Expeditors International turned in a particularly strong third-quarter performance, posting substantial year-on-year increases in revenue, operating income and earnings per share. The group’s results were bolstered by increasing freight volumes, robust demand for its services and increased activity from hyperscale technology companies.

The Seattle-based asset-light customs brokerage and freight forwarding company said revenue was $4.1 billion, up 42% from a year ago.

Despite rising operating expenses profitability also improved significantly. Transportation costs increased 49% exceeding revenue growth and employee compensation costs increased 15%. But operating income was up 55 percent to $445.4 million, compared with $288 million in the third quarter of last year.

Diluted earnings per share increased 61% year-over-year to $2.65. This was a beat of $0.42 per share on the consensus estimate of analysts as reported by Seeking Alpha. Revenue of about $4.11 billion, $510 million better than expected.

Strong financial results fail to boost share price

Expeditors’ stock was little changed in early trading although it topped analysts’ revenue and earnings expectations.

In mid-morning trading on Friday, shares of the company (NYSE: EXPD) were down 0.76% at $199.04 a piece, losing $1.52 from the previous closing price. The company's price-to-earnings ratio for the trailing 12 months was about 28.9, a bit higher than the broader market average.

The muted response came after an already impressive run for the company’s shares. Barchart data showed Expeditors had gained about 3.9% over the past month, 17.2% over three months and 63.3% over the past year ahead of Tuesday’s trading session.

Airfreight volumes pick up over the quarter

Freight activity picked up in the third quarter, particularly the airfreight segment.

Year-on-year airfreight volume growth accelerated from 8% in July, to 13% in August and 19% in September. Volumes were up 13% over the whole quarter.

Ocean freight also recorded positive growth, but with a different pattern of monthly evolution. Volumes rose by 5% in both July and August before increasing by 12% in September. For the quarter, the overall increase was 12%.

These numbers further highlight the continued contribution of both transportation segments to Expeditors’ quarterly performance.

Tech, corporate teams get smaller as workforce grows

The company’s total number of employees rose slightly during the period. Expeditors had 20,463 employees at the end of the third quarter, compared with 20,170 a year ago, a 1.4% increase.

The expansion, however, was not evenly distributed through the organization. Global Technology reduced its headcount to 1,151 from 1,483, and corporate staffing fell to 396 from 419.

Expeditors does not conduct earnings conference calls with analysts.

In the company’s prepared earnings statement, CEO Daniel Wall cited continued market-share gains for the company, particularly in markets where it has a strategic focus.

The executive also cited the company's ability to manage shifting tariff policies as a key driver of its performance over the last 18 months. Expeditors' understanding of customs duties and the practical implications of them have helped it react to periods where trade restrictions have been introduced, modified or withdrawn within relatively short periods.

But Wall said the latest results could not be attributed solely to market disruption.

“We have performed well in periods of great disruption in our history, but the real driver of Q3 performance was the strength of demand for our products and services,” he said.

Additional momentum from hyperscale demand

The quick growth of artificial intelligence infrastructure has been another important area of business for Expeditors.

Demand from some customer groups, in particular hyperscalers, has been growing faster than the overall market, Wall said. These providers of large scale cloud computing and data infrastructure generated additional demand for logistics and transportation services.

At the same time, the company has tried to expand its customer base in the international network to reduce its dependence on particular market segments and diversify its revenues.

This momentum helped airfreight among other sectors. Wall pointed to record global air cargo tonnage and added that South Asia was an important market that added to demand.

He also noted the effect of hyperscaler-related shipments, but cautioned that available air cargo capacity is still under pressure. The industry’s ability to respond quickly to rising demand is hampered by limited fleet expansion and delays in new aircraft deliveries.

In several markets, demand continues to exceed available capacity.

US-China e-commerce flows rebound

Another trend Wall pointed to was the recovery of e-commerce trade between the United States and China.

The two countries have seen cross-border e-commerce disrupted after the US lifted the de minimis exemption on low-value imports. But Wall said trade volumes have since rebounded to pre-May 2025 policy change levels.

The air cargo environment has gained a layer of complexity from geopolitical developments. These factors, along with demand exceeding available capacity, kept airfreight rates elevated through the third quarter, the CEO said.

Asian typhoons put ocean freight operations to the test

The ocean freight business of Expeditors also had operational challenges in the quarter, particularly after the impact of three typhoons in Asia.

The company managed to keep its services running across its network despite the deteriorating weather.

Wall said Expeditors was able to weather the storm because of the strength of the company’s global infrastructure and the capabilities of its operating teams, which allowed the company to respond effectively as conditions worsened.

“We had a strong global network and world class operating teams which enabled us to maintain service continuity and to respond effectively when conditions deteriorated,” he added.

Therefore, the third-quarter results reflect the combined impact of improved demand for freight, growing activity from hyperscalers, a positive air cargo market environment, and the company’s ability to maintain operations despite geopolitical and weather-related disruptions.