AIR INDUSTRIES GROUP (AIRI)·Q3 2025 Earnings Summary

Executive Summary

• Q3 2025 showed improved profitability despite lower revenue: net sales were $10.3M, gross margin expanded to 22.3%, operating income reached $0.316M, and net loss narrowed to $0.044M from $0.404M in Q3 2024 .
• Sequential margin expansion and cost discipline drove a notable Adjusted EBITDA increase to $1.281M versus $0.893M in Q2 2025 and $0.576M in Q1 2025, marking AIRI’s strongest quarter of 2025 on EBITDA .
• Management emphasized operational efficiency and expects a strong finish to 2025; Q2 commentary had telegraphed a softer second half versus first half but anticipated Q4 to be the strongest by far .
• Street consensus estimates via S&P Global were not available for EPS or revenue (microcap coverage limited). We therefore anchor results vs prior year/quarter and management guidance commentary; no “beat/miss” vs consensus can be assessed.*

What Went Well and What Went Wrong

What Went Well

• Material margin improvement: gross margin rose to 22.3% in Q3 2025 from 16.0% in Q2 2025 and 15.5% in Q3 2024, reflecting efficiency gains and expense control .
• Adjusted EBITDA strengthened to $1.281M in Q3 2025, up from $0.893M in Q2 2025 and $0.576M in Q1 2025, highlighting improving profitability through the year .
• CEO tone constructive: “Our results for the third quarter of 2025 were solid and demonstrated measurable improvements in Adjusted EBITDA… we remain focused on driving profitability and operational efficiency… looking forward to a strong finish to the year” .

What Went Wrong

• Revenue declined year over year to $10.309M (from $12.555M in Q3 2024) and sequentially from $12.659M in Q2 2025, indicating ongoing demand/timing headwinds .
• Q2 had highlighted delays in customer orders and extended subcontractor lead times; although Q3 margins improved, these issues likely constrained top line trajectory into the second half .
• Net income remained negative (loss of $0.044M), and interest expense ($0.466M) continues to weigh on GAAP earnings capacity .

Financial Results

Nine-month context:

Estimate comparison (S&P Global):

• Q3 2025 Revenue Consensus Mean: N/A*
• Q3 2025 Primary EPS Consensus Mean: N/A*
• Primary EPS - # of Estimates: N/A*
• Revenue - # of Estimates: N/A*
  Values retrieved from S&P Global.*

Guidance Changes

Note: AIRI did not provide specific numeric guidance ranges for revenue/EPS/margins in Q3 2025 materials .

Earnings Call Themes & Trends

Management Commentary

• “Our results for the third quarter of 2025 were solid and demonstrated measurable improvements in Adjusted EBITDA. Our effort to reduce expenses are paying off, as evidenced by a significant improvement in gross margins… we remain focused on driving profitability and operational efficiency… looking forward to a strong finish to the year.” — CEO Lou Melluzzo .
• “The second quarter of 2025 presented challenges, primarily delays in customer orders and extended lead times from subcontractors… we now expect overall second-half results in 2025 to be lower than the first half, with our fourth quarter expected to be the strongest by far… implemented cost-saving initiatives, including a workforce reduction that should reduce annual payroll by approximately $1.0 million.” — CEO Lou Melluzzo .
• “Book-to-Bill… was 1.34 to 1.00 at end of the first quarter, 2025… funded backlog… increased by $2.7 million or 2.3%… total backlog… continues to exceed a quarter of a billion dollars.” — CEO Lou Melluzzo .

Q&A Highlights

• The Q3 2025 call was brief with limited prepared remarks; no questions were raised during the Q&A session .
• Participants included CEO Luciano (Lou) Melluzzo and CFO Scott Glassman .
• Commentary emphasized operational improvements and strong finish expectations; external summaries referenced consideration to refinance facilities maturing end-December 2025 .

Estimates Context

• S&P Global Wall Street consensus estimates for AIRI’s Q3 2025 EPS and revenue were unavailable; number of covering estimates appears limited for this microcap. Results cannot be benchmarked vs consensus this quarter.*
  Values retrieved from S&P Global.*

Key Takeaways for Investors

• Margin expansion is the story: gross margin reached 22.3% and Adjusted EBITDA hit $1.281M, signaling improved operational efficiency despite revenue pressure .
• Sequential profitability trajectory is favorable: EBITDA progressed Q1→Q2→Q3 ($0.576M → $0.893M → $1.281M), with Q4 positioned to be strongest by management’s Q2 commentary .
• Demand visibility mixed: aftermarket/MRO wins ($6.9M) and B-52 contract ($5.4M) support medium-term activity, but Q3 revenue was below prior year and sequentially lower, implying timing headwinds remain .
• Capital structure watch item: management is considering refinancing facilities maturing end-Dec 2025; monitor terms, covenants, and interest expense trajectory for GAAP earnings leverage .
• With consensus unavailable, trading catalysts hinge on margin durability, contract flow/backlog commentary, and refinancing clarity rather than “beat/miss” optics.*
• Near-term: constructive setup for Q4 on margin and EBITDA; medium-term: aftermarket penetration and backlog conversion underpin thesis if order timing/supply chain constraints continue to abate .

References:

• Q3 2025 8-K and press release: detailed results and CEO commentary .
• Q2 2025 press release and 8-K: headwinds and cost actions .
• Q1 2025 press release and 8-K: margin improvement, book-to-bill, backlog .
• Q3-related press releases: MRO contracts ($6.9M) and B-52 landing gear ($5.4M) .
• Earnings call external sources: Seeking Alpha, Investing.com, Yahoo Finance, MarketScreener .

*Values retrieved from S&P Global.