EPS of $-0.12 increased by 36.8% from previous year
Gross margin of 21.1%
Net income of -335.00K
"N/A" - N/A
Air T Inc (AIRT) QQ1 2025 Results: Revenue Decline Amid Debt-Heavy Balance Sheet and Modest Margin Recovery
Executive Summary
Air T Inc generated $66.41 million of revenue in QQ1 2025, with gross profit of $14.04 million and a gross margin of 21.13%. The quarter shows a modest EBITDA of $2.81 million but an operating loss of $0.58 million and a net loss of $0.335 million, driven by ongoing fixed-cost absorption and heavy leverage. Year-over-year revenue declined 7.03% while gross profit rose 4.65% on a YoY basis, but sequential performance deteriorated notably in gross profit and operating income (QoQ gross profit down 15.84%, operating income down 139.71% to negative territory). The company posted a small operating cash flow of $0.11 million and effectively flat free cash flow at negative $0.226 million, highlighting tight near-term cash execution while maintaining liquidity with cash on hand of about $8.71 million. Leverage remains a core constraint: total debt stood at $130.59 million with a net debt of $122.77 million and a debt ratio of 0.74, underscoring elevated interest costs and refinancing risk in a volatile macro environment. Absence of a published earnings transcript in the provided data constrains the incorporation of direct management quotes, but the quantitative results imply a cautious near-term outlook with a need for margin expansion and working-capital discipline to drive a sustainable earnings trajectory.
Net income: -$0.335 million; net margin -0.50% (YoY improvement +36.91%; QoQ +80.29%).
Financial Highlights
Revenue and profitability workstream
- QQ1 2025 revenue: $66.41 million ( YoY -7.03%; QoQ -8.63% ).
- Gross profit: $14.04 million; gross margin 21.13% (YoY +4.65%; QoQ -15.84%).
- EBITDA: $2.81 million; EBITDA margin 4.23% (EBITDAR 4.23%).
- Operating income: -$0.58 million; operating margin -0.87% (YoY swing to negative; QoQ deterioration).
- Net income: -$0.335 million; net margin -0.50% (YoY improvement +36.91%; QoQ +80.29%).
- EPS (diluted): -$0.12; diluted EPS -$0.12 (YoY +36.84%; QoQ +80.33%).
Liquidity and balance sheet
- Cash and cash equivalents: $8.71 million; total debt: $130.59 million; net debt: $122.77 million.
- Total assets: $175.49 million; total liabilities: $162.91 million; total stockholders’ equity: $4.12 million.
- Current ratio: 2.15; quick ratio: 0.92; cash ratio: 0.19.
- Leverage: debt ratio 0.744; debt-to-equity 31.67x; long-term debt to capitalization 0.961; total debt to capitalization 0.969.
Operating efficiency
- Asset turnover: 0.378; receivables turnover: 2.55x; inventory turnover: 0.907x; days sales outstanding (DSO): 35.2 days; days inventory outstanding (DIO): 99.25 days; days payables outstanding (DPO): 24.06 days; cash conversion cycle: ~110 days (approximate from given metrics).
Cash flow and capital allocation
- Net cash provided by operating activities: $0.113 million; capex: -$0.339 million; free cash flow: -$0.226 million.
- Net cash used in financing activities: -$1.291 million; net cash from investing activities: -$2.008 million; net change in cash: +$0.862 million; cash at end of period: $8.705 million.
Income Statement
Metric
Value
YoY Change
QoQ Change
Revenue
66.41M
-7.03%
-8.63%
Gross Profit
14.04M
4.65%
-15.84%
Operating Income
-577.00K
-187.69%
-139.71%
Net Income
-335.00K
36.91%
80.29%
EPS
-0.12
36.84%
80.33%
Key Financial Ratios
currentRatio
2.15
grossProfitMargin
21.1%
operatingProfitMargin
-0.87%
netProfitMargin
-0.5%
returnOnAssets
-0.19%
returnOnEquity
-8.13%
debtEquityRatio
31.67
operatingCashFlowPerShare
$0.04
freeCashFlowPerShare
$-0.08
priceToBookRatio
15.19
priceEarningsRatio
-46.73
Net Income vs. Revenue
Expense Breakdown
Management Commentary
No earnings transcript data were provided in the dataset for QQ1 2025. As a result, executive commentary, strategic intent, and management tone from the QQ1 call could not be quoted or quoted contextually. If a transcript is supplied, a thematically grouped highlights section (strategy, operations, market conditions) should be appended with direct quotes and attributions.
N/A
— N/A
N/A
— N/A
Forward Guidance
There is no explicit management guidance in the provided data for QQ1 2025. Given the earnings context and industry dynamics, the base-case outlook hinges on stabilizing revenue in Air T's Overnight Air Cargo and Ground Equipment segments, improving operating leverage, and addressing debt maturities. Scenarios:
- Base case: Modest revenue stabilization with continued cost discipline; EBITDA margins inch higher as SG&A is absorbed and utilization improves. Key targets: sustainable positive EBIT and modest free cash flow as capex abates.
- Upside: Revenue recovery from air express demand and fleet utilization; improved equipment service mix; potential reductions in per-unit fixed costs could lift EBITDA and cash flow.
- Downside: Persistent revenue weakness, higher-than-expected interest expense, and refinancing risk given high leverage; negative operating cash flow and higher working-capital needs could pressure liquidity. Monitoring points: trend in revenue versus industry volumes, contract renewals with major customers, refinancing timelines, and any asset impairment considerations.
Competitive Position
Company
Gross Margin
Operating Margin
Return on Equity
P/E Ratio
AIRT Focus
21.13%
-0.87%
-8.13%
-46.73%
ATXG
23.80%
-59.30%
-4.79%
-79.00%
HUBG
7.65%
3.67%
1.67%
23.69%
LSTR
13.20%
4.83%
4.63%
36.02%
JBHT
10.20%
6.85%
3.06%
39.78%
Gross Profit Margin
Operating Profit Margin
Return on Equity
P/E Ratio Comparison
Investment Outlook
Air T Inc faces a challenging near-term earnings trajectory given QQ1 2025 results: revenue declined vs. prior year and quarter, margins remain thin, and leverage is high. However, the company trades at a price-to-book around 15.19x, reflecting market expectations for a potential turnaround or stabilization rather than rapid revenue expansion. Near-term stock guidance should hinge on: (1) improvements in operating leverage to lift EBITDA and positive cash flow, (2) ability to stabilize or grow revenue across its core segments, and (3) timely debt refinancings at favorable terms. Investors should monitor liquidity indicators (OCF, FCF, net leverage trajectory), debt maturity schedules, and any management commentary on cost optimization, fleet utilization, and aftermarket services growth. In a scenario where EBITDA improves and debt is de-risked, Air T could begin to claim more meaningful upside; otherwise, leverage and cash burn may constrain equity value. Relative to diversified peers like EXPD and JBHT, Air T’s leverage and asset utilization gaps present meaningful risk that could weigh on multiyear valuation unless a revenues-and-cash-flow improvement plan materializes.
Key Investment Factors
Growth Potential
Air T's diverse asset-light/asset-heavy mix (overnight air cargo services and ground equipment) offers optionality to expand service offerings and aftermarket maintenance revenue. Growth potential depends on freight volumes, fleet utilization, and service life extension programs that improve maintenance and parts revenue over time.
Profitability Risk
Key risks include high leverage (debt ratio 0.744; debt-to-equity 31.67x), negative EBIT and net income in QQ1 2025, limited near-term free cash flow, and sensitivity to macro-economic cycles affecting express freight demand. Interest-rate exposure and debt refinancing risk are material given long-term debt of $112.43 million and net debt of $122.77 million. Operational leverage and working-capital requirements (CCC ~110–135 days) imply financing discipline is critical.
Financial Position
Constrained liquidity with $8.71 million cash, modest operating cash flow ($0.113 million) and negative free cash flow (-$0.226 million). Balance sheet shows solid current ratio (2.15) but weak equity base (Total equity $4.12 million) relative to debt, indicating a fragile cushion against earnings volatility. Asset turnover is 0.378, signaling underutilized assets relative to peers.
SWOT Analysis
Strengths
Diversified product mix spanning Overnight Air Cargo, Ground Equipment, and Commercial Aircraft Engines and Parts, which can provide cross-selling opportunities and a more resilient revenue base than a single-segment carrier.
Liquidity with a recognizable cash buffer (approximately $8.7M) combined with current assets ($100.67M) to support short-term obligations.
Moderate gross margin (~21.1%) indicates ability to generate margin in core operations relative to peers.
Weaknesses
Significant leverage (debt ratio 0.744; long-term debt capitalization near 0.96) and negative operating income in QQ1 2025 raise refinancing and default concerns.
Negative net income in QQ1 2025 (-$0.335M) and negative free cash flow, signaling limited cash generation to support debt service and capex.
Low asset turnover (0.378) suggests underutilization of assets relative to peers, implying potential inefficiencies.
Opportunities
Expansion of aftermarket services and maintenance contracts for engines and ground equipment to diversify revenue streams and improve gross margin resilience.
Operational improvements and utilization gains in the Overnight Air Cargo fleet could lift EBITDA and cash flow over time.
Strategic partnerships or fleet optimization could reduce fixed costs and enhance working capital efficiency.
Threats
Macro volatility in freight volumes and e-commerce demand impacting express and ground equipment demand.
Refinancing risk given high long-term debt and negative earnings, particularly if interest rates rise.
Industry competition with established peers (CHRW, EXPD, JBHT) that may have stronger leverage profiles and higher asset turnover.