Breaking Down Air T, Inc. (AIRT) Financial Health: Key Insights for Investors

You're looking at Air T, Inc. (AIRT) and trying to figure out if the recent profitability gains are a real trend or just a blip, and honestly, that's the right question to be asking. The full-year financials for fiscal 2025 show a company that's growing top-line revenue-it hit $291.9 million, a 2% increase-but it's still struggling with the bottom line, posting a loss per share of $2.23. But here's the quick math: the most recent quarter (Q2 FY2026, ended September 30, 2025) told a different story, with earnings per share jumping to $1.61, up 76.9% year-over-year, even as revenue dipped to $64.2 million. This means they are defintely getting better at cost control and margin management, especially in their Commercial Aircraft, Engines and Parts segment, but the revenue dip is a clear risk. We need to break down how a multi-segment business can have such diverging results to see if the stock, recently trading around $20.97, is a value play or a value trap.

Revenue Analysis

If you are looking at Air T, Inc. (AIRT), the first thing to grasp is that its revenue engine is a diverse portfolio, not a single monolithic business. For the fiscal year ended March 31, 2025, the company reported total revenues of $291.9 million, an increase of 2% from the prior fiscal year. This modest growth of $5.0 million is a critical signal, showing the company is still expanding, but the growth is uneven across its four core segments.

The core of Air T, Inc.'s business is split between two major, nearly equal, segments: air cargo services and aircraft parts trading. Honestly, this diversification is a good thing in a cyclical industry, but it means you have to look past the top-line number. The primary revenue sources are the four segments, which include the legacy businesses and a smaller, high-growth unit: Overnight Air Cargo, Commercial Aircraft, Engines and Parts, Ground Support Equipment, and Digital Solutions.

Here's the quick math on how each segment contributed to the $291.9 million total revenue in fiscal year 2025:

• Overnight Air Cargo: Provides air express delivery services, primarily for FedEx Corporation.
• Commercial Aircraft, Engines and Parts: Focuses on leasing, buying, selling, and trading surplus and aftermarket jet engines and parts.
• Ground Support Equipment: Manufactures and services specialized equipment like mobile deicers for airlines and the military.
• Digital Solutions: The smallest but fastest-growing segment, focused on software subscriptions.

The segmental performance for FY 2025 tells a story of two segments carrying the load while another faced headwinds. The Overnight Air Cargo segment was the largest contributor, bringing in $124.0 million, or about 42.5% of total revenue. Still, the Commercial Aircraft, Engines and Parts segment was right behind it at $118.2 million, or about 40.5% of revenue.

The most significant change was the 5.8% revenue decline in the Commercial Aircraft, Engines and Parts segment. This drop was primarily due to a reduced supply of whole aircraft assets available for purchase and resale, which is a key part of their business model. To be fair, this segment's Adjusted EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization) actually increased significantly due to higher gross profit margins on component package sales, which is a better quality of revenue. Meanwhile, the Overnight Air Cargo segment's 7.3% revenue increase to $124.0 million was driven by higher labor revenue and an increase in administrative fees, plus pass-through maintenance costs from FedEx.

You should defintely pay attention to the Digital Solutions segment, which, while only contributing $7.3 million, saw a sharp 26% revenue increase year-over-year, thanks to new and recurring software subscriptions. This is the future opportunity, but it's still small. The table below shows the full breakdown you need to understand the underlying dynamics of Air T, Inc.'s revenue streams, a deeper dive into which you can find in our full post: Breaking Down Air T, Inc. (AIRT) Financial Health: Key Insights for Investors.

What this estimate hides is the difference between high-volume, low-margin revenue (like pass-through costs in Overnight Air Cargo) and high-margin component sales in Commercial Aircraft, Engines and Parts. That's why you see a revenue decline in the latter, yet its profitability improved.

Profitability Metrics

You're looking for the hard numbers on Air T, Inc. (AIRT)'s profitability, and the story for the fiscal year ended March 31, 2025 (FY 2025) is one of razor-thin operating gains that are ultimately wiped out by non-operating costs. The company is showing signs of operational efficiency improvement in its core segments, but the bottom line remains a loss. That's the quick takeaway.

For FY 2025, Air T, Inc. reported total revenue of $291.85 million, a modest 2% increase from the prior year. The real story is in the margins, which show where the money is made and where it's lost.

Operational Efficiency and Gross Margin Trends

The Gross Profit Margin of 22.12% shows that Air T, Inc. is defintely managing its direct costs well, especially considering the diverse, asset-heavy nature of its business segments. This margin is the first line of defense, and it's holding up. The improvement in operational efficiency is most evident in the Commercial Aircraft, Engines and Parts segment, where a higher gross profit from component package sales drove its Adjusted EBITDA up significantly to $9.8 million. That's a clear win from a better sales mix, even as the segment's total revenue declined.

Here's the quick math on the operating leverage: Operating Income rose to $1.91 million in FY 2025, a 50.9% jump from $1.26 million in FY 2024. That's a strong trend. But, still, the Operating Profit Margin of 0.65% is a fraction of the global airline/air cargo industry's expected net operating margin of 6.7% for 2025. The gap tells you that Selling, General, and Administrative (SG&A) expenses are eating up nearly all the gross profit.

• Gross Profit hit $64.55 million, up from $55.18 million in FY 2024.
• Operating Income increased 50.9% year-over-year.
• The Commercial Aircraft segment saw higher gross profit from component sales.

The Net Profit Drag

The transition from a positive, albeit small, Operating Profit to a Net Loss of -$6.14 million is the single biggest red flag on the income statement. The Net Profit Margin of -2.10% is a stark contrast to the global airline industry's projected 3.6% net profit margin for 2025. This divergence is primarily due to non-operating expenses, particularly high interest expense, which is a common issue for highly leveraged companies (companies with a lot of debt). The company's loss per share improved slightly to $2.23 from $2.42 in the prior year, so the trend is moving in the right direction, but it is still a loss. You need to watch the debt-service costs closely.

For a deeper dive into the balance sheet and what this means for liquidity, check out the full analysis: Breaking Down Air T, Inc. (AIRT) Financial Health: Key Insights for Investors.

Debt vs. Equity Structure

Air T, Inc. (AIRT) presents a complex, high-leverage financing structure, which is typical for an industrial conglomerate focused on capital-intensive sectors like aviation and equipment. For the fiscal year ended March 31, 2025, the company's debt-to-equity (D/E) ratio was reported at -75.69, a figure that immediately signals a highly leveraged balance sheet with a significant portion of shareholder equity being negative. This isn't a sign of low debt; it means the company's total liabilities effectively exceed its total assets, making the capital structure reliant on creditors.

Looking at the consolidated balance sheet, the overall debt profile is substantial. Total debt is approximately $128.1 million, which is a heavy load against total shareholder equity of just $5.3 million. This disparity is why some calculations show a D/E ratio as high as 2420.1%. Short-term liabilities, which are the bills due in the next year, stand at about $49.1 million. The near-term liquidity looks adequate, with short-term assets exceeding these liabilities, but the long-term liability picture is still a concern.

Here's the quick math on the core leverage metrics:

In June 2025, Air T, Inc. executed a major refinancing move to bolster its long-term capital foundation, entering a Third Note Purchase Agreement for a Multiple Advance Senior Secured Note of up to $100 million. This new financing, which carries an annual interest rate of 8.5% and matures on May 31, 2035, is defintely a strategic shift toward long-term, committed debt. The company had already disbursed $40 million of this note by May 30, 2025, with an additional $60 million committed in increments through 2027. This is a clear signal that growth and strategic initiatives, like the pursuit of Rex Regional Airlines, are being funded primarily through debt, not new equity issuance.

The company's balancing act between debt and equity is a story of two halves. While the consolidated entity carries significant leverage, management has shown a focused effort on deleveraging within key subsidiaries. For instance, the aircraft asset management business, Contrail, successfully eliminated all of its bank debt and held $6.7 million in cash as of September 30, 2025. This milestone, a significant reduction from a peak of $74.9 million in debt during the pandemic era, shows that targeted, subsidiary-level debt management is possible and is a positive operational sign.

For investors, the risk is clear: the high leverage means any operational misstep will be amplified, but the commitment of institutional investors to the $100 million note provides necessary runway. To understand who is supporting this capital structure, you should look at Exploring Air T, Inc. (AIRT) Investor Profile: Who's Buying and Why?. The focus now shifts to whether the new debt will be deployed effectively to generate returns that outpace the 8.5% interest cost.

• Monitor interest coverage ratio closely.
• Track the deployment of the new $100 million note.
• Watch for further debt reduction at the subsidiary level.

Liquidity and Solvency

You need to know if Air T, Inc. (AIRT) can cover its near-term bills, and the data gives us a mixed but improving picture. The short answer is yes, the company has enough liquid assets to meet its immediate obligations, but it's still relying heavily on inventory, which is a key distinction for a business dealing in aircraft parts and ground support equipment.

The most recent balance sheet data shows a strong current ratio, which is your first line of defense. Air T, Inc.'s current ratio, which measures current assets against current liabilities, stands at 1.89 as of late 2025. This means the company has $1.89 in current assets for every dollar of short-term debt, which is a healthy position. However, looking at the quick ratio (acid-test ratio) tells a different story. The quick ratio, which strips out inventory-the least liquid current asset-is only 0.80. A quick ratio below 1.0 means the company cannot cover its current liabilities with just cash, receivables, and marketable securities. This isn't necessarily a crisis for a company with significant inventory like Air T, Inc., but it's a red flag to watch.

Here's the quick math on working capital (current assets minus current liabilities):

• Total Current Assets (Jun 2025): $92.9 million
• Total Current Liabilities (Jun 2025): $49.1 million
• Net Working Capital: $43.8 million

The positive $43.8 million in net working capital confirms the company has a buffer. The trend is that short-term assets are comfortably exceeding short-term liabilities. What this estimate hides, though, is the quality of that inventory; if the market for used aircraft engines and parts softens, that $43.8 million could shrink fast. You should definitely check out Exploring Air T, Inc. (AIRT) Investor Profile: Who's Buying and Why? for more on the market dynamics of their core segments.

When we look at the Cash Flow Statement for the fiscal year 2025, we see a focus on generating cash from operations and a significant investment push. Cash Flow from Operating Activities (CFO) was a strong positive at approximately $23.50 million for the fiscal year ended March 31, 2025. This is the lifeblood of the company, and a positive CFO means the core business is generating cash. Still, the Cash Flow from Investing Activities was a net outflow of roughly -$20.19 million, which suggests substantial capital expenditures (CapEx) or strategic acquisitions-a necessary investment in future growth, but a near-term cash drain.

The financing side shows a clear deleveraging strategy. Cash Flow from Financing Activities was a net outflow of around -$13.91 million in the last full fiscal year, primarily driven by debt repayments. This is a huge positive for solvency (long-term debt-paying ability). A major strength is the subsidiary Contrail's successful elimination of its entire bank debt, ending September 30, 2025, with $6.7 million in cash. This move alone significantly reduces future interest expense and frees up cash flow. The table below summarizes the key cash flow trends:

The main liquidity strength is the positive working capital and the clear deleveraging, especially within the Contrail segment. The main risk remains the quick ratio of 0.80; if a sudden market shock required immediate cash, Air T, Inc. would need to liquidate inventory or secure a new credit line. For now, the positive operating cash flow and debt management give them a decent runway.

Valuation Analysis

You want to know if Air T, Inc. (AIRT) is a buy, a hold, or a sell, and the short answer is that the valuation metrics are screaming a mixed signal, which is typical for a conglomerate with negative profitability. Based on the fiscal year (FY) 2025 data, the stock appears cheap on a Price-to-Book (P/B) basis but looks expensive when you consider its earnings power.

To be clear, the common stock (AIRT) is not paying a dividend, so you're looking for capital appreciation, not income. The high dividend yield you might see, around 10.49%, is for the preferred stock (AIRTP), and honestly, that yield comes with its own risks, given the preferred stock's payout ratio is an unsustainable 595.24% based on its earnings per share of $0.34.

Is Air T, Inc. Overvalued or Undervalued?

Air T, Inc.'s valuation is complex because the company is not profitable on a GAAP basis. For the fiscal year ended March 31, 2025, the company reported a loss per share of $2.23. This results in a negative Price-to-Earnings (P/E) ratio, around -7.90 as of November 2025. A negative P/E means the company is losing money, so the ratio is not useful for traditional valuation; it just confirms the current lack of profitability.

Here's the quick math on key multiples, using a market capitalization of roughly $58 million:

• Price-to-Earnings (P/E): Negative (-7.90). This signals a loss-making operation.
• Price-to-Book (P/B): Approximately 0.20. This looks incredibly cheap, but what this estimate hides is the company's negative Debt-to-Equity ratio of -30.65, which means liabilities exceed assets. A P/B below 1.0 suggests undervaluation, but a negative equity position makes the ratio highly volatile and less reliable.
• Enterprise Value-to-EBITDA (EV/EBITDA): The ratio stands at 24.36. Given the company's Adjusted EBITDA for FY2025 was $7.4 million, this multiple looks quite high compared to the Industrials sector median, suggesting the market is placing a premium on future growth or the value of its underlying assets, like the 103 aircraft it dry-leases to FedEx Corporation.

Stock Trends and Analyst View

The stock price trend over the last 12 months has been volatile, with a 52-week range between $14.56 and $26.70. As of mid-November 2025, the stock is trading around $20.57, and it has actually fallen by -9.22% in the preceding 10 days. This near-term price weakness is a risk you defintely need to factor in.

The analyst consensus on Air T, Inc. is mixed to negative. The average rating is a consensus Sell. One recent analyst rating is a Hold with a $22.00 price target. Other analysis suggests the stock is a Hold candidate, upgraded from a Sell, while technical indicators are generally negative. The market is clearly waiting for the strategic moves, like the planned acquisition of Regional Express Holdings Limited, to translate into consistent, positive earnings.

If you're interested in the institutional players and insiders driving these price swings, you should be Exploring Air T, Inc. (AIRT) Investor Profile: Who's Buying and Why? Exploring Air T, Inc. (AIRT) Investor Profile: Who's Buying and Why?

Risk Factors

You're looking for the unvarnished truth on Air T, Inc. (AIRT), and as a seasoned analyst, I can tell you the company's diversified structure is both its strength and its primary source of risk. The biggest challenge is a concentrated customer base in one segment and a heavy debt load, which together create a significant liquidity pinch.

For the fiscal year ended March 31, 2025, Air T reported total revenue of $291.9 million, but still posted a net loss of approximately $(5.4) million. This tells you the company is generating top-line growth but is still struggling with profitability, which magnifies the impact of every risk factor below. Here's the quick math: a small operating margin means any unexpected cost spike or revenue dip can quickly push the company deeper into the red.

Operational and External Risks: The FedEx Dependency

The core operational risk for Air T, Inc. is its dependence on a single major customer in the Overnight Air Cargo segment. The company's air express delivery services are primarily for FedEx Corporation, and contracts with FedEx accounted for $39.9 million of revenue in the fiscal year 2025.

• Customer Concentration: A reduction in the number of aircraft operated for FedEx, or an adverse contract modification, would materially affect business results.
• Regulatory Headwinds: The aviation industry is highly regulated, and changes in Federal Aviation Administration (FAA) laws could impact the company's ability to lease or sell aircraft and engines, especially in the Commercial Aircraft, Engines and Parts segment.
• Market Volatility: The Ground Support Equipment segment is vulnerable to mild winter weather conditions, which reduce the demand for deicing equipment, forcing customers to defer or reduce significant orders.

Financial and Strategic Risks: Debt and Diversification

The financial structure presents a clear and present danger. As of the end of fiscal year 2025, the company reported total debt of approximately $129.115 million. With rising interest rates, the cost to service this debt increases, which directly reduces cash flow and raises the risk of not meeting debt service covenants. Liquidity challenges are a constant concern, impacting the company's ability to meet its obligations.

On the strategic front, the company is actively pursuing new growth, notably the proposed acquisition of Rex Regional Airlines (Rex). While this is a move toward diversification, the successful integration and market acceptance of new, relatively unproven ventures like its aircraft asset management business remain a key risk. You need to watch the integration process defintely.

Here is a snapshot of the key financial risks mapped to their primary cause:

Mitigation Strategies and Clear Actions

Management is not ignoring these risks. Their mitigation strategy centers on two key areas: deleveraging and diversification. The most concrete action is the significant deleveraging achieved by a subsidiary, Contrail, which eliminated its entire bank debt and held $6.7 million in cash as of September 30, 2025. This is a major win that improves the balance sheet health of a core segment.

To counter market risks, management is exploring hedging strategies to mitigate interest rate fluctuations and foreign currency exchange rates. Furthermore, the company is focusing on enhancing cybersecurity measures and exploring growth opportunities in digital solutions to diversify revenue streams away from the traditional aviation services. For a deeper dive into the company's long-term vision, review the Mission Statement, Vision, & Core Values of Air T, Inc. (AIRT).

Growth Opportunities

You're looking at Air T, Inc. (AIRT) and seeing a holding company with mixed segment performance, so the real question is where the future growth comes from. The direct takeaway is that Air T is actively repositioning for a significant international expansion via acquisition and doubling down on higher-margin, asset-light businesses, which should drive cash flow per share.

The company's strategy is clear: use disciplined capital allocation to acquire and deleverage. This is not a high-growth tech stock; it's an industrious, value-focused play. The fiscal year ended March 31, 2025, saw total revenues of $291.9 million, a modest 1.7% increase, but the operating income jumped to $1.9 million from $1.3 million the prior year, showing better operational control. The future growth hinges on three core drivers: strategic acquisitions, asset management deleveraging, and the scaling of its digital segment.

Strategic Initiatives and Market Expansion

The biggest near-term opportunity is the proposed acquisition of Regional Express Holdings Limited (Rex), Australia's leading regional airline. This is a massive market expansion, expected to close by year-end 2025, pending court and creditor approvals. This move is a strategic commitment to regional air connectivity and gives Air T an immediate, established foothold in the Australian market.

Rex isn't just a new airline; it's a vertical integration play. Worthington Aviation, an Air T company, is already a world-leading supplier of Saab 340 parts, which is Rex's core fleet. This deepens a long-standing partnership, creating a competitive advantage by controlling the supply chain for a major part of the new subsidiary's operations. Additionally, the company launched a new product, Runway Aero Advisors LLC, in January 2025, which is a new subsidiary focused on advising companies on raising capital. That's a smart, low-capital way to diversify revenue streams.

• Acquire Rex: Enter Australian regional airline market.
• Launch Runway Aero: Start new capital advisory service.
• Buy Royal Aircraft Services: Add aircraft maintenance for $1.2 million.

Segment-Specific Growth Drivers

While the overall top line was relatively flat in fiscal 2025, certain segments showed strong internal growth that points toward better profitability. The Digital Solutions segment, for example, saw its revenue increase significantly by 26% due to growing software subscriptions, which is a great sign for a high-margin business. The Ground Support Equipment segment also looks strong, with its order backlog growing to $14.3 million as of March 31, 2025, up from $12.6 million a year earlier. That backlog gives you visibility into fiscal 2026 revenue.

Here's the quick math on the asset management side: Contrail, the engine and aircraft asset management business, eliminated its entire bank debt. That debt was once at a peak of $74.9 million during the pandemic, and now it's zero, with the business holding $6.7 million in cash as of September 30, 2025. This deleveraging frees up capital and positions them to be opportunistic buyers in the secondary market for end-of-life engines, which is a core competitive advantage.

Competitive Advantages and Earnings Outlook

Air T, Inc.'s competitive edge is its deep, long-term relationships and its ability to manage complex aviation assets. Their relationship with FedEx is a defintely foundational anchor, with dry-lease agreements representing 39% of total consolidated revenues in fiscal 2025. This provides a stable, recurring revenue base that underpins the entire operation.

While the company doesn't provide formal forward guidance, the focus on expanding and strengthening cash flow per share is the key metric. The Rex acquisition, once fully integrated, will be the single largest driver of revenue and earnings growth in the near-term. For a deeper dive into the institutional interest, you should check out Exploring Air T, Inc. (AIRT) Investor Profile: Who's Buying and Why?