Executive Summary
FedEx’s QQ1 2025 results show a modest top-line decline with a still-healthy but compressed profitability profile. Revenue of 21.579 billion USD declined 0.5% year over year and 2.4% quarter over quarter, while gross profit was 4.376 billion USD for a gross margin of ~20.28%. Operating income reached 1.08 billion USD (operating margin ~5.0%), and net income was 0.794 billion USD with an EPS of 3.21. The quarter benefited from continued depreciation and amortization of 1.078 billion USD and offset by other expenses totaling 3.296 billion USD, contributing to an EBITDA of 2.286 billion USD and an EBITDA margin of about 10.6%. Cash flow remained robust on an absolute basis (operating cash flow ~1.187 billion USD; free cash flow ~0.42 billion USD), with capital expenditures of 0.767 billion USD and net debt around 31.8 billion USD after financing activity. FedEx ended the period with about 5.943 billion USD of cash and equivalents and a total debt of 37.765 billion USD, implying a leverage profile (debt to capitalization ~58.2%, debt to equity ~1.39) consistent with a highly leveraged, asset-light logistics operator.
Key takeaway for investors: near-term profitability is being pressured by industry-wide demand softness and cost headwinds, but the company continues to generate positive free cash flow and maintains ample liquidity. The main questions going forward relate to volume recovery, yield management, and debt reduction versus ongoing capital investment in network efficiency and capacity.
Key Performance Indicators
QoQ: -14.58% | YoY:-7.15%
QoQ: -45.65% | YoY:-27.27%
QoQ: -46.13% | YoY:-26.35%
QoQ: -46.32% | YoY:-25.17%
Key Insights
Revenue: 21.579B; YoY -0.47%, QoQ -2.40%; grossProfit: 4.376B; YoY -7.15%, QoQ -14.58%; operatingIncome: 1.08B; YoY -27.27%, QoQ -45.65%; netIncome: 0.794B; YoY -26.35%, QoQ -46.13%; EPS: 3.21; YoY -25.17%, QoQ -46.32%; EBITDA: 2.286B; EBITDARatio: 0.1059; grossProfitMargin: 0.203; operatingProfitMargin: 0.050; pretaxProfitMargin: 0.0489; netProfitMargin: 0.0368; currentRatio: 1.282; debtToCapitalization: 0.582; debtToEquity: 1.390; cashFlowFromOperations: 1.187B; capex: 0.767B; freeCashFlow: 0....
Financial Highlights
Revenue: 21.579B; YoY -0.47%, QoQ -2.40%; grossProfit: 4.376B; YoY -7.15%, QoQ -14.58%; operatingIncome: 1.08B; YoY -27.27%, QoQ -45.65%; netIncome: 0.794B; YoY -26.35%, QoQ -46.13%; EPS: 3.21; YoY -25.17%, QoQ -46.32%; EBITDA: 2.286B; EBITDARatio: 0.1059; grossProfitMargin: 0.203; operatingProfitMargin: 0.050; pretaxProfitMargin: 0.0489; netProfitMargin: 0.0368; currentRatio: 1.282; debtToCapitalization: 0.582; debtToEquity: 1.390; cashFlowFromOperations: 1.187B; capex: 0.767B; freeCashFlow: 0.42B; cashEndOfPeriod: 5.943B; totalDebt: 37.765B; netDebt: 31.822B; payoutRatio: 0.427; ROA: 0.00916; ROE: 0.0292; assetTurnover: 0.249; receivablesTurnover: 2.09; daysSalesOutstanding: 43.01; cashConversionCycle: 26.65; enterpriseValueMultiple: 45.90; priceToEarningsRatio: 23.02; priceToBookValueRatio: 2.69; priceToSalesRatio: 3.39; dividendYield: 0.00464; freeCashFlowPerShare: 1.698; operatingCashFlowPerShare: 4.80; epsDiluted: 3.21
Income Statement
| Metric |
Value |
YoY Change |
QoQ Change |
| Revenue |
21.58B |
-0.47% |
-2.40% |
| Gross Profit |
4.38B |
-7.15% |
-14.58% |
| Operating Income |
1.08B |
-27.27% |
-45.65% |
| Net Income |
794.00M |
-26.35% |
-46.13% |
| EPS |
3.21 |
-25.17% |
-46.32% |
Key Financial Ratios
operatingCashFlowPerShare
$4.8
freeCashFlowPerShare
$1.7
dividendPayoutRatio
42.7%
Management Commentary
No earnings transcript content was provided in the data set. As a result, there are no management quotes or theme notes available to anchor this section. If a transcript becomes available, we will extract quotes by themes (strategy, operations, market conditions) and attach them here with the corresponding speaker attribution.
Forward Guidance
No formal forward guidance was included in the provided materials for QQ1 2025. Given the revenue decline and margin compression observed, investors should monitor: (1) volume recovery in core express and ground networks, (2) yield and price discipline amidst competitive dynamics with UPS and other peers, (3) fuel cost exposure and its hedging outcomes, (4) efficiency initiatives and network optimization that could lift operating margins, and (5) deleveraging progress and capital allocation priorities (share repurchases vs. sustaining capex). Based on current metrics, a gradual improvement in operating margin toward low-to-mid single digits and modest free cash flow growth would be key signals to watch if demand stabilizes.