Exchange: NASDAQ | Sector: Industrials | Industry: Specialty Business Services
Q1 2026
Published: Sep 24, 2025
Earnings Highlights
Revenue of $2.72B up 10% year-over-year
EPS of $1.20 increased by 18.6% from previous year
Net income of 491.14M
"We are raising our fiscal 2026 financial guidance. We expect our revenue to be in the range of $11.06 billion to $11.18 billion, a total growth rate of 7% to 8.1%." - Todd Schneider
Cintas Corporation (CTAS) Q1 FY2026 QQ1 Earnings Analysis: Revenue Momentum, Margin Resilience, and Upside Through Diversified Route-Based Model
Executive Summary
Cintas delivered solid first-quarter performance for fiscal 2026, underscoring the resilience of its route-based business model and its ability to scale through no-programmer (DIY) conversions and cross-selling across three core service lines. Reported revenue rose 8.7% to $2.72 billion, with organic growth of 7.8%, reflecting strength across Uniform Rental and Facility Services, First Aid and Safety Services, and Fire Protection Services. Uniform Direct Sale declined in the quarter, a known source of quarterly variability, highlighting the company’s emphasis on outsourcing and managed services rather than direct selling.
Profitability remained robust, with gross margin at 50.3% (up 20 bps year over year) and operating income of $617.9 million (up 10.1% YoY), translating to diluted EPS of $1.20 (up 9.1%). Cintas also highlighted continued investments to sustain revenue growth and margin expansion, including technology-enabled workforce tools and SAP-related initiatives in Fire Protection. Management raised full-year guidance for revenue to $11.06–$11.18 billion (7%–8.1% growth) and for diluted EPS to $4.74–$4.86, signaling confidence in continued operating momentum even in a modestly uncertain macro backdrop. The company underscored a disciplined capital-allocation approach, highlighted by a 42nd consecutive annual dividend increase (15.4% year over year), ongoing buybacks ($347.4 million through Sep 23), and a free cash flow of $312.5 million for the quarter, reinforcing a durable and shareholder-friendly financial profile.
Key Performance Indicators
Revenue
2.72B
QoQ: 4.18% | YoY:10.00%
Operating Income
617.86M
QoQ: 1.31% | YoY:12.83%
Net Income
491.14M
QoQ: 5.96% | YoY:18.54%
EPS
1.21
QoQ: 6.14% | YoY:18.63%
Revenue Trend
Margin Analysis
Key Insights
Revenue: $2.718B in Q1, up 8.7% reported; organic growth 7.8% YoY, 0.? QoQ (reported: 4.18% QoQ from earnings metrics)
- Revenue: $2.718B in Q1, up 8.7% reported; organic growth 7.8% YoY, 0.? QoQ (reported: 4.18% QoQ from earnings metrics)
- Gross margin: 50.3% (+20 bps YoY)
- Operating income: $617.9M, margin 22.7% (vs. 22.4% YoY)
- Net income: $491.1M; EPS (diluted) $1.20 (+9.1% YoY)
- Cash flow: Operating cash flow $414.5M; free cash flow $312.5M; capex $102.0M
- Balance sheet: Cash $138.1M; total assets $9.078B; total liabilities $3.574B; total stockholders’ equity $4.756B; net debt $2.537B
- Shareholder returns: Dividends up 15.4% QoQ; buybacks $347.4M; Q1 dividend and buyback activity reflects ongoing capital deployment
- Guidance: FY2026 revenue $11.06B–$11.18B; EPS $4.74–$4.86; effective tax rate guide 20%; no-acquisition assumption; FX held constant; net interest expense ~$97M; no significant downturn scenarios included
Income Statement
Metric
Value
YoY Change
QoQ Change
Revenue
2.72B
10.00%
4.18%
Operating Income
617.86M
12.83%
1.31%
Net Income
491.14M
18.54%
5.96%
EPS
1.21
18.63%
6.14%
Key Financial Ratios
Net Income vs. Revenue
Expense Breakdown
Management Commentary
Key takeaways from management commentary and Q&A:
- Strategy and guidance progression: Todd Schneider emphasized continued momentum and raised FY2026 guidance, noting revenue guidance of $11.06B–$11.18B and EPS guidance of $4.74–$4.86, with momentum across all three route-based segments. Quote: “We are raising our fiscal 2026 financial guidance. We expect our revenue to be in the range of $11.06 billion to $11.18 billion, a total growth rate of 7% to 8.1%.” (Todd Schneider)
- No-programmer growth and cross-sell: Jim Rozakis highlighted success in converting no-programmers and expanding the product lines within existing customers, illustrating the durability of Cintas’ value proposition across verticals. Quote: “We are seeing great success in converting no-programmers, selling additional products and services to our existing customers as well as retaining our valued customers.”
- Margin dynamics and SAP investment: The Fire Protection segment is experiencing some near-term gross-margin headwinds associated with SAP implementation, while the company remains bullish on long-term efficiency and capability gains. Quote: “we’re busy working on SAP for our fire business, and there are additional costs that come along with that. But we’re quite bullish on that business, and we’re investing for the future.”
- Market environment and competition: Todd noted the environment remains competitive but that CTAS benefits from a sizable total addressable market within no-programmers and a diversified portfolio, enabling resilience even in uncertain macro conditions. Quote: “The outsourcing can improve and steady the cash flow... and we continue to win in many ways.”
We are raising our fiscal 2026 financial guidance. We expect our revenue to be in the range of $11.06 billion to $11.18 billion, a total growth rate of 7% to 8.1%.
— Todd Schneider
We are seeing great success in converting no-programmers, selling additional products and services to our existing customers as well as retaining our valued customers.
— James Rozakis
Forward Guidance
Assessment of the forward-looking outlook: CTAS reaffirmed a constructive trajectory for FY2026 with revenue growth targeted at 7%–8.1% and EPS growth of 7.7%–10.5%. The guidance is predicated on several conservative assumptions: no material acquisitions, constant foreign exchange rates, net interest expense around $97 million, and a 20% tax rate. Management explicitly noted that the guidance does not include any future share buybacks or significant disruptions. The implied acceleration in Q2–Q4 vs. Q1 suggests operating leverage from volume growth and margin expansion through mix and SG&A leverage as the company scales its three primary route-based segments.
Risks to watch include:
- Tariff and import-cost volatility, which CTAS acknowledges but mitigates via diverse supplier base and process improvements.
- Macro softness or a stronger downturn, which could impact hiring-related wearers and routine demand, though the company has demonstrated growth even when GDP/job growth softens.
- SAP implementation costs in Fire and potential ramp in SG&A as investments persist.
Key metrics investors should monitor: trajectory of no-programmer conversion, SG&A leverage realization, progress on SAP integration in Fire, and any M&A activity that could alter the revenue trajectory or margin mix.
Competitive Position
Company
Gross Margin
Operating Margin
Return on Equity
P/E Ratio
ABM
12.30%
3.67%
2.45%
19.18%
CPRT
44.70%
35.40%
4.59%
34.23%
DLB
89.80%
21.00%
2.86%
30.68%
RELX
0.00%
0.00%
0.00%
0.00%
Gross Profit Margin
Operating Profit Margin
Return on Equity
P/E Ratio Comparison
Investment Outlook
CTAS remains well-positioned in the Industrials subsector through a diversified, recurring-revenue model that benefits from macro resilience and strong customer relationships. The company’s guidance uplift for FY2026 reflects confidence in continued momentum across Uniform Rental, First Aid and Safety, and Fire Protection, supported by cross-selling, improved process efficiency, and ongoing technology investments. Key catalysts include sustained no-programmer conversions, disciplined capital allocation (dividends and buybacks), and potential accretive tuck-ins in Fire and Safety. However, near-term margins may be moderated by SAP-related costs and mix shifts in All Other, requiring vigilance on cost discipline and integration progress. Overall, a balanced risk-reward profile with upside from M&A and further productivity gains under a stable macro backdrop.
Key Investment Factors
Growth Potential
Long-run growth anchored in three core route-based services (Uniform Rental & Facility Services, First Aid & Safety, Fire Protection). The company estimates a low-double-digit top-line growth opportunity in First Aid and Safety with meaningful cross-sell opportunities into existing customers. The large TAM of no-programmers (14–17 million businesses in U.S./Canada) remains an outsized growth vector as CTAS penetrates beyond traditional uniforms into facility services, safety programs, and fire protection.
Profitability Risk
Key risks include tariff-related cost pressure, macro softness impacting hiring and demand, and execution risk associated with SAP deployment in Fire Protection leading to near-term margin headwinds. Competition for no-programmers remains intense, though CTAS maintains a broad, diversified, and scalable operating model. The Uniform Direct Sale segment can be lumpy quarter-to-quarter, adding some earnings volatility if large programs roll out unevenly.
Financial Position
Financially resilient with strong cash generation and a disciplined capital-allocation framework. Cash from operations was $414.5M in Q1, capex of $102.0M, and free cash flow of $312.5M, supporting a 42-year streak of dividend increases and sizable buybacks ($347.4M). Cash balance of $138.1M and net debt of $2.54B indicate a solid but leveraged balance sheet that is managed to support ongoing buybacks and potential tuck-ins. The company targets ~4% annual capex and a sustainable tax rate around 20%.
SWOT Analysis
Strengths
Large, diversified route-based business with three core segments (Uniform Rental & Facility Services, First Aid & Safety, Fire Protection) providing recurring revenue and high customer retention.
Strong cash flow and balance-sheet discipline enabling sustained dividends and buybacks.
Market leadership in outsourcing wear-and-service logistics with scalable technology platforms (myCintas, SAP foundation).
Proven ability to cross-sell across services within existing customers, expanding wallet share.
Weaknesses
Uniform Direct Sale remains a smaller, more volatile contributor and can be a quarterly revenue swing.
Near-term margin pressure in All Other due to SAP implementation in Fire; ongoing investments may temper margin expansion in the near term.
Opportunities
Cross-selling opportunities across all three route-based segments, especially expanding Fire and First Aid within existing customer bases.
M&A in Fire and Safety and potential tuck-ins to broaden geographic reach and service capabilities.
Digital investments (myCintas, portal capabilities) to improve customer engagement and partner productivity.
Strengthening TAM with continued growth in no-programmer market through expanded product lines and services.
Threats
Tariffs and import-cost volatility impacting input costs; mitigated by supplier diversity but remains an external risk.
Macro downturn affecting capex budgets and hiring trends, which could influence demand for rental-based services.
Competitive intensity in the no-programmer market and potential execution challenges from large-scale SAP deployments.
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