Executive Summary
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.
Key Performance Indicators
QoQ: 157.75% | YoY:142.38%
QoQ: 155.79% | YoY:53.84%
QoQ: 155.71% | YoY:50.00%
Key Insights
Revenue: $1,399,023,000 (YoY -5.86%, QoQ +18.19%). Gross Profit: $696,132,000 (YoY +3.80%, QoQ +23.72%). Operating Income: $173,080,000 (YoY +142.38%, QoQ +157.75%). Net Income: $170,382,000 (YoY +53.84%, QoQ +155.79%). EPS: $0.39 (YoY +50.00%, QoQ +155.71%). Gross Margin: 49.76%. Operating Margin: 12.37%. Net Margin: 12.18%. EBITDA: $209,027,000. EBITDA Margin: 14.94%. Diluted EPS: $0.39. Wholesale vs DTC channel mix not disclosed in the provided data; the operating cadence implies a favorable ...
Financial Highlights
Revenue: $1,399,023,000 (YoY -5.86%, QoQ +18.19%). Gross Profit: $696,132,000 (YoY +3.80%, QoQ +23.72%). Operating Income: $173,080,000 (YoY +142.38%, QoQ +157.75%). Net Income: $170,382,000 (YoY +53.84%, QoQ +155.79%). EPS: $0.39 (YoY +50.00%, QoQ +155.71%). Gross Margin: 49.76%. Operating Margin: 12.37%. Net Margin: 12.18%. EBITDA: $209,027,000. EBITDA Margin: 14.94%. Diluted EPS: $0.39. Wholesale vs DTC channel mix not disclosed in the provided data; the operating cadence implies a favorable margin expansion but cash-flow challenges due to working capital needs.
Income Statement
| Metric |
Value |
YoY Change |
QoQ Change |
| Revenue |
1.40B |
-5.86% |
18.19% |
| Gross Profit |
696.13M |
3.80% |
23.72% |
| Operating Income |
173.08M |
142.38% |
157.75% |
| Net Income |
170.38M |
53.84% |
155.79% |
| EPS |
0.39 |
50.00% |
155.71% |
Key Financial Ratios
operatingProfitMargin
12.4%
operatingCashFlowPerShare
$-0.74
freeCashFlowPerShare
$-0.85
Management Commentary
No earnings call transcript was provided in the data. As a result, management commentary, qualitative guidance, and specific Q&A insights could not be extracted from the source material. If you can share the transcript or access to the official call, I can synthesize themes on strategy, operations, and market conditions with direct quotes.
Forward Guidance
Formal forward guidance was not included in the provided dataset. Given the quarter’s earnings trajectory, investors should consider: (1) whether operating margins can be sustained or expanded as the product mix improves and fixed-cost absorption increases; (2) the trajectory of working-capital cadence to reverse negative operating cash flow and achieve positive free cash flow; (3) the potential growth in Direct-to-Consumer channels and international expansion to offset wholesale exposure. Absent explicit guidance, scenarios suggest that a constructive path would require improved cash conversion (lower working capital intensity) and continued gross-margin stability around the current ~50% level. Key factors to monitor include inventory levels, receivables/payables turnover, currency translations, and consumer discretionary demand in core markets.