Air Industries Group (AIRI) cuts net loss by 89% in Q3: Can EBITDA momentum last?

Air Industries Group (NYSE American: AIRI), a precision aerospace and defense component manufacturer, reported improved profitability in the third quarter of 2025, driven by stronger operational discipline and gross margin expansion. While net sales continued to contract year-over-year, the company successfully boosted its Adjusted EBITDA and reduced its net loss significantly, positioning itself for what executives described as a potentially strong end to the fiscal year.

The American manufacturer, which supplies landing gears, engine mounts, flight controls, and jet engine components to major defense and aerospace contractors, posted quarterly results showing margin discipline and profitability traction even as broader revenue headwinds persisted. Management highlighted the Q3 performance as evidence of internal improvements and cost-saving strategies starting to yield results.

What is driving Air Industries Group’s EBITDA performance despite softer revenue and rising expenses?

For the three-month period ended September 30, 2025, Air Industries Group reported net sales of 10.3 million US dollars. This marked a 17.9 percent decline from 12.6 million US dollars in the corresponding period of 2024. The company attributed the decline to project timing and customer program variability typical of its end markets, which include defense aviation and complex precision assemblies.

Despite the top-line compression, gross profit for the quarter reached 2.3 million US dollars, translating to a gross margin of 22.3 percent, up substantially from the 15.5 percent reported a year earlier. This margin uplift reflected tighter cost controls and better execution across production lines. Total operating expenses for the quarter rose moderately to 2 million US dollars, up 5.6 percent year over year. However, the uptick in expenses was more than offset by the improvement in gross profitability.

Operating income increased to 316,000 US dollars compared to 67,000 US dollars in the third quarter of 2024. Interest expenses remained high at 466,000 US dollars, nearly flat versus the prior-year period. However, the company benefitted from higher other income, which rose to 106,000 US dollars. The resulting net loss narrowed to just 44,000 US dollars in Q3 2025, a significant improvement over the 404,000 US dollars loss recorded in the year-ago period.

Adjusted EBITDA, a non-GAAP financial measure, improved 51.5 percent to 1.28 million US dollars compared to 845,000 US dollars in the third quarter of 2024. Chief Executive Officer Lou Melluzzo credited these results to a company-wide focus on efficiency, commenting that ongoing efforts to reduce expenses and optimize operations were clearly reflected in the company’s growing margin profile and improving bottom line.

What do Air Industries Group’s nine-month FY25 results reveal about ongoing revenue headwinds and cost management progress?

While the third-quarter performance reflected strong execution, Air Industries Group’s nine-month results underscore ongoing structural pressures, particularly on revenue. Net sales for the nine-month period ended September 30, 2025, came in at 35.1 million US dollars, a 12.6 percent decrease from 40.2 million US dollars reported in the same period of 2024.

Gross profit for the nine months stood at 6.36 million US dollars, nearly flat compared to 6.49 million US dollars in the prior-year period. However, gross margin improved to 18.1 percent from 16.2 percent, reflecting operational improvement even amidst lower volumes. Operating expenses grew to 6.78 million US dollars, up from 5.93 million US dollars. The increase was largely due to higher depreciation, which climbed to 1.96 million US dollars from 1.66 million US dollars, and stock-based compensation, which rose significantly to 836,000 US dollars from 302,000 US dollars.

The company posted an operating loss of 422,000 US dollars for the nine-month period, a reversal from the 560,000 US dollars operating profit recorded in the prior year. Interest expenses for the nine months totaled 1.35 million US dollars, while net other income jumped to 322,000 US dollars from 46,000 US dollars in 2024. The cumulative net loss widened to 1.45 million US dollars from 812,000 US dollars.

Nevertheless, Air Industries Group’s Adjusted EBITDA for the nine-month period remained relatively resilient at 2.75 million US dollars, marginally higher than the 2.62 million US dollars reported in the comparable period last year. This figure points to underlying stability in core profitability, even as GAAP net income figures remained under pressure.

How is Air Industries Group’s stock reacting to the Q3 2025 earnings release and what does the latest price action reveal about shifting investor sentiment?

Air Industries Group’s stock closed at 2.92 US dollars on November 14, 2025, down 2.01 percent for the day and 4.26 percent over the previous five trading sessions. The stock traded between 2.91 and 2.99 US dollars during regular market hours and closed lower than its previous close of 2.98 US dollars. However, the stock rallied in after-hours trading, rising to 3.12 US dollars, a gain of 6.85 percent.

The sharp post-market move suggests that investors responded positively to the margin and EBITDA improvements disclosed in the earnings release. With the company’s shares still hovering close to their 52-week low of 2.80 US dollars and far from the 52-week high of 4.90 US dollars, there may be room for upside revaluation if operational progress continues in the coming quarters.

The stock’s after-hours activity is notable, as it followed a period of generally muted sentiment among retail investors. The move suggests increased interest from momentum-focused traders or investors interpreting the EBITDA gains as an early signal of turnaround potential.

What strategic focus areas are guiding Air Industries Group through the fourth quarter?

Chief Executive Officer Lou Melluzzo emphasized that cost reduction and profitability remain central to Air Industries Group’s strategy for the remainder of fiscal year 2025. With improved third-quarter metrics demonstrating traction from internal initiatives, the company appears poised to maintain margin discipline into the fourth quarter.

Melluzzo stated that the company is looking forward to a strong finish to the year, indicating expectations for further EBITDA improvement and possible net profitability gains. The company did not issue formal guidance for Q4, but implied that operational consistency and disciplined cost management will remain in focus.

Air Industries Group is also expected to benefit from stability in defense-related project demand, particularly as geopolitical tensions and U.S. military procurement cycles continue to favor domestic aerospace suppliers. Its positioning as a Tier-1 and Tier-2 components provider to major defense contractors provides it with visibility into long-term program requirements, even if quarterly sales can remain lumpy due to order timing.

How does Air Industries Group compare with similar small-cap aerospace and defense suppliers?

In a sector where small-cap aerospace manufacturers are often challenged by supply chain volatility, labor shortages, and working capital constraints, Air Industries Group’s improved EBITDA margin and narrowing net losses stand out. With an Adjusted EBITDA margin of approximately 12.4 percent in Q3 2025, the company outperformed several peers who have reported flat or declining profitability in recent quarters.

While the company still faces balance sheet pressure from high interest expenses and modest revenue declines, its progress in containing operating costs and sustaining core earnings capacity has drawn attention. Peer companies in the sub-500 million US dollar market capitalization range have struggled to maintain margin stability amid inflationary input costs, suggesting that Air Industries Group’s current trajectory places it in a stronger relative position for the near term.

What should investors focus on ahead of the November 17 earnings call and how could Q4 guidance shape expectations for fiscal 2026?

Looking ahead, investors will be closely tracking Air Industries Group’s ability to sustain its EBITDA momentum while working to stabilize revenues and further reduce its net loss. The upcoming conference call on November 17 is expected to provide additional insight into backlog conversion rates, customer order timing, and Q4 profitability projections.

Particular attention will be paid to the company’s interest burden and whether there is scope for refinancing or debt reduction to support bottom-line recovery. Analysts will also look for signs of capital discipline, any potential contract wins, and commentary around defense procurement trends that could support forward guidance into fiscal 2026.

While the company has not issued forward Adjusted EBITDA targets, its nine-month performance and margin trajectory suggest that any incremental topline growth could flow through to earnings meaningfully. The firm’s ability to manage cash flows and deliver steady profitability improvements will remain a key theme for institutional investors monitoring micro-cap industrial plays.

What are the key takeaways from Air Industries Group’s Q3 and nine-month FY25 earnings report?

• Air Industries Group reported Q3 2025 net sales of 10.3 million US dollars, down 17.9 percent year over year, but achieved a gross margin of 22.3 percent, up from 15.5 percent.

• Adjusted EBITDA rose 51.5 percent to 1.28 million US dollars in Q3, driven by improved cost controls and operational efficiency gains.

• Net loss for the quarter narrowed significantly to 44,000 US dollars from 404,000 US dollars in the same period last year, signaling improved profitability.

• Nine-month FY25 net sales declined to 35.1 million US dollars from 40.2 million US dollars, while net loss widened to 1.45 million US dollars, primarily due to higher depreciation and operating expenses.

• Despite lower revenue, nine-month Adjusted EBITDA remained resilient at 2.75 million US dollars, slightly above the prior year’s 2.62 million US dollars.

• Operating expenses rose to 6.78 million US dollars for the nine-month period, reflecting increased depreciation and stock compensation costs.

• Air Industries Group’s stock declined 2 percent on the day of the Q3 earnings release but jumped 6.85 percent in after-hours trading to 3.12 US dollars, suggesting positive investor reaction to margin and EBITDA improvements.

• CEO Lou Melluzzo emphasized margin discipline and expense reduction as key drivers of improved performance and expressed optimism for a strong year-end.

• The aerospace and defense component manufacturer continues to face elevated interest expenses, which remain a drag on net profitability.

• Investors are expected to watch the November 17 earnings call closely for updates on backlog conversion, cost controls, and fiscal 2026 positioning.