Cintas(CTAS) - 2025 Q4 - Annual Results

Financial Highlights Cintas achieved strong fiscal 2025 Q4 and full-year growth, marked by increased revenue, EPS, and significant capital returns Q4 Fiscal 2025 Performance vs. Q4 Fiscal 2024 | Metric | Q4 FY2025 | Q4 FY2024 | % Change | | :--- | :--- | :--- | :--- | | Revenue | $2.67 billion | $2.47 billion | 8.0% | | Organic Revenue Growth | 9.0% | N/A | N/A | | Gross Margin | 49.7% | 49.2% | +50 bps | | Operating Income | $597.5 million | $547.6 million | 9.1% | | Net Income | $448.3 million | $414.3 million | 8.2% | | Diluted EPS | $1.09 | $1.00 | 9.0% | Full Year Fiscal 2025 Performance vs. Full Year Fiscal 2024 | Metric | FY2025 | FY2024 | % Change | | :--- | :--- | :--- | :--- | | Revenue | $10.34 billion | $9.60 billion | 7.7% | | Organic Revenue Growth | 8.0% | N/A | N/A | | Operating Income | $2.36 billion | $2.07 billion | 14.1% | | Operating Margin | 22.8% | 21.6% | +120 bps | | Diluted EPS | $4.40 | $3.79 | 16.1% | - In fiscal 2025, Cintas demonstrated a strong commitment to shareholder returns and strategic growth[7] - Capital Expenditures: Spent $408.9 million (4.0% of revenue) - Acquisitions: Acquired businesses for a total of $232.9 million - Dividends: Paid $611.6 million in cash dividends, a 15.2% increase over fiscal 2024 - Share Buybacks: Purchased 3.8 million shares for $679.3 million at an average price of $179.07 per share Management Commentary CEO Todd M. Schneider attributed strong results to strategic investments and operational excellence, with a future focus on customer service and sustainable growth - The CEO emphasized that strong organic revenue growth and record-high gross and operating margins were achieved through strategic investments and the dedication of employee-partners[8] - The company's focus for fiscal 2026 is on providing unmatched customer service, leveraging its unique culture, and delivering sustainable long-term results[9] Fiscal 2026 Guidance Cintas projects fiscal 2026 revenue between $11.00 billion and $11.15 billion, with diluted EPS of $4.71 to $4.85, based on specific assumptions Fiscal 2026 Full-Year Guidance | Metric | Guidance Range | | :--- | :--- | | Revenue | $11.00 billion to $11.15 billion | | Diluted EPS | $4.71 to $4.85 | - Key assumptions for the fiscal 2026 guidance include[12] - Same number of workdays as fiscal 2025 - No future acquisitions - Constant foreign currency exchange rates - Net interest expense of approximately $98.0 million - Effective tax rate of 20.0% - No future share buybacks or significant economic disruptions Financial Statements The consolidated financial statements detail the company's strong revenue and profit growth, increased assets and equity, and robust operating cash flow allocation Consolidated Condensed Statements of Income Fiscal 2025 saw total revenue increase by 7.7% to $10.34 billion, with operating income up 14.1% to $2.36 billion, reflecting strong profit growth Q4 Income Statement Highlights (in thousands) | Account | Q4 FY2025 | Q4 FY2024 | % Change | | :--- | :--- | :--- | :--- | | Total Revenue | $2,667,652 | $2,470,935 | 8.0% | | Operating Income | $597,452 | $547,594 | 9.1% | | Net Income | $448,256 | $414,315 | 8.2% | | Diluted EPS | $1.09 | $1.00 | 9.0% | Full Year Income Statement Highlights (in thousands) | Account | FY2025 | FY2024 | % Change | | :--- | :--- | :--- | :--- | | Total Revenue | $10,340,181 | $9,596,615 | 7.7% | | Operating Income | $2,359,726 | $2,068,633 | 14.1% | | Net Income | $1,812,281 | $1,571,592 | 15.3% | | Diluted EPS | $4.40 | $3.79 | 16.1% | Consolidated Condensed Balance Sheets As of May 31, 2025, Cintas's balance sheet strengthened with total assets increasing to $9.83 billion and shareholders' equity growing to $4.68 billion Balance Sheet Summary (in thousands) | Account | May 31, 2025 | May 31, 2024 | | :--- | :--- | :--- | | Total Current Assets | $3,436,169 | $3,185,207 | | Total Assets | $9,825,241 | $9,168,817 | | Total Current Liabilities | $1,644,502 | $1,828,519 | | Total Liabilities | $5,140,760 | $4,852,445 | | Total Shareholders' Equity | $4,684,481 | $4,316,372 | Consolidated Condensed Statements of Cash Flows Cintas generated $2.17 billion in operating cash flow for fiscal 2025, primarily used for capital expenditures, acquisitions, share repurchases, and dividends Cash Flow Summary for Fiscal Year 2025 (in thousands) | Activity | FY2025 | FY2024 | | :--- | :--- | :--- | | Net Cash from Operating Activities | $2,165,905 | $2,068,500 | | Net Cash used in Investing Activities | ($623,638) | ($603,334) | | Net Cash used in Financing Activities | ($1,619,011) | ($1,247,506) | | Net (Decrease) Increase in Cash | ($78,042) | $217,866 | | Cash at End of Year | $263,973 | $342,015 | Supplemental and Segment Data This section provides deeper insights into Cintas's performance, highlighting improved margins, strong non-GAAP free cash flow, and robust segment-level growth Margin Analysis Cintas demonstrated improved profitability in fiscal 2025, with total gross margin expanding to 50.0% and net income margin increasing to 17.5% Margin Performance | Margin Type | FY2025 | FY2024 | Change (bps) | | :--- | :--- | :--- | :--- | | Uniform rental gross margin | 49.3% | 48.2% | +110 bps | | Other gross margin | 52.4% | 51.0% | +140 bps | | Total gross margin | 50.0% | 48.8% | +120 bps | | Net income margin | 17.5% | 16.4% | +110 bps | Non-GAAP Financial Measures Reconciliation The company reconciled GAAP to non-GAAP measures, showing fiscal 2025 free cash flow increased to $1.76 billion and full-year organic revenue growth was 8.0% - Free cash flow for the twelve months ended May 31, 2025, was $1.757 billion, an increase from $1.659 billion in the prior year[24] Organic Revenue Growth Reconciliation | Period | Reported Revenue Growth (%) | Workday Adjustment (%) | Organic Revenue Growth (%) | | :--- | :--- | :--- | :--- | | Q4 FY2025 | 8.0% | +1.6% | 9.0% | | Full Year FY2025 | 7.7% | +0.9% | 8.0% | Segment Performance For fiscal 2025, the Uniform Rental and Facility Services segment saw revenue grow to $7.98 billion, while First Aid and Safety Services showed robust growth to $1.22 billion Full Year Segment Performance (in thousands) | Segment | Revenue FY2025 | Revenue FY2024 | % Change | Operating Income FY2025 | Operating Income FY2024 | % Change | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Uniform Rental & Facility Services | $7,976,073 | $7,465,199 | 6.8% | $1,873,390 | $1,659,501 | 12.9% | | First Aid & Safety Services | $1,218,090 | $1,067,334 | 14.1% | $294,728 | $239,153 | 23.2% | | All Other | $1,146,018 | $1,064,082 | 7.7% | $191,608 | $169,979 | 12.7% |