477 104,071 Net defined benefit assets 3,157 3,220 Deferred tax assets 20,308 19,873 Other Non-Current Assets 12,060 6,952 TOTAL NON-CURRENT ASSETS 5,077,131 4,804,946 TOTAL ASSETS 6,894,517 6,583,024 LIABILITIES Loans and borrowings 218,254 172,885 Current portion of lease liability 66,901 66,132 Accounts payable 210,249 164,320 Accounts payable to related parties 1,409 1,333 Air traffic liability 750,546 737,616 Frequent flyer deferred revenue 160,478 155,584 Taxes Payable 81,360 62,931 Accrued expenses payable 39,970 66,016 Income tax payable 27,122 11,929 Other Current Liabilities 9,111 1,361 TOTAL CURRENT LIABILITIES 1,565,401 1,440,107 Loans and borrowings long-term 1,890,520 1,807,556 Lease Liability 241,670 258,383 Deferred tax Liabilities 72,940 59,217 Other long-term liabilities 250,445 242,337 TOTAL NON-CURRENT LIABILITIES 2,455,575 2,367,494 TOTAL LIABILITIES 4,020,976 3,807,600 EQUITY Class A - 34,257,137 issued and 29,861,335 outstanding 23,316 23,290 Class B - 10,938,125 7,466 7,466 Additional Paid-In Capital 221,661 220,190 Treasury Stock (345,147) (300,143) Retained Earnings 2,769,716 2,168,911 Net profit 212,467 671,648 Other comprehensive loss (15,939) (15,939) TOTAL EQUITY 2,873,541 2,775,423 TOTAL EQUITY LIABILITIES 6,894,517 6,583,024 Consolidated statement of cash flows For the three months ended (In US$ thousands) 2026 2025 (Unaudited) (Unaudited) Net cash flow from operating activities 359,710 205,477 Investing activities Net Acquisition of Investments 54,498 (340,191) Net cash flow related to advance payments on aircraft purchase contracts (245,026) (115,130) Acquisition of property and equipment (163,486) (56,216) Proceeds from sale of property and equipment 85 - Acquisition of intangible assets (5,559) (6,515) Cash flow used in investing activities (359,488) (518,052) Financing activities Proceeds from new borrowings 154,605 - Payments on loans and borrowings (31,543) (51,863) Payment of lease liability (16,033) (14,007) Share repurchase (45,004) (3,555) Dividends paid (70,578) (66,493) Cash flow used in financing activities (8,553) (135,918) Net (decrease) in cash and cash equivalents (8,331) (448,493) Cash and cash equivalents as of January 1 382,554 613,313 Cash and cash equivalents as of March 31, $ 374,223 $ 164,820 Short-term investments 959,457 751,525 Long-term investments 190,157 425,821 Total cash and cash equivalents and investments as of March 31, $ 1,523,837 $ 1,342,166 Copa Holdings, S. A. and Subsidiaries Non-IFRS Financial Measures Reconciliation This press release includes the following non-IFRS financial measures: Operating CASM Excluding Fuel and Adjusted Net Debt to EBITDA. This supplemental information is presented because we believe it is a useful indicator of our operating performance and for comparing our performance with other companies in the airline industry. These measures should not be considered in isolation and should be considered together with comparable IFRS measures, in particular operating profit and net profit. The following is a reconciliation of these non-IFRS financial measures to the comparable IFRS measures: Reconciliation of Operating Costs per ASM Excluding Fuel (CASM Excl. Fuel) 1Q26 1Q25 4Q25 Operating Costs per ASM as Reported (in US$ Cents) 8.9 8.8 8.8 Aircraft Fuel Cost per ASM (in US$ Cents) 3.2 3.0 2.9 Operating Costs per ASM excluding fuel (in US$ Cents) 5.8 5.8 5.9 Reconciliation of Adjusted Net Debt to EBITDA 1Q26 1Q25 4Q25 Net Debt $ 893,509 $ 592,934 $ 718,218 LTM Operating Profit/(Loss) (in US$ thousands) $ 863,774 $ 750,788 $ 818,960 LTM Depreciation and amortization (in US$ thousands) $ 379,579 $ 333,628 $ 365,137 LTM EBITDA (in US$ thousands) $ 1,243,353 $ 1,084,417 $ 1,184,096 Adjusted Net Debt to EBITDA 0.7 0.5 0.6 10

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