Executive Summary
Nike reported a solidly profitable QQ2 2025 despite a meaningful year-over-year revenue decline, underscoring durable profitability and strong cash flow generation in a challenging macro backdrop. Revenue for QQ2 2025 was $12.354 billion, down 7.72% year over year, with a gross margin of 43.6% (gross profit of $5.389 billion). Despite the revenue headwinds, operating income reached $1.384 billion, producing an operating margin of approximately 11.2% and a net income of $1.163 billion, translating to an EPS of $0.78. The quarter benefited from a modest sequential recovery (QoQ revenue +6.6%), indicating stabilizing demand after a prior period softness and a deliberate focus on price/mix discipline, product rationalization, and cost controls.
Nike generated robust operating cash flow of $1.049 billion and free cash flow of about $0.92 billion in QQ2 2025, supporting a strong liquidity position (cash and equivalents of $7.98 billion) and a net debt position of roughly $4.09 billion. Management’s capital allocation remained constructive, with $1.096 billion of share repurchases and $0.557 billion in dividends during the period, reflecting an emphasis on returning value while maintaining a solid balance sheet. The company’s balance sheet shows total assets of $37.96 billion against total liabilities of $23.92 billion and stockholders’ equity of $14.04 billion, with a current ratio of 2.22 and a quick ratio of 1.51, signaling solid near-term liquidity.
Looking ahead, the key uncertainties remain macro demand, currency dynamics, and inventory normalization across regions. The company’s strategic levers – direct-to-consumer growth, digital acceleration, pricing discipline, and continued product innovation – are positioned to support margin stability and mid-to-long-term profitability, even as revenue growth moderates. The overall investment thesis rests on Nike’s brand strength, cash flow resilience, and disciplined capital deployment in an environment of uneven consumer demand and competitive intensity.
Key Performance Indicators
QoQ: 14.47% | YoY:-24.16%
QoQ: 10.66% | YoY:-26.30%
QoQ: 11.43% | YoY:-25.00%
Key Insights
Revenue: $12.354B in QQ2 2025, YoY -7.72%, QoQ +6.60%.
Gross Profit: $5.389B; Gross Margin: 43.62%; YoY Gross Profit change: -9.75%; QoQ Gross Profit change: +2.51%.
Operating Income: $1.384B; Operating Margin: ~11.20%; YoY Operating Income change: -24.16%; QoQ change: +14.47%.
Net Income: $1.163B; Net Margin: 9.41%; YoY Net Income change: -26.30%; QoQ change: +10.66%.
EPS (Diluted): $0.78; YoY EPS change: -25.00%; QoQ change: +11.43%.
Cash Flow: Net Cash Provided by Operating Activities = ...
Financial Highlights
Revenue: $12.354B in QQ2 2025, YoY -7.72%, QoQ +6.60%.
Gross Profit: $5.389B; Gross Margin: 43.62%; YoY Gross Profit change: -9.75%; QoQ Gross Profit change: +2.51%.
Operating Income: $1.384B; Operating Margin: ~11.20%; YoY Operating Income change: -24.16%; QoQ change: +14.47%.
Net Income: $1.163B; Net Margin: 9.41%; YoY Net Income change: -26.30%; QoQ change: +10.66%.
EPS (Diluted): $0.78; YoY EPS change: -25.00%; QoQ change: +11.43%.
Cash Flow: Net Cash Provided by Operating Activities = $1.049B; Free Cash Flow = $0.92B.
Balance Sheet: Cash and cash equivalents = $7.979B; Total debt = $12.065B; Net debt = $4.086B; Total assets = $37.960B; Total liabilities = $23.922B; Total stockholders’ equity = $14.037B.
Liquidity/Leverage: Current ratio 2.22; Quick ratio 1.512; Debt to capitalization ~0.462; Debt to equity ~0.86; Cash flow to debt indications supportive of near-term liquidity.
Capital Allocation: Share repurchases = $1.096B; Dividends paid = $0.557B; Net cash used in financing = $1.448B; Capital expenditure (CAC) = $129M; Free cash flow yield supports ongoing buybacks and shareholder value creation.
Income Statement
| Metric |
Value |
YoY Change |
QoQ Change |
| Revenue |
12.35B |
-7.72% |
6.60% |
| Gross Profit |
5.39B |
-9.75% |
2.51% |
| Operating Income |
1.38B |
-24.16% |
14.47% |
| Net Income |
1.16B |
-26.30% |
10.66% |
| EPS |
0.78 |
-25.00% |
11.43% |
Key Financial Ratios
operatingCashFlowPerShare
$0.71
freeCashFlowPerShare
$0.62
dividendPayoutRatio
47.9%
Management Commentary
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Forward Guidance
No explicit forward guidance is included in the provided data for QQ2 2025. Given Nike’s ongoing emphasis on direct-to-consumer growth, digital channel expansion, inventory management, and cost discipline, the trajectory will likely hinge on: (1) demand stabilization across key geographies (notably North America and Greater China), (2) product mix and price realization contributing to margin resilience, and (3) currency headwinds/benefits influencing reported growth. Investors should monitor quarterly revenue progression, continued leverage of DTC platforms, inventory levels, and any regional demand shifts. Absent formal guidance, the most actionable near-term indicators are gross margin trajectory, operating margins, cash flow generation, and the pace of share repurchases relative to dividend payments.