Under Armour delivered a positive quarterly bottom line in QQ2 2025 with a revenue of $1.399 billion, marking a year-over-year decline of 5.9% but a sequential gain of 18.2% on a QoQ basis. Gross margin remained robust at approximately 49.76%, contributing to an operating income of $173.08 million and net income of $170.38 million, or $0.39 per share (diluted). The quarter shows meaningful margin expansion relative to the prior year period, supported by improved gross profit of $696.13 million on a revenue base of $1.399 billion, and a favorable operating leverage trajectory as fixed costs remain controlled.
Despite the earnings strength, cash-flow performance remained a material headwind. Net cash provided by operating activities was negative $321.38 million, driven by a sizable working capital burn of about $505.3 million. Free cash flow registered at negative $367.21 million, and the company finished the period with roughly $549.85 million in cash and cash equivalents against total debt of $1.3318 billion, leaving a net debt position of about $801.08 million. Liquidity metrics remained solid on a relative basis (current ratio 2.18, quick ratio 1.24, cash ratio 0.45), but the cash conversion cycle remained a focal point for management as builds in inventory and receivables interacted with payables.
From a profitability and balance-sheet perspective, Under Armour is showing resilience in earnings power with a YoY and QoQ improvement in operating income and net income, while still needing to address cash-flow generation and working-capital efficiency. The stock’s valuation metrics — including a P/E around 5.65 and an EV/EBITDA around 22.3 — imply a discount to some apparel peers, reflecting execution risk and cash-flow headwinds. Investors should monitor the pace of Direct-to-Consumer (DTC) growth, the wholesale mix, inventory management, and the company’s ability to convert earnings into tangible free cash flow over the balance of 2025.