“Organic revenue grew 5% in the first quarter to $4.6 billion with the foodservice business up over 6% as a result of strong base business and net new business. We expect revenue growth to accelerate, particularly in the second half of the year given our great start in fiscal 2025 in both new account wins and client retention.”
— John Zillmer
03Detailed Report
ARMK
Company ARMK
Period
Q1 2025
CurrencyUSD
Report TypeQuarterly Earnings
GeneratedJun 27, 2026
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Executive Summary
Aramark delivered a solid QQ1 2025 performance with meaningful top-line momentum and margin expansion, supported by a robust pipeline of new business and favorable cost dynamics. Organic revenue grew 5% in the quarter to $4.6 billion, led by the Food and Support Services (FSS) segment, with US FSS organic revenue up 3% and International up 10% year over year. Adjusted operating income (AOI) rose 13% on a constant-currency basis to $258 million, driving AOI margin to 5.6% (up ~40 bps YoY). GAAP EPS was $0.39 and adjusted EPS $0.51, up 25% year over year on a constant-currency basis. Management reaffirmed full-year guidance, with organic revenue growth of 7.5%–9.5%, AOI growth of 15%–18%, and adjusted EPS growth of 23%–28%, incorporating the 53rd week in Q4 and targeting ~3x leverage by year-end. The quarter featured several strategic moves (Quantum acquisition, debt refinancing, share repurchases) and a strong pipeline of high-profile new accounts (Walmart HQ, General Dynamics, WPP, Indianapolis Zoo) along with ongoing NCAA athletics opportunities (ASU athletics) and cross-border GPO expansion. Inflation remained modest (2%–3%), and tariff impact was modeled as de minimis (about 30 bps in input costs). Near-term cash flow showed seasonality headwinds (free cash flow negative in QQ1) but free-cash-flow dynamics improved versus last year, setting up a constructive path for the remainder of fiscal 2025.
Key Performance Indicators
Revenue
Increasing
4.55B
QoQ: 3.06% | YoY: 3.27%
Gross Profit
Increasing
400.85M
8.81% margin
QoQ: 0.96% | YoY: 10.52%
Operating Income
Increasing
217.26M
QoQ: -0.70% | YoY: 30.14%
Net Income
Increasing
105.62M
QoQ: -13.72% | YoY: 270.13%
EPS
Increasing
0.40
QoQ: 175.47% | YoY: 263.64%
Revenue Trend
Margin Analysis
Financial Highlights
Overview and interpretation of key QQ1 2025 metrics:
- Revenue: $4.552B (YoY growth 3.27%; QoQ growth 3.06%). The quarter reflected continued top-line resilience and synergies from new and ongoing contracts.
- Gross Profit: $400.854M; gross margin 8.81%, in line with 2H FY2024 trajectory and supportive of margin expansion through scale and pricing.
- Operating Income / AOI: Operating income $217.264M (margin 4.77%); AOI $258.0M (AOI margin 5.6%, +40 bps YoY on a constant-currency basis).
- Net Income / EPS: Net income $105.619M; GAAP EPS $0.39; Adjusted EPS $0.51 (+25% YoY, CC basis).
- Balance sheet and liquidity: Total assets $12.707B; total liabilities $9.615B; stockholders’ equity $3.081B. Net debt $5.736B; cash availability >$1.7B; leverage ~3.0x by year-end guidance.
- Cash flow: Net cash from operating activities: -$587.2M (seasonal timing impact); free cash flow (FCF) -$707.0M (vs prior year improvement driven by higher earnings and working capital).
- Working capital efficiency: DSO 43.5 days; DIO 7.95 days; DPO 23.95 days; CCC 51.47 days, reflecting the seasonality and mix shifts in collegiate hospitality and international operations.
- Capital allocation: Quantum acquisition completed to expand GPO footprint; $500M share repurchase program initiated; debt maturity extension via $1.4B new term loans to replace 2025/2027 notes; cash availability over $1.7B at quarter-end.
- Guidance highlights: 53rd week embedded in FY25 guidance; full-year organic revenue growth 7.5%–9.5%; AOI growth 15%–18%; adjusted EPS growth 23%–28%; leverage target ~3x; 53rd week expected to lift second-half growth materially.
Income Statement
Metric
Value
YoY Change
QoQ Change
Revenue
4.55B
3.27%
3.06%
Gross Profit
400.85M
10.52%
0.96%
Operating Income
217.26M
30.14%
-0.70%
Net Income
105.62M
270.13%
-13.72%
EPS
0.40
263.64%
175.47%
Key Financial Ratios
Gross Profit Margin
Weak
8.81%
Gross profit margin is below industry norms, profitability concerns
Operating Profit Margin
Weak
4.77%
Operating margin is below industry norms, profitability concerns
Net Profit Margin
Weak
2.32%
Net profit margin is below industry norms, profitability concerns
Return on Assets
Weak
0.83%
Return on assets suggests inefficient capital allocation
Return on Equity
Weak
3.43%
Return on equity suggests inefficient capital allocation
Current Ratio
Concern
0.94
Current ratio below safe levels, potential liquidity risk
Debt to Equity
High Risk
2.02
Debt-to-equity indicates high leverage and elevated financial risk
P/E Ratio
Fair Value
23.47x
P/E ratio in line with market averages
Price to Book
Premium
3.22x
Trading at premium to book value, reflects strong intangibles or growth
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