Logistics and freight forwarding company Expeditors (NYSE: EXPD) met Wall Street’s revenue expectations in Q4 CY2025, but sales fell by 3.3% year on year to $2.86 billion. Its GAAP profit of $1.49 per share was 1.9% above analysts’ consensus estimates.

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Company Overview

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

Revenue Growth

A company’s long-term performance is an indicator of its overall quality. Any business can put up a good quarter or two, but many enduring ones grow for years. Over the last five years, Expeditors grew its sales at a sluggish 2.9% compounded annual growth rate. This fell short of our benchmarks and is a tough starting point for our analysis.

Long-term growth is the most important, but within industrials, a half-decade historical view may miss new industry trends or demand cycles. Expeditors’s annualized revenue growth of 9.1% over the last two years is above its five-year trend, suggesting its demand recently accelerated.

We can dig further into the company’s revenue dynamics by analyzing its most important segments, Airfreight and Ocean freight, which are 38.8% and 21.4% of revenue. Over the last two years, Expeditors’s Airfreight revenue (transport by plane) averaged 12% year-on-year growth while its Ocean freight revenue (transport by sea) averaged 11.7% growth.

This quarter, Expeditors reported a rather uninspiring 3.3% year-on-year revenue decline to $2.86 billion of revenue, in line with Wall Street’s estimates.

Looking ahead, sell-side analysts expect revenue to grow 1.5% over the next 12 months, a deceleration versus the last two years. This projection is underwhelming and implies 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.

Looking at the trend in its profitability, Expeditors’s operating margin decreased by 2 percentage points over the last five years. This raises questions about the company’s expense base because its revenue growth should have given it leverage on its fixed costs, resulting in better economies of scale and profitability.

This quarter, Expeditors generated an operating margin profit margin of 8.8%, down 1.4 percentage points year on year. Conversely, its gross margin actually rose, so we can assume its recent inefficiencies were driven by increased operating expenses like marketing, R&D, and administrative overhead.

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 an unimpressive 7.8% compounded annual growth rate over the last five years. This performance was better than its flat revenue but 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 to better understand the drivers of its performance. A five-year view shows that Expeditors has repurchased its stock, shrinking its share count by 21.6%. 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 growth of 9.1% was higher than its five-year trend. Accelerating earnings growth is almost always an encouraging data point.

In Q4, Expeditors reported EPS of $1.49, down from $1.68 in the same quarter last year. Despite falling year on year, this print beat analysts’ estimates by 1.9%. Over the next 12 months, Wall Street expects Expeditors’s full-year EPS of $5.95 to grow 1.5%.

Key Takeaways from Expeditors’s Q4 Results

It was encouraging to see Expeditors beat analysts’ EBITDA and EPS expectations this quarter. On the other hand, revenue was just in line. Overall, this print was fine. The market seemed to be hoping for more, and the stock traded down 1.1% to $147.96 immediately following the results.

Is Expeditors an attractive investment opportunity right now? If you’re making that decision, you should consider the bigger picture of valuation, business qualities, as well as the latest earnings. We cover that in our actionable full research report which you can read here (it’s free).