Air T, Inc. Soars on Strong Q3 Results, Driven by Fleet Expansion and Market Opportunities

Air T, Inc. (NASDAQ:AIRT) has reported strong financial results for the third quarter of fiscal 2025, with revenues increasing 22% to $77.9 million and operating income reaching $1.8 million, compared to a loss of $1.6 million in the prior year's comparable quarter. The company's Adjusted EBITDA profit for the quarter ended December 31, 2024, was $2.7 million, compared to an Adjusted EBITDA loss of $0.1 million in the prior year's comparable quarter. This impressive turnaround can be attributed to several key factors across the company's segments.

The overnight air cargo segment's revenue increased by 5% to $30.6 million, primarily due to higher administrative fees and pass-through revenue. This growth was driven by an increased fleet size, which grew from 85 aircraft as of December 31, 2023, to 105 aircraft as of December 31, 2024. The segment's Adjusted EBITDA increased by $0.1 million compared to the prior year's comparable quarter, reflecting improved operational efficiency. This expansion has allowed Air T, Inc. to maintain stable EBITDA margins while scaling operations efficiently.



The ground equipment sales ("GGS") segment's revenue totaled $11.8 million, up 40% compared to the previous year's third fiscal quarter. This increase was primarily driven by the higher number of deicing trucks sold and higher parts and service revenue in the current year's quarter compared to the prior year's comparable quarter. The segment's Adjusted EBITDA profit was $0.2 million, an increase of $0.7 million compared to the prior year's quarter, indicating successful cost management despite challenging market conditions. The segment's order backlog was $12.9 million as of December 31, 2024, compared to $6.2 million as of December 31, 2023, suggesting potential market share gains or improving industry conditions.

The commercial jet engines and parts segment's revenue totaled $32.7 million, an increase of $8.5 million versus the previous year's fiscal third quarter. This increase was largely attributed to higher component sales at Contrail during the current quarter, which is a result of airlines prioritizing the maintenance of their existing 737NG and A320CEO fleets due to OEM delivery delays. The segment's Adjusted EBITDA was $2.9 million, representing a remarkable turnaround from last year's loss, demonstrating the segment's ability to capitalize on market opportunities.

Contrail, a key business unit, has shown exceptional growth dynamics, with revenue CAGR of 42.27% since 2017. This strong execution in a complex market environment contributed to the company's overall revenue growth and operating profit. The recent deleveraging positions Contrail well for future opportunities in a market where aviation asset values are rising.

In conclusion, Air T, Inc.'s strong financial performance in the third quarter of fiscal 2025 is a testament to the company's strategic focus on independent yet interrelated businesses and its ability to adapt to the challenges and opportunities presented by the aviation asset marketplaces. The expansion of the overnight air cargo segment's fleet, coupled with the successful execution of Contrail and the ground equipment sales segment's cost management, has driven the company's impressive revenue growth and operating profit. As Air T, Inc. continues to navigate the near-term challenges posed by rising aviation asset values, investors should keep a close eye on the company's progress and potential market share gains.