Wheels Up Experience Inc.
03/10/2026 | Press release | Distributed by Public on 03/10/2026 14:46
Annual Report for Fiscal Year Ending December 31, 2025 (Form 10-K)
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
The following management's discussion and analysis of our financial condition and results of operations ("MD&A") should be read in conjunction with our consolidated financial statements and the related notes to our consolidated financial statements included in Part II, Item 8"Financial Statements and Supplementary Data" of this Annual Report on Form 10-K for the year ended December 31, 2025 ("Annual Report"). This discussion contains forward-looking statements which involve risks and uncertainties. Our actual results could differ materially from those anticipated in these forward-looking statements. See our Cautionary Note Regarding Forward-Looking Statements, Part I, Item 1A"Risk Factors" and the risks described elsewhere in this Annual Report for more information. Unless the context otherwise requires, references in this MD&A section to "Wheels Up," "we," "us," "our," and "the Company" are intended to mean the business and operations of Wheels Up Experience Inc. and its consolidated subsidiaries for all periods.
This section generally discusses the results of our operations for the year ended December 31, 2025 compared to the year ended December 31, 2024. For a discussion of the year ended December 31, 2024 compared to the year ended December 31, 2023, see Part II, Item 7 "Management's Discussion and Analysis of Financial Condition and Results of Operations" included in our Annual Report on Form 10-K for the year ended December 31, 2024, which was filed with the U.S. Securities and Exchange Commission ("SEC") on March 11, 2025.
Overview of Our Business
Wheels Up is a leading provider of global on-demand private aviation. Wheels Up offers a complete private aviation solution with a large, diverse aircraft fleet, backed by an uncompromising commitment to safety and service. Our offering is delivered through a mix of charter solutions and our membership program that strategically utilize our controlled aircraft fleet and global network of safety-vetted charter operators to deliver a greater range of travel alternatives. In addition, our first-of-its-kind partnership with Delta Air Lines, Inc. ("Delta") provides our members and customers with a seamless offering across both private and premium commercial travel.
We offer numerous services to our members, customers and industry partners, and generate the majority of our revenue from member and customer flights, whether as part of Wheels Up's membership program or charter solutions. We generate Membership revenue from fees paid for Wheels Up's membership program, which provides members with access to our large, diverse controlled aircraft fleet. We also generate Other revenue from activities and services that complement our core private aviation business, including, but not limited to, group charter flights, cargo flights and special missions. Due to the nature of the services that we provide, we have determined that we operate as one reportable segment, which is private aviation services. Our flight operations have historically been favorably affected by increased utilization of our aircraft and generally higher levels of charter activity in the summer months and close in time to major holidays.
Wheels Up Signature Membership
In early September 2025, we announced the Wheels Up Signature Membership, an evolution enabled by our fleet modernization strategy that provides members access to our Bombardier Challenger 300 series and Embraer Phenom 300 series aircraft, in addition to our legacy aircraft fleet. Signature Membership is designed to give our members flexibility, certainty and premium benefits that make flying simpler and more rewarding. Signature Members pay a small monthly fee and purchase a fund as an advance to us for the cost of future flight services and other incidental costs, such as catering and ground transportation (a "Membership Fund," formerly referred to as a "Prepaid Block"). Signature Membership unlocks increased flexibility, allowing our members to choose between the Dynamic Access Plan, which provides discounted, dynamically-priced hourly rates, and the Fixed Access Plan, which provides predictability and consistency in hourly rates to private flyers. Each access plan includes guaranteed availability and recovery for flights in the Contiguous U.S., within 225 miles of the Canada and Mexico borders, and for select other international destinations, such as the Bahamas and Cabo San Lucas, Mexico. Our first-of-its-kind partnership with Delta gives our members the opportunity to earn Delta SkyMiles® Diamond Medallion® status based on their qualifying Wheels Up spend and use their Membership Fund to purchase discounted Delta flights and
receive other benefits with Delta, in each case subject to certain terms and conditions. We also continue to provide Custom Enterprise Solutions to larger corporate customers.
While we continue to offer and serve existing members under the membership program related to our legacy aircraft fleets in accordance with their terms, we have provided those existing members with a streamlined on-ramp to Signature Membership and access to our Bombardier Challenger 300 series and Embraer Phenom 300 series aircraft. In January 2026, we began limiting new membership sales to Signature Membership. As we continue to scale the Challenger and Phenom fleets, we expect an increasing percentage of Membership Fund purchases by new and existing members will be for the Wheels Up Signature Membership product versus legacy fleet-focused products.
Wheels Up Charter Solutions
For travelers looking to pay as they go, Wheels Up's charter solutions allow members and customers to book charter trips with no upfront costs. Wheels Up offers options to suit virtually every charter need through our international network of trusted partners. Our charter offerings customize the member and customer experience for short- and long-haul flights with bespoke private jet arrangements or group charters, including for commercial-size charters with large passenger groups of 15 or more, sports teams, global corporate events and tour operations. Wheels Up's charter solutions complement Wheels Up's membership program and provide a leading solution for members and customers wishing to fly globally through attractive market-based pricing and personalized alternatives.
Review of 2025 Achievements
As described below, we made significant progress in 2025 to evolve our membership program, expand our charter offerings, advance our fleet modernization strategy, enhance our partnership with Delta and implement efficiency, productivity and overhead cost reduction actions.
Signature Membership Launch
In early September 2025, we launched the Wheels Up Signature Membership that provides our members access to our Bombardier Challenger 300 series and Embraer Phenom 300 series aircraft, in addition to our legacy aircraft fleet. This latest membership program is a direct result of the scale we have built and expect to continue building through execution of our fleet modernization strategy. In the fourth quarter of 2025, approximately 44% of total Membership Funds sold during the quarter were for our Signature Membership, with approximately 25% of those sales from new customers. Details about our Signature Membership are included under the paragraph that begins with "Wheels Up Signature Membership" above.
Executing Our Fleet Modernization Strategy
In October 2024, we announced our current fleet modernization strategy, which we expect will result in the transition from the operation of four legacy private jet models - Hawker 400XP and Cessna Citation CJ3, X and Excel/XLS aircraft - to two different private jet models - Bombardier Challenger 300 series and Embraer Phenom 300 series aircraft, while operating a smaller fleet of King Air 350i turboprop aircraft. We have made substantial progress to advance our fleet transformation, including:
•in November 2024, we acquired 17 Embraer Phenom 300 series aircraft from a third-party operator, which resulted in the immediate introduction of that aircraft type into our controlled fleet;
•in February 2025, we sold our owned Cessna Citation X aircraft to an unrelated third-party, and entered into leases for a portion of the aircraft sold and amended existing leases with the buyer;
•in April 2025, we introduced our first Bombardier Challenger 300 series aircraft into our controlled fleet;
•in June 2025, we retired our legacy Cessna Citation CJ3 fleet from revenue service and in the fourth quarter of 2025, returned the last leased Citation CJ3 to its lessor;
•in September 2025, we sold seven of our owned Hawker 400XP aircraft to an unrelated third-party and entered into short-term leases for a portion of the aircraft sold; and
•in November 2025, we retired our Cessna Citation Excel and XLS fleet from revenue service and sold our owned aircraft of those models to an unrelated third-party buyer.
In addition, in December 2025, we closed a sale-leaseback transaction with an institutional capital provider for three Bombardier Challenger 300 series and seven Embraer Phenom 300 series premium jets. The transaction resulted in long-term operating leases for the 10 premium jets, a gain of $23.8 million recorded within Gain on sale of aircraft held for sale during the three months ended December 31, 2025 and the funding of approximately $30 million of cash net proceeds, after related debt repayments, to our balance sheet. The debt principal repayments of approximately $65 million in the aggregate under our Revolving Equipment Notes Facility (as defined below) upon closing of the transaction became available to be reborrowed in the future to finance aircraft acquisitions, subject to certain terms and conditions.
As of December 31, 2025, approximately 40% of our controlled jet fleet consisted of Bombardier Challenger 300 series and Embraer Phenom 300 series premium jets. We expect to substantially complete our current fleet modernization strategy by the end of 2026, which is ahead of our original mid-2027 estimate.
Update on Efficiency, Productivity and Cost Reduction Initiatives
We first announced in August 2025 that we were in the process of implementing initiatives that are expected to drive approximately $50 million in annual cash cost savings following implementation through the efficiency, productivity and overhead cost reduction actions associated with our fleet modernization plan and other actions. In November 2025, we increased our estimate of the annual cash cost savings from $50 million to $70 million due to additional savings measures identified. These actions are ongoing and are expected to continue through the second quarter of 2026. We anticipate that we will realize a portion of the expected savings on a rolling basis as actions, including those described below, are taken, with the full impact of the anticipated cost savings expected to be reflected in our financial results beginning in the third quarter of 2026 relative to a second quarter of 2025 baseline.
Our efficiency, productivity and overhead cost reduction actions are ongoing and to-date included:
•in the third quarter of 2025, rationalizing our maintenance footprint and headcount at our Palm Beach International Airport (Florida) and Teterboro Airport (New Jersey) locations as we continue to add Bombardier Challenger 300 series and Embraer Phenom 300 series aircraft that have historically been more operationally reliable than the legacy aircraft fleets we have retired or intend to retire;
•in the third quarter of 2025, further streamlining our business by selling three non-core services businesses - Baines Simmons, Kenyon International Emergency Services and Redline Assured Security (collectively, the "Non-Core Services Businesses") - to an unrelated third party; and
•in the fourth quarter of 2025, implementing discrete cost reductions identified as part of our annual budgeting process that are intended to improve our operating efficiency.
In the first quarter of 2026, we announced the unification of our global private jet sales teams under the Wheels Up brand to provide a more streamlined, customer-centric, end-to-end aviation experience. These actions were designed to deliver personalized service and customer engagement across our private jet offerings. As we work to fully integrate our sales and member services teams in the coming months, we anticipate the newly integrated commercial model will provide a single, personalized team to manage private aviation membership, global private charter, group charter and hybrid private-commercial itineraries. We will continue to provide our global group charter and cargo, government and defense charter solutions under our Air Partner brand.
At-the-Market Common Stock Offering Program
On August 29, 2025, we entered into an ATM Equity OfferingSMSales Agreement (the "ATM Sales Agreement") with BofA Securities, Inc. and Jefferies LLC (each, a "Sales Agent" and together, the "Sales Agents"), pursuant to which we may sell, from time to time, up to an aggregate sales price of $50.0 million of our Class A common stock, $0.0001 par value per share ("Common Stock"), through the Sales Agents (the "ATM Program"). Sales of shares of Common Stock under the ATM Sales Agreement, if any, may be made by any method deemed to be an "at the market offering" as defined in Rule 415(a)(4) of the Securities Act of 1933, as amended ("Securities Act"), including sales made in ordinary brokers' transactions on the New York Stock Exchange or otherwise at market prices prevailing at the time of the sale, at prices related to prevailing market prices or at negotiated prices and block trades. This Annual Report is not an offer to sell or the solicitation of any offer to buy shares of Common Stock under the ATM Program, nor shall there be an offer, solicitation or sale of such shares of Common Stock in any state in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of such state. See "Liquidity and Capital Resources" below for more information on the ATM Program.
Key Investor Lock-Up Extension
On September 21, 2025, we entered into Amendment No. 3 to Investment and Investor Rights Agreement (the "Third Investor Rights Agreement Amendment"), with each of Delta, CK Wheels LLC ("CK Wheels"), Cox Investment Holdings, LLC ("CIH" and, collectively with Delta and CK Wheels, the "Lead Investors"), and each of Kore Air LLC, Pandora Select Partners, L.P., Whitebox GT Fund, LP, Whitebox Multi-Strategy Partners, L.P., Whitebox Relative Value Partners, L.P. (collectively, the "Additional Investors" and, collectively with the Lead Investors, the "Investors"), to amend and extend, among others, certain transfer restrictions set forth in the Investor Rights Agreement, dated September 20, 2023, by and among, us and the Investors (as amended by Amendment No. 1 thereto, dated as of November 15, 2023, as further amended by Amendment No. 2 thereto, dated as of September 22, 2024, as further amended by the Third Investor Rights Agreement Amendment, and the joinders to such agreement, collectively, the "Investor Rights Agreement"). Pursuant to the Third Investor Rights Agreement Amendment: (i) the Lead Investors agreed to extend the lock-up restriction applicable to all of their shares of Common Stock issued pursuant to the Investor Rights Agreement ("Investor Shares") through May 22, 2026 (the "Extended Lock-Up Expiration"), subject to limited exceptions for transfers to Permitted Transferees (as defined in the Investor Rights Agreement); and (ii) the Additional Investors agreed to extend the lock-up restriction with respect to 29% of their Investor Shares through January 2, 2026, subject to limited exceptions for transfers to Permitted Transferees; provided, that any transfers or sales of Investor Shares held by the Additional Investors after September 21, 2025 and until the Extended Lock-Up Expiration may not occur during specified periods, are subject to certain volume limitations and may not be at a price less than the minimum price per share, in each case as specified in the Third Investor Rights Agreement Amendment. Pursuant to the Third Investor Rights Agreement Amendment, approximately 83.6% of our outstanding shares of Common Stock as of September 21, 2025 will remain subject to a lock-up restriction until May 22, 2026.
On September 21, 2025, the holders that collectively beneficially own in excess of 66.67% of the Registrable Securities (as defined in the Registration Rights Agreement, dated as of September 20, 2023, by and among the Company and the equity holders set forth on Schedule 1 thereto) extended the deadline by which we must file an initial shelf registration statement to register the Investor Shares under the Securities Act to May 22, 2026.
Extension of Revolving Credit Facility Availability Period
As previously announced, we entered into Amendment No. 3 to Credit Agreement, dated April 30, 2025 (the "Third Credit Agreement Amendment"), by and among the Company, as borrower, the other Loan Parties (as defined herein) party thereto, as guarantors, Delta and the Agent (as defined herein), pursuant to which Delta extended the period during which the $100.0 million Revolving Credit Facility (as defined herein) is available to be drawn to September 20, 2026. As of December 31, 2025, no amounts were outstanding under the Revolving Credit Facility.
Key Factors Affecting Financial Condition and Results of Operations
We believe that the following factors have affected our financial condition and results of operations and are expected to continue to have a significant effect:
Market Competition
The private aviation industry is highly competitive and fragmented. We compete with operators that have different business models than us, such as fractional aircraft ownership, aircraft management, lease-based models, jet cards, alternative membership programs, charter solutions and wholesale operations. In addition, many potential members and customers have the option to pursue whole aircraft ownership. These different service models result in significantly different business plans, operating models, and up-front and ongoing financial commitments by the customer. In general, the private aviation industry is marked by periods of rapid expansion that result in short-term supply constraints, followed by periods of more moderate growth that provide opportunities for consolidation. Economic cycles can impact customer behavior in the private aviation industry and result in switching between these various private flight options. We expect that competition in the private aviation industry will remain strong and that industry participants will continue to innovate.
Our ability to attract new, and retain existing, members and customers is a key factor in our ability to generate revenue. While we believe that our latest membership program and suite of charter solutions appeal to a broad base of private aviation users, we must continue to adapt our service offerings and customer outreach efforts to meet the needs of a variety of private flyers. We believe that our diversified offering of both our membership program and global charter solutions is advantageous to our target customers, produces advantages over our competitors and can be scaled to meet the varying needs of a wider array of private flyers across our global platform.
Multi-Year Business Transformation
We are continuing to execute our multi-year business transformation. In recent years, we have rapidly advanced our membership program and charter offerings, implemented cost reduction and operational efficiency initiatives, and experienced rapid changes in our aircraft fleet as a result of our current fleet modernization strategy. As we strive to achieve our financial goals, we expect to take additional actions to improve our service offerings, control costs, optimize our service delivery and transform our asset base to support long-term growth. We are actively working on these initiatives and expect to continue to further refine our practices in the future; however, the timing of these actions and their resulting impacts cannot be predicted with certainty. As we continue our transformation, we may experience variability in, and adverse or unintended impacts on, our business, prospects, results of operations and financial condition that may not be reflective of future results or trends.
Costs and Expense Management
Our operating results are impacted by our ability to manage costs and expenses, as well as realize cost savings from improving our operations, leverage our scale and optimize previously acquired assets and businesses. Our success depends, in part, on achieving a balance between revenue growth initiatives and investments in our business, maintaining cost discipline and executing cost reduction actions to decrease losses and drive eventual profitability. As described above, in 2025 we announced initiatives expected to drive approximately $70 million in annual cash cost savings following implementation through the efficiency, productivity and overhead cost reduction actions. In addition, we are investing significant resources into advancing our pricing and scheduling models to help optimize the utility and efficiency of our operations. We are working to find additional opportunities to enhance margins and operate more efficiently, while elevating the member experience and delivering operational excellence.
Economic Conditions
The private aviation industry has historically been volatile and affected by economic cycles and trends. On-demand flying is typically discretionary for members and customers, and may be affected by negative trends in the economy. Consumer confidence, changes in fuel prices, inflation, interest rates, geopolitical instability, governmental regulations or actions, taxes, tariffs and trade policies, safety concerns and other factors all could negatively impact our business, prospects, results of operations and financial condition. In addition, our members and customers may choose other options for travel more or less frequently depending on the economic cycle. The foregoing factors, many of which are outside of our control, may adversely impact our ability to retain members and customers, grow or sustain previous levels of flight activity, efficiently utilize our assets, manage our costs and expenses, or provide service offerings on terms attractive to our members and customers. Inflation related to goods, services, labor and wages used in our operations has, and may in the future, also directly or indirectly impact our operations, cost structure and results of operations, despite our best efforts to manage or mitigate such impacts.
Our People
In recent years, we have experienced increased competition for qualified personnel, including pilots, maintenance and operations personnel, that are eligible for hire due to our stringent qualification and training standards. In addition, wages for qualified personnel in our industry have recently outpaced overall inflation. We seek to attract and retain qualified, experienced and skilled personnel through various compensation initiatives. To achieve our financial goals, it is important that we tailor our hiring practices and accurately forecast attrition to balance the number of qualified personnel that we need with the size of our aircraft fleet and market demand for our service offerings. If our forecasts are inaccurate, we do not effectively balance the number of personnel we employ with the size of our aircraft fleet and market demand, the supply of qualified, experienced and skilled personnel, including pilots, becomes constricted or wages continue to rise faster than the prices of our services, our results of operations and financial condition could be adversely affected.
Non-GAAP Financial Measures
In addition to our results of operations below, we report certain key financial measures that are not required by, or presented in accordance with, U.S. generally accepted accounting principles ("GAAP"). These non-GAAP financial measures are in addition, and not a substitute for or superior to, measures of financial performance prepared in accordance with GAAP and should not be considered as an alternative to any performance measures derived in accordance with GAAP. We believe that these non-GAAP financial measures provide useful supplemental information to investors about Wheels Up. However, there are certain limitations related to the use of these non-GAAP financial measures and their nearest GAAP measures, including that they exclude significant expenses that are required to be recorded in Wheels Up's financial measures under GAAP. Other companies may calculate non-GAAP financial measures differently or may use other measures to calculate their financial performance, and therefore, our non-GAAP financial measures may not be directly comparable to similarly titled measures of other companies. Accordingly, you are cautioned not to place undue reliance on this information.
Adjusted EBITDA and Adjusted EBITDAR
We calculate Adjusted EBITDA as Net income (loss) adjusted for (i) Interest income (expense), (ii) Income tax expense, (iii) Depreciation and amortization, (iv) Equity-based compensation expense, (v) Acquisition and integration related expenses and (vi) other items not indicative of our ongoing operating performance, including but not limited to, restructuring charges. We calculate Adjusted EBITDAR as Adjusted EBITDA, as further adjusted for aircraft lease costs. We include Adjusted EBITDA and Adjusted EBITDAR as supplemental measures for assessing operating performance and for the following:
•To be used in conjunction with bonus program target achievement determinations, strategic internal planning, annual budgeting, allocating resources and making operating decisions; and
•To provide useful information for historical period-to-period comparisons of our business, as each measure removes the effect of certain non-cash expenses and other items not indicative of our ongoing operating performance.
Adjusted EBITDAR is included as a supplemental measure, because we believe it provides an alternate presentation to adjust for the effects of financing in general and the accounting effects of capital spending and acquisitions of aircraft, which may be acquired outright, acquired subject to acquisition debt, including under the
Revolving Equipment Notes Facility, by capital lease or by operating lease, each of which may vary significantly between periods and results in a different accounting presentation.
The following table reconciles each of Adjusted EBITDA and Adjusted EBITDAR to Net loss, which is the most directly comparable GAAP measure (in thousands):
| Year Ended December 31, | |||||||||||
| 2025 | 2024 | ||||||||||
| Net loss | $ | (294,217) | $ | (339,635) | |||||||
| Add back (deduct): | |||||||||||
| Interest expense | 90,470 | 65,352 | |||||||||
| Interest income | (3,020) | (2,170) | |||||||||
| Income tax expense | 3,503 | 1,226 | |||||||||
| Other expense, net | 1,413 | 717 | |||||||||
| Depreciation and amortization | 61,171 | 56,546 | |||||||||
| Change in fair value of warrant liability | - | 8 | |||||||||
| (Gain) loss on divestiture | (1,681) | (2,003) | |||||||||
| (Gain) loss on disposal of assets, net | (4,960) | 3,295 | |||||||||
| Equity-based compensation expense | 45,430 | 45,977 | |||||||||
|
Integration and transformation expense(1)
|
5,253 | - | |||||||||
|
Fleet modernization expense(2)
|
30,824 | 28,135 | |||||||||
|
Restructuring charges(3)
|
- | 7,850 | |||||||||
|
Atlanta Member Operations Center set-up expense(4)
|
- | 3,481 | |||||||||
|
Certificate consolidation expense(5)
|
- | 6,749 | |||||||||
|
Other(6)
|
22,331 | 6,599 | |||||||||
| Adjusted EBITDA | $ | (43,483) | $ | (117,873) | |||||||
|
Aircraft lease costs(7)
|
16,829 | 33,260 | |||||||||
| Adjusted EBITDAR | $ | (26,654) | $ | (84,613) | |||||||
__________________
(1)Consists of expenses associated with the Company's global integration efforts, including charges for employee separation programs and third-party advisor costs.
(2)Consists of expenses incurred in connection with the execution of our fleet modernization strategy first announced in October 2024, which primarily includes expenses associated with transitioning our Bombardier Challenger 300 series and Embraer Phenom 300 series aircraft to our operations and pilot training programs aligned to our fleet modernization strategy, as well as certain cash and non-cash costs incurred associated with exiting legacy private jet models.
(3)Includes charges for contract termination fees and employee separation programs as part of our cost reduction and strategic business initiatives.
(4)Consists of expenses associated with establishing our Member Operations Center located in the Atlanta, Georgia area ("Atlanta Member Operations Center") and its operations, primarily including redundant operating expenses during the transition period, relocation expenses for employees and costs associated with onboarding new employees. The Atlanta Member Operations Center began operating on May 15, 2023.
(5)Consists of expenses incurred to execute the consolidation of our U.S. Federal Aviation Administration ("FAA") operating certificates, primarily related to pilot training and retention programs, and consultancy fees associated with planning and implementing the consolidation process.
(6)For the year ended December 31, 2025, primarily includes a one-time $20.2 million non-cash pre-tax right-of-use asset impairment charge associated with vacating our former New York City corporate office space for a smaller, centralized location and related on-going lease costs for the vacated space while we seek a sublease tenant. For the year ended December 31, 2024, includes (i) collections of certain aged receivables which were added back to Net loss in the reconciliation presented for the year ended December 31, 2022, (ii) reserves and/or write-off of certain aged receivables associated with the aircraft management business which was divested on September 30, 2023, (iii) expenses associated with litigation matters and (iv) amounts reserved during the second quarter of 2024 related to Parts and supplies inventory deemed in excess after revision of future business needs associated with strategic business initiatives.
(7)Aircraft lease costs are reflected in Cost of revenue on the consolidated statement of operations for the applicable period.
Adjusted Contribution and Adjusted Contribution Margin
We calculate Adjusted Contribution as Gross profit (loss) excluding Depreciation and amortization and adjusted further for equity-based compensation included in Cost of revenue and other items included in Cost of revenue that are not indicative of our ongoing operating performance. Adjusted Contribution Margin is calculated by dividing Adjusted Contribution by total Revenue. We include Adjusted Contribution and Adjusted Contribution Margin as supplemental measures for assessing operating performance and for the following:
•To be used to understand our ability to achieve profitability over time through scale and leveraging costs; and
•To provide useful information for historical period-to-period comparisons of our business and to identify trends.
The following table reconciles Adjusted Contribution to Gross profit, which is the most directly comparable GAAP measure (in thousands, except percentages):
| Year Ended December 31, | |||||||||||
| 2025 | 2024 | ||||||||||
| Revenue | $ | 736,495 | $ | 792,104 | |||||||
| Less: Cost of revenue | (662,755) | (733,075) | |||||||||
| Less: Depreciation and amortization | (61,171) | (56,546) | |||||||||
| Gross profit | 12,569 | 2,483 | |||||||||
| Gross margin | 1.7% | 0.3% | |||||||||
| Add back (deduct): | |||||||||||
| Depreciation and amortization | $ | 61,171 | $ | 56,546 | |||||||
| Equity-based compensation expense in Cost of revenue | 273 | 2,228 | |||||||||
|
Integration and transformation expense in Cost of revenue(1)
|
3,310 | - | |||||||||
|
Fleet modernization expense in Cost of revenue(2)
|
28,444 | 10,033 | |||||||||
|
Restructuring charges in Cost of revenue(3)
|
- | 3,984 | |||||||||
|
Atlanta Member Operations Center set-up expense in Cost of revenue(4)
|
- | 1,860 | |||||||||
|
Certificate consolidation expense in Cost of revenue(5)
|
- | 5,297 | |||||||||
|
Other in Cost of revenue(6)
|
(1,698) | 3,256 | |||||||||
| Adjusted Contribution | 104,069 | 85,687 | |||||||||
| Adjusted Contribution Margin | 14.1% | 10.8% | |||||||||
(1)Consists of expenses associated with the Company's global integration efforts including charges for employee separation programs.
(2)Consists of expenses incurred in connection with the execution of our fleet modernization strategy first announced in October 2024, which primarily includes expenses associated with transitioning our Bombardier Challenger 300 series and Embraer Phenom 300 series aircraft to our operations and pilot training programs aligned to our fleet modernization strategy, as well as certain cash and non-cash costs incurred associated with exiting legacy private jet models.
(3)Primarily includes charges for employee separation programs as part of our ongoing cost reduction and strategic business initiatives.
(4)Consists of expenses associated with establishing the Atlanta Member Operations Center and its operations primarily including redundant operating expenses during the transition period, relocation expenses for employees and costs associated with onboarding new employees. The Atlanta Member Operations Center began operating on May 15, 2023.
(5)Consists of expenses incurred to execute the consolidation of our FAA operating certificates, primarily including pilot training and retention programs and consultancy fees associated with planning and implementing the consolidation process.
(6)Consists of amounts recovered on Parts and supplies inventory reserved during prior periods related to Parts and supplies inventory deemed in excess after revision of future business needs associated with strategic business initiatives, including fleet modernization.
Key Operating Metrics
In addition to financial measures, we regularly review certain key operating metrics to evaluate our business, determine the allocation of resources and make decisions regarding business strategies. We believe that these metrics can be useful for understanding the underlying trends in our business.
The following table summarizes our key operating metrics:
| Three Months Ended December 31, | |||||||||||||||||
| 2025 | 2024 | % Change | |||||||||||||||
|
Total Gross Bookings(1)
|
$ | 269,024 | $ | 313,861 | (14) | % | |||||||||||
|
Private Jet Gross Bookings(1)
|
$ | 210,590 | $ | 212,395 | (1) | % | |||||||||||
|
Live Flight Legs
|
10,235 | 12,731 | (20) | % | |||||||||||||
| Private Jet Gross Bookings per Live Flight Leg | $ | 20,575 | $ | 16,683 | 23 | % | |||||||||||
|
Utility(2)
|
41.0 | 41.1 | - | % | |||||||||||||
| Completion Rate | 99 | % | 98 | % | 1 pp | ||||||||||||
| On-Time Performance (D-60) | 91 | % | 87 | % | 4 pp | ||||||||||||
| Year Ended December 31, | |||||||||||||||||
| 2025 | 2024 | % Change | |||||||||||||||
|
Total Gross Bookings(1)
|
$ | 1,039,501 | $ | 1,043,826 | - | % | |||||||||||
|
Private Jet Gross Bookings(1)
|
$ | 833,904 | $ | 810,133 | 3 | % | |||||||||||
|
Live Flight Legs
|
44,694 | 50,116 | (11) | % | |||||||||||||
| Private Jet Gross Bookings per Live Flight Leg | $ | 18,658 | $ | 16,165 | 15 | % | |||||||||||
________________
(1) Amount shown in thousands.
(2) For the three months ended December 31, 2025, Utility for the Embraer Phenom 300 series, Bombardier Challenger 300 series and legacy fleet aircraft in our controlled fleet were 60.7, 48.1 and 30.8 hours, respectively. Utility for the three months ended December 31, 2024 reflects the inclusion of 17 Embraer Phenom 300 series aircraft from November 13, 2024 to the end of the respective period and zero Challenger 300 series aircraft.
Definitions of our key operating metrics are below. From time to time, we may adjust the definitions and calculations of our key operating metrics to reflect changes in our business or new data types, or to improve the accuracy and usefulness of such metrics. Our calculation of our key operating metrics may not be comparable to similarly titled measures reported by other companies.
Total Gross Bookings and Private Jet Gross Bookings
We define Total Gross Bookings as the total gross spend by our members and customers on all private jet flight services under our membership program and charter offerings, all group charter flights, which are charter flights with 15 or more passengers ("Group Charter Flights"), and all cargo flight services ("Cargo Services"). We believe
Total Gross Bookings provides useful information about the scale of the overall global aviation solutions that we provide our members and customers.
We define Private Jet Gross Bookings as the total gross spend by our members and customers on all private jet flight services under our membership program and charter offerings (excluding Group Charter Flights and Cargo Services). We believe Private Jet Gross Bookings provides useful information about the aggregate amount our members and customers spend with Wheels Up versus our competitors.
For each of Total Gross Bookings and Private Jet Gross Bookings, the total gross spend by our members and customers is the amount invoiced to the member or customer and includes the cost of the flight and related services, such as catering, ground transportation, certain taxes, fees and surcharges. We use Total Gross Bookings and Private Jet Gross Bookings for historical period-to-period comparisons of our business and to identify trends, including relative to our competitors.
Live Flight Legs
We define Live Flight Legs as the number of completed one-way revenue generating private jet flight legs in the applicable period, excluding empty repositioning legs, Group Charter Flights and Cargo Services. We believe Live Flight Legs is a useful metric to measure the scale and usage of our platform, and our ability to generate Flight revenue.
Private Jet Gross Bookings per Live Flight Leg
We use Private Jet Gross Bookings per Live Flight Leg to measure the average gross spend by our members and customers on all private jet flight services under our membership program and charter offerings for each Live Flight Leg.
Utility
We define Utility for the applicable period as the total revenue generating flight hours flown on our controlled aircraft fleet, excluding empty repositioning legs, divided by the monthly average number of available aircraft in our controlled aircraft fleet. Utility is expressed as a monthly average. We measure the revenue generating flight hours for a given flight on our controlled aircraft as the actual flight time from takeoff to landing. We determine the number of aircraft in our controlled aircraft fleet available for revenue generating flights at the end of the applicable month and exclude aircraft then classified as held for sale. We use Utility to measure the efficiency of our operations, our ability to generate a return on our assets and the impact of our fleet modernization strategy.
Completion Rate
We define Completion Rate as the percentage of total scheduled flights operated and completed, excluding customer-initiated flight cancellations.
On-Time Performance (D-60)
We define On-Time Performance (D-60) as the percentage of total flights flown that departed within 60 minutes of the scheduled time, inclusive of air traffic control, weather, maintenance and customer delays, excluding all cancelled flights.
Beginning with the Company's Quarterly Report on Form 10-Q for the three months ended March 31, 2025, we changed the presentation of Completion Rate and On-Time Performance (D-60) to include wholesale flights, which we believe better aligns those metrics to information that we use internally to evaluate our operations and reported Live Flight Legs, which includes wholesale flights. Completion Rate and On-Time Performance (D-60) for the three months ended December 31, 2025 and 2024 reported in the table above includes wholesale flights, which were previously excluded from such metrics in the Company's filings with the SEC beginning with the Company's Quarterly Report on Form 10-Q for the three months ended March 31, 2024 through and including our Annual Report on Form 10-K for the year ended December 31, 2024. Completion Rate and On-Time
Performance (D-60) reported in the Company's previously filed Annual Report on Form 10-K for the three months and year ended December 31, 2024, which excluded wholesale flight activity, were 98% and 80%, respectively.
Components of Our Results of Operations
The key components of our results of operations include:
Revenue
Revenue is derived from flight, membership and other services.
Flight revenue consists of retail and wholesale flights and certain related fees and surcharges. Members can either pay as they fly or prepay for flights, including through the use of Membership Funds.
Membership revenue includes any one-time initiation fees paid at the commencement of a membership and recurring annual fees. Historically, a portion of the initiation fee was applied to annual dues; however, we discontinued initiation fees starting in July 2024. The remainder of any initiation fee, less any flight credits, is deferred and recognized on a straight-line basis over the estimated duration of the member relationship period, which is estimated to be three years. Members are charged recurring annual fees to maintain their membership. Revenue related to the annual fees is deferred and recognized on a straight-line basis over the related contractual period. If a member qualifies to earn Delta miles in the Delta SkyMiles® program as part of their membership, then a portion of the membership fee is allocated at contract inception.
Aircraft management revenue consists of contractual monthly management fees charged to aircraft owners, recovery of owner incurred expenses including maintenance coordination, cabin crew and pilots, and recharging of certain incurred aircraft operating costs such as maintenance, fuel, landing fees and parking. We pass recovery and recharge amounts back to owners at either cost or at a predetermined margin. We sold our aircraft management business to an unrelated third-party effective September 30, 2023. We do not expect to realize any significant revenue or expenses associated with aircraft management activities in future periods. See Note 3, Revenue in the Notes to Financial Statements in Part II, Item 8 "Financial Statements and Supplementary Data" for additional information on Aircraft management revenue for the year ended December 31, 2023.
Other revenue includes, but is not limited to, sales of whole aircraft, group charter revenue, cargo revenue, revenue sponsorships and partnership fees, safety and security revenue, and special missions including government, defense, emergency and medical transport. In addition, Other revenue includes flight management fees, software subscription fees from third-party operators for access to UP FMS, fees from third-party sponsorships and partnership fees and special missions revenue, including government, defense, emergency and medical transport.
Costs and Expenses
Costs and expenses consist of the following components:
Cost of Revenue
Cost of revenue primarily consists of direct expenses incurred to provide flight services and facilitate operations, including aircraft lease costs, fuel, crew travel, maintenance and third-party flight costs. Cost of revenue also consists of compensation expenses, including equity-based compensation and related benefits, for employees that directly facilitate flight operations. In addition, Cost of revenue includes aircraft management expenses incurred such as maintenance coordination, cabin crew and pilots, and certain aircraft operating costs such as maintenance, fuel, landing fees and parking.
Technology and Development
Technology and development expense primarily consists of compensation expenses for engineering, product development and design employees, including equity-based compensation and related benefits, expenses associated with ongoing improvements to, and maintenance of, our platform offerings and other technology. Technology and development expense also includes software expenses and technology consulting fees.
Sales and Marketing
Sales and marketing expense primarily consists of compensation expenses in support of sales and marketing such as commissions, salaries, equity-based compensation and related benefits. Sales and marketing expense also includes expenses associated with advertising, promotions of our services, member experience, account management and marketing.
General and Administrative
General and administrative expense primarily consists of compensation expenses, including allocable portions of equity-based compensation and related benefits, for our executive, finance, human resources and legal teams and other personnel performing administrative functions. General and administrative expense also includes any other cost or expense incurred not deemed to be related to Cost of revenue, Sales and marketing expense or Technology and development expense.
We allocate overhead such as facility costs and telecommunications charges, based on department headcount, as we believe this to be the most accurate measure. As a result, a portion of general overhead expenses are reflected in each operating expense category.
Depreciation and Amortization
Depreciation and amortization expense primarily consists of depreciation of capitalized aircraft, as well as amortization of capitalized software development costs and acquired finite-lived intangible assets.
Gain on Sale of Aircraft Held for Sale
Gain on sale of aircraft held for sale consists of the gain on aircraft previously held as property and equipment and subsequently elected to actively market for sale or aircraft purchased with the intent to sell.
Gain (Loss) on Disposal of Assets, Net
Gain (loss) on disposal of assets, net, consists of any gains or losses on disposal of other assets during the period.
Gain on Divestiture
Gain on divestiture primarily consists of the net working capital adjustment received in the third quarter of 2025 associated with the divestiture of Non-Core Services Businesses on August 20, 2025.
Loss on Extinguishment of Debt
Loss on extinguishment of debt consists of fees incurred during the period to extinguish debt instruments in advance of the maturity date.
Change in Fair Value of Warrant Liability
Change in fair value of Warrant liability consists of unrealized gain (loss) on the Warrants (as defined below) assumed as part of the business combination consummated on July 13, 2021 between WUP and Aspirational Consumer Lifestyle Corp. ("Aspirational"), a blank check company (the "Business Combination"), consisting of 7,991,544 redeemable public warrants ("Public Warrants") and 4,529,950 redeemable private warrants (the "Private Warrants" and, together with the Public Warrants, the "Warrants"), in each case exercisable for 1/10th of one share of Common Stock at an exercise price of $115.00 per whole share of Common Stock.
Interest Income
Interest income primarily consists of interest earned on cash equivalents in money market funds.
Interest Expense
Interest expense primarily consists of the interest paid or payable and the amortization of debt discounts and deferred financing costs on our credit facilities, promissory notes and other debt obligations.
Income Tax Expense
Income tax expense consists of income taxes recorded using the asset and liability method. Under this method, deferred tax assets and liabilities are recorded based on the estimated future tax effects of differences between the financial reporting and tax bases of existing assets and liabilities. These differences are measured using the enacted tax rates that are expected to be in effect when these differences are anticipated to reverse. Deferred tax assets are reduced by a valuation allowance to the extent management believes it is not more likely than not to be realized.
Results of Our Operations for the Year Ended December 31, 2025 Compared to the Year Ended December 31, 2024
The following table sets forth our results of operations for the years ended December 31, 2025 and 2024 (in thousands, except percentages):
| Year Ended December 31, | Change in | ||||||||||||||||||||||
| 2025 | 2024 |
$
|
% | ||||||||||||||||||||
| Revenue | $ | 736,495 | $ | 792,104 | $ | (55,609) | (7) | % | |||||||||||||||
| Costs and expenses: | |||||||||||||||||||||||
| Cost of revenue (exclusive of items shown separately below) | 662,755 | 733,075 | (70,320) | (10) | % | ||||||||||||||||||
| Technology and development | 38,762 | 40,690 | (1,928) | (5) | % | ||||||||||||||||||
| Sales and marketing | 88,643 | 84,317 | 4,326 | 5 | % | ||||||||||||||||||
| General and administrative | 145,300 | 137,594 | 7,706 | 6 | % | ||||||||||||||||||
| Depreciation and amortization | 61,171 | 56,546 | 4,625 | 8 | % | ||||||||||||||||||
| Gain on sale of aircraft held for sale | (51,763) | (4,622) | (47,141) | n/m | |||||||||||||||||||
| (Gain) loss on disposal of assets, net | (4,960) | 3,295 | (8,255) | n/m | |||||||||||||||||||
| Total costs and expenses | 939,908 | 1,050,895 | (110,987) | (11) | % | ||||||||||||||||||
| Loss from operations | (203,413) | (258,791) | 55,378 | 21 | % | ||||||||||||||||||
| Other income (expense): | |||||||||||||||||||||||
| Gain on divestiture | 1,681 | 2,003 | (322) | n/m | |||||||||||||||||||
| Loss on extinguishment of debt | (119) | (17,714) | 17,595 | n/m | |||||||||||||||||||
| Change in fair value of warrant liability | - | (8) | 8 | n/m | |||||||||||||||||||
| Interest income | 3,020 | 2,170 | 850 | 39 | % | ||||||||||||||||||
| Interest expense | (90,470) | (65,352) | (25,118) | 38 | % | ||||||||||||||||||
| Other income (expense), net | (1,413) | (717) | (696) | n/m | |||||||||||||||||||
| Total other income (expense) | (87,301) | (79,618) | (7,683) | (10) | % | ||||||||||||||||||
| Loss before income taxes | (290,714) | (338,409) | 47,695 | (14) | % | ||||||||||||||||||
| Income tax expense | (3,503) | (1,226) | (2,277) | n/m | |||||||||||||||||||
| Net loss | (294,217) | (339,635) | 45,418 | (13) | % | ||||||||||||||||||
| Less: net income (loss) attributable to non-controlling interests | - | - | - | - | % | ||||||||||||||||||
| Net loss attributable to Wheels Up Experience Inc. | $ | (294,217) | $ | (339,635) | $ | 45,418 | (13) | % | |||||||||||||||
__________
n/m - not meaningful
Revenue
Revenue for the year ended December 31, 2025 compared to the year ended December 31, 2024, was as follows (in thousands):
| Year ended December 31, | Change in | ||||||||||||||||||||||
| 2025 | 2024 | $ | % | ||||||||||||||||||||
| Membership | $ | 28,887 | $ | 57,614 | $ | (28,727) | (50) | % | |||||||||||||||
| Flight | 622,688 | 633,865 | (11,177) | (2) | % | ||||||||||||||||||
|
Other
|
84,920 | 100,625 | (15,705) | (16) | % | ||||||||||||||||||
|
Total
|
$ | 736,495 | $ | 792,104 | $ | (55,609) | (7) | % | |||||||||||||||
The decrease in Membership revenue was primarily driven by a decrease in members year-over-year as a result of streamlining our membership offering and shifting less frequent flyers to our charter offerings.
The decrease in Flight revenue was primarily driven by a $68.6 million decrease attributable to a 11% decreasein Live Flight Legs year-over-year, which was partially offset by a $57.4 million increaseattributable to a 10% increase in Flight Revenue per Live Flight Leg,as a result of a greater mix of flights on larger and premium jets generally associated with higher hourly rates.
The decrease in Other revenue was primarily attributable to the absence of $9.7 million of residual Aircraft management revenue during the year ended December 31, 2024 following our sale of the aircraft management business on September 30, 2023, a $5.7 million decrease in group charter revenue primarily due to the absence of one-time projects in the fourth quarter of 2024 that did not repeat in 2025, a $3.6 million decrease in ground services revenue following the sale of our fixed-base operator activities in the first quarter of 2025, a $3.6 million decrease in services revenue following the divestiture of Non-Core Services Businesses in the third quarter of 2025 (see Note 5, Acquisition and Divestitures in the Notes to Financial Statements in Part II, Item 8 "Financial Statements and Supplementary Data" in this Annual Report) and a $1.2 million decrease in sales of inventory aircraft following our decision to reduce focus on whole aircraft sales after the first quarter of 2024. These decreases were partially offset by a $2.4 million increase in ancillary fee revenue and a $1.4 million increase in defense contract revenue.
Cost of Revenue
Cost of revenue decreased $70.3 million, or 10%, for the year ended December 31, 2025 compared to the year ended December 31, 2024. The decrease was primarily driven by a $47.3 million reduction in employee compensation and allocable costs due to reduced headcount, and a $19.1 million decrease in fuel cost, a $16.4 million decrease in aircraft lease costs and a $10.2 million decrease in pilot travel costs, all driven by fewer Live Flight Legs year-over-year. The decrease was also attributable to an $8.4 million reduction in non-cash charges related to the reserve for certain parts inventory deemed obsolete or in excess of forecasted demand for aircraft maintenance and related to our legacy fleet and a $4.0 million reduction in third-party operator costs for group charter flights. These decreases were partially offset by a $42.4 million increase in third party operator costs for private jet flights.
Other Operating Expenses
Technology and Development
Technology and development expenses decreased $1.9 million, or 5%, for the year ended December 31, 2025 compared to the year ended December 31, 2024, primarily attributable to a $3.4 million decrease in enterprise software and other IT-related spend as a result of cost and operational efficiency actions and a $0.5 million decrease in employee compensation and allocable costs due to reduced headcount. The decrease was partially offset by a higher mix of costs expensed in the period that were not eligible for capitalization, which resulted in a $2.0 million increase in expenses during the year ended December 31, 2025.
Sales and Marketing
Sales and marketing expenses increased $4.3 million, or 5%, for the year ended December 31, 2025 compared to the year ended December 31, 2024, primarily attributable to a $5.2 million increase in employee compensation and allocable costs due to higher headcount and a $1.4 million increase in marketing events-related spend. The increases were partially offset by the absence of a $1.6 million one-time charge to terminate a consultancy agreement during the first quarter of 2024 and a $1.0 million reduction in spend on marketing flights and partnership-related expenses.
General and Administrative
General and administrative expenses increased $7.7 million, or 6%, for the year ended December 31, 2025 compared to the year ended December 31, 2024, primarily driven by a one-time $20.2 million non-cash, pre-tax right-of-use asset impairment charge associated with vacating our former New York City corporate office space during the three months ended March 31, 2025 (see Note 10, Leases in the Notes to Financial Statements in Part II, Item 8 "Financial Statements and Supplementary Data" in this Annual Report). The increase was partially offset by a $5.3 million decrease in professional services spend, a $3.3 million decrease in employee compensation and allocable costs due to reduced headcount and the absence of a $1.3 million charge to bad debt expense associated with certain aged receivables related to the aircraft management business we sold in the third quarter of 2023 that were recorded during first quarter of 2024.
Depreciation and Amortization
Depreciation and amortization expenses increased $4.6 million, or 8%, for the year ended December 31, 2025 compared to the year ended December 31, 2024, primarily driven by a one-time impairment of certain leasehold improvements and furniture and fixtures associated with vacating our former New York City corporate office space (see Note 10, Leases in the Notes to Financial Statements in Part II, Item 8 "Financial Statements and Supplementary Data" in this Annual Report) and higher value aircraft we have purchased as part of our ongoing fleet transformation.
Interest Income
Interest income increased $0.9 million for the year ended December 31, 2025 compared to the year ended December 31, 2024, primarily driven by an increase in the average amount of cash equivalents held in money market funds versus the prior year period.
Interest Expense
Interest expense increased $25.1 million for the year ended December 31, 2025 compared to the year ended December 31, 2024. The increase was primarily attributable to paid-in-kind interest expense associated with the Term Loan and Credit Support Premium (each as defined below).
Income Tax Expense
Income tax expense increased $2.3 million for the year ended December 31, 2025 compared to the year ended December 31, 2024.
Net Loss
As a result of the factors described above, Net loss improved by $45.4 million for the year ended December 31, 2025 compared to the year ended December 31, 2024.
Liquidity and Capital Resources
Overview & Liquidity Outlook
Our principal sources of liquidity have historically consisted of financing activities, including proceeds from debt financing transactions and the ATM Program, proceeds from asset sales aligned with our business strategies, and operating activities, primarily from deferred revenue associated with the sale of Membership Funds. As of December 31, 2025, we had $133.9 million of Cash and cash equivalents and $30.6 million of Restricted cash, and our long-term debt obligations consisted primarily of approximately $173.2 million aggregate principal amount outstanding of Revolving Equipment Notes (as defined below) and approximately $498.1 million aggregate principal amount outstanding under the Term Loan (as defined below), inclusive of capitalized paid-in-kind interest and approximately $8.7 million aggregate principal amount outstanding in connection with the Credit Support Premium (as defined below) portion of the Revolving Credit Facility (as defined below). In addition, we had a working capital deficit of $656.7 million as of December 31, 2025 and Net cash used in operating activities was $166.3 million for the year ended December 31, 2025. See the caption titled "Any inability to satisfy the terms of our contractual agreements, including operating leases and debt financing obligations, could adversely affect our business, results of operations and financial condition" in Part I, Item 1A"Risk Factors" in this Annual Report for more information about our contractual obligations.
Pursuant to the Credit Agreement (as defined below), Delta has provided a commitment for the Revolving Credit Facility in the aggregate original principal amount of $100.0 million, which may be drawn under certain circumstances through September 20, 2026 and is subject to liquidity-driven repayment conditions. As of December 31, 2025, no amounts were outstanding under the Revolving Credit Facility with respect to Delta's $100.0 million commitment. See "Sources and Uses of Liquidity-Long-Term Debt-Term Loan & Revolving Credit Facility" below for more information about the Revolving Credit Facility.
We expect to meet our liquidity needs for the next 12 months with a combination of cash and cash equivalents, cash flows from operations, strategic dispositions of underutilized assets, depending on market conditions, sales of shares of Common Stock under the ATM Program or other equity financings and, if needed and to the extent available to be drawn, proceeds from borrowings under the Revolving Credit Facility with respect to Delta's $100.0 million commitment and under the Revolving Equipment Notes. Our ability to satisfy our long-term liquidity needs will depend on, among others, our ability to generate cash flows from operations and enter into additional or alternate financing arrangements.
Sources & Uses of Liquidity
Long-Term Debt
The terms of our material long-term debt arrangements are briefly summarized below. See Note 8, Long-Term Debt in the Notes to Consolidated Financial Statements included in Part II, Item 8 "Financial Statements and Supplementary Data" in this Annual Report for more information about the Revolving Equipment Notes, Credit Support Premium, Term Loan and Revolving Credit Facility (as each term is defined below). As of December 31, 2025, scheduled maturities of our long-term debt: (i) in 2026 were expected to be approximately $19.0 million; (ii) from 2027 through 2029 were expected to range between $20.0 million and $120.1 million annually; and (iii) in and after 2030 were nil.
Revolving Equipment Notes Facility
The Note Purchase Agreement, dated as of November 13, 2024 (the "NPA"), by and among Wheels Up Partners LLC, an indirect subsidiary of the Company ("WUP LLC"), Wilmington Trust, National Association, as subordination agent and trustee, and Wheels Up Class A-1 Loan Trust 2024-1, a Delaware statutory trust (the "2024-1 Trust"), provides for the revolving issuance from time to time by WUP LLC of Series A-1 equipment notes (the "Revolving Equipment Notes") in an aggregate principal amount up to $332.0 million (the "Revolving Equipment Notes Facility"). The Revolving Equipment Notes mature on November 13, 2029 (the "Revolving Equipment Notes Maturity Date") and require annual amortization of principal amount equal to 10% per annum on and from November 13, 2024 to November 13, 2027 (the "Availability Period") and 12% per annum thereafter to
the Revolving Equipment Notes Maturity Date, in each case payable in cash quarterly on the same dates as interest payments. The Revolving Equipment Notes bear interest at the variable rate of the then applicable three-month secured overnight funds rate ("SOFR") plus 1.75% per annum during the Availability Period, SOFR plus 2.25% immediately after the end of the Availability Period to November 13, 2028, and SOFR plus 2.75% from November 13, 2028 to the Revolving Equipment Notes Maturity Date. Interest on the Revolving Equipment Notes is payable in cash quarterly on February 15, May 15, August 15 and November 15 of each year, and on the Revolving Equipment Notes Maturity Date. WUP LLC must also pay a customary commitment fee on unused amounts available to be borrowed under the Revolving Equipment Note Facility.
Any amounts of principal under a Revolving Equipment Note repaid by WUP LLC prior to the Availability Period, either through regular principal amortization payments or from the early redemption of principal amounts related to any aircraft secured by the Revolving Equipment Notes Facility, will become available to be reborrowed by WUP LLC for the purchase of additional aircraft to be secured by such facility during the Availability Period, subject to certain conditions. WUP LLC may redeem any Revolving Equipment Note in connection with the sale of an aircraft that constitutes Revolving Equipment Notes Collateral (as defined in Note 8, Long-Term Debt in the Notes to Consolidated Financial Statements) or otherwise, at any time, and is not required to pay any prepayment premiums in connection with such early redemptions. We are subject to certain covenants under the Revolving Equipment Notes Facility, which are summarized in Note 8, Long-Term Debt in the Notes to Consolidated Financial Statements.
During the year ended December 31, 2025, WUP LLC redeemed in-full the Revolving Equipment Notes for 49 aircraft, which reduced the aggregate principal amount outstanding under the Revolving Equipment Notes Facility by $178.9 million, and issued new Revolving Equipment Notes for 8 aircraft in the aggregate principal amount of $65.7 million. As of December 31, 2025, under the Revolving Equipment Notes Facility: (i) approximately $173.2 million aggregate principal amount of Revolving Equipment Notes were outstanding; (ii) approximately $158.8 million was available to be borrowed to fund future aircraft acquisitions; and (iii) the carrying value of the 55 aircraft that were subject to first-priority liens under outstanding Revolving Equipment Notes was $183.7 million.
Credit Support
Delta provides credit support for the Revolving Equipment Notes Facility, which effectively guarantees WUP LLC's payment obligations thereunder upon the occurrence and continuation of specified events of default, in exchange for an annual fee as a percentage of the aggregate principal amounts drawn under the Revolving Equipment Notes Facility that is payable-in-kind by the Company and accrues interest over the life of the Revolving Equipment Notes Facility (the "Credit Support Premium"). The Credit Support Premium constitutes a revolving loan payable to Delta under the Revolving Credit Facility pursuant to the Second Credit Agreement Amendment (as defined below). Amounts in respect of the Credit Support Premium accrue while the Revolving Equipment Notes are outstanding and include interest that is compounded and capitalized on the last day of each calendar quarter; however, any such accrued amounts do not reduce Delta's $100.0 million commitment under the Revolving Credit Facility. The Credit Support Premium will become due and payable in-full upon the earlier of repayment and extinguishment of the Revolving Equipment Note Facility and the termination of Delta's obligation to provide credit support for the Revolving Equipment Notes Facility. See Note 8, Long-Term Debt in the Notes to Consolidated Financial Statements in this Annual Report for more information about the Credit Support Premium.
Term Loan & Revolving Credit Facility
The Company is party to a Credit Agreement, dated as of September 20, 2023 (as amended by Amendment No. 1 thereto, dated as of November 15, 2023, as further amended by Amendment No. 2 thereto, dated as of November 13, 2024 (the "Second Credit Agreement Amendment"), and as further amended by the Third Credit Agreement Amendment, the "Credit Agreement"), by and among the Company, as borrower, certain subsidiaries of the Company, as guarantors (collectively with the Company, the "Loan Parties"), Delta, CK Wheels LLC, Cox Investment Holdings LLC and certain other lenders party thereto from time to time (collectively, the "Lenders"), and U.S. Bank Trust Company, N.A., as administrative agent for the Lenders and as collateral agent for the secured parties (the "Agent"), pursuant to which as of December 31, 2025 (i) the Lenders have provided a term loan facility
(the "Term Loan") in the aggregate original principal amount of $390.0 million and (ii) Delta has provided a commitment for a revolving loan facility (the "Revolving Credit Facility" and together with the Term Loan, the "Credit Facility") in the aggregate original principal amount of $100.0 million.
The scheduled maturity date for the Term Loan is September 20, 2028, and the scheduled maturity date for the Revolving Credit Facility is the earlier of September 20, 2028 and the first date after September 20, 2026 on which all amounts owed under the Revolving Credit Facility have been repaid pursuant to their terms, subject in each case to earlier termination upon acceleration or termination of any obligations upon the occurrence and continuation of an event of default. Interest on the Term Loan and any borrowings under the Revolving Credit Facility (each, a "Loan" and, collectively, the "Loans") accrues at a rate of 10% per annum on the unpaid principal balance of the Loans then outstanding. Accrued interest on each Loan is payable-in-kind as compounded interest and capitalized to the principal amount of the applicable Loan on the last day of each of March, June, September and December each year, and the applicable maturity date.
As part of the Credit Facility, Delta has provided a commitment for the Revolving Credit Facility in the aggregate original principal amount of $100.0 million, which is separate and apart from the portion with respect to the Credit Support Premium. The Company may borrow available amounts under the Revolving Credit Facility at any time through September 20, 2026 in an amount and to the extent that after giving pro forma effect to any borrowing thereunder, the Company's Unrestricted Cash Amount (as defined in the Credit Agreement) will not exceed $100.0 million. The Company generally must promptly repay any borrowings under the Revolving Credit Facility prior to maturity as follows: (i) at any time prior to September 20, 2026, to the extent the Unrestricted Cash Amount (as defined in the Credit Agreement) exceeds $100.0 million and (ii) on or after September 20, 2026 but prior to maturity, to the extent that the Unrestricted Cash Amount (as defined in the Credit Agreement) exceeds $125.0 million and if Consolidated Cash Flow (as defined in the Credit Agreement) has been positive for any fiscal quarter since September 20, 2023. As of December 31, 2025, no amounts were outstanding under the Revolving Credit Facility with respect to Delta's $100.0 million commitment.
At-the-Market Common Stock Offering Program
On August 29, 2025, the Company entered into the ATM Sales Agreement with the Sales Agents, pursuant to which the Company may sell, from time to time, up to an aggregate sales price of $50.0 million of Common Stock under the ATM Program. During the year ended December 31, 2025, the Company issued 21,157,534 shares of Common Stock under the ATM Program for $49.4 million in aggregate gross proceeds, resulting in aggregate net proceeds to the Company of approximately $47.5 million after deducting sales commissions. As of December 31, 2025, approximately $0.6 million of capacity to issue shares of Common Stock remained under the ATM Program.
Cash Flows
The following table summarizes our cash flows for the years ended December 31, 2025, and 2024 (in thousands):
| Year Ended December 31, | |||||||||||
| 2025 | 2024 | ||||||||||
|
Net cash used in operating activities
|
$
|
(166,295)
|
$
|
(77,888)
|
|||||||
|
Net cash (used in) provided by investing activities
|
$
|
180,368
|
$
|
(46,681)
|
|||||||
|
Net cash (used in) provided by financing activities
|
$
|
(98,513)
|
$
|
78,662
|
|||||||
|
Net decrease in cash, cash equivalents and restricted cash
|
$
|
(81,965)
|
$
|
(46,357)
|
|||||||
Cash Flow from Operating Activities
The cash outflows from operating activities consisted of our Net loss during the respective periods, net of non-cash items of $133.2 million and $177.7 million during the years ended December 31, 2025 and 2024, respectively, and the balance from a general decrease in net operating assets and liabilities during the year ended December 31, 2025 compared to the year ended December 31, 2024. During the year ended December 31, 2025, we sold $576.0 million of Membership Funds, which was a 3% decrease from the $595.4 million of Membership Funds sold during
2024. The decrease was primarily attributable to changes in our membership program offerings aimed at attracting and retaining higher spending, more frequent flyers. During the three months ended December 31, 2025, we sold $188.1 million of Membership Funds.
Cash Flow from Investing Activities
The cash inflow from investing activities during the year ended December 31, 2025 was primarily attributable to $271.6 million in proceeds from sales of aircraft that were classified as held for sale and $20.7 million in proceeds from the sale of the Non-Core Services Businesses. The cash inflows were partially offset by cash outflows of $105.1 million for capital expenditures, primarily consisting of purchases of higher value aircraft in furtherance of our fleet transformation and $11.5 million of capitalized software development costs.
Cash Flow from Financing Activities
The cash outflow from financing activities was primarily attributable to the prepayments of long-term debt of $210.0 million (including the redemption in-full of the Revolving Equipment Notes for 49 aircraft, which reduced the aggregate principal amount outstanding under the Revolving Equipment Notes Facility by $178.9 million), partially offset by the issuance of new Revolving Equipment Notes for 8 aircraft in the aggregate principal amount of $65.7 million and the issuance and sale of shares of Common Stock under the ATM Program for approximately $47.5 million in aggregate net proceeds after deducting sales commissions.
Future Obligations and Commitments
As of December 31, 2025, our principal ongoing commitments consisted of contractual cash obligations to pay principal and interest payments under the Revolving Equipment Notes, principal and accrued interest under the Credit Agreement when due at maturity (including any amounts in respect of the Credit Support Premium), operating leases for our controlled aircraft, offices and operational facilities, trade payables and ordinary course arrangements involving our obligation to provide future services for which we have already received deferred revenue. For further information about the foregoing obligations and commitments, see the following Notes to Consolidated Financial Statements included in Part II, Item 8 "Financial Statements and Supplementary Data" in this Annual Report: Note 3, Revenue; Note 8, Long-Term Debt; and Note 10, Leases. In addition, the Share Repurchase Program (as defined in Part II, Item 5"Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities") gives management the discretion to purchase shares of Common Stock from time to time, and any open order or executory contract to acquire shares of Common Stock in the future would constitute a cash contractual commitment by the Company to the extent it is not cancelled prior to trade execution.
To execute our fleet modernization strategy, we will need to, among other things, continue to strategically acquire aircraft, which may include purchasing or leasing aircraft, acquiring private aviation operators or entering into alternative financing structures, selling legacy owned aircraft and returning legacy leased aircraft to their lessors. This strategy is expected to be capital intensive and will require significant internal and external resources over the remainder of the expected transition period and thereafter as we supplement our controlled fleet. As of the date of this Annual Report, we expect that we will fund any fleet transition-related obligations or commitments using cash and cash equivalents on-hand, including cash received from any sales or sale-leaseback transactions involving our owned aircraft, operating cash flows, available borrowings under the Revolving Equipment Notes Facility, and the future possible strategic transactions, such as potential acquisitions of private aviation operators, strategic leasing arrangements or additional debt or equity financings. See "Review of 2025 Achievements-Executing Our Fleet Modernization Strategy" above and the caption titled "We may not be able to successfully implement our growth strategies or realize the expected benefits of our strategic initiatives, including changes in our commercial offerings, operational efficiency and cost reduction actions, and our fleet modernization strategy" in Part I, Item 1A"Risk Factors" in this Annual Report for more information about our fleet modernization strategy.
Off-Balance Sheet Arrangements
As of December 31, 2025, we were not a party to any off-balance sheet arrangements (as defined in Regulation S-K) that have or are reasonably likely to have a current or future material effect on our financial condition, results of operations or cash flows.
Critical Accounting Policies and Estimates
Our management's discussion and analysis of our financial condition and results of our operations is based on our consolidated financial statements and accompanying notes, which have been prepared in accordance with GAAP. Certain amounts included in or affecting the consolidated financial statements presented in this Annual Report and related disclosure must be estimated, requiring management to make assumptions with respect to values or conditions which cannot be known with certainty at the time the consolidated financial statements are prepared. Management believes that the accounting policies set forth below comprise the most important "critical accounting policies" for Wheels Up. A "critical accounting policy" is one which is both important to the portrayal of our financial condition and results of operations and that involves management's judgments, often as a result of the need to make estimates about the effect of matters that are inherently uncertain. Management evaluates such policies on an ongoing basis, based upon historical results and experience, consultation with experts and other methods that management considers reasonable in the particular circumstances under which the judgments and estimates are made, as well as management's forecasts as to the manner in which such circumstances may change in the future.
Revenue Recognition
We determine revenue recognition through the following steps in accordance with Accounting Standards Codification ("ASC") 606, Revenue from Contracts with Customers:
•identification of the contract, or contracts, with a customer;
•identification of the performance obligations in the contract;
•determination of the transaction price;
•allocation of the transaction price to the performance obligations in the contract; and
•recognition of revenue when, or as, a performance obligation is satisfied.
A performance obligation is a promise in a contract to transfer a distinct service to the customer and is the basis of revenue recognition. There are contracts which could have more than one performance obligation. For contracts that include additional performance obligations, we account for individual performance obligations if they are distinct. If there is a group of performance obligations bundled in a contract, the transaction price is required to be allocated based upon the relative standalone selling prices of the promised services underlying each performance obligation. We generally determine the standalone selling price based on the prices charged to customers. If there are services included in the transaction price for which the standalone selling price is not directly observable, then we would first apply the standalone selling price for those services that are known, such as the flight hourly rate, and then allocate the total consideration proportionately to the other performance obligations in the contract.
Revenue is recognized when control of the promised service is transferred to our member or the customer, in an amount that reflects the consideration we expect to be entitled to in exchange for those services. Our revenue is reported net of discounts and incentives. We generally do not issue refunds for flights unless there is a failure to meet our service obligations. Refunded amounts for annual membership and initiation fees are granted to some customers that no longer wish to remain members following their first flight. We generally do not have contracts that include variable terms.
We utilize registered independent third-party air carriers in the performance of a portion of our flights. We evaluate whether there is a promise to transfer services to the customer, as the principal, or to arrange for services to be provided by another party, as the agent, using a control model. The nature of the flight services we provide to members is similar regardless of which third-party air carrier is involved. If Wheels Up has primary responsibility to fulfill the obligation, then the revenue and the associated costs are reported on a gross basis in the consolidated statements of operations. If Wheels Up arranges for services to be provided by another party, as the agent, then the revenue and the associated costs are reported on a net basis in the statement of operations.
Business Combinations and Asset Acquisitions
We account for business combinations and asset acquisitions using the acquisition method of accounting, which requires allocation of the purchase price to the tangible and intangible assets acquired and liabilities assumed based on their estimated fair values as of the acquisition date. For acquisitions meeting the definition of a business combination in ASC 805, Business Combinations, the excess of the purchase price over the amounts recognized for assets acquired and liabilities assumed is recorded as goodwill. During the measurement period, which may be up to one year from the acquisition date, we may record adjustments to the assets acquired and liabilities assumed in a business combination with the corresponding offset to goodwill. Upon the conclusion of the measurement period or final determination of the values of assets acquired or liabilities assumed, whichever comes first, any subsequent adjustments are recorded in the consolidated statements of operations. For acquisitions meeting the definition of an asset acquisition, the fair value of the consideration transferred, including transaction costs, is allocated to the assets acquired and liabilities assumed based on their relative fair values. No goodwill is recognized in an asset acquisition.
The acquisition method of accounting requires us to exercise judgment and make estimates and assumptions regarding fair values using the information available as of the date of acquisition. We may also refine these estimates over a one-year measurement period, to reflect any new information obtained about facts and circumstances that existed as of the acquisition date that, if known, would have affected the measurement of the amounts recognized as of that date. If we are required to retroactively adjust provisional amounts that we have recorded for the fair value of assets and liabilities in connection with an acquisition, these adjustments could materially impact our financial position and results of operations. Assumptions that we make in estimating the fair value of acquired developed technology, trade names, customer relationships and other identifiable intangible assets include future cash flows that we expect to generate from the acquired assets. If the subsequent actual results and updated projections of the underlying business activity change compared with the assumptions and projections used to develop these values, we could record impairment charges.
Goodwill and Intangible Assets
Goodwill represents the excess of the consideration transferred over the fair value of the identifiable assets acquired and liabilities assumed in business combinations. The carrying value of goodwill is tested for impairment on an annual basis or on an interim basis if events or changes in circumstances indicate that an impairment loss may have occurred (i.e., a triggering event). Our annual goodwill impairment testing date is September 1st. The test for impairment is performed at the reporting unit level. The Company has two reporting units, the Air Partner reporting unit and the legacy Wheels Up reporting unit.
Goodwill impairment is the amount by which a reporting unit's carrying value exceeds its fair value, not to exceed the carrying value of goodwill. We use both qualitative and quantitative approaches when testing goodwill for impairment. Our qualitative approach evaluates various events including, but not limited to, macroeconomic conditions, changes in the business environment in which we operate, a sustained decrease in our share priceand other specific facts and circumstances. If, after assessing qualitative factors, we determine that it is more-likely-than-not that the fair value of our reporting unit is greater than the carrying value, then performing a quantitative impairment assessment is unnecessary and our goodwill is not considered to be impaired. If, based on the qualitative assessment, we conclude that it is more-likely-than-not that the fair value of the reporting unit is less than the carrying value, or if we elect to bypass the qualitative assessment, we proceed with performing the quantitative impairment assessment.
When a quantitative impairment assessment is performed, we primarily determine the fair value of our reporting units using a discounted cash flow model, or income approach, and supplement this with observable valuation multiples for comparable companies, as appropriate. The completion of the discounted cash flow model requires that we make a number of significant estimates and assumptions, which include projections of future revenue, costs and expenses, capital expenditures and working capital changes, as well as assumptions about the estimated weighted average cost of capital and other relevant variables. We base our estimates and assumptions on our recent performance, our expectations of future performance, economic or market conditions and other assumptions we believe to be reasonable. Actual future results may differ from those estimates.
Intangible assets, other than goodwill, acquired in a business combination are recognized at their fair value as of the date of acquisition. We periodically reassess the useful lives of our definite-lived intangible assets when events or circumstances indicate that useful lives have significantly changed from the previous estimate.
See Note 6, Goodwill and Intangible Assets in the Notes to Consolidated Financial Statements included in Part II, Item 8 "Financial Statements and Supplementary Data" in this Annual Report for additional information about impairment testing for goodwill and intangible assets, including the goodwill impairment charges that we recognized during the fiscal year ended December 31, 2023.
Impairment of Long-Lived Assets
Long-lived assets include aircraft, property and equipment, finite-lived intangible assets and operating lease right-of-use assets. We review the carrying value of long-lived assets for impairment when events or circumstances indicate that the carrying value may not be recoverable based on the estimated undiscounted future cash flows expected to result from the use and eventual disposition of the asset. The circumstances that would indicate potential impairment may include, but are not limited to, a significant change in the manner in which an asset is being used or losses associated with the use of an asset. We review long-lived assets for impairment at the individual asset or the asset group level for which the lowest level of independent cash flows can be identified and measured. If the carrying amount of a long-lived asset or asset group is determined not to be recoverable, an impairment loss is recognized and a write-down to fair value is recorded.
Equity-Based Compensation
Equity-based compensation awards are measured on the date of grant based on the estimated fair value of the respective award and the resulting compensation expense is recognized over the requisite service period of the respective award. We account for forfeitures of awards as they occur.
For Restricted stock units ("RSUs") granted under the Wheels Up Experience Inc. 2021 Long-Term Incentive Plan, as amended and restated effective April 1, 2023 (as amended by the LTIP Amendments (as defined in Note 11, Stockholders' Equity and Equity-Based Compensation in the Notes to Financial Statements in Part II, Item 8 "Financial Statements and Supplementary Data" in this Annual Report), the "Amended and Restated 2021 LTIP"), we recognize compensation expense on a straight-line basis over the requisite service period. Certain of our RSUs granted under the Amended and Restated 2021 LTIP vest upon achievement of pre-determined performance objectives ("PSUs"). The vesting of RSUs and PSUs are generally subject to a participant's continued service to the Company through the vesting date. Compensation expense associated with PSUs is recognized based on the quantity of awards we have determined are probable of vesting and is recognized over the longer of the estimated performance goal attainment period or time vesting period. The grant date fair value of RSUs with market-based vesting conditions is recognized over the derived service period for the award, unless the market condition is satisfied in advance of the derived service period, in which case a cumulative catch-up is recognized as of the date of achievement.
The Executive Performance Plans (as defined in Note 11, Stockholders' Equity and Equity-Based Compensation in the Notes to Financial Statements in Part II, Item 8 "Financial Statements and Supplementary Data" in this Annual Report) are subject to the satisfaction of the applicable performance- and service-based vesting conditions under such award, if at all. Compensation expense associated with the Executive Performance Plans is recognized over the derived service period.
Recent Accounting Pronouncements
For further information on recent accounting pronouncements, see Note 2, Summary of Significant Accounting Policies in the Notes to Consolidated Financial Statements included in Part II, Item 8 "Financial Statements and Supplementary Data" in this Annual Report.
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