Executive Summary

Q3 FY2025 revenue was $77.9M, up 22% YoY; operating income improved to $1.8M from a $1.6M loss, and Adjusted EBITDA turned positive to $2.7M from a $(0.1)M loss, driven by strength in Commercial Jet Engines & Parts and stabilization in Cargo; EPS not disclosed in the press release for Q3 .
Segment highlights: Commercial Jet Engines & Parts revenue rose to $32.7M (+$8.5M YoY) with Adjusted EBITDA of $2.9M, citing strong component sales as airlines maintain 737NG/A320CEO fleets amid OEM delivery delays; GGS backlog increased to $12.9M, suggesting future recovery despite industry-wide weak deicer sales .
Management emphasized calibration amid rising aviation asset values, Contrail deleveraging, Crestone portfolio activity, and expected steady growth in digital revenues (Shanwick); tone remains constructive but vigilant on margins and demand variability .
Catalyst watch: OEM delivery delays supporting aftermarket part demand; growing GGS backlog; continued digital revenue growth; equity-method investees’ balance rose to $18.7M, reflecting investment momentum .

What Went Well and What Went Wrong

What Went Well

Commercial Jet Engines & Parts strength: $32.7M revenue (+$8.5M YoY) and $2.9M Adjusted EBITDA, supported by airlines’ focus on maintaining 737NG/A320CEO fleets due to OEM cancellations/delays: “Contrail has been able to meet this rising demand by leveraging its inventory and expertise…” .
Cargo stability: Overnight Air Cargo revenue increased 5% to $30.6M amid fleet expansion to 105 aircraft; adjusted EBITDA at $2.0M .
Digital revenues and Shanwick subscriptions contributed to Corporate & Other revenue growth to $2.8M; management expects “continued steady growth in our digital revenues” .

What Went Wrong

GGS margins remain pressured: Segment Adjusted EBITDA only $0.2M despite revenue growth; management cited “deicer sales have been weak for all participants,” expecting reversal next year .
Corporate & Other Adjusted EBITDA loss widened to $(2.5)M due to higher health insurance claims .
Industry/weather headwinds: Q2 commentary flagged lower industry-wide de-icing equipment sales due to a “second warmer winter” and broader sentiment impacts (election uncertainty), which continued to weigh on GGS focus areas .

Financial Results

Metric	Q2 FY2025 (quarter ended 9/30/2024)	Q3 FY2025 (quarter ended 12/31/2024)
Revenue ($USD Millions)	$81.2	$77.9
Operating Income ($USD Millions)	$3.9	$1.8
Adjusted EBITDA ($USD Millions, non-GAAP)	$5.0	$2.7
Diluted EPS ($USD)	$0.91	— (not disclosed in Q3 press release)
YoY Rev Growth (%)	+3%	+22%

Segment breakdown

Segment	Q2 FY2025 Revenue ($M)	Q2 FY2025 Adj. EBITDA ($M)	Q3 FY2025 Revenue ($M)	Q3 FY2025 Adj. EBITDA ($M)
Overnight Air Cargo	$31.2	$2.0	$30.6	$2.0
Ground Equipment Sales (GGS)	$14.5	$0.5	$11.8	$0.2
Commercial Jet Engines & Parts	$32.9	$4.1	$32.7	$2.9
Corporate & Other	$2.7	$(1.6)	$2.8	$(2.5)

KPIs

KPI	Q2 FY2025	Q3 FY2025
Fleet aircraft count (Cargo)	105	105
GGS Order Backlog ($M)	$9.1 (as of 9/30/2024)	$12.9 (as of 12/31/2024)
Equity-method investees balance ($M)	$17.6 (as of 9/30/2024)	$18.7 (as of 12/31/2024)
Total Adjusted EBITDA ($M)	$5.0	$2.7

Notes: Adjusted EBITDA is a non-GAAP measure; reconciliations are provided in Exhibits with operating income bridges for Q2 and Q3 .

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Company Guidance	FY2025/Forward	Not provided	Not provided	Maintained (no formal guidance)

Management did not issue formal revenue/EPS/margin/OpEx guidance ranges in Q2 or Q3 press releases .

Earnings Call Themes & Trends

No Q3 FY2025 earnings call transcript was available in our document catalog; we searched for “earnings-call-transcript” for AIRT in Jan–Mar 2025 and found none [ListDocuments 0 results].

Topic	Previous Mentions (Q2 & Q1)	Current Period (Q3)	Trend
Aftermarket parts demand	Q2: Strong margins in aviation parts trading; airlines focusing on maintaining 737NG/A320CEO fleets due to OEM cancellations/delays . Q1: Investor deck showed modest Adjusted EBITDA and focus on asset origination/parts inventory .	Continued strong component sales; segment revenue and EBITDA growth in Contrail; OEM delays persist .	Improving/stable demand tailwind
GGS (deicers)	Q2: Industry-wide sales softer due to warmer winter and election uncertainty ; backlog at $9.1M .	Sales still weak across participants; backlog rose to $12.9M; management expects reversal next year .	Near-term soft, medium-term improving (backlog)
Digital revenues (Shanwick)	Q2: Revenue up on increased software subscriptions .	Expect “continued steady growth” in digital revenues; Corporate & Other revenue up .	Positive growth trajectory
Balance sheet/Leverage	Q1 Investor materials addressed interest coverage and reinvestment policy .	Contrail “deleveraged significantly”; Crestone sold and added net assets .	Improving asset quality/leverage management
Macro/OEM delivery delays	Q2: OEM cancellations/delays driving maintenance focus .	Same drivers reiterated; supporting Contrail component sales .	Persistent tailwind to parts

Management Commentary

CEO Nick Swenson: “Aviation assets are rising in value creating near-term challenges… Our independent-yet-interrelated businesses… are making adjustments to adapt. Notably, Contrail has deleveraged significantly… Crestone has both sold aviation assets and added net assets… GGS… deicer sales have been weak for all participants… We’re hopeful that this will reverse in the next year. Finally, we expect continued steady growth in our digital revenues.” .
Q2 CEO comment: “Results for the quarter were driven by strong margins in our aviation parts trading business… Challenges… included a combination of issues that lowered industry-wide sales of de-icing equipment, namely a second warmer winter and… election uncertainty…” .

Q&A Highlights

Shareholder Q&A (Slido) addressed interest coverage ratio; management reiterated policy to reinvest cash flows in positive expected return investments, with optionality to reduce investment level and corporate expenses if needed; historical Adjusted EBITDA vs net interest expense table presented, showing coverage dynamics over FY2020–FY2024 .
No Q3 earnings call Q&A transcript available; management invites ongoing stakeholder questions via Slido and quarterly written responses .

Estimates Context

Wall Street consensus (S&P Global) for Q3 FY2025 EPS and revenue was unavailable due to S&P Global daily request limit restrictions at query time. As a result, estimate comparison cannot be provided.
We will anchor future comparisons to S&P Global consensus once access is available and update beat/miss assessments accordingly.

Key Takeaways for Investors

Aftermarket parts momentum remains the core earnings driver as OEM delivery delays push airlines to maintain existing fleets; Contrail’s inventory and expertise enable share capture in serviceable materials .
GGS backlog expansion to $12.9M suggests improving forward demand despite near-term margin softness; watch for margin recovery as deicer sales normalize next year .
Cargo segment revenue rose with fleet expansion to 105 aircraft; stability at ~$2M Adjusted EBITDA supports base cash generation .
Corporate & Other losses widened due to health insurance claims; monitor cost discipline and digital revenue growth (Shanwick) to offset .
Equity-method investees balance increased to $18.7M, indicating ongoing capital deployment and potential dividend/distribution flows; Q2 showed strong net income and distributions from Crestone Asset Management .
Trading setup: Near-term upside skew tied to continued aftermarket parts strength and backlog conversion; risk factors include GGS demand timing and cost pressures in Corporate.
Medium-term thesis: Portfolio approach across cargo, GSE, and parts, with leverage reduction and digital revenue growth potentially raising through-cycle profitability and reducing volatility .

Additional Context: Prior Quarters and Press Releases

Q2 FY2025: Revenue $81.2M (+$2.3M YoY), operating income $3.9M, Adjusted EBITDA $5.0M, EPS $0.91; parts margins strong; GGS backlog $9.1M .
Q1 FY2025: Investor presentation provides Adjusted EBITDA detail (Q1 FY2025 $0.7M) and strategic priorities; a formal Q1 press release for earnings was not found in our catalog [SearchDocuments results].
Other Q3-timed press: Nominal awarded USAF STTR Phase 2 (defense software analytics collaboration with MIT/USAF TPS), showing adjacency in aerospace tech ecosystems; while not a consolidated AIRT business line, it reflects broader sector innovation relevant to AIRT’s network .
Financing update: Ashland Place completed a new facility financing a 737-800 for Crestone (AIRT’s asset management platform), reinforcing capital access for portfolio transactions .

AIR T INC (AIRT)·Q3 2025 Earnings Summary