Executive Summary
Cintas delivered a robust start to fiscal 2025 (quarter ended August 31, 2024), underscored by solid organic growth, margin expansion and meaningful cash flow generation. Total revenue reached a quarterly record of $2.50 billion, up 6.8% year over year, with same-day growth of 8.4% and an organic growth rate of 8.0% after adjusting for acquisitions, FX and one fewer workday. Gross margin climbed to 50.1% (up 140 bps YoY) and operating margin reached a record 22.4% of revenue, up 100 bps YoY, supporting an 18.3% rise in diluted EPS to $1.10 (reflecting the 4-for-1 stock split). Free cash flow increased 62.4% YoY to $466.7 million, enabling continued capital returns and investments in technology, Six Sigma initiatives, and route optimization.
Management raised the full-year guidance for fiscal 2025: revenue to $10.22–$10.32 billion (6.5–7.5% growth) with organic growth of 7.0–8.1%, and diluted EPS to $4.17–$4.25 (10.0–12.1% growth). The company highlighted strength across its four verticals—healthcare, hospitality, education, and state/local government—and noted continued momentum in first aid and safety and fire protection services, with the rental business performing “right where we like them to be.” The narrative also emphasized investments in technology (including SmartTruck and SAP), partnerships (Verizon, Google, SAP), and ongoing capital allocation via dividends and stock repurchases. While the near-term margin trajectory benefits from operating leverage and supply chain optimization, management cautioned that SAP implementation could exert some SG&A pressure in fiscal 2025, particularly within the fire protection segment. The quarter also featured a strategic 4-for-1 stock split to broaden ownership accessibility and a notable dividend increase of 15.6%.
Overall, the combination of a diversified service platform, strong cash flow, and a favorable long-run addressable market supports a constructive investment thesis, albeit with near-term execution risks related to technology implementations and potential macro volatility.
Key Performance Indicators
Key Insights
Revenue and growth: Q1 FY2025 revenue $2.501B, up 6.8% YoY; same-day growth 8.4%; organic growth 8.0% after adjustments (acquisitions, FX, fewer workdays) versus 6.8% reported growth.
Margins and profitability: Gross margin 50.1% (up 140 bps YoY); operating margin 22.4% (up 100 bps YoY); EBITDA $679.5M; tax rate 15.8% (discrete items cap stock-based compensation); net income $452.0M; diluted EPS $1.10 (up 18.3% YoY).
Cash flow and capital allocation: Operating cash flow $466.7M; free cash flow...
Financial Highlights
Revenue and growth: Q1 FY2025 revenue $2.501B, up 6.8% YoY; same-day growth 8.4%; organic growth 8.0% after adjustments (acquisitions, FX, fewer workdays) versus 6.8% reported growth.
Margins and profitability: Gross margin 50.1% (up 140 bps YoY); operating margin 22.4% (up 100 bps YoY); EBITDA $679.5M; tax rate 15.8% (discrete items cap stock-based compensation); net income $452.0M; diluted EPS $1.10 (up 18.3% YoY).
Cash flow and capital allocation: Operating cash flow $466.7M; free cash flow $373.8M (up 62.4% YoY); capex $92.9M in Q1; stock repurchases $473.6M; dividends paid $138.2M; 4-for-1 stock split effective 9/12/2024; total cash at period-end $101.4M; net debt $2.736B; net debt/EBITDA not disclosed in the data but large cash flow supports deleveraging potential over time.
Guidance and outlook: FY2025 revenue guidance raised to $10.22–$10.32B (6.5–7.5% growth); organic growth guidance 7.0–8.1%; diluted EPS guidance $4.17–$4.25; fiscal 2025 effective tax rate guided at 20.4% (unchanged); capex guidance 3.5–4% of revenue; net interest ~$101M; SAP-related SG&A pressure anticipated in the Fire segment; Q2–Q4 implied growth trajectory approximately 6.9–8.3% same-workday growth, assuming 65 workdays per quarter, with the caveat of two fewer workdays in fiscal 2025 versus fiscal 2024.
Income Statement
| Metric |
Value |
YoY Change |
QoQ Change |
| Revenue |
2.50B |
6.80% |
1.24% |
| Gross Profit |
1.25B |
9.68% |
6.68% |
| Operating Income |
561.03M |
12.08% |
2.45% |
| Net Income |
452.03M |
17.39% |
9.10% |
| EPS |
1.12 |
19.15% |
9.80% |
Key Financial Ratios
operatingProfitMargin
22.4%
operatingCashFlowPerShare
$1.16
freeCashFlowPerShare
$0.93
dividendPayoutRatio
30.6%
Management Commentary
- Management emphasized breadth and strength of the value proposition across customers and verticals, noting that the four focus verticals (healthcare, hospitality, education, and state/local government) performed well and continued to drive demand.
- Todd Schneider highlighted the company’s culture and operational excellence as core drivers of performance, pointing to supply chain improvements, technology investments (SmartTruck), and SAP to optimize processes and margins.
- Mike Hansen discussed margin expansion driven by scale, a robust supply chain, technology investments, and Six Sigma/engineering efficiency, while noting SAP implementation could exert some near-term SG&A pressure in fiscal 2025, particularly in Fire.
- The company discussed a disciplined capital allocation framework, including a 15.6% dividend increase and $473.6M of share repurchases in the quarter, and reiterated M&A as an important growth vector within a broad platform strategy.
- Management reaffirmed a constructive view on M&A, acknowledging that the market is dynamic but emphasizing execution discipline and maintaining competitive positioning.
- The Q&A highlighted resilience in the rental business and a continued ability to grow faster than GDP in various macro scenarios, with no material shifts in customer buying behavior despite macro uncertainty.
"First quarter total revenue grew 6.8% to $2.5 billion, an all-time high for revenue in a quarter. On a same-day work basis, first quarter revenue growth was 8.4%. The organic growth rate ... was 8.0%."
— Todd Schneider
"M&A is an important component of our business, has been and will be. We certainly stay aware of what's going on in the marketplace. And we like our competitive position. We will continue to invest to make sure that we're appropriately positioned to compete in the marketplace moving forward."
— Todd Schneider
Forward Guidance
Cintas reiterated FY2025 targets: revenue $10.22–$10.32 billion (6.5–7.5% growth) and organic growth 7.0–8.1%, with diluted earnings per share of $4.17–$4.25 (≈10–12% growth). The company also guided capex at 3.5–4% of revenue and an expected FY2025 tax rate of ~20.4%. Management noted two fewer workdays in fiscal 2025 (Q1 and Q4) and expects rest-of-year momentum to align with the first-quarter trajectory, implying similar sequential growth dynamics in Q2–Q4, adjusted for day-count effects. Key risk factors include execution and integration of SAP-driven changes, potential SG&A pressures from technology initiatives, and macro variability affecting customer capex and hiring. Investors should monitor: (i) progress on SAP deployment and its impact on Fire SG&A margins, (ii) effectiveness of SmartTruck, data sharing, and other tech initiatives on route density and product sourcing costs, (iii) M&A activity pipeline and integration milestones, and (iv) macro developments that could influence hiring, consumer spending, and the pace of new account wins.