Azul (AZUL4) Q4 2024 earnings summary

Executive summary

• Achieved record Q4 and full-year 2024 revenue and EBITDA, with Q4 revenue at R$5.5 billion and EBITDA at R$2.0 billion (35.2% margin), despite significant operational and macroeconomic challenges such as supply chain disruptions, currency devaluation, fuel price volatility, and severe weather events.

• Maintained industry-leading profitability and lowest unit costs in the region, supported by a diversified network and business units, with business units contributing 23% of RASK and 24% of EBITDA in Q4.

• Successfully completed a comprehensive capital and balance sheet restructuring, extinguishing over US$1.6 billion (R$8.5 billion) in debt, reducing gross debt by R$6.3 billion, and raising US$525 million in new capital.

• Ended the year with immediate liquidity above R$3 billion, representing 15.7%-16% of LTM revenues.

Financial highlights

• Q4 revenue reached R$5.5 billion, up 10.2% year-over-year, with RASK at R$44.98 cents and CASK at R$34.93 cents (-6.5% YoY); full-year operating revenue was R$19.5 billion (+4.4% YoY).

• Q4 EBITDA was R$2.0 billion (35.2% margin), EBIT R$1.2 billion (22.3% margin); full-year adjusted EBITDA was R$6.1 billion (31.1% margin).

• Net loss for 2024 was R$9.15 billion, mainly due to FX losses; adjusted net loss was R$1.06 billion.

• Capacity grew 11% YoY in Q4; domestic capacity up 8.2% for the year, international down 5.4% due to fleet transition.

• Immediate liquidity at R$3.1 billion (+22.5% QoQ); cash and equivalents at R$4.1 billion.

Outlook and guidance

• Reaffirmed 2025 EBITDA guidance of R$7.4 billion, with expectations of margin expansion, positive free cash flow, and further deleveraging.

• Projected overall capacity growth of 10%-12% in 2025, mainly from international expansion; domestic growth expected at around 8%.

• Free cash flow guidance remains on track, with only minor fare increases needed to offset recent currency devaluation.