Logistics and freight forwarding company Expeditors (NYSE: EXPD) reported Q3 2026 results beating Wall Street’s revenue expectations, with revenue up 41.9% year on year to $4.11 billion. Its GAAP profit of $2.65 per share was 18.9% above analysts’ consensus estimates.

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“We continue to gain share, particularly in markets that we have made a strategic focus. By continuing to streamline our processes and prioritize companywide growth across every region, product, and district, we once again generated double-digit growth across most of our businesses. While we have thrived during periods of significant disruption throughout our history, the strength of demand for our products and services is what really drove Q3 performance. Demand from certain customers, such as the hyperscalers, has been outpacing the market overall, but we have been very deliberate to expand our customer base across our global network and further diversify our revenues. I sincerely thank our global operations, transition & implementation, sales, and account management teams for their continued focus and dedication to our customers. Through those efforts, we are now charting a course for durable performance no matter what the operating environment.”

Revenue growth

Reviewing a company’s long-term revenue performance reveals insights into its quality. Even a low-quality business can perform well for one or two quarters, but a top-tier one grows for years. Over the last five years, Expeditors’s demand was weak and its revenue declined by 1.2% per year. This fell below our standards and points to poor business quality.

Long-term growth is the most important, but within industrials, a half-decade historical view may miss new industry trends or demand cycles. Expeditors’s annualized revenue growth of 15.5% over the last two years is above its five-year trend, suggesting its demand recently accelerated.

This quarter, Expeditors reported year-on-year revenue growth of 41.9%, and its $4.11 billion in revenue beat Wall Street’s consensus estimates by 13.5%.

Looking ahead, sell-side analysts expect revenue to grow 1.9% over the next 12 months, according to S&P, a deceleration versus the last two years. This projection is underwhelming and implies its products and services will see some demand headwinds.

Operating margin

Expeditors has managed its cost base well over the last five years. It demonstrated solid profitability for an industrials business, producing an average operating margin of 10.3%. This result was particularly impressive because of its low gross margin, which largely reflects what it sells and requires substantial shifts to change meaningfully. Companies have more control over their operating margins, and high operating margins alongside low gross margins indicate well-managed operations.

Looking at the trend in its profitability, Expeditors’s operating margin decreased by 1 percentage point over the last five years. Even though its historical margin was healthy, shareholders will want to see Expeditors become more profitable in the future.

This quarter, Expeditors generated an operating margin of 10.8%, in line with the same quarter last year. This indicates the company’s cost structure has recently been stable.

Earnings per share

Revenue trends explain a company’s historical growth, but the long-term change in earnings per share (EPS) points to the profitability of that growth – for example, a company could inflate its revenue through excessive spending on advertising and promotions.

Expeditors’s EPS grew at a 3.1% compounded annual growth rate over the last five years. This performance was better than its 1.2% annualized revenue decline but doesn’t tell us much about its business quality because its operating margin didn’t improve.

A closer look at Expeditors’s earnings can help explain its performance. A five-year view shows that Expeditors has repurchased its stock, shrinking its share count by 24.2%. This indicates its EPS outperformed its revenue not because of increased operational efficiency but because of financial engineering, as buybacks boost per share earnings.

As with revenue, a shorter-term view of EPS can reveal a change in the business.

For Expeditors, its two-year annual EPS growth of 24% was higher than its five-year trend. This acceleration made it one of the faster-growing industrials companies in recent history.

In Q3, Expeditors reported EPS of $2.65, up from $1.64 in the same quarter last year. EPS comfortably beat analysts’ consensus estimates, a positive result for shareholders. Over the next 12 months, Wall Street expects Expeditors’s full-year EPS to stay about the same, moving from $7.88 to $7.84, according to S&P.

Key takeaways from Expeditors’s Q3 results

A sizable revenue beat and EPS above Wall Street’s estimates made Q3 a quarter with important positives for Expeditors. Revenue came in well above analysts’ consensus estimates. The stock remained flat at $198.59 immediately after the release.

The latest quarter matters when deciding whether to invest in Expeditors, but longer-term fundamentals and valuation matter more. Read the full research report here (it’s free).