Air T 2026 Q2 Earnings EPS Surges 76.9% as Revenue Slumps 21%

Air T (NASDAQ:AIRT) delivered mixed second-quarter fiscal 2026 results, marked by a significant revenue decline but robust earnings growth. While the company’s revenue fell 21% year-over-year to $64.15 million, EPS soared 76.9% to $1.61, and net income grew 69.9% to $5.03 million. Management provided forward-looking guidance aligned with its strategic focus on capital deployment and segment reinvestment, though specific financial targets beyond six-month metrics were omitted.

Revenue

Air T’s Q2 revenue contraction of 21% to $64.15 million reflected softness across multiple segments. The Overnight Air Cargo division saw reduced flight administration fees due to increased parked aircraft, while the Ground Support Equipment segment faced lower deicing truck sales. The Commercial Aircraft, Engines and Parts segment was further impacted by declining component sales at Contrail. Digital Solutions, however, remained unquantified in the earnings report, with no segment-specific figures provided.

Earnings/Net Income

The company’s earnings performance outpaced its revenue decline, with EPS rising 76.9% to $1.61 and net income surging 69.9% to $5.03 million. This reflects effective cost management and improved operational efficiency, particularly in high-margin segments. The earnings growth underscores Air T’s ability to leverage its capital structure and disciplined cost controls to enhance profitability despite challenging market conditions.

Price Action

The stock price of Air T has edged down 0.00% during the latest trading day, has dropped 6.35% during the most recent full trading week, and has dropped 4.86% month-to-date.

Post-Earnings Price Action Review

The strategy of buying Air T (AIRT) shares on the date of its revenue raise and holding for 30 days showed favorable performance over the past three years. The cumulative return was 17.5%, with an average annual return of 5.8%. This indicates the strategy captured moderate gains following the earnings release, suggesting it aligned well with the company's positive financial outlook.

CEO Commentary

Nick Swenson, President and CEO of Air T, Inc., emphasized the company’s focus on capital allocation and strategic growth. He highlighted a disciplined approach to capital deployment, targeting investments with returns exceeding 15% or those that enhance capabilities or defend markets. Swenson noted the acquisition of Regional Express Holdings Limited (Rex) as an example of leveraging the company’s network to identify value-creating opportunities. The CEO underscored Air T’s alignment with shareholders through treasury stock repurchases and a capital structure designed to limit downside risk. He described the company’s long-term outlook as optimistic, citing operational diversification across four core segments and a track record of generating attractive returns on capital.

Guidance

Air T provided forward-looking guidance for FY26, reflecting growth in key segments. For the six-month period ended 9/30/2025, the company reported revenue of $135.0 million and Adjusted EBITDA of $9.3 million, with expectations of continued reinvestment in high-performing businesses and strategic acquisitions. Management plans to expand its aircraft asset management business, pursue new cash-flow generating acquisitions, and enhance its securities portfolio while maintaining a disciplined approach to capital allocation.

Additional News

Air T secured creditor support for its $6.7 million acquisition of Rex Regional Airlines, with courts expected to finalize the deal by year-end. The company also released its Q2 FY2026 investor presentation, highlighting a $135.0 million six-month revenue and $9.3 million Adjusted EBITDA. Additionally, Air T announced Contrail’s debt elimination milestone, reducing bank debt from $74.9 million during the pandemic to $0 by Q2 2026.

Key Operational Highlights

• Rex Acquisition: Majority creditor approval accelerates integration of Australia’s largest regional airline.

• Contrail Debt Elimination: Contrail’s $74.9 million pandemic-era debt fully repaid, strengthening balance sheet.

• Capital Deployment: Management prioritizes investments with >15% returns, emphasizing treasury buybacks and strategic acquisitions.