Air T, Inc. (AIRT) FY2026 Earnings: Revenue $327M (+12.1%)
AIRT — FY2026 Financial Report Analysis
Full Year · Fiscal year 2026 · Published by Pham Hop
Air T's FY2026 (to March 2026) net income of $78.0M ($28.85/share) came from a $111.2M non-cash gain on buying Australia's Rex; the businesses lost $11.2M at the operating line and burned $25.0M of operating cash.
Revenue
$327M
+12.1% YoY
Net income
$78M
Diluted EPS
$28.85
Operating margin
-3.4%
This period vs a year ago
Same period last year
This period
Revenue▲+12.1%
≈$292M
$327M
Year-ago figures (≈) are worked out from the growth rate the company reported. Each row has its own scale.
Air T's fiscal 2026: a $78 million profit built on a one-time accounting gain, while the operating businesses lost money
Air T, Inc. — a small holding company that owns an overnight cargo airline flying for FedEx, a de-icing truck maker, an aircraft-parts trader, aviation data businesses and, since December 2025, Australia's Regional Express (Rex) — reported net income attributable to shareholders of $78.0 million ($28.85 per diluted share) for the fiscal year ended March 31, 2026, against a loss of $6.1 million ($2.23 per share) a year earlier. Revenue rose 12% to $327.1 million.
That headline profit is almost entirely a $111.2 million non-cash "bargain purchase gain" booked on buying Rex out of Australian voluntary administration (similar to bankruptcy). The filing itself says that without this gain Air T would have reported a pre-tax loss of about $25.2 million. The businesses Air T actually runs posted an operating loss of $11.2 million, down from a $1.9 million operating profit the year before, and operating cash flow swung to an outflow of $25.0 million.
At a glance
$111.2 million — the accounting gain from buying Rex for far less than its assets were valued at. It is a paper gain: no cash came in, and the figure can still change while the purchase valuation is finalized.
–$11.2 million — operating loss (profit or loss from running the businesses, before interest, investment results and tax). Rex alone lost $14.2 million in its first three and a half months under Air T.
–$25.0 million — operating cash flow, versus +$23.5 million last year, mainly because inventory roughly doubled to $77.1 million.
Results versus last year
Metric
FY2026 (to Mar 31, 2026)
FY2025
YoY Change
Revenue
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$327.1M
$291.9M
+12.1%
Operating income (loss)
–$11.2M
$1.9M
n/m (swing to loss)
Operating margin
–3.4%
0.7%
–4.1 pts
Gain on bargain purchase (Rex)
$111.2M
—
n/m
Pre-tax income (loss)
$86.0M
–$5.0M
n/m
Net income attributable to Air T
$78.0M
–$6.1M
n/m
Diluted EPS
$28.85
–$2.23
n/m
Adjusted EBITDA (company's non-GAAP measure)
$10.1M
$7.4M
+37.5%
Operating cash flow
–$25.0M
$23.5M
–$48.5M
FedEx share of revenue
35%
39%
–4 pts
n/m = not meaningful (a change from a loss to a profit, or vice versa, has no sensible percentage). Adjusted EBITDA is earnings before interest, tax, depreciation and amortization, with further company-chosen adjustments (listed below).
Takeaway: Air T's $28.85 of EPS is not earnings power — it is the accounting value of buying a distressed airline cheaply. The operating businesses lost $11.2 million, cash flow went negative, and debt nearly doubled. Whether the Rex bet pays off will show up in Rex's first full-year operating results, not in this gain.
How each business did
Air T reports five segments. Revenue figures below are before intercompany eliminations, as the filing presents them.
Segment
FY2026 revenue
FY2025 revenue
Change
FY2026 operating income
FY2025 operating income
Overnight air cargo
$128.7M
$124.9M
+3%
$6.2M
$6.2M
Commercial aircraft, engines & parts
$89.9M
$119.4M
–25%
$6.2M
$6.5M
Ground support equipment
$47.2M
$38.9M
+21%
$4.1M
–$1.2M
Digital solutions
$9.1M
$7.3M
+25%
–$1.3M
–$1.1M
Regional airline (Rex, from Dec 18, 2025)
$55.3M
—
new
–$14.2M
—
Corporate and other
$5.1M
$3.6M
+42%
–$13.4M
–$9.4M
Overnight air cargo (flying for FedEx): flat profit of $6.2 million. Revenue at the two FedEx-contracted airlines (Mountain Air Cargo and CSA Air) was essentially unchanged; Mountain Air Cargo's operating income fell $1.3 million on higher pilot pay. The maintenance unit WASI offset that, with revenue up $2.8 million (32%) from more third-party maintenance work and operating income up $1.6 million. FedEx still supplied 35% of all Air T revenue, down from 39% only because Rex added a new revenue stream — the dependence on one customer, which can end the aircraft leases on 90 days' notice, is unchanged.
Commercial aircraft, engines and parts: revenue fell 25%, driven by a $38.8 million drop in component sales at Contrail, which management says reflects a prior year of "elevated" trading "not expected to recur at that level in the foreseeable future." Segment profit held at $6.2 million only because Contrail booked a $7.0 million gain on selling two leased Airbus A321 aircraft — a one-off. Worthington Aviation grew revenue 23% to $41.0 million (more maintenance work and expansion in Australia) but its operating loss widened to $1.0 million because, per the filing, "costs did not scale proportionally with volume."
Ground support equipment (de-icing trucks and catering vehicles): the cleanest improvement in the group. Revenue rose 21% to $47.2 million on new and expanded de-icing contracts, and the segment swung from a $1.2 million loss to $4.1 million profit, helped by about $6.4 million of extra gross margin (sales minus direct production cost) from better volume, pricing and factory efficiency. One flag: the year-end order backlog fell to $0.6 million from $14.3 million, which the company attributes to timing — the annual US Air Force order arrived in May 2026, after year-end rather than before it.
Digital solutions: WorldACD (air-cargo market data) grew revenue 29% to $8.2 million and lifted profit by $0.6 million, but Ambry Hill's loss widened by $0.9 million to $3.7 million on higher staff costs with flat revenue (annual recurring revenue of $1.1 million).
Regional airline (Rex): $55.3 million of revenue and a $14.2 million operating loss in roughly three and a half months. That loss includes $8.8 million of depreciation and amortization, a $3.4 million one-time Australian "landholder duty" (a state tax on transferring ownership of companies that own land, triggered by the acquisition) and $2.0 million of integration costs. Stripping those out leaves Rex at roughly break-even on the company's adjusted EBITDA basis ($10 thousand). Management notes January and February are Rex's weakest months for ticket sales and that March 2026 was the first month Rex earned an operating profit under Air T.
The Rex deal, in plain terms
Rex entered voluntary administration in July 2024. Air T bought it on December 18, 2025, paying $10.2 million in cash to a creditors' trust (nominal equity price: zero) and taking on Rex's debt to the Australian government, which was valued at $22.2 million because it carries no interest as long as Rex meets its service commitments. Independent valuers put Rex's net assets at $121.4 million — including $70.4 million of aircraft, $21.8 million of spare engines and $22.9 million of rotable parts. The difference between the value of what Air T got and what it paid is the $111.2 million gain.
The deal comes with strings. Under the Commonwealth (Australian government) facilities, Rex has committed for at least ten years to minimum numbers of Saab 340 aircraft in service, minimum weekly flights on routes where it is the only operator, and government notice before exiting routes, with interest penalties if it falls short. Rex must also keep at least A$5.0 million in cash at all times. Air T financed its part through a new $40.0 million, 11.5% senior secured note, lent on to Rex at 12.0%.
What the headline numbers hide
The profit is a valuation, not cash. The $111.2 million gain is "non-cash" and "subject to change over the measurement period," per the filing, and Air T says it is still evaluating the fair value of aircraft, leases, contingencies from the administration, and tax balances. If those values come down, the gain shrinks. The gain also pushed the effective tax rate to just 1.6% (versus the 21% US statutory rate), because Air T doesn't pay tax on it and put a full valuation allowance on Rex's tax assets.
Cash conversion was poor. Net income was $84.7 million (including minority partners' share) but operating cash flow was –$25.0 million. The main drain was a $44.7 million swing in inventory: inventories rose from $38.5 million to $77.1 million, while revenue grew 12%. Part of that is Rex's $14.6 million of aircraft parts brought in by the acquisition; the rest is the parts segment buying engines and airframes, after a prior year in which it sold more inventory than it bought.
Adjusted EBITDA excludes a lot. The $10.1 million adjusted figure adds back $5.7 million of acquisition and integration costs, the $3.4 million landholder duty, $11.7 million of depreciation and amortization, an inventory write-down of $0.9 million and other items. Most of those exclusions are tied to Rex and are plausibly one-off, but the company's own number still only covers about 84% of the year's $12.0 million interest bill.
Debt nearly doubled. Long-term debt (including current portions and related-party debt) rose to about $209 million from about $115 million a year earlier, and interest expense rose $3.7 million to $12.0 million. Shareholders' equity went from a $3.2 million deficit to $79.8 million, but that improvement is mostly the bargain-purchase gain.
One-offs inside the operating line: the $7.0 million aircraft sale gain at Contrail, $5.7 million of deal costs and the $3.4 million duty. Excluding the sale gain alone, the operating loss would have been about $18.2 million.
No help from buybacks: Air T bought back only 1,264 shares ($28,000) in the year, so the per-share figures reflect the business, not a shrinking share count.
Outlook
Air T gives no numeric guidance; its "market outlook" section only warns about inflation, tariffs and geopolitical uncertainty. What the filing does show about the year ahead:
Rex's first full year is the swing factor. Fiscal 2026 caught Rex's seasonal low (January–February). A full year will include the stronger months, but also full-year depreciation, Saab 340 reactivation costs under the government commitments, and 12% interest on its new facility.
More acquisitions and more debt. In June 2026 Air T paid $21.8 million in cash for Arena Aviation Partners, a Netherlands aircraft asset manager, and its 8.5% Multiple Advance Note gives it access to another $10 million roughly every four months through May 2027.
De-icing should bounce back once the May 2026 US Air Force order is counted, but management says Contrail's prior-year parts-trading level is not expected to recur in the foreseeable future.
Our read: Air T has turned itself into a bigger, more leveraged and more complicated company in one year. The core FedEx-linked cargo business is steady but not growing, ground equipment improved meaningfully, and parts trading is resetting lower. The investment case now hinges on whether Rex can move from breaking even before depreciation to generating cash that services roughly $209 million of group debt. The numbers to watch in the coming quarters are Rex's operating income in the seasonally strong months, any revision to the $111.2 million gain as the valuation is finalized, and whether operating cash flow turns positive as Contrail's inventory build slows. Air T's June 2026 quarter (Q1 of fiscal 2027) 10-Q was filed on August 14, 2026 and is the first period with a full quarter of Rex.