Shares of Air T, Inc. AIRT have lost 1.2% since the company reported its earnings for the quarter ended Dec. 31, 2024. This compares to the S&P 500 Index’s 0.7% gain over the same time frame. Over the past month, the stock lost 0.7% versus the S&P 500’s 1.8% rise.

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Revenue and Earnings Performance

For the third quarter of fiscal 2025, which ended Dec. 31, 2024, Air T reported revenues of $77.9 million, marking a 22.2% increase from $63.8 million in the prior-year quarter. The company posted operating income of $1.8 million against a loss of $1.6 million in the year-ago period. Adjusted EBITDA stood at $2.7 million against a loss of $0.1 million in the previous year’s comparable quarter.

Despite revenue growth, the company reported a net loss attributable to Air T stockholders of $1.3 million, narrowing from a $2.9 million net loss a year earlier. Loss per share was $0.47, narrowing from a loss of $1.06 per share in the same quarter last year.

Business Segment Performance

Overnight Air Cargo: This segment, which primarily provides air express delivery services for FedEx, reported revenues of $30.6 million, up 5.4% from $29 million in the prior-year quarter. The increase was driven by a larger fleet, which expanded to 105 aircraft from 85 a year earlier. Adjusted EBITDA for the segment was $1.98 million, rising 4.2% from $1.90 million in the previous year.

Ground Equipment Sales: This segment, which manufactures deicing trucks and ground-support equipment, recorded revenues of $11.8 million, a 40.3% jump from $8.4 million in the prior-year quarter. Growth was primarily attributed to higher sales of deicing trucks and increased parts and service revenues. Adjusted EBITDA was $0.2 million against a loss of $0.5 million a year ago. The segment’s order backlog nearly doubled to $12.9 million from $6.2 million at the end of the prior-year quarter.

Commercial Jet Engines and Parts: Revenues for this segment surged 35.4% to $32.7 million from $24.1 million in the same quarter last year. The rise was primarily driven by higher component sales at Contrail, which benefited from airlines prioritizing maintenance of their existing fleets amid delays in new aircraft deliveries from original equipment manufacturers. Adjusted EBITDA for the segment improved significantly to $2.9 million from a loss of $0.1 million in the prior year.

Corporate and Other: This segment, which includes various investments and smaller business interests, posted revenues of $2.8 million, up 27.6% from $2.2 million a year earlier. The increase was mainly due to higher software subscription revenue at Shanwick. However, the segment’s adjusted EBITDA loss widened to $2.5 million from $1.4 million in the prior-year quarter due to increased health insurance claims.

Other Key Business Metrics

AIRT’s total investment balance in equity method investees stood at $18.7 million as of Dec. 31, 2024, up from $16.7 million as of Mar. 31, 2024. The company’s interest expense rose 67.6% to $2.6 million from $1.5 million a year earlier, reflecting higher borrowing costs.

Management Commentary

Chairman and CEO Nick Swenson noted that rising aviation asset values have created near-term challenges for the company and its customers, requiring adjustments to future expectations. Swenson highlighted Contrail’s significant deleveraging over the past year and Crestone’s asset sales and portfolio expansion as key strategic moves. He also pointed to weaker industry-wide deicer sales but expressed optimism for a potential rebound in the coming year. Additionally, he expects continued steady growth in digital revenues.

Factors Influencing Results

The improvement in operating results was primarily driven by revenue growth across all segments. However, higher operating costs, particularly in the overnight air cargo segment, offset some of the gains. The company also faced increased interest expenses and a foreign currency exchange loss, which contributed to its non-operating loss of $2.7 million compared with a $0.3 million loss in the year-ago period.

Other Developments

Air T's subsidiary, Contrail, marked its 25th anniversary, celebrating its role as a leading provider of aircraft trading, leasing, and parts solutions. Since being acquired by Air T in 2016, Contrail has demonstrated revenue growth and portfolio expansion, with a 42.27% compound annual growth rate from fiscal 2017 through fiscal year 2024.

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