Delta’s third quarter saw a positive market reaction, reflecting the company’s outperformance versus Wall Street expectations across revenue, earnings, and margins. Management attributed this to robust demand among higher-income travelers, a rebound in corporate travel, and continued strength in premium and loyalty revenue streams. CEO Ed Bastian highlighted, “Revenue grew 4%, led by premium, corporate and loyalty, reflecting the power of Delta's brand, the financial strength of our customer base and improving industry fundamentals.” Operational reliability and enhanced customer experience were also cited as important contributors to the quarter’s performance.
Is now the time to buy DAL? Find out in our full research report (it’s free for active Edge members).
Delta (DAL) Q3 CY2025 Highlights:
- Revenue: $16.67 billion vs analyst estimates of $16.06 billion (6.4% year-on-year growth, 3.8% beat)
- EPS (GAAP): $2.17 vs analyst estimates of $1.55 (39.8% beat)
- Adjusted EBITDA: $2.31 billion vs analyst estimates of $2.23 billion (13.8% margin, 3.5% beat)
- Revenue Guidance for Q4 CY2025 is $16.03 billion at the midpoint, above analyst estimates of $15.68 billion
- EPS (GAAP) guidance for the full year is $6 at the midpoint, missing analyst estimates by 9.2%
- Operating Margin: 10.1%, up from 8.9% in the same quarter last year
- Revenue Passenger Miles: 67.62 billion, up 1.31 billion year on year
- Market Capitalization: $40.02 billion
While we enjoy listening to the management's commentary, our favorite part of earnings calls are the analyst questions. Those are unscripted and can often highlight topics that management teams would rather avoid or topics where the answer is complicated. Here is what has caught our attention.
Our Top 5 Analyst Questions From Delta’s Q3 Earnings Call
- Duane Pfennigwerth (Evercore ISI) asked about the drivers behind improved cash flow. CFO Daniel Janki pointed to working capital efficiency and expected further improvement as booking curves normalize.
- Thomas Fitzgerald (TD Cowen) questioned the uniqueness of Delta’s domestic market strength. President Glen Hauenstein cited higher-income customer exposure and premium product investments as key differentiators.
- Catherine O'Brien (Goldman Sachs) inquired about efficiency gains and premium seat retrofits. Janki confirmed ongoing gains from technology and workforce, while Hauenstein detailed that retrofits and new aircraft will further increase premium seat mix.
- Jamie Baker (JPMorgan) sought clarity on the drivers of premium revenue growth and consumer behavior shifts. Hauenstein explained that both affluent frequent flyers and upward-trading leisure travelers are contributing, with high retention rates for premium cabins.
- Andrew Didora (Bank of America) asked about transatlantic challenges and margin trends by geography. Hauenstein acknowledged a disappointing third quarter in the Atlantic, with plans to adjust capacity and booking strategies, and noted convergence of domestic and international margins.
Catalysts in Upcoming Quarters
Looking forward, the StockStory team will closely track (1) further growth in premium and loyalty revenue streams as capacity shifts toward higher-margin products, (2) progress on fleet renewal and efficiency initiatives to support margin expansion, and (3) the pace of recovery in corporate travel and Main Cabin demand. Additionally, we will monitor the impact of macro risks such as government shutdowns and supply chain inflation on both revenue and cost trajectories.
Delta currently trades at $61.35, up from $57.14 just before the earnings. At this price, is it a buy or sell? Find out in our full research report (it’s free for active Edge members).
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