Executive Summary
Air T Inc reported Q3 2025 revenue of $77.88 million, up 22.15% year over year (YoY) and 354.67% quarter over quarter (QoQ), with gross profit of $16.99 million and a gross margin of 21.82%. Despite topline strength and improving gross profitability, the company posted net income of -$1.30 million and basic earnings per share (EPS) of -$0.47 in the quarter. EBITDA totaled $2.99 million, yielding an EBITDA margin of 3.84% and an operating income of $1.82 million (operating margin ~2.33%). The result signals meaningful revenue scale and cost containment at the gross level, but profitability remains constrained by non-operating costs and interest burden.
A standout feature of QQ3 2025 was robust operating cash flow and free cash flow generation. Operating cash flow was $16.33 million, with free cash flow of $15.98 million and a substantial working capital change of +$15.95 million, underscoring strong cash conversion driven by working capital dynamics. The balance sheet shows a heavily leveraged capital structure, with total debt of $142.00 million and net debt of $123.54 million. Interest expense of $2.56 million contrasted with EBIT of $1.82 million results in a near-term interest coverage of 0.71x, indicating limited cushion to cover interest from operating earnings alone.
Valuation remains modest on a revenue basis (P/S about 0.60) and negative on a earnings basis (P/E negative) given the quarterly earnings mix. Management commentary from the earnings call is not included in the dataset provided, limiting the ability to quote directly; nonetheless, the financials imply a near-term de-leveraging focus and potential upside if margins stabilize and debt costs are addressed. The company’s cash-generative profile versus its debt load presents a mixed risk-reward: meaningful optionality from continued FCF generation exists if leverage can be gradually reduced and profitability maintained or expanded. Investors should weigh Air T’s strategic diversification and cash generation against the looming debt service burden and cyclicality inherent in the industrials/logistics space.
Key Performance Indicators
QoQ: 354.67% | YoY:22.15%
QoQ: 178.69% | YoY:38.50%
QoQ: -53.42% | YoY:212.94%
QoQ: -151.47% | YoY:56.46%
QoQ: -151.65% | YoY:55.66%
Key Insights
Revenue: $77.88 million; YoY +22.15%; QoQ +354.67%.
Gross Profit: $16.99 million; Gross Margin 21.82% (YoY +38.50%; QoQ +178.69%).
Operating Income: $1.82 million; Operating Margin 2.33% (YoY +212.94%; QoQ -53.42%).
Net Income: -$1.30 million; Net Margin -1.67% (YoY +56.46%; QoQ -151.47%).
EPS: -$0.47; YoY +55.66%; QoQ -151.65%.
EBITDA: $2.99 million; EBITDA Margin ~3.84%.
Cash Flow: Net cash from operating activities $16.33 million; Free cash flow $15.98 million.
Liquidity/Leverage: Cash $18.46...
Financial Highlights
Revenue: $77.88 million; YoY +22.15%; QoQ +354.67%.
Gross Profit: $16.99 million; Gross Margin 21.82% (YoY +38.50%; QoQ +178.69%).
Operating Income: $1.82 million; Operating Margin 2.33% (YoY +212.94%; QoQ -53.42%).
Net Income: -$1.30 million; Net Margin -1.67% (YoY +56.46%; QoQ -151.47%).
EPS: -$0.47; YoY +55.66%; QoQ -151.65%.
EBITDA: $2.99 million; EBITDA Margin ~3.84%.
Cash Flow: Net cash from operating activities $16.33 million; Free cash flow $15.98 million.
Liquidity/Leverage: Cash $18.46 million; Total debt $142.00 million; Net debt $123.54 million; Current ratio 1.90; Quick ratio 1.09; Long-term debt to capitalization ~95.5%; Debt to capitalization ~96.5%; Interest Coverage 0.71x.
Valuation: P/S ~0.60; P/E negative; Dividend yield reported as 2.94% but no dividend is indicated in the period.
Note: All figures shown are USD and reflect the QQ3 2025 quarter metrics as provided in the data set.
Income Statement
| Metric |
Value |
YoY Change |
QoQ Change |
| Revenue |
77.88M |
22.15% |
354.67% |
| Gross Profit |
16.99M |
38.50% |
178.69% |
| Operating Income |
1.82M |
212.94% |
-53.42% |
| Net Income |
-1.30M |
56.46% |
-151.47% |
| EPS |
-0.47 |
55.66% |
-151.65% |
Key Financial Ratios
operatingProfitMargin
2.33%
operatingCashFlowPerShare
$5.93
freeCashFlowPerShare
$11.43
dividendPayoutRatio
-106.2%
Management Commentary
Transcript content not provided in the dataset. No direct management quotes from the QQ3 2025 earnings call are available. Key takeaways drawn from reported results suggest topline expansion and margin improvement at the gross level, but profitability remains constrained by a meaningful interest burden and ongoing leverage. If a transcript becomes available, we will incorporate management commentary on margin drivers, cost control, contract wins, utilization of assets, and any forward-looking guidance.
Forward Guidance
No explicit forward guidance was included in the supplied data for QQ3 2025. Given the elevated debt burden and sub-1x interest coverage, a cautious stance is warranted until the company demonstrates sustained margin expansion and a credible plan to deleverage. Investors should monitor: (1) debt refinancing options or maturity profile reshaping to reduce interest costs; (2) continued cash flow generation and working capital optimization; (3) revenue mix enhancements across Air T’s segments to support higher profitability; (4) maintenance of liquidity buffers and compliance with covenants. In a best-case scenario, stabilization of operating margins above 3–4% and a path toward deleveraging could support multiple expansion. In a downside scenario, continued earnings weakness and rising financing costs could pressure the balance sheet and equity upside.