Executive Summary
Cintas delivered a strong fiscal 2025 second quarter, underscoring durable demand for its diversified platform and the efficiency of its operating model. Revenue of $2.56 billion rose 7.8% year over year, with organic growth of 7.1% (adjusted for acquisitions and FX). Gross margin expanded to 49.8% from 48.0% a year ago, and operating margin reached a quarterly high of 23.1%, driving diluted EPS of $1.09 (up 21.1% YoY). Management attributed the margin strength to volume leverage, Six Sigma/engineering initiatives, route optimization (SmartTruck), and better sourcing, with no material one-offs reported for the quarter. Free cash flow for the first six months grew 34.9% YoY, supporting a disciplined capital allocation program that includes capex, acquisitions, dividends, and share repurchases.
Management raised fiscal 2025 guidance reflecting momentum: revenue expected to be $10.255–$10.32 billion (up from $10.22–$10.32B), organic growth guidance of 7.0–7.7%, and diluted EPS guidance of $4.28–$4.34 (up from $4.17–$4.25). The company emphasized a balanced mix of growth drivers including strength in First Aid & Safety, Fire Protection, and healthcare-related services, while Uniform Direct Sale remained a headwind in the quarter. The long-term growth framework remains anchored in efficiency gains, cross-selling, and strategic acquisitions to broaden the value proposition for customers.
Key Performance Indicators
Key Insights
Revenue: $2.561B in Q2 FY2025, up 7.77% YoY and 2.41% QoQ (per earnings metrics). Gross profit: $1.2767B; gross margin: 49.84% (YoY +180 bps). Operating income: $591.39M; operating margin: 23.08% (YoY +210 bps). Net income: $448.50M; net margin 17.51%. Diluted EPS: $1.09 (GAAP) vs. $1.11 (basic reported), up 21.1% YoY. Free cash flow (H1): $340.0M, up 34.9% YoY. Balance sheet: cash and equivalents $122.4M; total assets $9.37B; total liabilities $5.07B; total stockholders’ equity $4.29B. Debt: ...
Financial Highlights
Revenue: $2.561B in Q2 FY2025, up 7.77% YoY and 2.41% QoQ (per earnings metrics). Gross profit: $1.2767B; gross margin: 49.84% (YoY +180 bps). Operating income: $591.39M; operating margin: 23.08% (YoY +210 bps). Net income: $448.50M; net margin 17.51%. Diluted EPS: $1.09 (GAAP) vs. $1.11 (basic reported), up 21.1% YoY. Free cash flow (H1): $340.0M, up 34.9% YoY. Balance sheet: cash and equivalents $122.4M; total assets $9.37B; total liabilities $5.07B; total stockholders’ equity $4.29B. Debt: total debt $2.845B; net debt $2.724B. Key cash flows: Operating cash flow $441.4M; capex $101.4M; dividends paid $157.3M; share repurchases $36.7M. Segment margins: Uniform Rental and Facility Services GM 49.1%; First Aid & Safety GM 57.3%; Fire Protection GM 49.9%; Uniform Direct Sale GM 41.2%.
Income Statement
| Metric |
Value |
YoY Change |
QoQ Change |
| Revenue |
2.56B |
7.77% |
2.41% |
| Gross Profit |
1.28B |
11.84% |
1.96% |
| Operating Income |
591.39M |
18.35% |
5.41% |
| Net Income |
448.50M |
19.72% |
-0.78% |
| EPS |
1.11 |
20.65% |
-0.89% |
Key Financial Ratios
operatingProfitMargin
23.1%
operatingCashFlowPerShare
$1.07
freeCashFlowPerShare
$0.83
dividendPayoutRatio
35.1%
Management Commentary
Key takeaways from Cintas management commentary:
- Growth trajectory and guidance: Todd Schneider stated, We are updating our annual revenue expectations from a range of $10.22 billion to $10.32 billion to a range of $10.255 billion to $10.32 billion, a total growth rate of 6.9% to 7.5%, with organic growth of 7.0% to 7.7%.
- Organic growth composition: Mike Hansen noted organic growth by subsegment at Q2: Uniform Rental and Facility Services +6.9%, First Aid and Safety Services +12.3%, Fire Protection Services +10%, Uniform Direct Sale -9.2% YoY.
- Margin discipline and leverage: Management attributed margin strength to volume leverage and Six Sigma/engineering initiatives; incremental margins were described as robust, with management guiding long-term incremental margins of 25–35% while acknowledging outperformance in the first half.
- Pricing environment: Todd highlighted that price realization is now at historic levels (roughly 0% to 2%), noting that inflation has receded and price increases are more challenging but still achievable.
- Tariffs and sourcing strategy: Todd emphasized a diversified, dual-sourced supply chain (dedicated distribution center for First Aid; global procurement) with the ability to pivot in response to policy changes; they are positioned to manage potential tariff impacts.
- M&A activity and strategy: Management described acquisitions as accretive and complementary across rental, First Aid, and Fire Protection spaces, reinforcing the strategy to broaden the value proposition and cross-sell.
- Direct sale and vertical focus: Uniform Direct Sale remained a lumpier, strategic, no programmers-driven channel; the four verticals (healthcare, hospitality, education, state/local government) continue to perform above normal growth rates, contributing meaningfully to overall results.
- MyCintas portal and digitalization: The company reiterated the importance of myCintas as a conduit for customer management and efficiency, while noting it complements in-person service rather than replacing it.
Obtaining price increases is more challenging than it was in the past, compared to earlier portion of the calendar year and the first quarter, but we're still able to obtain price increases. They are right at about our historical levels now.
— Todd Schneider
We want to be in an incremental of 25% to 35%. And while we are above that in the first half, our expectation is longer-term, we're going to be sort of in that range and that's what we've guided for the back half of the year.
— Mike Hansen
Forward Guidance
Outlook and achievability:
- Revenue and growth: Fiscal 2025 guidance now implies total revenue of $10.255–$10.32B and organic growth of 7.0–7.7%, with workday-rebased revenue growth of 7.7–8.4%. The back-half implied organic growth range is roughly 6.6–7.9%, consistent with prior guidance, suggesting a stable trajectory into the second half.
- Profitability: 2025 diluted EPS guidance raised to $4.28–$4.34, reflecting continued margin expansion and operating leverage. Management reiterated a target incremental margin framework of 25–35% over time, indicating a balanced outlook for sustainable profitability as the base accelerates.
- Cash flow and capital allocation: Free cash flow for the first six months increased 34.9% YoY, enabling continued capital investments, M&A, dividends, and buybacks. Net interest expense is expected to be approximately $101 million in 2025 (vs. $95 million in 2024) due to higher variable-rate debt.
- Key drivers and risks: The company will rely on continued demand strength in its four verticals, ongoing cost-reduction programs (Six Sigma, route optimization, and energy management via SmartTruck), and selective acquisitions to sustain growth. Risks include a more challenging pricing environment as inflation normalizes, tariff dynamics, macro deterioration, and potential FX exposure across international operations.
- Monitoring points for investors: (1) trajectory of organic growth and pricing power, (2) execution and integration of acquisitions, (3) sustainability of incremental margins in a non-linear operating environment, (4) evolution of cross-sell penetration across the 1 million customer base, and (5) tariff and geopolitical developments affecting supply chain costs.