01—Abstract
Summary
Summary of the 10-Q filed November 6, 2025. Cited figures are marked; the original filing is the authoritative source.
Expeditors International of Washington, Inc. (EXPD) reported its third-quarter 2025 results, showing a 4% decrease in total revenues to $2.9 billiona compared to the prior year.
This decline was primarily driven by a significant 27% drop in ocean freight and ocean services revenue, largely due to lower average ocean sell and buy rates and a 3% decrease in containers shipped. However, this was partially offset by a 13% increase in customs brokerage and other services revenue and a 3% increase in airfreight services revenue. Despite the revenue dip, operating income saw a modest 4% decrease, and net earnings attributable to shareholders declined by 3% to $222.3 millionb.
Diluted earnings per share remained stable at $1.64c. The company generated a strong $201 million in cash from operating activities, significantly up from the previous year, and returned $212 million to shareholders through stock repurchases. Management remains confident in its liquidity and capital resources to meet future needs, with no long-term debt obligations other than lease liabilities.
02—Key points
Key Highlights
- Total revenues decreased by 4% year-over-year to $2.9 billion for Q3 2025.
- Ocean freight and ocean services revenue declined by 27% due to lower rates and volumes.
- Customs brokerage and other services revenue grew by 13%, driven by increased volumes and complexity.
- Airfreight services revenue saw a 3% increase, supported by demand from technology customers.
- Net earnings attributable to shareholders decreased by 3% to $222.3 million.
- Diluted earnings per share remained flat at $1.64.
- Cash from operating activities significantly increased to $201 million from $90 million in Q3 2024.
03—One dollar
04—Financials
Financial Highlights
Figures from 10-QQ3 FY2025filed November 6, 2025Financial Statements
Q3 FY2025 against Q3 FY2024
| Line item | Q3 FY2025Q3 FY2024 | Change |
|---|---|---|
| Revenue | $2.89B$3.00B | −3.5% |
| Operating Expenses | $2.61B$2.70B | −3.4% |
| Operating Income | $288.04M$301.52M | −4.5% |
| Net Income | $222.26M$229.57M | −3.2% |
| EPS (Basic) | $1.65$1.63 | +1.2% |
| EPS (Diluted) | $1.64$1.63 | +0.6% |
| Shares Outstanding (Basic) | 134.96M140.42M | −3.9% |
| Shares Outstanding (Diluted) | 135.28M141.03M | −4.1% |
05—Questions
Frequently Asked Questions
What is the primary reason for the decline in ocean freight revenue?
The primary reasons for the 27% decline in ocean freight and ocean services revenue are significant decreases in average ocean sell rates and buy rates, coupled with a 3% decrease in ocean containers shipped. This was attributed to softening demand, particularly on exports out of Asia, and an increase in available carrier capacity.
How did the company address the decline in ocean freight volumes?
While volumes decreased in some regions, the company noted that some volumes are shifting to other routes as customers seek to mitigate exposure to U.S./China-specific tariffs. The company is closely monitoring these shifts and adapting its strategies. Despite the ocean segment's performance, growth in customs brokerage and airfreight services helped offset some of the revenue decline.
What is the outlook for the company given the current volatile trade environment?
The company operates in a highly uncertain global economic and trade environment, with increased tariffs and intergovernmental disputes. Management acknowledges this unpredictability, noting potential negative impacts on business volumes and revenues. However, they are also seeing opportunities in areas like customs brokerage due to increasing trade complexity. Expeditors is focused on adapting to these changing conditions and managing operational risks.
Are there any material weaknesses in internal controls reported?
Yes, the company disclosed that its disclosure controls and procedures were not effective as of the end of the reporting period due to material weaknesses in internal control over financial reporting. These weaknesses relate to unauthorized access and changes to databases and applications, and a lack of proper review and authorization. The company is actively implementing remediation measures with the oversight of its Audit Committee, but these weaknesses have not yet been fully remediated.
06—Continue