Logistics and freight forwarding company Expeditors (NYSE: EXPD) reported Q2 CY2025 results exceeding the market’s revenue expectations, with sales up 8.7% year on year to $2.65 billion. Its GAAP profit of $1.34 per share was 7.9% above analysts’ consensus estimates.

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“Throughout the Expeditors global network, we are seeing the positive impact of our strategic initiatives to maximize operational excellence,” said Daniel R. Wall, President and Chief Executive Officer.

Company Overview

Expeditors (NYSE: EXPD) offers air and ocean freight as well as brokerage services.

Revenue Growth

A company’s long-term sales performance can indicate its overall quality. Any business can experience short-term success, but top-performing ones enjoy sustained growth for years. Unfortunately, Expeditors’s 6% annualized revenue growth over the last five years was tepid. This was below our standard for the industrials sector and is a poor baseline for our analysis.

We at StockStory place the most emphasis on long-term growth, but within industrials, a half-decade historical view may miss cycles, industry trends, or a company capitalizing on catalysts such as a new contract win or a successful product line. Expeditors’s performance shows it grew in the past but relinquished its gains over the last two years, as its revenue fell by 5.5% annually. Expeditors isn’t alone in its struggles as the Air Freight and Logistics industry experienced a cyclical downturn, with many similar businesses observing lower sales at this time.

Expeditors also breaks out the revenue for its most important segments, Airfreight and Ocean freight, which are 35.9% and 25.5% of revenue. Over the last two years, Expeditors’s Airfreight revenue (transport by plane) was flat while its Ocean freight revenue (transport by sea) averaged 8.8% year-on-year growth.

This quarter, Expeditors reported year-on-year revenue growth of 8.7%, and its $2.65 billion of revenue exceeded Wall Street’s estimates by 9.2%.

Looking ahead, sell-side analysts expect revenue to decline by 7.1% over the next 12 months, a slight deceleration versus the last two years. This projection doesn't excite us and indicates its products and services will face some demand challenges.

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Operating Margin

Expeditors has managed its cost base well over the last five years. It demonstrated solid profitability for an industrials business, producing an average operating margin of 10.5%. This result was particularly impressive because of its low gross margin, which is mostly a factor of what it sells and takes huge shifts to move meaningfully. Companies have more control over their operating margins, and it’s a show of well-managed operations if they’re high when gross margins are low.

Analyzing the trend in its profitability, Expeditors’s operating margin decreased by 1.1 percentage points over the last five years. Many Air Freight and Logistics companies also saw their margins fall (along with revenue, as mentioned above) because the cycle turned in the wrong direction. We hope Expeditors can emerge from this a stronger company, as the silver lining of a downturn is that market share can be won and efficiencies found.

In Q2, Expeditors generated an operating margin profit margin of 9.3%, in line with the same quarter last year. This indicates the company’s cost structure has recently been stable.

Earnings Per Share

We track the long-term change in earnings per share (EPS) for the same reason as long-term revenue growth. Compared to revenue, however, EPS highlights whether a company’s growth is profitable.

Expeditors’s EPS grew at a solid 11.6% compounded annual growth rate over the last five years, higher than its 6% annualized revenue growth. However, this alone doesn’t tell us much about its business quality because its operating margin didn’t improve.

We can take a deeper look into Expeditors’s earnings quality to better understand the drivers of its performance. A five-year view shows that Expeditors has repurchased its stock, shrinking its share count by 19.3%. This tells us its EPS outperformed its revenue not because of increased operational efficiency but financial engineering, as buybacks boost per share earnings.

Like with revenue, we analyze EPS over a more recent period because it can provide insight into an emerging theme or development for the business.

For Expeditors, its two-year annual EPS declines of 4.2% mark a reversal from its (seemingly) healthy five-year trend. We hope Expeditors can return to earnings growth in the future.

In Q2, Expeditors reported EPS at $1.34, up from $1.24 in the same quarter last year. This print beat analysts’ estimates by 7.9%. Over the next 12 months, Wall Street expects Expeditors’s full-year EPS of $6.12 to shrink by 13%.

Key Takeaways from Expeditors’s Q2 Results

We liked that Expeditors beat revenue and EPS expectations this quarter. However, management expressed caution, saying "Looking ahead, we continue to expect the freight environment to remain unpredictable". The market seemed to be hoping for more, and the stock traded down 3.3% to $113 immediately following the results.

Big picture, is Expeditors a buy here and now? The latest quarter does matter, but not nearly as much as longer-term fundamentals and valuation, when deciding if the stock is a buy. We cover that in our actionable full research report which you can read here, it’s free.