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Southwest Airls Co Financials

LUV
Source SEC Filings (10-K/10-Q) Updated Dec 31, 2025 Currency USD FYE December

This page shows Southwest Airls Co (LUV) financial statements, including the income statement, balance sheet, cash flow statement, and key financial ratios. View 19 years of annual fundamentals and quarterly data, with year-over-year growth rates and compound annual growth rates (CAGR). All figures are derived from SEC filings (10-K and 10-Q reports).

Financial Health Signals

Profitability Growth Leverage Liquidity Cash Flow Returns 33 / 100
Financial Profile 33/100

Based on FY2025 annual data. Scores normalized against common benchmarks. How we calculate these scores

Profitability
26

Southwest Airls Co has an operating margin of 1.5%, meaning the company retains $2 of operating profit per $100 of revenue. This below-average margin results in a low score of 26/100, suggesting thin profitability after operating expenses. This is up from 1.2% the prior year.

Growth
37

Southwest Airls Co's revenue grew a modest 2.1% year-over-year to $28.1B. This slow but positive growth earns a score of 37/100.

Leverage
89

Southwest Airls Co carries a low D/E ratio of 0.62, meaning only $0.62 of long-term debt for every $1 of shareholders' equity. This conservative leverage earns a score of 89/100, indicating a strong balance sheet with room for future borrowing.

Liquidity
5

Southwest Airls Co's current ratio of 0.52 means current assets barely cover short-term liabilities. This tight liquidity results in a low score of 5/100, which could limit financial flexibility.

Cash Flow
18

While Southwest Airls Co generated $1.8B in operating cash flow, capex of $2.7B consumed most of it, leaving -$831.0M in free cash flow. This results in a low score of 18/100, reflecting heavy capital investment rather than weak cash generation.

Returns
23

Southwest Airls Co generates a 5.5% ROE, indicating limited profit relative to shareholders' investment. This results in a returns score of 23/100. This is up from 4.5% the prior year.

Altman Z-Score Grey Zone
2.11

Southwest Airls Co scores 2.11, placing it in the grey zone between 1.81 and 2.99. This signals moderate financial risk that warrants monitoring.

Piotroski F-Score Strong
7/9

Southwest Airls Co passes 7 of 9 financial strength tests. All 4 profitability signals pass (positive income, cash flow, and earnings quality), 2 of 3 leverage/liquidity signals pass, both operating efficiency signals pass.

Earnings Quality Cash-Backed
4.18x

For every $1 of reported earnings, Southwest Airls Co generates $4.18 in operating cash flow ($1.8B OCF vs $441.0M net income). This indicates profits are well-supported by actual cash generation, not accounting adjustments.

Interest Coverage Adequate
2.6x

Southwest Airls Co earns $2.6 in operating income for every $1 of interest expense ($428.0M vs $167.0M). This adequate coverage means the company can meet its interest obligations, but has limited cushion if earnings fall.

Key Financial Metrics

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Earnings & Revenue

Revenue
$28.1B
YoY+2.1%
5Y CAGR+25.4%
10Y CAGR+3.5%

Southwest Airls Co generated $28.1B in revenue in fiscal year 2025. This represents an increase of 2.1% from the prior year.

EBITDA
$2.0B
YoY+0.5%
10Y CAGR-9.0%

Southwest Airls Co's EBITDA was $2.0B in fiscal year 2025, measuring earnings before interest, taxes, depreciation, and amortization. This represents an increase of 0.5% from the prior year.

Net Income
$441.0M
YoY-5.2%
10Y CAGR-14.8%

Southwest Airls Co reported $441.0M in net income in fiscal year 2025. This represents a decrease of 5.2% from the prior year.

EPS (Diluted)
$0.79
YoY+3.9%
10Y CAGR-13.2%

Southwest Airls Co earned $0.79 per diluted share (EPS) in fiscal year 2025. This represents an increase of 3.9% from the prior year.

Cash & Balance Sheet

Free Cash Flow
-$831.0M
YoY+47.8%

Southwest Airls Co generated -$831.0M in free cash flow in fiscal year 2025, representing cash available after capex. This represents an increase of 47.8% from the prior year.

Cash & Debt
$3.2B
YoY-57.0%
5Y CAGR-21.8%
10Y CAGR+7.4%

Southwest Airls Co held $3.2B in cash against $4.9B in long-term debt as of fiscal year 2025.

Dividends Per Share
$0.72
YoY+0.0%
5Y CAGR+32.0%
10Y CAGR+9.7%

Southwest Airls Co paid $0.72 per share in dividends in fiscal year 2025. This represents an increase of 0.0% from the prior year.

Shares Outstanding
491M
YoY-17.1%
5Y CAGR-3.6%
10Y CAGR-2.6%

Southwest Airls Co had 491M shares outstanding in fiscal year 2025. This represents a decrease of 17.1% from the prior year.

Margins & Returns

Gross Margin
N/A
Operating Margin
1.5%
YoY+0.4pp
5Y CAGR+43.7pp
10Y CAGR-19.2pp

Southwest Airls Co's operating margin was 1.5% in fiscal year 2025, reflecting core business profitability. This is up 0.4 percentage points from the prior year.

Net Margin
1.6%
YoY-0.1pp
5Y CAGR+35.5pp
10Y CAGR-9.4pp

Southwest Airls Co's net profit margin was 1.6% in fiscal year 2025, showing the share of revenue converted to profit. This is down 0.1 percentage points from the prior year.

Return on Equity
5.5%
YoY+1.0pp
5Y CAGR+40.2pp
10Y CAGR-26.7pp

Southwest Airls Co's ROE was 5.5% in fiscal year 2025, measuring profit generated per dollar of shareholder equity. This is up 1.0 percentage points from the prior year.

Capital Allocation

R&D Spending
N/A
Share Buybacks
$2.5B
YoY+920.0%
5Y CAGR+41.4%
10Y CAGR+8.0%

Southwest Airls Co spent $2.5B on share buybacks in fiscal year 2025, returning capital to shareholders by reducing shares outstanding. This represents an increase of 920.0% from the prior year.

Capital Expenditures
$2.7B
YoY+30.1%
5Y CAGR+39.0%
10Y CAGR+2.7%

Southwest Airls Co invested $2.7B in capex in fiscal year 2025, funding long-term assets and infrastructure. This represents an increase of 30.1% from the prior year.

LUV Income Statement

Metric Q4'25 Q3'25 Q2'25 Q1'25 Q4'24 Q3'24 Q2'24 Q1'24
Revenue $7.4B+7.1% $6.9B-4.1% $7.2B+12.7% $6.4B-7.2% $6.9B+0.9% $6.9B-6.6% $7.4B+16.2% $6.3B
Cost of Revenue N/A N/A N/A N/A N/A N/A N/A N/A
Gross Profit N/A N/A N/A N/A N/A N/A N/A N/A
R&D Expenses N/A N/A N/A N/A N/A N/A N/A N/A
SG&A Expenses N/A N/A N/A N/A N/A N/A N/A N/A
Operating Income $391.0M+1017.1% $35.0M-84.4% $225.0M+200.9% -$223.0M-180.2% $278.0M+631.6% $38.0M-90.5% $398.0M+201.3% -$393.0M
Interest Expense $47.0M+34.3% $35.0M-10.3% $39.0M-15.2% $46.0M-20.7% $58.0M-7.9% $63.0M0.0% $63.0M-3.1% $65.0M
Income Tax $84.0M+500.0% $14.0M-79.1% $67.0M+255.8% -$43.0M-164.2% $67.0M+204.5% $22.0M-80.2% $111.0M+265.7% -$67.0M
Net Income $323.0M+498.1% $54.0M-74.6% $213.0M+243.0% -$149.0M-156.9% $262.0M+291.0% $67.0M-81.7% $367.0M+258.9% -$231.0M
EPS (Diluted) N/A $0.10-74.4% $0.39+250.0% $-0.26 N/A $0.11-81.0% $0.58+248.7% $-0.39

LUV Balance Sheet

Metric Q4'25 Q3'25 Q2'25 Q1'25 Q4'24 Q3'24 Q2'24 Q1'24
Total Assets $29.1B+2.6% $28.3B-1.4% $28.7B-13.5% $33.2B-1.6% $33.8B-3.1% $34.8B-2.0% $35.6B-1.3% $36.0B
Current Assets $5.6B+4.6% $5.4B-11.4% $6.1B-43.2% $10.7B-4.8% $11.3B-5.5% $11.9B-6.4% $12.8B-4.0% $13.3B
Cash & Equivalents $3.2B+11.3% $2.9B-16.5% $3.5B-57.3% $8.1B+8.3% $7.5B-11.7% $8.5B+4.4% $8.1B-2.7% $8.4B
Inventory N/A N/A N/A N/A N/A N/A N/A N/A
Accounts Receivable $98.0M+88.5% $52.0M-13.3% $60.0M+27.7% $47.0M0.0% $47.0M-6.0% $50.0M-25.4% $67.0M+15.5% $58.0M
Goodwill $970.0M0.0% $970.0M0.0% $970.0M0.0% $970.0M0.0% $970.0M0.0% $970.0M0.0% $970.0M0.0% $970.0M
Total Liabilities $21.1B+2.6% $20.5B-0.8% $20.7B-13.1% $23.8B+1.9% $23.4B-4.2% $24.4B-2.6% $25.1B-2.8% $25.8B
Current Liabilities $10.9B-0.7% $11.0B+0.9% $10.9B-21.6% $13.9B+13.2% $12.3B-9.0% $13.5B-4.4% $14.1B+15.4% $12.2B
Long-Term Debt $4.9B+20.8% $4.1B0.0% $4.1B-0.1% $4.1B-39.0% $6.7B+32.0% $5.1B+0.2% $5.1B-36.5% $8.0B
Total Equity $8.0B+2.6% $7.8B-2.8% $8.0B-14.6% $9.4B-9.5% $10.3B-0.6% $10.4B-0.5% $10.5B+2.6% $10.2B
Retained Earnings $16.4B+1.4% $16.2B-0.3% $16.2B+0.7% $16.1B-1.5% $16.3B+1.0% $16.2B-0.2% $16.2B+1.6% $16.0B

LUV Cash Flow Statement

Metric Q4'25 Q3'25 Q2'25 Q1'25 Q4'24 Q3'24 Q2'24 Q1'24
Operating Cash Flow $295.0M+2.8% $287.0M-28.4% $401.0M-53.4% $860.0M+80.7% $476.0M+321.2% $113.0M+591.3% -$23.0M+77.9% -$104.0M
Capital Expenditures $859.0M+26.7% $678.0M+6.8% $635.0M+26.7% $501.0M+8.9% $460.0M-11.0% $517.0M+4.7% $494.0M-15.3% $583.0M
Free Cash Flow -$564.0M-44.2% -$391.0M-67.1% -$234.0M-165.2% $359.0M+2143.8% $16.0M+104.0% -$404.0M+21.9% -$517.0M+24.7% -$687.0M
Investing Cash Flow -$742.0M-73.4% -$428.0M+51.5% -$882.0M-241.6% $623.0M+753.4% $73.0M-84.1% $458.0M+322.3% -$206.0M+64.8% -$585.0M
Financing Cash Flow $776.0M+279.6% -$432.0M+89.7% -$4.2B-386.9% -$858.0M+44.4% -$1.5B-634.8% -$210.0M-5350.0% $4.0M+101.7% -$232.0M
Dividends Paid $0-100.0% $189.0M+83.5% $103.0M-3.7% $107.0M+10800.0% -$1.0M-100.5% $216.0M $0-100.0% $215.0M
Share Buybacks $50.0M-80.0% $250.0M-83.3% $1.5B+100.0% $750.0M+200.0% $250.0M $0 $0 $0

LUV Financial Ratios

Metric Q4'25 Q3'25 Q2'25 Q1'25 Q4'24 Q3'24 Q2'24 Q1'24
Gross Margin N/A N/A N/A N/A N/A N/A N/A N/A
Operating Margin 5.3%+4.8pp 0.5%-2.6pp 3.1%+6.6pp -3.5%-7.5pp 4.0%+3.5pp 0.5%-4.9pp 5.4%+11.6pp -6.2%
Net Margin 4.3%+3.6pp 0.8%-2.2pp 2.9%+5.3pp -2.3%-6.1pp 3.8%+2.8pp 1.0%-4.0pp 5.0%+8.6pp -3.6%
Return on Equity 4.0%+3.4pp 0.7%-2.0pp 2.7%+4.3pp -1.6%-4.1pp 2.5%+1.9pp 0.6%-2.9pp 3.5%+5.8pp -2.3%
Return on Assets 1.1%+0.9pp 0.2%-0.6pp 0.7%+1.2pp -0.4%-1.2pp 0.8%+0.6pp 0.2%-0.8pp 1.0%+1.7pp -0.6%
Current Ratio 0.52+0.0 0.49-0.1 0.56-0.2 0.77-0.1 0.92+0.0 0.88-0.0 0.90-0.2 1.09
Debt-to-Equity 0.62+0.1 0.52+0.0 0.51+0.1 0.44-0.2 0.65+0.2 0.490.0 0.48-0.3 0.78
FCF Margin -7.6%-2.0pp -5.6%-2.4pp -3.2%-8.8pp 5.6%+5.4pp 0.2%+6.1pp -5.9%+1.2pp -7.0%+3.8pp -10.8%

Note: The current ratio is below 1.0 (0.52), indicating current liabilities exceed current assets, which may suggest potential short-term liquidity concerns.

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Frequently Asked Questions

Southwest Airls Co (LUV) reported $28.1B in total revenue for fiscal year 2025. This represents a 2.1% change compared to the previous fiscal year. Revenue measures the total income earned from the company's primary business operations before any expenses are deducted.

Southwest Airls Co (LUV) revenue grew by 2.1% year-over-year, from $27.5B to $28.1B in fiscal year 2025.

Yes, Southwest Airls Co (LUV) reported a net income of $441.0M in fiscal year 2025, with a net profit margin of 1.6%.

Southwest Airls Co (LUV) reported diluted earnings per share of $0.79 for fiscal year 2025. This represents a 3.9% change compared to the previous fiscal year. EPS represents the portion of a company's net income allocated to each outstanding share of common stock and is widely used to evaluate profitability on a per-share basis.

Southwest Airls Co (LUV) had EBITDA of $2.0B in fiscal year 2025, measuring earnings before interest, taxes, depreciation, and amortization.

As of fiscal year 2025, Southwest Airls Co (LUV) had $3.2B in cash and equivalents against $4.9B in long-term debt.

Southwest Airls Co (LUV) had an operating margin of 1.5% in fiscal year 2025, reflecting the profitability of core business operations before interest and taxes.

Southwest Airls Co (LUV) had a net profit margin of 1.6% in fiscal year 2025, representing the share of revenue converted into profit after all expenses.

Yes, Southwest Airls Co (LUV) paid $0.72 per share in dividends during fiscal year 2025.

Southwest Airls Co (LUV) has a return on equity of 5.5% for fiscal year 2025, measuring how efficiently the company generates profit from shareholder equity.

Southwest Airls Co (LUV) generated -$831.0M in free cash flow during fiscal year 2025. This represents a 47.8% change compared to the previous fiscal year. Free cash flow represents the cash a company generates after accounting for capital expenditures, and is widely used to assess financial flexibility and shareholder value.

Southwest Airls Co (LUV) generated $1.8B in operating cash flow during fiscal year 2025, representing cash generated from core business activities.

Southwest Airls Co (LUV) had $29.1B in total assets as of fiscal year 2025, including both current and long-term assets.

Southwest Airls Co (LUV) invested $2.7B in capital expenditures during fiscal year 2025, funding long-term assets and infrastructure.

Yes, Southwest Airls Co (LUV) spent $2.5B on share buybacks during fiscal year 2025, returning capital to shareholders by reducing shares outstanding.

Southwest Airls Co (LUV) had 491M shares outstanding as of fiscal year 2025.

Southwest Airls Co (LUV) had a current ratio of 0.52 as of fiscal year 2025, which is below 1.0, which may suggest potential liquidity concerns.

Southwest Airls Co (LUV) had a debt-to-equity ratio of 0.62 as of fiscal year 2025, measuring the company's financial leverage by comparing total debt to shareholder equity.

Southwest Airls Co (LUV) had a return on assets of 1.5% for fiscal year 2025, measuring how efficiently the company uses its assets to generate profit.

Southwest Airls Co (LUV) has an Altman Z-Score of 2.11, placing it in the Grey Zone (moderate risk). The Z-Score combines five financial ratios—working capital, retained earnings, EBIT, market capitalization, and revenue relative to total assets—to predict the likelihood of bankruptcy. Scores above 2.99 indicate financial safety while scores below 1.81 suggest financial distress. Learn more in our complete guide to financial health indicators.

Southwest Airls Co (LUV) has a Piotroski F-Score of 7 out of 9, indicating strong financial health. The F-Score evaluates nine binary signals across profitability (positive ROA, positive cash flow, improving ROA, earnings quality), leverage (decreasing debt, improving liquidity, no share dilution), and operating efficiency (improving gross margin, improving asset turnover). Scores of 7–9 indicate strong and improving fundamentals. Learn more in our complete guide to financial health indicators.

Southwest Airls Co (LUV) has an earnings quality ratio of 4.18x, considered cash-backed (high quality). This ratio compares operating cash flow to net income. A ratio above 1.0x means the company generates more cash than its reported earnings, indicating sustainable, cash-backed profits. Ratios below 1.0x suggest earnings rely on accounting accruals rather than actual cash generation. Learn more in our complete guide to financial health indicators.

Southwest Airls Co (LUV) has an interest coverage ratio of 2.6x, meaning it can adequately cover its interest obligations. This ratio divides operating income by interest expense. Ratios above 5x indicate strong debt-servicing ability, while ratios below 2x suggest the company may face difficulty meeting interest payments if earnings decline. Learn more in our complete guide to financial health indicators.

Southwest Airls Co (LUV) scores 33 out of 100 on our Financial Profile, indicating weak overall financial health. This composite score evaluates six dimensions: profitability (operating margin), revenue growth, leverage (debt-to-equity), liquidity (current ratio), cash flow quality (free cash flow margin), and shareholder returns (return on equity). Each dimension is normalized against standard financial benchmarks. Learn more in our complete guide to financial health indicators.

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