Executive Summary

Q3 2025 delivered sequential and year-over-year improvement: revenue of $19.27M vs $15.18M in Q2 2025 and $19.42M in Q3 2024; gross margin expanded to 22.3% (from 4.4% in Q2 and 21.7% YoY); net income rose to $1.11M and diluted EPS to $0.09 (vs $(0.10) in Q2 2025 and $0.06 YoY) .
Mix and efficiency were the primary drivers; management cited “improved product mix and efficiencies” driving +60 bps gross margin and +49% net income YoY; adjusted EBITDA grew 17% YoY to $1.94M .
Backlog remained robust at $509M (Sep 30), buoyed by an RTX missile wing assembly award (deliveries start 2026) and additional USAF T-38 kit orders ($10.2M) during Q3; total debt declined to $15.9M, an all‑time low according to management .
Street consensus (S&P Global) for Q3 revenue/EPS was unavailable, limiting formal beat/miss assessment; catalysts center on sustained mix improvement, backlog conversion, and execution on new programs while A‑10 headwinds wane .

What Went Well and What Went Wrong

What Went Well

Margin/earnings recovery: gross margin rose to 22.3% (vs 4.4% in Q2) and net income reached $1.11M with diluted EPS $0.09; CEO: “improved product mix and efficiencies” led to a 60 bps YoY gross margin increase and 49% net income increase .
Non-GAAP profitability improved: adjusted EBITDA was $1.94M, +17% YoY; nine‑month adjusted EBITDA ex-A‑10 was $3.90M, highlighting underlying earnings power post A‑10 .
Commercial momentum and balance sheet: new RTX missile wing assemblies award and $10.2M of USAF orders support backlog ($509M) while total debt fell to $15.9M; management emphasized this as a “strategic win” expanding into missiles/adjacent markets .

What Went Wrong

Year-to-date still pressured by A‑10 termination: 9M 2025 revenue $49.85M vs $59.31M and gross margin 13.3% (20.4% ex‑A‑10); 9M net loss $(1.54)M vs income $2.33M .
Prior-quarter disruption: Q2 gross margin dropped to 4.4% with $(1.33)M net loss due to A‑10 write-offs, underscoring sensitivity to legacy program clean-up .
Controls note in Q2: management identified a material weakness in internal control over financial reporting tied to debt classification pending a covenant amendment, with remediation underway (no financial result impact claimed) .

Financial Results

Metric	Q3 2024	Q1 2025	Q2 2025	Q3 2025
Revenue ($USD Millions)	$19.42	$15.40	$15.18	$19.27
Gross Profit ($USD Millions)	$4.22	$1.65	$0.66	$4.31
Gross Margin (%)	21.7%	10.7%	4.4% (17.1% ex‑A‑10)	22.3%
Net Income ($USD Millions)	$0.75	$(1.32)	$(1.32)	$1.11
Diluted EPS ($)	$0.06	$(0.10)	$(0.10)	$0.09
Adjusted EBITDA ($USD Millions)	$1.65	$(0.77)	$(1.73)	$1.94

Notes: Q2 and Q1 were impacted by A‑10 termination charges; management provides ex‑A‑10 views for context .

Actual vs Consensus (Q3 2025)

Metric	Actual	Consensus (S&P Global)
Revenue ($USD Millions)	$19.27	N/A (unavailable via S&P Global dataset)
Diluted EPS ($)	$0.09	N/A (unavailable via S&P Global dataset)

KPIs

KPI	Q3 2024	Q1 2025	Q2 2025	Q3 2025
Backlog ($USD Millions)	N/A	$516	$506	$509
Total Debt ($USD Millions)	N/A	$16.7	$16.2	$15.9
Debt / Adjusted EBITDA (ex‑A‑10)	N/A	2.9	2.7	2.6

Segment breakdown: Not applicable; the company does not present segments in the press release .

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
—	—	—	—	No formal guidance provided in Q3 press release .

Earnings Call Themes & Trends

Note: No Q3 2025 earnings call transcript was available in our document set; themes are derived from company 8-K press releases.

Topic	Previous Mentions (Q1 & Q2 2025)	Current Period (Q3 2025)	Trend
Program mix/transition from A‑10	Q1: $2.1M A‑10 loss; ex‑A‑10 margins solid; pivoting to “programs of the future” . Q2: A‑10 impact $4.5M 1H; first Advanced Tactical Flight Pod delivery to Raytheon .	Management credits mix/efficiencies for margin/earnings improvements; A‑10 impact now chiefly first half .	Improving mix; A‑10 drag abating .
Backlog momentum	$516M at Q1 end ; $506M at Q2 end .	$509M at Q3 end; added RTX missile wing assemblies .	Stable to improving with new wins .
Balance sheet deleveraging	Debt $16.7M (Q1), Debt/Adj. EBITDA 2.9 .	Debt $15.9M, Debt/Adj. EBITDA 2.6 ex‑A‑10 .	Gradual deleveraging .
New business wins	Ongoing awards from L3Harris, Raytheon, Lockheed, Embraer .	RTX missile wing assemblies; USAF T‑38 additional $10.2M orders .	Positive wins broaden adjacencies .
Internal controls	Q2: Material weakness identified re: debt classification; remediation in process .	No new update in Q3 PR .	Watch remediation progress .

Management Commentary

“Our third quarter 2025 performance was stronger than third quarter 2024 on all fronts, with improved product mix and efficiencies resulting in 60 basis points gross profit margin increase and a 49% net income increase… third quarter‑adjusted EBITDA of $1.9 million is 17% higher than third quarter 2024.” — Dorith Hakim, President & CEO .
“We… continued to improve our balance sheet… total debt down to an all‑time low of $15.9 million and our Debt‑to‑Adjusted EBITDA Ratio to 2.6 excluding the impact of the A‑10 Program termination.” .
“We are also pleased to receive an award from Raytheon… to manufacture structural missile wing assemblies… deliveries starting in 2026… adding to our backlog of $509 million.” .
Prior quarter context: “We took a $2.3 million write‑off on the A‑10 Program… Without the impact of the terminated A‑10 Program, we performed well… first Advanced Tactical Flight Pod delivery to Raytheon.” .
Q1 setup: “First quarter 2025 results were significantly impacted by… a pre‑tax loss of $2.1 million on our A‑10 Program… gross profit without the A‑10 Program impact was 21.6%.” .

Q&A Highlights

No Q3 2025 earnings call transcript was available in our document set; as such, Q&A themes and clarifications cannot be sourced for this period [ListDocuments: earnings-call-transcript returned none for Q3 window].

Estimates Context

S&P Global (Capital IQ) consensus for Q3 2025 EPS and revenue was unavailable via our tool; actuals were revenue $19.27M and diluted EPS $0.09. Without consensus, we cannot determine a formal beat or miss for the quarter .
Implications: Given sequential recovery and YoY margin/earnings improvement, estimate revisions may skew higher for near‑term profitability assuming mix/efficiency trends persist and A‑10 headwinds do not recur, but this depends on backlog conversion and program execution .

Key Takeaways for Investors

Sequential rebound and YoY improvement: revenue recovered to $19.27M and gross margin to 22.3%, restoring adjusted EBITDA to $1.94M; evidence of underlying earnings power ex‑A‑10 .
Mix tailwinds: management attributes gains to mix and efficiencies, a potentially durable driver as legacy A‑10 rolls off and new programs scale .
Backlog supports visibility: $509M backlog plus RTX missile wing award and USAF T‑38 orders bolster medium‑term demand; watch 2026 deliveries on RTX award .
Deleveraging trend: total debt reduced to $15.9M; Debt/Adj. EBITDA ex‑A‑10 at 2.6 provides balance sheet flexibility .
Near‑term watch items: conversion of backlog to revenue/margins, any further legacy program clean‑ups, and remediation of the Q2 material weakness in ICFR .
Trading setup: Absent consensus data, narrative catalysts include continued margin expansion, program execution milestones (e.g., Raytheon pod systems, missile assemblies), and incremental defense orders.
Risk factors: program timing/deferrals, cost control on fixed‑price contracts, and dependency on large defense primes; Q2 demonstrated margin sensitivity to legacy program adjustments .

Citations

Q3 2025 press release and financials: .
Q2 2025 press release and financials: .
Q1 2025 press release and financials: .
Additional press releases (orders/awards; trading activity): .

S&P Global estimates note: Consensus values for CVU in Q3 2025 were unavailable via the S&P Global tool during this analysis; actuals listed above are from company filings/press releases .

CPI AEROSTRUCTURES INC (CVU)·Q3 2025 Earnings Summary