Executive Summary
Air T Inc posted a markedly uneven Q2 2025, with revenue of $17.13 million representing a year-over-year decline of approximately 78% and a quarter-over-quarter drop of about 74%. The period showed a negative gross profit of $(21.59) million on negative gross margin (-1.26%), yet the company delivered positive operating income of $3.90 million and EBITDA of $6.41 million, culminating in a net income of $2.52 million and earnings per share of $0.91. The discrepancy between negative gross profit and positive bottom-line performance suggests a non-operating component or unusual items contributing to net income, alongside relatively lower operating expenses in aggregate during the quarter. Free cash flow was positive at $3.27 million and operating cash flow stood at $2.93 million, underscoring ongoing cash generation even as revenue and gross margin deteriorated.
The balance sheet remains leverage-intensive: total debt stood at $146.6 million with long-term debt at $131.3 million, and equity of only $7.04 million, yielding a debt-to-capitalization near 0.95 and an interest coverage of 1.80x. Cash and cash equivalents totaled about $8.6–9.2 million over the period, with working capital dynamics driven by substantial accounts receivable and inventory levels. Management commentary (where available in the dataset) is not provided, limiting visibility into the drivers of the gross-margin deterioration and the path to de-leveraging.
From a market perspective, Air T operates across three segments – Overnight Air Cargo, Ground Equipment Sales, and Commercial Aircraft Engines & Parts – offering exposure to aerospace maintenance, repair, and logistics services. While the Q2 results reflect a challenging quarter for top-line growth, the company’s ability to generate positive EBITDA and free cash flow in a leveraged capital structure could support a path to balance-sheet repair if revenue stability resumes and operating efficiencies improve. Investors should monitor debt reduction progress, any shifts in revenue mix that could restore gross margins, and the trajectory of cash conversion relative to working capital needs. Given the absence of formal forward guidance in the dataset, the investment thesis hinges on de-leveraging momentum, stabilization of revenue streams, and execution of cost containment and asset-light opportunities within Air T’s service portfolio.
Key Performance Indicators
QoQ: -74.21% | YoY:-78.31%
QoQ: -253.84% | YoY:-252.85%
QoQ: 775.74% | YoY:412.35%
QoQ: 852.24% | YoY:256.62%
QoQ: 858.33% | YoY:259.65%
Key Insights
Revenue: $17.13 million; YoY change: -78.31%; QoQ change: -74.21%.
Gross Profit: $(21.59) million; Margin: -1.26% (YoY: -252.85%; QoQ: -253.84%).
Operating Income: $3.89 million; Margin: 0.23% (YoY: +412.35%; QoQ: +775.74%).
EBITDA: $6.41 million; EBITDARatio: 0.37.
Net Income: $2.52 million; Net Margin: 14.71% (YoY: +256.62%; QoQ: +852.24%).
EPS: $0.91; Weighted Avg Shares: 2.76 million; EPS Diluted: $0.91.
Cash Flow: Operating Cash Flow $2.93 million; Capex $0.34 million; Free Cash Flow $3.27 ...
Financial Highlights
Revenue: $17.13 million; YoY change: -78.31%; QoQ change: -74.21%.
Gross Profit: $(21.59) million; Margin: -1.26% (YoY: -252.85%; QoQ: -253.84%).
Operating Income: $3.89 million; Margin: 0.23% (YoY: +412.35%; QoQ: +775.74%).
EBITDA: $6.41 million; EBITDARatio: 0.37.
Net Income: $2.52 million; Net Margin: 14.71% (YoY: +256.62%; QoQ: +852.24%).
EPS: $0.91; Weighted Avg Shares: 2.76 million; EPS Diluted: $0.91.
Cash Flow: Operating Cash Flow $2.93 million; Capex $0.34 million; Free Cash Flow $3.27 million.
Balance Sheet (selected): Total Assets $197.12 million; Total Liabilities $181.04 million; Total Debt $146.55 million; Long-Term Debt $131.30 million; Cash & Equivalents about $8.6–9.2 million; Total Shareholders’ Equity $7.04 million; Current Ratio 2.27; Quick Ratio 1.14; Interest Coverage 1.80x; Debt-to-Capitalization ~0.95; Asset Turnover 0.0869; Receivables Turnover 0.504; Inventory Turnover 0.755.
Valuation/Leverage Signals: Price-to-Book around 6.34x; Enterprise Value Multiple about 28.48x; Gross margin negative but EBITDA and net income positive indicate mixed operational leverage and potential non-operating drivers of earnings. Cash conversion and capex coverage metrics imply modest liquidity headroom but a heavily indebted balance sheet that requires deleveraging to sustain long-term earnings credibility.
Income Statement
| Metric |
Value |
YoY Change |
QoQ Change |
| Revenue |
17.13M |
-78.31% |
-74.21% |
| Gross Profit |
-21.59M |
-252.85% |
-253.84% |
| Operating Income |
3.90M |
412.35% |
775.74% |
| Net Income |
2.52M |
256.62% |
852.24% |
| EPS |
0.91 |
259.65% |
858.33% |
Key Financial Ratios
grossProfitMargin
-126.1%
operatingProfitMargin
22.8%
operatingCashFlowPerShare
$1.06
freeCashFlowPerShare
$1.19
Management Commentary
Notes: The provided dataset contains no earnings transcript. As a result, management quotes or thematic quotes from an after-quarter call could not be sourced or cited. Consequently, the transcriptHighlights section reflects the absence of direct call content and relies on the disclosed financials to infer potential management themes. Key qualitative themes are therefore speculative and should be treated as hypotheses rather than sourced conclusions.
Forward Guidance
No explicit management guidance is provided in the dataset for Air T Inc’s QQ2 2025 period. Given the elevated leverage and the revenue deterioration observed in Q2 2025, the forward-looking assessment focuses on two scenarios:
- Base case: Revenue stabilization or modest growth in core segments (Overnight Air Cargo, Ground Equipment Sales, and Engines & Parts) accompanied by disciplined cost management. A return to mid-to-high single-digit EBITDA margins would materially improve free cash flow and debt service capacity, but would require a meaningful improvement in gross margin or a reduction in cost of revenue.
- Downside: Ongoing revenue volatility with limited gross margin discipline, constraining EBITDA and cash flow and delaying deleveraging. In either case, investors should monitor (1) debt reduction progress and refinancing risk, (2) working capital dynamics and their impact on cash conversion, and (3) any shift in the mix between higher-margin services and lower-margin revenue lines.
Overall, the absence of formal guidance places greater emphasis on management’s execution around deleveraging, operating efficiency, and portfolio optimization amid aerospace cycle volatility.