Cintas(CTAS) - 2025 Q3 - Quarterly Results

Financial Performance - Revenue for Q3 fiscal 2025 was $2.61 billion, an increase of 8.4% from$ 2.41 billion in Q3 fiscal 2024[2] - Gross margin for Q3 fiscal 2025 was $1.32 billion, up 11.1% from$ 1.19 billion in the same quarter last year, representing 50.6% of revenue[3] - Operating income increased 17.1% to $609.9 million, with an operating margin of 23.4% compared to 21.6% in Q3 fiscal 2024[4] - Net income for Q3 fiscal 2025 was$ 463.5 million, a 16.6% increase from $397.6 million in Q3 fiscal 2024[5] - Diluted earnings per share (EPS) rose 17.7% to$ 1.13 from $0.96 in the prior year[5] - Total revenue for the nine months ended February 28, 2025, was$ 7,672,529, representing a 7.7% increase from $7,125,680 in the same period of 2024[19] - Net income increased by 17.9% to$ 1,364,025 for the nine months ended February 28, 2025, compared to $1,157,277 for the same period in 2024[19] - Basic earnings per share rose by 19.1% to$ 3.37, up from $2.83 in the prior year[19] - Operating income for the nine months ended February 28, 2025, increased by 15.9% to$ 1,762,274 from $1,521,039 in the prior year[19] - The company reported a total gross margin of 50.2% for the nine months ended February 28, 2025, compared to 48.7% for the same period in 2024[21] Revenue Expectations - The company updated its annual revenue expectations to a range of$ 10.280 billion to $10.305 billion, reflecting a slight reduction due to foreign currency impacts[7] - The organic revenue growth rate for Q3 fiscal 2025 was 7.9%, with the low end of the organic growth rate expectations raised from 7.0% to 7.4%[7] - Organic revenue growth for the nine months ended February 28, 2025, was 7.7%, reflecting strong performance excluding acquisitions and foreign currency impacts[27] Cash Flow and Dividends - Free cash flow for the nine months ended February 28, 2025, was$ 1,235,896, an increase from $1,079,183 in the same period of 2024[25] - Cintas paid a quarterly dividend of$ 158.1 million, an increase of 14.9% from the previous year[6] - Dividends paid increased to $453,703, compared to$ 393,310 in the previous year, representing a rise of 15.4%[32] Assets and Equity - Total current assets as of February 28, 2025, were $3,341,428, up from$ 3,185,207 as of May 31, 2024[30] - The total shareholders' equity increased to $4,592,248 as of February 28, 2025, from$ 4,316,372 as of May 31, 2024[30] Expenses and Investments - Interest expense for fiscal 2025 is expected to be approximately $100.0 million, up from$ 95.0 million in fiscal 2024[12] - Capital expenditures for the period were $294,260, a decrease from$ 307,558 in the previous year, indicating a reduction of 4.2%[32] - Net cash used in investing activities was $474,372, slightly improved from$ 503,278 in the prior year, showing a decrease of 5.7%[32] Cash and Receivables - Cash and cash equivalents at the end of the period were $243,428, compared to$ 128,483 at the end of the previous year, marking an increase of 89.5%[32] - Accounts receivable net change was $(158,761), worsening from$ (109,040) in the prior year, indicating a decline in collection efficiency[32] Other Financial Metrics - The effective tax rate for Q3 fiscal 2025 was 21.0%, up from 19.9% in the same quarter last year[5] - The gross margin for uniform rental and facility services improved to 49.5% for the nine months ended February 28, 2025, compared to 48.1% for the same period in 2024[21] - Net cash provided by operating activities increased to $1,530,156, up from$ 1,386,741, reflecting a growth of 10.3%[32] - The company repurchased common stock amounting to $678,129, up from$ 468,146, reflecting a significant increase of 44.8%[32] - The company reported a gain on the sale of property and equipment of $23,972, which was not recorded in the previous year[32] - The effect of exchange rate changes on cash and cash equivalents resulted in a decrease of$ 3,790, contrasting with a gain of $341 in the previous year[32]