Executive Summary
FedEx reported QQ2 2025 with revenue of $21.967 billion, essentially flat year over year (-0.9%) and up modestly quarter over quarter (+1.8%). The gross profit rose to $5.642 billion, yielding a gross margin of 25.7%, while operating income was $1.052 billion for an operating margin of 4.79% and net income of $0.741 billion (net margin 3.37%). EPS stood at $3.07, down from prior-year and prior-quarter levels. The quarter featured meaningful cash flow generation, with operating cash flow of $1.318 billion and free cash flow of about $0.5 billion, supporting a cash balance of roughly $5.03 billion at period end. Management deployed capital toward a sizable share repurchase program (-$1.02 billion) alongside $0.337 billion of dividends, and capital expenditures of $0.818 billion. Net debt remained elevated at approximately $32.25 billion, while liquidity indicators remained solid (current ratio 1.23, quick ratio 1.19).
Key Performance Indicators
QoQ: -2.59% | YoY:-17.55%
QoQ: -6.68% | YoY:-17.67%
QoQ: -4.36% | YoY:-14.48%
Key Insights
Revenue: $21.967B; YoY -0.89%, QoQ +1.80%; Gross Profit: $5.642B; YoY +0.45%, QoQ +28.93%; Operating Income: $1.052B; YoY -17.55%, QoQ -2.59%; Net Income: $0.741B; YoY -17.67%, QoQ -6.68%; EPS: $3.07; YoY -14.48%, QoQ -4.36%; Gross Margin: 25.68%; Operating Margin: 4.79%; Net Margin: 3.37%; Cash Flow from Operations: $1.318B; Capital Expenditures: -$0.818B; Free Cash Flow: $0.500B; Dividend Payouts: -$0.337B; Share Buybacks: -$1.020B; Total Debt: $37.274B; Net Debt: $32.245B; Cash and Cash Equiv...
Financial Highlights
Revenue: $21.967B; YoY -0.89%, QoQ +1.80%; Gross Profit: $5.642B; YoY +0.45%, QoQ +28.93%; Operating Income: $1.052B; YoY -17.55%, QoQ -2.59%; Net Income: $0.741B; YoY -17.67%, QoQ -6.68%; EPS: $3.07; YoY -14.48%, QoQ -4.36%; Gross Margin: 25.68%; Operating Margin: 4.79%; Net Margin: 3.37%; Cash Flow from Operations: $1.318B; Capital Expenditures: -$0.818B; Free Cash Flow: $0.500B; Dividend Payouts: -$0.337B; Share Buybacks: -$1.020B; Total Debt: $37.274B; Net Debt: $32.245B; Cash and Cash Equivalents: $5.029B; Current Ratio: 1.231; Quick Ratio: 1.188; DSO: 43.99 days; DIO: 3.21 days; DPO: 20.17 days; Cash Conversion Cycle: 27.03 days; ROA: 0.87%; ROE: 2.80%; ROCE: 1.48%; Price-to-Book: 2.78; P/E: 24.82; Dividend Yield: 0.46%; Enterprise Value Multiple: 43.34.
Income Statement
| Metric |
Value |
YoY Change |
QoQ Change |
| Revenue |
21.97B |
-0.89% |
1.80% |
| Gross Profit |
5.64B |
0.45% |
28.93% |
| Operating Income |
1.05B |
-17.55% |
-2.59% |
| Net Income |
741.00M |
-17.67% |
-6.68% |
| EPS |
3.07 |
-14.48% |
-4.36% |
Key Financial Ratios
operatingProfitMargin
4.79%
operatingCashFlowPerShare
$5.45
freeCashFlowPerShare
$2.07
dividendPayoutRatio
45.5%
Management Commentary
No earnings call transcript data were provided in the dataset for QQ2 2025, so management-prompted themes, qualitative guidance, and quote-based rationale could not be extracted from the call transcript within this analysis.
Forward Guidance
No formal forward guidance was included in the provided data. From a qualitative standpoint, investors should monitor: (1) volume and mix dynamics across FedEx Express, Ground, and Freight segments as e-commerce and cross-border trade trends evolve; (2) cost inflation drivers (fuel, labor, warehousing) and the company’s ongoing cost-out initiatives and network optimization efforts; (3) pricing/tiering discipline and fuel surcharges to support yield; (4) capital allocation cadence, including the balance between deleveraging efforts and buyback activity; and (5) leverage risk given the sizable net debt base. In a base-case, a gradually improving margin profile would hinge on successful cost-reduction programs and favorable volume resilience, supported by steady free cash flow generation.