[Filing Information](index=1&type=section&id=Filing%20Information) [Form 10-Q Details](index=1&type=section&id=Form%2010-Q%20Details) This section details the Form 10-Q filing for Expeditors International, including its large accelerated filer status and common shares outstanding for Q2 2025 - Report is a Quarterly Report on Form 10-Q for the period ended June 30, 2025[2](index=2&type=chunk) - Registrant is Expeditors International of Washington, Inc. (Commission File Number: 001-41871)[2](index=2&type=chunk) - The company is a **large accelerated filer**[3](index=3&type=chunk)[4](index=4&type=chunk) Common Stock Information | Metric | Value | |:---|:---| | Trading Symbol | EXPD | | Exchange | New York Stock Exchange | | Shares Outstanding (as of Aug 4, 2025) | 135,718,520 | [PART I. FINANCIAL INFORMATION](index=2&type=section&id=PART%20I.%20FINANCIAL%20INFORMATION) [Item 1. Financial Statements](index=2&type=section&id=Item%201.%20Financial%20Statements) This section presents the unaudited condensed consolidated financial statements, including Balance Sheets, Earnings, Comprehensive Income, Cash Flows, and Equity [Condensed Consolidated Balance Sheets](index=2&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) Condensed Consolidated Balance Sheets (June 30, 2025 vs. Dec 31, 2024) | Metric (in thousands) | June 30, 2025 | December 31, 2024 | |:---|:---|:---|\n| **Assets:** | | |\n| Cash and cash equivalents | $1,156,162 | $1,148,320 |\n| Accounts receivable, less allowance for credit loss | $2,005,094 | $1,997,840 |\n| Total current assets | $3,651,576 | $3,659,775 |\n| Total assets | $4,786,481 | $4,754,458 |\n| **Liabilities:** | | |\n| Accounts payable | $1,118,283 | $1,036,749 |\n| Total current liabilities | $2,116,274 | $2,066,473 |\n| **Equity:** | | |\n| Total shareholders' equity | $2,195,354 | $2,223,012 |\n| Total liabilities and equity | $4,786,481 | $4,754,458 | [Condensed Consolidated Statements of Earnings](index=3&type=section&id=Condensed%20Consolidated%20Statements%20of%20Earnings) Condensed Consolidated Statements of Earnings (Three Months Ended June 30) | Metric (in thousands) | 2025 | 2024 | Change (%) | |:---|:---|:---|:---|\n| Total revenues | $2,651,885 | $2,439,001 | 8.7% |\n| Total operating expenses | $2,404,149 | $2,215,082 | 8.5% |\n| Operating income | $247,736 | $223,919 | 10.6% |\n| Net earnings attributable to shareholders | $183,574 | $175,469 | 4.6% |\n| Diluted earnings attributable to shareholders per share | $1.34 | $1.24 | 8.1% | Condensed Consolidated Statements of Earnings (Six Months Ended June 30) | Metric (in thousands) | 2025 | 2024 | Change (%) | |:---|:---|:---|:---|\n| Total revenues | $5,318,304 | $4,645,679 | 14.5% |\n| Total operating expenses | $4,804,710 | $4,206,984 | 14.2% |\n| Operating income | $513,594 | $438,695 | 17.1% |\n| Net earnings attributable to shareholders | $387,369 | $344,621 | 12.4% |\n| Diluted earnings attributable to shareholders per share | $2.82 | $2.41 | 17.0% | [Condensed Consolidated Statements of Comprehensive Income](index=4&type=section&id=Condensed%20Consolidated%20Statements%20of%20Comprehensive%20Income) Condensed Consolidated Statements of Comprehensive Income (Three Months Ended June 30) | Metric (in thousands) | 2025 | 2024 | Change | |:---|:---|:---|:---|\n| Net earnings | $183,919 | $175,151 | 5.0% |\n| Foreign currency translation adjustments, net of tax | $33,396 | $(10,862) | N/A |\n| Comprehensive income attributable to shareholders | $217,098 | $164,486 | 32.0% | Condensed Consolidated Statements of Comprehensive Income (Six Months Ended June 30) | Metric (in thousands) | 2025 | 2024 | Change | |:---|:---|:---|:---|\n| Net earnings | $388,018 | $345,551 | 12.3% |\n| Foreign currency translation adjustments, net of tax | $47,079 | $(26,387) | N/A |\n| Comprehensive income attributable to shareholders | $434,594 | $318,221 | 36.6% | [Condensed Consolidated Statements of Cash Flows](index=5&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) Condensed Consolidated Statements of Cash Flows (Three Months Ended June 30) | Metric (in thousands) | 2025 | 2024 | Change | |:---|:---|:---|:---|\n| Net cash from operating activities | $179,212 | $126,769 | 41.4% |\n| Net cash from investing activities | $(15,851) | $(7,877) | 101.2% |\n| Net cash from financing activities | $(339,875) | $(207,393) | 63.9% |\n| Change in cash and cash equivalents | $(162,358) | $(98,603) | 64.7% |\n| Cash and cash equivalents at end of period | $1,156,162 | $1,271,853 | -9.1% | Condensed Consolidated Statements of Cash Flows (Six Months Ended June 30) | Metric (in thousands) | 2025 | 2024 | Change | |:---|:---|:---|:---|\n| Net cash from operating activities | $521,834 | $383,673 | 36.0% |\n| Net cash from investing activities | $(28,847) | $(17,961) | 60.6% |\n| Net cash from financing activities | $(505,846) | $(582,315) | -13.2% |\n| Change in cash and cash equivalents | $7,842 | $(241,030) | N/A |\n| Cash and cash equivalents at end of period | $1,156,162 | $1,271,853 | -9.1% | [Condensed Consolidated Statements of Equity](index=6&type=section&id=Condensed%20Consolidated%20Statements%20of%20Equity) Total Shareholders' Equity (June 30, 2025 vs. Dec 31, 2024) | Metric (in thousands) | June 30, 2025 | December 31, 2024 | |:---|:---|:---|\n| Total Shareholders' Equity, Beginning of Period (Six Months) | $2,223,012 | $2,390,350 |\n| Net earnings | $387,369 | $344,621 |\n| Shares repurchased (six months) | $(357,221) | $(436,184) |\n| Dividend and dividend equivalents paid (six months) | $(105,002) | $(103,665) |\n| Total Shareholders' Equity, End of Period | $2,195,354 | $2,223,012 | Common Shares Outstanding (Six Months Ended June 30) | Metric (in thousands) | 2025 | 2024 | |:---|:---|:---|\n| Beginning of period | 138,003 | 143,866 |\n| Shares issued under employee stock plans, net | 643 | 642 |\n| Shares repurchased under provisions of stock repurchase plan | (3,512) | (3,875) |\n| End of period | 135,134 | 140,633 | [Notes to Condensed Consolidated Financial Statements](index=7&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) [Note 1. Summary of Significant Accounting Policies](index=7&type=section&id=Note%201.%20Summary%20of%20Significant%20Accounting%20Policies) This note outlines significant accounting policies, including basis of presentation, revenue recognition, and recent accounting pronouncements - The Company is a non-asset based provider of global logistics services, operating through a worldwide network[22](index=22&type=chunk) - Revenue is primarily derived from airfreight, ocean freight, and customs brokerage and other services, generally recognized over time as services are rendered[25](index=25&type=chunk)[26](index=26&type=chunk) - The Company adopted new improvements to reportable segment disclosures retrospectively for 2024, requiring interim disclosures of segment profit/loss and assets, and significant segment expenses[32](index=32&type=chunk) - New ASUs on income tax disclosures (effective Jan 1, 2025) and disaggregation of income statement expenses (effective Jan 1, 2027) are expected to impact disclosures only, not financial statements[33](index=33&type=chunk)[34](index=34&type=chunk) [Note 2. Share-Based Compensation](index=9&type=section&id=Note%202.%20Share-Based%20Compensation) This note details share-based compensation plans, including RSUs and PSUs, and their expense recognition Share-Based Awards Granted (Second Quarter) | Award Type | 2025 | 2024 | |:---|:---|:---|\n| Restricted Stock Units (RSUs) | 380 | 334 |\n| Weighted-average fair value (RSUs) | $106.18 | $114.90 |\n| Performance Stock Units (PSUs) | 94 | 78 | - RSUs vest annually over 3 years based on continued employment; PSUs have performance conditions measured in 2025, 2026, and 2027, with an adjustment factor of **0.5 to 2 times the target grant**[36](index=36&type=chunk)[37](index=37&type=chunk) - Stock compensation expense is recognized on a straight-line basis over service periods, or immediately for retirement-eligible employees[39](index=39&type=chunk) [Note 3. Taxes](index=9&type=section&id=Note%203.%20Taxes) This note discusses income tax framework, the 2025 Tax Act, tax contingencies, and the effective income tax rate - The **2025 Tax Act**, enacted July 4, 2025, includes corporate tax changes like restoring full expensing of R&D costs and immediate deductibility of capital expenditures; the company does not expect a material impact on 2025 consolidated tax expense and cash flows[41](index=41&type=chunk)[100](index=100&type=chunk) - The consolidated effective income tax rate increased to **28.7% (Q2 2025)** and **27.3% (H1 2025)** from 25.8% (Q2 2024) and 26.3% (H1 2024), primarily due to higher foreign tax expense from currency exchange rates and non-deductible expenses[45](index=45&type=chunk)[99](index=99&type=chunk) - The company is defending its position vigorously against the Indian tax authority's assertions of additional income tax and service tax, believing them to be without merit[42](index=42&type=chunk)[132](index=132&type=chunk) [Note 4. Basic and Diluted Earnings per Share](index=10&type=section&id=Note%204.%20Basic%20and%20Diluted%20Earnings%20per%20Share) This note reconciles basic and diluted earnings per share, detailing weighted-average shares and dilutive awards Basic and Diluted EPS (Three Months Ended June 30) | Metric | 2025 | 2024 | |:---|:---|:---|\n| Net earnings attributable to shareholders | $183,574 | $175,469 |\n| Weighted-average basic shares outstanding | 136,266 | 141,013 |\n| Effect of dilutive share-based awards | 365 | 703 |\n| Weighted-average diluted shares | 136,631 | 141,716 |\n| Basic earnings attributable to shareholders per share | $1.35 | $1.24 |\n| Diluted earnings attributable to shareholders per share | $1.34 | $1.24 | Basic and Diluted EPS (Six Months Ended June 30) | Metric | 2025 | 2024 | |:---|:---|:---|\n| Net earnings attributable to shareholders | $387,369 | $344,621 |\n| Weighted-average basic shares outstanding | 137,045 | 142,104 |\n| Effect of dilutive share-based awards | 492 | 824 |\n| Weighted-average diluted shares | 137,537 | 142,928 |\n| Basic earnings attributable to shareholders per share | $2.83 | $2.43 |\n| Diluted earnings attributable to shareholders per share | $2.82 | $2.41 | [Note 5. Shareholders' Equity](index=11&type=section&id=Note%205.%20Shareholders'%20Equity) This note details changes in shareholders' equity, including stock repurchases and dividend declarations - The Board of Directors authorized a Discretionary Stock Repurchase Plan to reduce outstanding common stock down to **130,000 shares**, with no expiration date[49](index=49&type=chunk)[137](index=137&type=chunk) Common Stock Repurchases (Six Months Ended June 30) | Period | Shares Repurchased (thousands) | Average Price Per Share | |:---|:---|:---|\n| 2025 | 3,512 | $114.31 |\n| 2024 | 3,875 | $119.43 | Semi-Annual Dividends Declared | Declaration Date | Payable Date | Record Date | Dividend Per Share | |:---|:---|:---|:---|\n| May 6, 2025 | June 16, 2025 | June 2, 2025 | $0.77 |\n| May 6, 2024 | June 17, 2024 | June 3, 2024 | $0.73 | [Note 6. Fair Value of Financial Instruments](index=11&type=section&id=Note%206.%20Fair%20Value%20of%20Financial%20Instruments) This note describes the fair value of financial instruments, primarily cash and cash equivalents - The carrying value of financial instruments (cash equivalents, accounts receivable, accounts payable, accrued expenses) approximates their fair value[51](index=51&type=chunk) Cash and Cash Equivalents (in thousands) | Category | June 30, 2025 (Fair Value) | December 31, 2024 (Fair Value) | |:---|:---|:---|\n| Cash and overnight deposits | $585,024 | $623,561 |\n| Corporate commercial paper | $499,787 | $498,742 |\n| Time deposits and money market funds | $71,662 | $26,574 |\n| Total | $1,156,473 | $1,148,877 | - Fair value of corporate commercial paper and time deposits is based on **Level 2 fair value measurement** (market interest rates for identical or similar assets)[52](index=52&type=chunk) [Note 7. Contingencies](index=12&type=section&id=Note%207.%20Contingencies) This note addresses claims, lawsuits, investigations, and tax audits, with no material effect expected on financials - The company is involved in claims, lawsuits, government investigations, and tax audits, but management does not expect a material effect on operations, cash flows, or financial position[53](index=53&type=chunk)[127](index=127&type=chunk) - The company is currently unable to estimate any additional loss or range of reasonably possible losses beyond recorded amounts for these matters[53](index=53&type=chunk)[127](index=127&type=chunk) [Note 8. Business Segment Information](index=12&type=section&id=Note%208.%20Business%20Segment%20Information) This note provides financial information by geographic operating segment, with CODM using operating income for performance assessment - The company is organized into geographic operating segments: Americas; North Asia; South Asia; Europe; and Middle East, Africa and India (MAIR)[54](index=54&type=chunk)[65](index=65&type=chunk) - Operating income is the primary measure used by the CODM to review financial performance and determine segment manager compensation, which is closely linked to operating unit profitability[54](index=54&type=chunk)[66](index=66&type=chunk) Geographic Segment Revenues (Three Months Ended June 30, 2025, in thousands) | Segment | Revenues | |:---|:---|\n| United States | $877,325 |\n| North Asia | $636,785 |\n| Europe | $449,712 |\n| South Asia | $359,531 |\n| Middle East, Africa and India | $155,458 |\n| Other North America | $108,128 |\n| Latin America | $66,904 |\n| Consolidated Total | $2,651,885 | Geographic Segment Operating Income (Three Months Ended June 30, 2025, in thousands) | Segment | Operating Income | |:---|:---|\n| United States | $125,094 |\n| North Asia | $55,866 |\n| South Asia | $25,492 |\n| Europe | $25,043 |\n| Middle East, Africa and India | $7,283 |\n| Latin America | $5,184 |\n| Other North America | $3,769 |\n| Consolidated Total | $247,736 | [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=14&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) This section provides management's analysis of financial condition and results, covering services, Q2 2025 summary, trends, and liquidity [Overview](index=14&type=section&id=Overview) Expeditors provides global logistics services, including air/ocean freight, customs brokerage, and supply chain solutions - Expeditors provides global logistics services including air/ocean freight, customs brokerage, warehousing, and supply chain solutions, operating as a non-asset based carrier[60](index=60&type=chunk) - Revenues are primarily from airfreight, ocean freight, and customs brokerage, driven by volume, sell rates, and buy rates[61](index=61&type=chunk) - The company manages its operations across geographic areas: Americas; North Asia; South Asia; Europe; and Middle East, Africa and India (MAIR)[65](index=65&type=chunk) [Summary of Second Quarter 2025](index=15&type=section&id=Summary%20of%20Second%20Quarter%202025) Strong demand, driven by anticipated tariffs, led to increased volumes and rate volatility across all services in Q2 2025 - Strong demand for all services, partly due to U.S. importers managing shipments in anticipation of higher trade tariffs, led to increased volumes and rate volatility[67](index=67&type=chunk) Key Performance Indicators (Q2 2025 vs. Q2 2024) | Metric | Q2 2025 | Q2 2024 | Change | |:---|:---|:---|:---|\n| Ocean containers shipped | Up 7% | N/A | N/A |\n| Airfreight tonnage | Up 7% | N/A | N/A |\n| Operating income | Up 11% | N/A | N/A |\n| Net earnings to shareholders | Up 5% | N/A | N/A |\n| Cash from operating activities | $179 million | $127 million | Up $52 million |\n| Shareholder returns (repurchases & dividends) | $335 million | N/A | N/A | - Growing complexity in customs brokerage due to the dynamic trade environment resulted in high demand and increased resources for brokerage services[67](index=67&type=chunk) [Industry Trends, Trade Conditions and Competition](index=16&type=section&id=Industry%20Trends%2C%20Trade%20Conditions%20and%20Competition) International trade is influenced by economic/political conditions, currency, tariffs, and restrictions, with the U.S. imposing higher tariffs - International trade is influenced by economic/political conditions, currency exchange rates, tariffs, and trade restrictions, with the U.S. implementing significantly higher tariffs on imports, especially from China[68](index=68&type=chunk) - The 'de minimis exemption' for low-value goods from China and Hong Kong was terminated on May 2, 2025, adding complexity to customs declarations[68](index=68&type=chunk) - The global economic and trade environments remain highly uncertain due to inflation, oil price volatility, high interest rates, and geopolitical conflicts, leading to potential declines in average sell and buy rates if demand softens and capacity increases[71](index=71&type=chunk) [Seasonality](index=17&type=section&id=Seasonality) Operating results are historically subject to seasonal demand trends, with Q1 weakest and Q3/Q4 strongest, though future patterns are uncertain - Historically, operating results are subject to seasonal demand trends, with the first quarter being the weakest and the third and fourth quarters being the strongest, though future patterns are uncertain due to economic conditions[72](index=72&type=chunk) - Revenues are largely impacted by factors outside the company's control, such as consumer demand, trade tariffs, product launches, and supply chain disruptions[73](index=73&type=chunk) [Critical Accounting Estimates](index=17&type=section&id=Critical%20Accounting%20Estimates) Financial statement preparation requires management estimates and judgments based on historical experience and assumptions - The preparation of financial statements requires management to make estimates and judgments, which are based on historical experience and reasonable assumptions[75](index=75&type=chunk) - Critical accounting estimates are consistent with those disclosed in the company's 2024 Form 10-K[75](index=75&type=chunk) [Results of Operations](index=18&type=section&id=Results%20of%20Operations) [Airfreight Services](index=18&type=section&id=Airfreight%20services) Airfreight services saw significant revenue and expense growth, driven by increased tonnage and higher rates from technology customers and tariff-driven front-loading Airfreight Services Performance (Three Months Ended June 30) | Metric | 2025 | 2024 | Change (%) | |:---|:---|:---|:---|\n| Revenues | $951,787 | $860,323 | 11% |\n| Expenses | $698,402 | $645,168 | 8% |\n| Tonnage | Up 7% | N/A | N/A |\n| Average sell rates | Up 4% | N/A | N/A |\n| Average buy rates | Up 3% | N/A | N/A | Airfreight Services Performance (Six Months Ended June 30) | Metric | 2025 | 2024 | Change (%) | |:---|:---|:---|:---|\n| Revenues | $1,853,547 | $1,619,697 | 14% |\n| Expenses | $1,346,896 | $1,182,759 | 14% |\n| Tonnage | Up 8% | N/A | N/A |\n| Average sell rates | Up 7% | N/A | N/A |\n| Average buy rates | Up 7% | N/A | N/A | - Tonnage increased due to higher market demand, primarily from technology customers, and shippers accelerating orders in anticipation of higher tariffs[80](index=80&type=chunk) - Average sell and buy rates increased on exports from South Asia and Europe due to elevated demand and limited capacity, and from North Asia and MAIR due to strong Q1 demand ahead of tariff changes[81](index=81&type=chunk) [Ocean Freight and Ocean Services](index=19&type=section&id=Ocean%20freight%20and%20ocean%20services) Ocean freight services showed mixed performance, with strong H1 growth from South Asia but Q2 declines in North Asia due to softening demand and capacity Ocean Freight & Services Performance (Three Months Ended June 30) | Metric | 2025 | 2024 | Change (%) | |:---|:---|:---|:---|\n| Revenues | $675,782 | $651,675 | 4% |\n| Expenses | $483,475 | $478,121 | 1% |\n| Ocean containers shipped | Up 7% | N/A | N/A |\n| Average sell rates | Down 6% | N/A | N/A |\n| Average buy rates | Down 9% | N/A | N/A | Ocean Freight & Services Performance (Six Months Ended June 30) | Metric | 2025 | 2024 | Change (%) | |:---|:---|:---|:---|\n| Revenues | $1,457,447 | $1,222,461 | 19% |\n| Expenses | $1,057,376 | $892,104 | 19% |\n| Ocean containers shipped | Up 8% | N/A | N/A |\n| Average sell rates | Up 15% | N/A | N/A |\n| Average buy rates | Up 13% | N/A | N/A | - South Asia ocean freight revenues increased **26% (Q2)** and **46% (H1)** due to a **27% (Q2)** and **23% (H1)** increase in containers shipped, driven by shippers managing tariffs and sourcing relocation[85](index=85&type=chunk) - North Asia ocean freight revenues decreased **8% in Q2 2025** due to declining containers shipped and average rates, following strong Q1 front-loading of shipments[86](index=86&type=chunk) [Customs Brokerage and Other Services](index=20&type=section&id=Customs%20brokerage%20and%20other%20services) Customs brokerage and other services saw revenue and expense increases, driven by higher shipment volumes into North America and Europe due to tariff anticipation Customs Brokerage & Other Services Performance (Three Months Ended June 30) | Metric | 2025 | 2024 | Change (%) | |:---|:---|:---|:---|\n| Revenues | $1,024,316 | $927,003 | 10% |\n| Expenses | $571,480 | $516,119 | 11% | Customs Brokerage & Other Services Performance (Six Months Ended June 30) | Metric | 2025 | 2024 | Change (%) | |:---|:---|:---|:---|\n| Revenues | $2,007,310 | $1,803,521 | 11% |\n| Expenses | $1,125,760 | $997,825 | 13% | - Increases were driven by higher shipment volumes, particularly into North America and Europe, due to shippers front-loading deliveries in anticipation of higher tariffs[89](index=89&type=chunk)[91](index=91&type=chunk) - The dynamic and complex trade environment increases demand for knowledgeable customs brokers with sophisticated systems[92](index=92&type=chunk) [Overhead Expenses](index=20&type=section&id=Overhead%20expenses) Overhead expenses increased due to higher salaries, incentive compensation, increased headcount in operations and IT, and technology-related costs Overhead Expenses Performance (Three Months Ended June 30) | Metric | 2025 | 2024 | Change (%) | |:---|:---|:---|:---|\n| Salaries and related costs | $471,336 | $426,431 | 11% |\n| Other overhead expenses | $179,456 | $149,243 | 20% |\n| Total overhead expenses | $650,792 | $575,674 | 13% | Overhead Expenses Performance (Six Months Ended June 30) | Metric | 2025 | 2024 | Change (%) | |:---|:---|:---|:---|\n| Salaries and related costs | $929,273 | $839,593 | 11% |\n| Other overhead expenses | $345,405 | $294,703 | 17% |\n| Total overhead expenses | $1,274,678 | $1,134,296 | 12% | - Salaries and related costs increased due to higher salaries, benefits, and incentive compensation from improved operating results, with headcount increasing **6% in operations and IT**[93](index=93&type=chunk) - Other overhead expenses increased due to technology-related expenses, consulting, higher rental and occupancy, and indirect taxes[97](index=97&type=chunk) [Income Tax Expense](index=21&type=section&id=Income%20tax%20expense) This section details income tax expense, including the effective tax rate and the expected impact of the 2025 Tax Act Consolidated Effective Income Tax Rate | Period | 2025 | 2024 | |:---|:---|:---|\n| Three months ended June 30 | 28.7% | 25.8% |\n| Six months ended June 30 | 27.3% | 26.3% | - The increase in effective tax rate is principally from higher foreign tax expense driven by changes in foreign currency exchange rates and certain non-deductible expenses[99](index=99&type=chunk) - The **2025 Tax Act**, enacted July 4, 2025, is being evaluated but is not expected to have a material impact on consolidated tax expense and cash flows for 2025[100](index=100&type=chunk) [Currency and Other Risk Factors](index=21&type=section&id=Currency%20and%20Other%20Risk%20Factors) The company is exposed to foreign exchange risk from worldwide operations, resulting in net foreign currency transactional losses in 2025 - The company is exposed to foreign exchange risk due to worldwide operations in multiple currencies, with net foreign currency transactional losses of **$12 million (Q2 2025)** and **$17 million (H1 2025)**, compared to gains in 2024[101](index=101&type=chunk)[117](index=117&type=chunk) - Rising inflation has led to increased labor costs, service provider rates, and rent/occupancy expenses, which may erode margins if price increases cannot offset them[102](index=102&type=chunk) - Uncertainty in future regulatory requirements and oil prices could impact buy rates; inability to pass on fuel price increases to customers could adversely affect our operating income[103](index=103&type=chunk) [Liquidity and Capital Resources](index=22&type=section&id=Liquidity%20and%20Capital%20Resources) This section discusses liquidity and capital resources, including cash flows from operating, investing, and financing activities and working capital Net Cash Provided by Operating Activities | Period | 2025 (in millions) | 2024 (in millions) | Change (in millions) | |:---|:---|:---|:---|\n| Three months ended June 30 | $179 | $127 | $52 |\n| Six months ended June 30 | $522 | $384 | $138 | - Working capital was **$1,535 million** at June 30, 2025, including **$1,156 million in cash and cash equivalents**; management believes current cash and operating cash flows are sufficient for future capital and liquidity needs[104](index=104&type=chunk) - Cash used in investing activities increased to **$16 million (Q2)** and **$29 million (H1)** in 2025, primarily for capital expenditures, estimated at **$60 million for the full year 2025**[108](index=108&type=chunk) - Cash used in financing activities was **$340 million (Q2)** and **$506 million (H1)** in 2025, primarily for common stock repurchases (**2.0 million shares in Q2, 3.5 million shares in H1**) and dividends[109](index=109&type=chunk) - Foreign subsidiaries held **$541 million in cash and cash equivalents** at June 30, 2025, with earnings not considered indefinitely reinvested outside the U.S[113](index=113&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=24&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) This section details the company's exposure to market risks, specifically foreign exchange and interest rate risks, and their management [Foreign Exchange Risk](index=24&type=section&id=Foreign%20Exchange%20Risk) The company is exposed to foreign exchange risk from multi-currency operations, with a hypothetical 10% USD weakening increasing operating income by $30 million - Principal foreign exchange risks include Chinese Yuan, Indian Rupee, Euro, Mexican Peso, Canadian Dollar, British Pound, and Vietnamese Dong[114](index=114&type=chunk) - A **10% weakening of the U.S. dollar** would raise operating income by approximately **$30 million**, while a **10% strengthening** would reduce it by **$24 million** for the six months ended June 30, 2025[116](index=116&type=chunk) - The company manages foreign exchange risk by accelerating international currency settlements for intercompany billings, rather than using derivative financial instruments[117](index=117&type=chunk) [Interest Rate Risk](index=24&type=section&id=Interest%20Rate%20Risk) Interest rate risk is minimal due to no long-term debt and limited impact from hypothetical rate changes on cash and equivalents - At June 30, 2025, the company had **$1,156 million in cash and cash equivalents**, with **$571 million** invested at short-term market interest rates[118](index=118&type=chunk) - A hypothetical **10 basis point change in interest rates** would not significantly impact earnings, and there has been no material change in interest rate risk exposure in Q2 2025[118](index=118&type=chunk) - The company had no long-term debt at June 30, 2025[118](index=118&type=chunk) [Item 4. Controls and Procedures](index=24&type=section&id=Item%204.%20Controls%20and%20Procedures) This section addresses the effectiveness of disclosure controls and internal control, identifying material weaknesses in IT general controls and remediation efforts [Evaluation of Disclosure Controls and Procedures](index=24&type=section&id=Evaluation%20of%20Disclosure%20Controls%20and%20Procedures) Disclosure controls and procedures were not effective due to material weaknesses in internal control over financial reporting related to unauthorized IT access - Disclosure controls and procedures were **not effective** due to material weaknesses in internal control over financial reporting[119](index=119&type=chunk) - Material weaknesses stemmed from ineffective controls to review and authorize access and direct changes to key operational and accounting systems, and lack of specific training for personnel in IT general controls[120](index=120&type=chunk) - Despite weaknesses, management performed additional analysis and procedures, believing the consolidated financial statements fairly present financial position, results of operations, and cash flows in accordance with U.S. GAAP[121](index=121&type=chunk) [Remediation](index=25&type=section&id=Remediation) The company is actively remediating identified material weaknesses through personnel, software, and training, though completion timeline is uncertain - Management is actively remediating material weaknesses by hiring qualified personnel, implementing third-party software, developing training programs, and creating management action plans[122](index=122&type=chunk)[125](index=125&type=chunk) - Remediation completion is uncertain due to complexities of legacy systems and time needed for full implementation of third-party solutions[122](index=122&type=chunk) - The Audit Committee provides oversight, receiving monthly reports and formal presentations on remediation efforts[123](index=123&type=chunk) [Changes in Internal Controls](index=25&type=section&id=Changes%20in%20Internal%20Controls) No material changes in internal control over financial reporting occurred, aside from ongoing remediation efforts for identified weaknesses - Except for ongoing remediation efforts related to the identified material weaknesses, there were no other material changes in internal control over financial reporting during the most recent fiscal quarter[124](index=124&type=chunk) [PART II. OTHER INFORMATION](index=26&type=section&id=PART%20II.%20OTHER%20INFORMATION) [Item 1. Legal Proceedings](index=26&type=section&id=Item%201.%20Legal%20Proceedings) This section discloses legal and tax proceedings, with management expecting no material effect on operations, cash flows, or financial position - The company is involved in various claims, lawsuits, government investigations, and tax audits in the ordinary course of business[127](index=127&type=chunk) - Management, based on legal and tax advice, believes none of these matters are expected to have a material effect on operations, cash flows, or financial position[127](index=127&type=chunk) - The company is currently unable to estimate any additional loss or range of reasonably possible losses beyond recorded amounts[127](index=127&type=chunk) [Item 1A. Risk Factors](index=27&type=section&id=Item%201A.%20Risk%20Factors) This section updates risk factors, focusing on volatile international trade, tariffs, geopolitical issues, and complex government regulation and tax laws [Industry Risks](index=27&type=section&id=Industry%20Risks) The volatile international trade environment, marked by disputes, trade actions, and increased tariffs, poses significant risks to business and operating results - The current volatile international trade environment, including increased U.S. tariffs on imports (especially from China) and retaliatory actions, may adversely impact business and operating results[129](index=129&type=chunk) - Expeditors is particularly exposed to trade volume impacts from U.S.-China tariff disputes, as **22% of 2024 revenues** and **17% of operating income** were from exports from China and Hong Kong[129](index=129&type=chunk) - Uncertainty and changes to trade volumes could lead to volatility in available capacity and average buy/sell rates, and increased complexity in customs regulations may require additional resources[129](index=129&type=chunk) [Government Regulation and Tax Risks](index=27&type=section&id=Government%20Regulation%20and%20Tax%20Risks) The company faces risks from complex and changing tax laws, including Pillar Two and the 2025 Tax Act, and adverse tax audit determinations - The company is subject to complex and changing tax laws in numerous jurisdictions, including the U.S. (2025 Tax Act) and international initiatives like Pillar Two, which could impact its effective tax rate and liabilities[130](index=130&type=chunk) - The Indian tax authority (ITA) has asserted additional tax related to transfer pricing and service tax, which the company is vigorously defending, but an adverse resolution could result in significant additional tax expense[132](index=132&type=chunk) - The timing of tax audit resolutions is highly uncertain, and ultimate payments may differ significantly from recorded amounts; changes in tax laws or interpretations could increase tax liabilities or volatility in the effective tax rate[131](index=131&type=chunk)[133](index=133&type=chunk) [Item 2. Unregistered Sales of Equity Securities, Use of Proceeds, and Issuer Purchases of Equity Securities](index=29&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%2C%20Use%20of%20Proceeds%2C%20and%20Issuer%20Purchases%20of%20Equity%20Securities) This section details common stock repurchase activities during Q2 2025 under the Discretionary Stock Repurchase Plan Issuer Purchases of Equity Securities (April 1 - June 30, 2025) | Period | Total Shares Purchased (thousands) | Average Price Paid Per Share | |:---|:---|:---|\n| May 1-31, 2025 | 2,000 | $112.05 |\n| Total (Q2 2025) | 2,000 | $112.05 | - The Board of Directors authorized a Discretionary Stock Repurchase Plan to reduce outstanding common stock down to **130 million shares**, with no expiration date[137](index=137&type=chunk) - As of June 30, 2025, **5,134 thousand shares** may yet be purchased under the plan[135](index=135&type=chunk) [Item 3. Defaults Upon Senior Securities](index=29&type=section&id=Item%203.%20Defaults%20Upon%20Senior%20Securities) No defaults upon senior securities are reported for the period - Not applicable[138](index=138&type=chunk) [Item 4. Mine Safety Disclosures](index=29&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) Mine safety disclosures are not applicable to the company's operations - Not applicable[139](index=139&type=chunk) [Item 5. Other Information](index=29&type=section&id=Item%205.%20Other%20Information) No directors or officers adopted or terminated Rule 10b5-1 trading arrangements during the reported quarter - No director or officer adopted or terminated any Rule 10b5-1 trading arrangement or non-Rule 10b5-1 trading arrangement during the quarter ended June 30, 2025[140](index=140&type=chunk) [Item 6. Exhibits](index=30&type=section&id=Item%206.%20Exhibits) This section lists the exhibits filed as part of the Form 10-Q, including CEO/CFO certifications and XBRL documents Key Exhibits | Exhibit Number | Description | |:---|:---|\n| 31.1 | Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 |\n| 31.2 | Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 |\n| 32 | Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 |\n| 104 | The cover page from the Company's Quarterly Report on Form 10-Q for the quarter ended June 30, 2025, has been formatted in Inline XBRL. | [SIGNATURES](index=31&type=section&id=SIGNATURES) This section contains the official signatures of the President, CEO, and CFO, certifying the report - The report was signed on August 7, 2025, by Daniel R. Wall, President, Chief Executive Officer and Director, and Bradley S. Powell, Senior Vice President and Chief Financial Officer[144](index=144&type=chunk)[145](index=145&type=chunk)

Summary of Expeditors International of Washington (EXPD) Update / Briefing August 06, 2025 Industry Overview - The briefing focuses on the U.S. Customs market and recent trade actions affecting importers, particularly in relation to tariffs and trade agreements [6][7][8]. Key Points and Arguments 1. **Recent U.S. Trade Actions**: - Six major trade actions are highlighted, with specific dates for implementation [7]. - Notable actions include the increase of tariffs on fentanyl imports from Canada and the introduction of copper tariffs from Brazil [10][11][12]. 2. **Tariff Increases**: - Fentanyl tariffs from Canada increased from 25% to 35% [13]. - Copper tariffs from Brazil set at 40%, raising the total tariff to 50% when combined with existing rates [25][26]. 3. **Reciprocal Tariffs**: - A new set of reciprocal tariffs will be implemented affecting 95 countries, with rates changing from a universal 10% to new specific rates [30][34]. - Countries with trade deficits with the U.S. may see increases in tariffs ranging from 15% to 41% [34]. 4. **In-Transit Exemptions**: - Exemptions for goods loaded on vessels before specific deadlines to avoid additional tariffs [26][56]. - Documentation is emphasized as crucial for claiming these exemptions [28][29]. 5. **Impact on India**: - An additional 25% duty on imports from India starting August 27, raising the total tariff to 50% due to geopolitical tensions [54][55]. 6. **End of De Minimis**: - The end of de minimis for low-value shipments (under $800) will apply to all countries starting August 29, requiring formal entries for all imports [59][62]. 7. **Ongoing Investigations**: - Section 232 investigations are ongoing, focusing on national security risks related to various industries, including pharmaceuticals and semiconductors [68][69]. 8. **Legal Challenges**: - Legal challenges against the government's authority to impose tariffs under the International Emergency Economic Powers Act (IEPA) are ongoing, with potential implications for future tariff enforcement [73][74][78]. 9. **Transshipment Concerns**: - The administration is concerned about transshipment practices that may evade tariffs, particularly involving inputs from non-market economies like China [82][90]. 10. **Value Chain Understanding**: - Importers are encouraged to understand the full value chain of their goods to comply with new regulations and avoid penalties [94][96]. Other Important Content - **Documentation and Compliance**: Emphasis on the importance of maintaining accurate documentation for customs declarations and understanding the life cycle of customs entries [99][100]. - **Future Outlook**: Continued monitoring of trade actions and legal developments is advised, as changes are expected to impact various sectors significantly [71][72]. This summary encapsulates the critical updates and insights from the Expeditors International briefing, focusing on the evolving landscape of U.S. trade policies and their implications for importers.

Summary of Expeditors International of Washington (EXPD) Update / Briefing Company Overview - **Company**: Expeditors International of Washington (EXPD) - **Division**: Onyx, an advisory firm under Expeditors, focuses on global supply chains and navigating trade disruptions [8][10] Industry Context - **Industry**: Trade and logistics, with a focus on customs and tariffs - **Current Environment**: Significant changes in U.S. trade policy, particularly regarding tariffs and trade agreements with various countries [13][15] Key Points and Arguments 1. **Tariff Changes**: Nine new tariff levels were announced, increasing the overall effective tariff rate significantly, with a focus on transshipment, which incurs an additional 40% tariff for goods attempting to avoid tariffs [15][16] 2. **Focus on China**: The U.S. administration is primarily targeting Chinese goods and exports, with a notable removal of de minimis exemptions for goods valued at $800 or less [17][18] 3. **Impact of Tariffs**: The competitive landscape will be affected on an industry-by-industry and product-by-product basis, with ongoing evaluations of how these tariffs will impact various sectors [20][21] 4. **Uncertainty in Trade Deals**: Current agreements are not fully defined, leading to significant uncertainty in trade relationships, particularly with the EU, Canada, and Mexico [22][56] 5. **Political Pressures**: Domestic political pressures, especially with upcoming midterms, may influence tariff policies and negotiations [26][66] 6. **EU Relations**: The EU has avoided a full trade war with the U.S., but faces economic and political challenges due to the current tariff landscape [27][58] 7. **China-U.S. Relations**: The relationship is in a strategic pause, with limited deals expected, focusing on structural demands rather than comprehensive agreements [62][63] 8. **USMCA and India**: The USMCA remains unresolved, and the Trump administration is applying pressure on India with reciprocal tariffs and potential sanctions related to oil purchases from Russia [66][70] Additional Important Insights 1. **Macroeconomic Impact**: Tariffs are expected to have a stagflationary effect, negatively impacting growth while pushing inflation higher, with estimates of a half percentage point reduction in GDP growth [80][81] 2. **Sector-Specific Effects**: Consumer electronics, automobiles, and industrial metals are among the most affected sectors due to high tariff exposure [82] 3. **Fiscal Implications**: Tariffs are projected to generate significant revenue, but the regressive nature of tariffs may disproportionately affect lower-income households [86] 4. **Investment Trends**: There is a potential shift in foreign direct investment towards Mexico and ASEAN economies as companies seek to derisk from China [87] Conclusion - The current trade environment is characterized by significant uncertainty and evolving tariff policies, with potential long-term implications for various sectors and international relationships. The focus remains on navigating these changes while assessing their macroeconomic impacts and sector-specific challenges.

Summary of Expeditors International of Washington (EXPD) Update / Briefing Company Overview - **Company**: Expeditors International of Washington (EXPD) - **Division**: Onex, an advisory firm under Expeditors, focuses on global supply chains and trade compliance [1][6][7]. Industry Context - **Industry**: Trade and logistics, particularly in the context of U.S. tariffs and international trade relations. - **Key Focus**: The impact of recent U.S. tariff policies on global trade dynamics, especially concerning China, the EU, and other trading partners [2][10][12]. Core Points and Arguments 1. **Recent Tariff Changes**: Nine new tariff levels were announced, significantly increasing effective tariff rates, particularly targeting China [12][14]. 2. **Transshipment Focus**: A new 40% tariff will apply to goods deemed to be avoiding U.S. tariffs, indicating a stringent approach to enforcement [12][26]. 3. **China Relations**: The U.S. is focusing on containing Chinese exports, with ongoing negotiations expected to yield limited agreements similar to the Phase One deal [14][58]. 4. **EU Trade Dynamics**: The EU has avoided a full trade war with the U.S., but faces internal challenges regarding its chemical industry and strategic investments [24][55]. 5. **India's Position**: The U.S. is applying pressure on India with a 25% tariff, but India is expected to remain resilient due to its strategic trade positioning [64][65]. 6. **Macroeconomic Impacts**: Tariffs are projected to lower U.S. GDP growth by up to 1.5 percentage points, with inflation expected to rise by about 0.5 percentage points [47][75]. 7. **Sector-Specific Impacts**: Consumer electronics, automobiles, and industrial metals are among the sectors most affected by the new tariffs [78][81]. 8. **Long-Term Outlook**: The U.S. administration's focus on reshoring manufacturing may lead to a complex interplay of tariffs and trade agreements, with significant uncertainty remaining [83][84]. Additional Important Insights - **Political Pressures**: The Trump administration's tariff policies are influenced by domestic political considerations, particularly with upcoming midterm elections [23][45]. - **Investment Dynamics**: There is a notable push for foreign direct investment into Mexico and ASEAN economies as companies seek to diversify away from China [84]. - **Uncertainty in Implementation**: Many aspects of the new tariff policies, especially regarding transshipments and country of origin rules, remain undefined, leading to potential surprises for importers [86][88]. This summary encapsulates the key points discussed in the briefing, highlighting the implications of U.S. trade policies on various sectors and international relationships.

Core Insights - Expeditors International of Washington (EXPD) reported second-quarter 2025 earnings of $1.34 per share, surpassing the Zacks Consensus Estimate of $1.24, marking an 8.1% year-over-year increase driven by higher freight volumes and customs fees [1][11] - Total revenues reached $2.65 billion, exceeding the Zacks Consensus Estimate of $2.4 billion, and reflecting an 8.7% year-over-year growth attributed to strong air tonnage and ocean volumes [1][11] Financial Performance - Airfreight tonnage and ocean container volume both increased by 7% during the quarter, contributing to an 11% year-over-year rise in operating income to $248 million [2] - Total operating expenses rose by 8.6% year over year to $2.4 billion [2] - Airfreight Services revenues grew by 10.6% year over year to $951.8 million, while ocean freight and services revenues increased by 3.7% to $675.8 million [3] Shareholder Returns - In the second quarter of 2025, EXPD returned $335 million to shareholders through dividends and share buybacks [4] - The company ended the quarter with cash and cash equivalents of $1.16 billion, slightly up from $1.15 billion at the end of 2024 [4] Strategic Outlook - The CEO of EXPD expressed optimism regarding the company's strategic initiatives aimed at maximizing operational excellence and enhancing customer service, positioning the company for organic growth and improved profitability [5]

Group 1 - Expeditors International reported $2.65 billion in revenue for the quarter ended June 2025, an increase of 8.7% year-over-year [1] - The company's EPS for the same period was $1.34, compared to $1.24 a year ago, reflecting an EPS surprise of +8.06% [1] - The reported revenue exceeded the Zacks Consensus Estimate of $2.4 billion by +10.52% [1] Group 2 - Airfreight services revenue was $951.79 million, surpassing the average estimate of $832.55 million by four analysts, representing a year-over-year change of +10.6% [4] - Customs brokerage and other services generated $1.02 billion in revenue, exceeding the average estimate of $915.75 million, with a year-over-year change of +10.5% [4] - Ocean freight and ocean services revenue reached $675.78 million, compared to the estimated $615.95 million, marking a +3.7% change year-over-year [4] Group 3 - Shares of Expeditors International returned +0.6% over the past month, while the Zacks S&P 500 composite changed by +1% [3] - The stock currently holds a Zacks Rank 3 (Hold), indicating potential performance in line with the broader market in the near term [3]

Earnings Release Overview [Company Information & Contacts](index=1&type=section&id=Company%20Information%20%26%20Contacts) Expeditors International of Washington, Inc. released its Q2 2025 earnings, providing contact details for its executive leadership and investor relations - Expeditors International of Washington, Inc. (NYSE:EXPD) is headquartered in Bellevue, Washington[2](index=2&type=chunk) - Key contacts for the earnings release include Daniel R. Wall (President and CEO), Bradley S. Powell (Senior Vice President and CFO), and Geoffrey Buscher (Director - Investor Relations)[2](index=2&type=chunk) [Second Quarter 2025 Key Financial Highlights](index=1&type=section&id=Second%20Quarter%202025%20Key%20Financial%20Highlights) Expeditors reported strong Q2 2025 financial performance, with growth across key metrics including EPS and revenues Second Quarter 2025 Key Financial Highlights (YoY Comparison) | Metric | Q2 2025 | Q2 2024 | % Change | | :----------------------------------- | :------ | :------ | :------- | | Diluted Net Earnings Attributable to Shareholders per share (EPS) | $1.34 | $1.24 | 8% | | Net Earnings Attributable to Shareholders | $184 million | $175 million | 5% | | Operating Income | $248 million | $224 million | 11% | | Revenues | $2.7 billion | $2.4 billion | 9% | | Airfreight tonnage increase | 7% | - | - | | Ocean container volume increase | 7% | - | - | | Cash returned to shareholders (dividends & repurchases) | $335 million | - | - | [Management Commentary](index=1&type=section&id=Management%20Commentary) Management highlighted strategic initiatives for operational excellence and adaptability in an unpredictable freight environment [CEO's Strategic Outlook](index=1&type=section&id=CEO's%20Strategic%20Outlook) CEO Daniel R. Wall highlighted strategic initiatives for operational excellence and adaptability, driving growth across all segments - Strategic initiatives are maximizing operational excellence and positioning the company to quickly adapt to a highly unpredictable environment[3](index=3&type=chunk) - All businesses grew, including airfreight (due to tonnage growth and higher rates, tight capacity, technology shipments) and ocean (increased volumes, South Asia exports, tariff deadlines)[4](index=4&type=chunk)[5](index=5&type=chunk) - Customs clearances increased in complexity, requiring greater skill, while road freight and warehousing also grew on strong volumes and new business[4](index=4&type=chunk)[5](index=5&type=chunk) - The freight environment is expected to remain unpredictable, with resilience stemming from the global network's experience and expertise[6](index=6&type=chunk) [CFO's Financial Review](index=2&type=section&id=CFO's%20Financial%20Review) CFO reported **11% operating income growth** from expense management, noting a higher tax rate and significant shareholder returns - Operating income increased by **11%** due to close expense monitoring and limiting headcount growth to support additional business activity[9](index=9&type=chunk) - Net earnings grew at a lower rate than operating income due to an increased effective tax rate from **25.8% to 28.7%**, driven by changes in foreign exchange rates and certain non-deductible expenses[9](index=9&type=chunk) - The Company returned **$335 million** to shareholders in common stock repurchases and dividends during the second quarter of 2025[9](index=9&type=chunk) Company Profile [Business Description](index=2&type=section&id=Business%20Description) Expeditors is a global logistics company providing comprehensive freight forwarding, customs brokerage, and customized solutions - Expeditors is a global logistics company headquartered in Bellevue, Washington, employing professionals in 172 district offices and numerous branch locations across six continents[10](index=10&type=chunk) - Services include consolidation or forwarding of air and ocean freight, customs brokerage, vendor consolidation, cargo insurance, time-definite transportation, order management, warehousing and distribution, and customized logistics solutions[10](index=10&type=chunk) Financial Performance [Summary Financial Results](index=3&type=section&id=Summary%20Financial%20Results) Q2 2025 revenues increased **9%** and operating income **11%** year-over-year, reflecting strong overall financial growth Three Months Ended June 30, 2025 vs 2024 (in thousands) | Metric | 2025 | 2024 | % Change | | :----------------------------------- | :--------- | :--------- | :------- | | Revenues | $2,651,885 | $2,439,001 | 9% | | Operating income | $247,736 | $223,919 | 11% | | Net earnings attributable to shareholders | $183,574 | $175,469 | 5% | | Diluted earnings attributable to shareholders per share | $1.34 | $1.24 | 8% | Six Months Ended June 30, 2025 vs 2024 (in thousands) | Metric | 2025 | 2024 | % Change | | :----------------------------------- | :--------- | :--------- | :------- | | Revenues | $5,318,304 | $4,645,679 | 14% | | Operating income | $513,594 | $438,695 | 17% | | Net earnings attributable to shareholders | $387,369 | $344,621 | 12% | | Diluted earnings attributable to shareholders per share | $2.82 | $2.41 | 17% | [Condensed Consolidated Balance Sheets](index=4&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) Total assets reached **$4.79 billion** as of June 30, 2025, with stable current assets, increased liabilities, and decreased equity Condensed Consolidated Balance Sheet (in thousands) | Metric | June 30, 2025 | December 31, 2024 | | :----------------------------------- | :-------------- | :---------------- | | Total current assets | $3,651,576 | $3,659,775 | | Total assets | $4,786,481 | $4,754,458 | | Total current liabilities | $2,116,274 | $2,066,473 | | Total liabilities and equity | $4,786,481 | $4,754,458 | | Total shareholders' equity | $2,195,354 | $2,223,012 | [Condensed Consolidated Statements of Earnings](index=5&type=section&id=Condensed%20Consolidated%20Statements%20of%20Earnings) All service segments reported increased revenues in Q2 2025 and year-to-date, driving overall operating income growth Revenues by Service (Three Months Ended June 30, in thousands) | Service | 2025 | 2024 | | :-------------------------- | :--------- | :--------- | | Airfreight services | $951,787 | $860,323 | | Ocean freight and ocean services | $675,782 | $651,675 | | Customs brokerage and other services | $1,024,316 | $927,003 | | Total revenues | $2,651,885 | $2,439,001 | Operating Income (Three Months Ended June 30, in thousands) | Metric | 2025 | 2024 | | :-------------------------- | :--------- | :--------- | | Operating income | $247,736 | $223,919 | | Net earnings attributable to shareholders | $183,574 | $175,469 | Revenues by Service (Six Months Ended June 30, in thousands) | Service | 2025 | 2024 | | :-------------------------- | :--------- | :--------- | | Airfreight services | $1,853,547 | $1,619,697 | | Ocean freight and ocean services | $1,457,447 | $1,222,461 | | Customs brokerage and other services | $2,007,310 | $1,803,521 | | Total revenues | $5,318,304 | $4,645,679 | Operating Income (Six Months Ended June 30, in thousands) | Metric | 2025 | 2024 | | :-------------------------- | :--------- | :--------- | | Operating income | $513,594 | $438,695 | | Net earnings attributable to shareholders | $387,369 | $344,621 | [Condensed Consolidated Statements of Cash Flows](index=6&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) Net cash from operating activities significantly increased in Q2 2025, reflecting higher capital expenditures and substantial shareholder returns Cash Flow Summary (Three Months Ended June 30, in thousands) | Activity | 2025 | 2024 | | :----------------------------------- | :--------- | :--------- | | Net cash from operating activities | $179,212 | $126,769 | | Net cash from investing activities | $(15,851) | $(7,877) | | Net cash from financing activities | $(339,875) | $(207,393) | | Cash and cash equivalents at end of period | $1,156,162 | $1,271,853 | Cash Flow Summary (Six Months Ended June 30, in thousands) | Activity | 2025 | 2024 | | :----------------------------------- | :--------- | :--------- | | Net cash from operating activities | $521,834 | $383,673 | | Net cash from investing activities | $(28,847) | $(17,961) | | Net cash from financing activities | $(505,846) | $(582,31

Core Viewpoint - Expeditors International (EXPD) reported quarterly earnings of $1.34 per share, exceeding the Zacks Consensus Estimate of $1.24 per share, and showing an earnings surprise of +8.06% [1][2] Financial Performance - The company achieved revenues of $2.65 billion for the quarter ended June 2025, surpassing the Zacks Consensus Estimate by 10.52%, compared to $2.44 billion in the same quarter last year [2] - Over the last four quarters, Expeditors International has consistently exceeded consensus EPS estimates [2] Stock Performance - Since the beginning of the year, Expeditors International shares have increased by approximately 5.5%, while the S&P 500 has gained 7.6% [3] - The stock currently holds a Zacks Rank 3 (Hold), indicating expected performance in line with the market in the near future [6] Earnings Outlook - The current consensus EPS estimate for the upcoming quarter is $1.33 on revenues of $2.73 billion, and for the current fiscal year, it is $5.38 on revenues of $10.54 billion [7] - The trend of estimate revisions for Expeditors International was mixed prior to the earnings release, which may change following the recent results [6] Industry Context - The Transportation - Services industry, to which Expeditors International belongs, is currently ranked in the bottom 15% of over 250 Zacks industries, indicating potential challenges ahead [8]

Core Insights - Expeditors International of Washington (EXPD) is set to report its second-quarter 2025 results on August 5, 2025, with a history of earnings surprises, having outperformed the Zacks Consensus Estimate in three of the last four quarters, averaging a beat of 13.28% [1][2]. Earnings Performance - The Zacks Consensus Estimate for EXPD's Q2 2025 earnings has been revised upward by 1.64% to $1.24 per share, remaining flat compared to the previous year [4]. - The revenue estimate for Q2 2025 is $2.40 billion, reflecting a 1.62% decline year over year [6]. Revenue Breakdown - Estimated revenues for Airfreight Services and ocean freight are projected at $807.6 million, with overall revenue expected to decrease due to weak air and ocean freight volumes [6][7]. - Customs brokerage and other services are expected to generate $933.9 million, indicating a slight increase of 0.7% from the previous year [7]. Market Conditions - The company's performance is anticipated to be impacted by lower revenues due to weak demand and declining rates in air-freight tonnage and ocean containers [6][8]. - High capital expenditures and uncertain demand stemming from inflation and cautious consumer behavior are significant challenges for the company [8]. Earnings Prediction - The model predicts a likely earnings beat for EXPD, supported by a positive Earnings ESP of +0.11% and a Zacks Rank of 3 [9].

Industry Overview - The Zacks Transportation sector is diverse, including airlines, railroads, package delivery companies, and truckers. The S&P 500 members of this sector are expected to see a 4.7% decline in second-quarter 2025 earnings year over year, with revenues estimated to decrease by 0.5% [1]. Earnings Outlook - Several companies in the sector, such as Expeditors International of Washington (EXPD), GXO Logistics (GXO), and ZIM Integrated Shipping Services (ZIM), are anticipated to report better-than-expected earnings despite challenges like weak freight demand, tariff-induced uncertainty, inflation, and supply chain disruptions [2]. - The decline in oil prices, which fell by 6% in the April-June period, is expected to positively impact the bottom-line growth of transportation companies due to reduced fuel expenses [3]. Cost Management and E-commerce - Companies are likely benefiting from cost control measures aimed at improving profitability amid weak freight demand. The ongoing strength of e-commerce is also a positive factor for the sector [4]. Airline and Shipping Company Performance - U.S. airline companies are experiencing stabilization in air travel demand despite economic uncertainties, which is a favorable sign. Shipping companies are showing resilience, particularly those focusing on growth and operational efficiency, despite facing high inflation and tariff-related challenges [5]. Company-Specific Insights - **Expeditors International of Washington (EXPD)**: The company has an Earnings ESP of +0.11% and a Zacks Rank of 3. It is expected to report its second-quarter 2025 results on August 5. Despite weak volumes in air-freight and ocean containers, cost-cutting efforts are likely to support its bottom line. EXPD has beaten the Zacks Consensus Estimate in the last four quarters, averaging a 13.3% beat [9][10]. - **GXO Logistics (GXO)**: GXO has an Earnings ESP of +8.33% and a Zacks Rank of 3, with results scheduled for August 5. Increased e-commerce, automation, and outsourcing are expected to enhance its performance, alongside cost-cutting measures. The company has beaten the Zacks Consensus Estimate in three of the last four quarters, with an average beat of 3.9% [11][12]. - **ZIM Integrated Shipping Services (ZIM)**: ZIM boasts an Earnings ESP of +20.66% and a Zacks Rank of 3, with results due on August 20. Its asset-light model allows for rapid capacity adjustments, and its focus on niche markets helps maintain strong pricing power. ZIM has consistently beaten the Zacks Consensus Estimate in the last four quarters, averaging a 34.5% beat [13][14].