Air T Stock Dips Post Q3 Earnings, Rex Deal Reshapes Outlook

Shares of Air T, Inc. AIRT have lost 0.6% since the company reported its earnings for the quarter ended Dec. 31, 2025. This compares to the S&P 500 Index’s 0.02% decline over the same time frame. Over the past month, the stock gained 13.5% against the S&P 500’s 1.9% decline.

AIRT’s Earnings Snapshot

For the third quarter of fiscal 2026 ended Dec. 31, 2025, Air T reported revenues of $71.1 million, down 8.7% from $77.9 million in the prior-year quarter. The company posted an operating loss of $3.8 million against an operating income of $1.4 million a year earlier. Net loss attributable to Air T stockholders widened to $2.5 million, or $(0.91) per share, from a loss of $1.3 million, or $(0.47) per share, in the prior-year period.

On a nine-month basis, revenue declined 8.6% to $206.2 million from $225.5 million, while net income attributable to Air T stockholders fell 69.8% to $0.3 million, or $0.10 per share, from $0.9 million, or $0.32 per share, a year earlier.

Segment performance was mixed. Overnight air cargo revenue was essentially flat at $30.6 million. Ground support equipment sales rose 7.9% to $12.8 million from $11.8 million. Commercial aircraft, engines and parts revenue fell 42.4% to $18.8 million from $32.7 million. Digital solutions revenue increased 24.9% to $2.5 million from $1.9 million, while the newly added regional airline segment contributed $5.2 million for the partial quarter following the Rex acquisition.

Air T’s Other Key Business Metrics

Adjusted EBITDA for the quarter was $0.2 million, down from $2.7 million in the prior-year period. By segment, ground support equipment generated $1.7 million in adjusted EBITDA, up from $0.2 million a year earlier, reflecting improved product mix and spending discipline. Overnight air cargo produced $1 million, down 48.6% from $1.9 million.

Commercial aircraft, engines and parts posted an adjusted EBITDA loss of $0.2 million against a $2.9 million profit last year. The regional airline segment reported a $0.5 million adjusted EBITDA loss for its initial 13 days of operations under Air T ownership.

Order backlog in ground support equipment segment nearly doubled to $12.9 million as of Dec. 31, 2025, from $6.2 million a year earlier.

AIRT’s equity method investments balance increased to $33.6 million as of Dec. 31, 2025, from $19 million as of March 31, 2025, underscoring continued capital deployment into affiliated ventures.

AIRT’s Management Commentary

Chairman and CEO Nick Swenson highlighted the December 2025 acquisition of Rex Regional Airlines, describing it as a strategic entry into the Australian regional airline market. Swenson emphasized the quality of the Rex management team and characterized the airline as a critical link between capital cities and regional Australia. He also acknowledged that the transaction required significant effort from Air T’s team throughout 2025.

Factors Influencing Air T’s Headline Numbers

The revenue decline was primarily due to weakness in the commercial aircraft, engines and parts segment, where lower component sales at Contrail reflected reduced inventory purchases over the prior 12 months. Additionally, the newly consolidated Rex operations generated a net loss of $1.5 million in the initial period due to fixed operating costs, regulatory compliance requirements and transaction-related integration expenses.

At the same time, the Rex acquisition resulted in a preliminary bargain purchase gain of $95.8 million, recorded as a deferred credit on the balance sheet, as the estimated fair value of net assets acquired exceeded the $11 million purchase consideration.

AIRT’s Guidance

Air T did not provide formal financial guidance for upcoming quarters or the remainder of fiscal 2026. Management commentary centered on operational integration of Rex and execution priorities rather than issuing specific revenue or earnings forecasts.

Air T’s Other Developments

On Dec. 18, 2025, Air T completed the acquisition of substantially all assets and operations of Rex Express Holdings Ltd. The preliminary fair value of assets acquired totaled $164.8 million against liabilities of $57.9 million, resulting in net assets of $106.9 million. The transaction included the assumption of liabilities under a Commonwealth Facility Agreement and the establishment of a creditors trust to address pre-existing claims, positioning Rex to exit voluntary administration and resume operations under AIRT’s ownership.

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