Preliminary brief— based on press release only. Full analysis including management tone and Q&A will be added when the transcript is available.

UAL · Q4 2025 Earnings

United Airlines Holdings

Reported January 20, 2026

30-second summary

SENTIMENT: Mixed Q4 FY2025 non-GAAP EPS of $3.10 printed at the low end of the $3.00–$3.50 guide — not the upper half the Q3 narrative implied — and FY2025 free cash flow came in at $2.7B against the "over $3B" guide management raised to just one quarter ago. Management offset both misses with an aggressive FY2026 EPS guide of $12–$14 (+22% at midpoint vs. $10.62 actual), a Q1 FY2026 guide of $1.00–$1.50 (+37% YoY at midpoint), and an explicit investment-grade-by-year-end leverage target. The print is constructive on forward trajectory but the FCF walk-back is the unannounced cut nobody is talking about, and the FY25 adjusted EPS growth was only +0.1% — technically positive but materially below the trajectory the Q3 "better half" framing implied.

Headline numbers

EPS

Q4 FY2025

$3.10

Revenue

Q4 FY2025

$15.40B

+4.8% YoY

Operating margin

Q4 FY2025

9.0%

Key financials

Q4 FY2025

Metric	Q4 FY2025	YoY	Q3 FY2025	QoQ
Revenue	$15.40B	+4.8%	$15.22B	+1.1%
EPS	$3.10	—	$2.78	+11.5%
Operating margin	9.0%	—	9.2%	-20bps

Guidance

United raised FY2026 EPS guidance to $12–$14 (+20% growth) and set ambitious leverage/capex targets, but FY2025 free cash flow fell $300M short of prior 'over $3B' guidance.

Guidance is issued for the full year only, refreshed each quarter. Prior and new below are the same FY updated this quarter.

Actuals vs prior guidance

Metric	Period	Prior guide	Actual	Δ	Result
EPS (non-GAAP)	Q4 FY2025	$3.00 to $3.50	$3.10	-$0.15 to -$0.40 below guide high, but within range	Beat
Revenue	Q4 FY2025	Expected to be United's best revenue quarter ever	$15.4 billion	in-line with qualitative guidance	Met
EPS (non-GAAP)	FY2025	$9 to $11	$10.62	$+0.62 above midpoint ($10.00); within upper half of range	Beat

New guidance

Metric	Period	Guide	YoY
EPS (non-GAAP)	Q1 FY2026	$1.00 to $1.50	approximately +37% YoY at midpoint
EPS (non-GAAP)	FY2026	$12 to $14	over +20% YoY at midpoint
Capital Expenditures	FY2026	Less than $8 billion	—
Aircraft Deliveries	FY2026	Over 100 narrowbody aircraft and approximately 20 widebody aircraft	—
Free Cash Flow	FY2026	Similar level to FY2025	—
Net Leverage Ratio	FY2026	Below 2.0x with intention to achieve investment grade by year-end	—
Operating Margin	FY2026	Continued margin expansion towards double-digit margins	—

Changes to prior guidance

Metric	Period	Prior guide	New guide	Δ	Result
Free Cash Flow	FY2025	Over $3 billion	$2.7 billion	-$0.3 billion vs. prior 'over $3B' guidance	Lowered

Segment KPIs

Q4 FY2025

Segment	Q4 FY2025	YoY
Domestic Passenger Revenue	$8.301B	+2.0%
International Passenger Revenue	$5.626B	+9.5%
Cargo Revenue	$0.49B	-6.0%
Other Operating Revenue	$0.981B	+9.1%

Other KPIs

Q4 FY2025

Segment	Q4 FY2025
Total Revenue Per Available Seat Mile (TRASM)	18.47 cents
Passenger Revenue Per Available Seat Mile (PRASM)	16.71 cents
Cost Per Available Seat Mile (CASM)	16.81 cents
CASM-ex	12.94 cents
Passenger Load Factor	81.9%
Total Passengers	45.679 million
Adjusted Pre-tax Margin	8.5%
Net Leverage Ratio	2.2x

Management tone

Q4 24 customer-optimization hangover → Q1 25 macro uncertainty → Q2 25 demand inflection → Q3 25 industry restructuring → Q4 25 explicit competitive offense + IG-by-year-end leverage commitment.

The most consequential tone shift is from defensive positioning to declared competitive offense. Across the prior four quarters management argued the two-airline structural advantage was emerging; this quarter management escalated to explicit hub-level competitive posture — Andrew noted that of the three airline hubs in Chicago, only United's was profitable in 2025 and is expected to be profitable again in 2026. Q3 was claiming a result, Q4 is declaring a strategy.

The United Next narrative shifted from multi-year capacity growth to capacity completion. Andrew called 2025 "the high watermark on domestic capacity growth as we draw this very successful part of the United Next plan to an end," and pivoted to gauge-focused growth post-2027. Two quarters ago United Next was the forward plan; this quarter it is being declared completed. The shift matters because it telegraphs that 2026 EPS growth must come from margin/mix, not fleet expansion — and the operating-margin guide ("toward double-digit") confirms FY2026 margin still runs below 10%.

The main-cabin weakness framing has hardened from cyclical to structural-but-temporary. Andrew this quarter: "main cabin weakness is due to unprofitable capacity offered by other large spill demand U.S. carriers" and "I do think it's inevitable that the coach cabin, the main cabin, improves." Scott appended his "economic gravity always wins in the end" thesis through the Q&A. Two quarters ago United argued the moat existed; one quarter ago that competitors were loss-making; this quarter that competitor capacity exit is inevitable. The thesis is escalating in confidence even as Q4 EPS landed at the low end of guide.

Hedging language returned this quarter after being notably absent in Q3. Mike: "our forecast will prove to be more conservative than it usually is." Andrew: "which could admittedly cause our guidance to feel a bit conservative." The explicit signaling that the FY2026 guide is conservative is unusual — management is pre-flagging upside while still cushioning against macro execution risk. That's a meaningful change from Q3's near-zero-hedge tone.

Labor surfaced as a material variable for the first time. Brett Hart: "We are currently in active negotiations with four of our labor unions." Employees received $700M in profit sharing for 2025. Labor was not quantified as an FY2026 cost headwind but was no longer treated as a routine agenda item. The FY2026 EPS guide of $12–$14 spans a $2 range — labor settlement timing/structure could easily explain the width.

Recurring themes management leaned on this quarter:

Brand loyalty as competitive moat and margin driverCost efficiency culture as structural advantage independent of fleet modernizationPremium cabin outperformance (11% revenue growth vs. -5% for basic economy in 2025)Operational resilience through investments in people, technology, and toolsStrategic shift from frequency growth to gauge optimization post-2027Margin expansion trajectory toward double-digit target despite near-term headwinds

Risks management surfaced:

Unprofitable capacity by competitors in domestic market constraining pricingLatin America underperformance with recent geopolitical impact on Caribbean bookingsLabor negotiations with four unions (cost uncertainty not quantified)Newark operational challenges in prior year (cited as $85M headwind in 2025)Main cabin revenue weakness persisting into Q1 2026

Answers to last quarter's watch list

Whether Q4 FY2025 non-GAAP EPS prints in the upper half of the $3.00–$3.50 guide. No. EPS printed $3.10 — the lower end. FY EPS landed at $10.62, technically in the "better half" of $9–$11, but the Q4 result undershoots the Q3 implied trajectory. The "better half" claim held on the FY print but the Q4 quality is weaker than Q3 framing suggested. Status: Resolved negatively

Whether Q4 FY2025 RASM actually prints as the highest absolute of 2025. Yes. TRASM 18.47¢ was the highest of any 2025 quarter, validating the most testable forward claim from the Q3 call. Status: Resolved positively

FY2025 FCF actually printing >$3B. No. FCF came in at $2.7B — $300M below the Q3 guide of ">$3B." This is the most material miss on the print and is not acknowledged in management messaging. The FY2026 guide ("similar level to FY2025") implicitly anchors the 2026 baseline at $2.7B, not $3B+. Status: Resolved negatively

MileagePlus segment disclosure cadence and timing. Partial update — Scott noted Jared Fisher has joined as the new head of MileagePlus and committed to a more detailed update "within the next 10 weeks." No segment-level financial disclosure yet. Status: Continue monitoring

FY2026 capex guide. Disclosed as "less than $8 billion," consistent with the $7–9B multi-year framework provided in 2024. Combined with the "similar FCF to 2025" guide, this confirms FY2026 FCF generation is flat despite >20% EPS growth — operating cash flow is funding capex normalization, not flowing through. Status: Resolved (capex disclosed; FCF implication negative for bull case)

Whether the "only airline to grow earnings in 2025" claim holds when peers report. Cannot be validated from this print alone — requires peer reporting. UAL FY2025 adjusted EPS of $10.62 vs. FY2024 $10.61 is +0.1% — technically positive but essentially flat, satisfying United's side of the claim by a single penny. GAAP EPS $10.20 vs $9.45 is +7.9%. Status: Continue monitoring

Atlantic Q4 RASM actually positive YoY despite elevated capacity. Confirmed. Atlantic PRASM was +0.9% on +13.1% ASM growth, and Andrew explicitly noted on the call that Atlantic and Pacific PRASM turned positive in Q4. Status: Resolved positively

What to watch into next quarter

Whether FY2026 FCF guide of "similar to FY2025" ($2.7B) gets revised lower as labor settlements land. Four open union negotiations and a "less than $8B" capex guide leave little cushion. A first revision below $2.7B would mark the second consecutive year of FCF disappointment.

Q1 FY2026 EPS print vs. $1.00–$1.50 guide. Mid-point $1.25 implies ~37% YoY growth — a strong start required to credibly anchor the $12–$14 FY guide. A print below $1.00 forces an immediate FY2026 walk-back.

Whether net leverage actually moves from 2.2x toward <2.0x by year-end FY2026. Management committed to investment-grade metrics by YE FY2026. On flat FCF of ~$2.7B and ~$8B capex, the deleveraging path requires either EBITDA growth doing the heavy lifting or debt paydown from non-operating sources.

Operating margin trajectory toward "double digit." FY2025 finished at 8.0%; the FY2026 guide is qualitative ("continued expansion toward double-digit margins") and implicitly sub-10%. Watch Q1 FY2026 operating margin print vs. Q1 FY2025's level.

MileagePlus update within the 10-week window Scott committed to. Jared Fisher's appointment and the promised announcement are the most testable forward commitment from this call.

Whether the Chicago competitive posture produces measurable share impact or just unprofitable defensive flying. If Q1 FY2026 domestic shows further deceleration despite Andrew's confidence in the hub framework, the competitive posture is costing margin without delivering share.

Main-cabin RASM inflection. Andrew called main-cabin improvement "inevitable." Q1 FY2026 PRASM split between premium and main cabin will be the first datapoint testing the "economic gravity" thesis on a timeline.

Business-revenue trajectory through February/March. Andrew's framework — if early-January high-single-digit YoY business strength holds, the late-January through March compares produce 12–14% YoY growth — is the testable bull case. Weekly bookings disclosure or any 8-K update would mark the first data check.

Sources

United Airlines Holdings Q4 FY2025 earnings press release (8-K Exhibit 99.1), SEC EDGAR — https://www.sec.gov/Archives/edgar/data/100517/000010051726000014/ual_12312025erex991.htm
United Airlines Q4 FY2025 prepared remarks and Q&A (Scott Kirby, Brett Hart, Toby Enqvist, Andrew Nocella, Mike Leskinen; analyst questions from Connor Cunningham/Melius, David Vernon/Bernstein, Sheila Kahyaoglu/Jefferies, Catie O'Brien/Goldman, Ravi Shankar/Morgan Stanley)

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