Executive Summary

Q2 FY2026 headline results: Revenue $64.2M (-21% YoY), Operating Income $5.5M (+$1.9M YoY), Adjusted EBITDA $7.9M (+$2.9M YoY), EPS $1.61 (+$0.70 YoY), driven by gains on aircraft sales and cost controls despite lower component sales and deicer timing .
Sequentially, revenue fell from $70.9M in Q1 FY2026 while profitability improved materially from Q1’s $0.4M operating income and $1.5M Adjusted EBITDA, reflecting mix and specific gains .
Management highlighted strategic progress: Contrail eliminated all bank debt and held $6.7M cash; Air T expects to close the Rex Regional Airlines acquisition in December pending court approvals—both potential catalysts for narrative and asset value .
Stock reaction: post-Q2 the shares slipped ~8.2% over the past month, with investor focus on top-line pressure vs stronger profitability; watch Rex closing and segment mix for near-term inflection .

What Went Well and What Went Wrong

What Went Well

Contrail deleveraged to zero bank debt and ended the quarter with $6.7M cash, improving financial flexibility and positioning ahead of any secondary market softening for end-of-life engines .
Commercial Aircraft, Engines & Parts Adjusted EBITDA rose to $6.9M, aided by the gain on sale of two aircraft at CASP, offsetting lower component margins at Contrail .
Ground Support Equipment backlog increased to $12.9M vs. $6.2M YoY, signaling demand durability despite quarterly timing shifts .
Quote (CEO Nick Swenson): “Contrail has reached the significant milestone of eliminating all of its bank debt and holding $6.7 million of cash… We believe Contrail is well positioned if the secondary market… starts to soften.”

What Went Wrong

Total revenue declined 21% YoY, driven largely by a $12.0M decline in Commercial Aircraft, Engines & Parts component sales and fewer deicing trucks sold in GGS due to timing .
Overnight Air Cargo revenue fell 4% to $29.9M, impacted by lower flight admin fees driven by increased soft and hard parked aircraft, highlighting demand softness at a key customer .
Digital Solutions posted a small Adjusted EBITDA loss (-$0.2M) as scaling investments outpaced revenue gains; profitability remains near breakeven .

Financial Results

Headline Metrics: Sequential and YoY

Metric	Q1 FY2026	Q2 FY2026	YoY Change vs Q2 FY2025
Revenue ($USD Millions)	$70.9	$64.2	-$17.1 (-21%)
Operating Income ($USD Millions)	$0.4	$5.5	+$1.9
Adjusted EBITDA ($USD Millions)	$1.5	$7.9	+$2.9
EPS ($USD)	N/A	$1.61	+$0.70 (from $0.91)

Notes: YoY prior-period absolute revenue not disclosed; press release provides the change and percent . Q1 EPS not disclosed in press release.

Segment Breakdown: Sequential Comparison

Segment	Revenue Q1 FY2026 ($M)	Revenue Q2 FY2026 ($M)	Adj. EBITDA Q1 FY2026 ($M)	Adj. EBITDA Q2 FY2026 ($M)
Overnight Air Cargo	$30.6	$29.9	$1.6	$1.8
Ground Support Equipment (GGS)	$15.1	$9.6	$1.4	$1.7
Commercial Aircraft, Engines & Parts	$22.0	$20.9	$0.8	$6.9
Digital Solutions	$2.1	$2.2	-$0.1	-$0.2

KPIs and Other Quantitative Items

KPI	Q1 FY2026	Q2 FY2026
GGS Order Backlog ($USD Millions)	$7.2	$12.9
Equity-Method Investees Balance ($USD Millions)	$19.9 at 6/30/25	$27.9 at 9/30/25
Contrail Cash & Cash Equivalents ($USD Millions)	N/A	$6.7
Six-Month Revenue ($USD Millions)	$135.0 (H1 FY2026)	N/A
Six-Month Adjusted EBITDA ($USD Millions)	$9.346 (H1 FY2026)	N/A

Guidance Changes

Air T does not issue formal forward guidance as a matter of policy .

Metric	Period	Previous Guidance	Current Guidance	Change
Financial Guidance (Revenue, EPS, Margins)	FY2026	None	None	Maintained (no formal guidance)
Strategic Update – Rex Regional Airlines	Q3 FY2026 timing	In process	Expected closing in December, pending court approvals	Update (timing specified)

Earnings Call Themes & Trends

No Q2 FY2026 earnings call transcript was found; analysis based on Q2 press release and Q2 investor presentation .

Topic	Previous Mentions (Q4 FY2025 & Q1 FY2026)	Current Period (Q2 FY2026)	Trend
FedEx aircraft utilization and admin fees	Q1: lower maintenance margins in Overnight Air Cargo	Lower flight admin fees due to increased soft/hard parked aircraft	Slightly negative
GGS deicer sales/margins	Q1: +105% revenue YoY; higher margins; backlog $7.2M	Revenue down 33% due to timing; backlog up to $12.9M; margins supported	Mixed (timing-driven)
Contrail component inventory and margins	Q1: lower component sales and margins; segment EBITDA $0.8M	Component sales down; segment Adjusted EBITDA $6.9M with aircraft sale gains; debt eliminated	Improving (balance sheet strength; mixed mix)
Rex Regional acquisition	Not highlighted Q1	Expect closing in December, pending court approvals	Strategic positive (execution pending)
Digital Solutions subscriptions	Q1: revenue +$0.4M YoY; loss narrowed	Revenue +$0.4M YoY; small loss continues (-$0.2M)	Stable growth; near breakeven

Management Commentary

CEO Nick Swenson: “If courts approve the transaction, then we expect to close on the acquisition of Rex Regional sometime in December… the end of the beginning on a long journey that we are calling ‘the return to classic Rex.’”
CEO on Contrail: “Contrail has reached the significant milestone of eliminating all of its bank debt and holding $6.7 million of cash and cash equivalents at September 30th… well positioned if the secondary market for end of life and low green time engines starts to soften.”
Company overview reiterates focus on building intrinsic value per share through portfolio businesses across Overnight Air Cargo, GGS, Commercial Aircraft/Engines/Parts, and Digital Solutions .

Q&A Highlights

No Q2 FY2026 earnings call transcript or Q&A document was located; the company directed stakeholder questions to Slido for written quarterly responses and live discussion at the annual meeting .

Estimates Context

Wall Street consensus (S&P Global) for EPS and revenue was unavailable for Q2 FY2026; no consensus means were returned, indicating minimal analyst coverage. Comparisons to estimates are therefore not possible. Values retrieved from S&P Global.*
Actuals: Revenue $64.2M and EPS $1.61 per the company’s press release .

Metric	Consensus (S&P Global)	Actual Q2 FY2026
Revenue ($USD Millions)	Unavailable*	$64.2
EPS ($USD)	Unavailable*	$1.61

*Values retrieved from S&P Global.

Key Takeaways for Investors

Profitability inflected strongly despite top-line pressure: Operating income and Adjusted EBITDA improved materially on aircraft sale gains and expense discipline—watch sustainability of mix effects into H2 .
Segment mix matters: Commercial Aircraft/Engines/Parts can swing results via asset sales; GGS backlog points to recovery in future quarters, but quarterly timing can be volatile .
Contrail’s clean balance sheet is a strategic asset into a potentially softer engine secondary market; expect disciplined capital allocation as market conditions evolve .
Overnight Air Cargo exposure to FedEx aircraft parking reduces admin fees; monitor FedEx-related utilization trends as a key variable for steady revenue .
Rex Regional acquisition timing (December pending approvals) is a near-term catalyst; execution and integration will shape narrative and potential value creation .
With no formal guidance policy, use backlog, segment margin commentary, and asset activity as leading indicators rather than top-down targets .
Near-term trading: watch for confirmation of Rex closing and any follow-up disclosures; medium term, focus on segment profitability durability, component inventory cycles, and recurring Digital Solutions revenue trajectory .

AIR T INC (AIRT)·Q2 2026 Earnings Summary