Freight transportation and logistics provider Saia (NASDAQ: SAIA) beat Wall Street’s revenue expectations in Q2 CY2025, but sales were flat year on year at $817.1 million. Its GAAP profit of $2.67 per share was 11.6% above analysts’ consensus estimates.

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Saia President and CEO, Fritz Holzgrefe, commented on the quarter stating, "I was pleased with our team's ability to focus on what was within our control in the second quarter. Our continued emphasis on taking care of the customer in all of our markets, mix management, and managing costs to adjust to current volume trends demonstrated our ability to navigate a dynamic backdrop. "

Company Overview

Pivoting its business model after realizing there was more success in delivering produce than selling it, Saia (NASDAQ: SAIA) is a provider of freight transportation solutions.

Revenue Growth

A company’s long-term sales performance is one signal of its overall quality. Even a bad business can shine for one or two quarters, but a top-tier one grows for years. Luckily, Saia’s sales grew at an excellent 12.7% compounded annual growth rate over the last five years. Its growth beat the average industrials company and shows its offerings resonate with customers.

Long-term growth is the most important, but within industrials, a half-decade historical view may miss new industry trends or demand cycles. Saia’s annualized revenue growth of 8.7% over the last two years is below its five-year trend, but we still think the results were respectable. We also think Saia’s recent performance stands out as many other Ground Transportation businesses have faced declining sales because of cyclical headwinds.

We can dig further into the company’s revenue dynamics by analyzing its number of tons shipped, which reached 1.58 million in the latest quarter. Over the last two years, Saia’s tons shipped averaged 7.6% year-on-year growth. Because this number is in line with its revenue growth, we can see the company kept its prices fairly consistent.

This quarter, Saia’s $817.1 million of revenue was flat year on year but beat Wall Street’s estimates by 1.2%.

Looking ahead, sell-side analysts expect revenue to grow 2.7% over the next 12 months, a deceleration versus the last two years. This projection is underwhelming and implies its products and services will see some demand headwinds.

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Operating Margin

Operating margin is a key measure of profitability. Think of it as net income - the bottom line - excluding the impact of taxes and interest on debt, which are less connected to business fundamentals.

Saia’s operating margin might fluctuated slightly over the last 12 months but has remained more or less the same, averaging 14.7% over the last five years. This profitability was top-notch for an industrials business, showing it’s an well-run company with an efficient cost structure. This result was particularly impressive because of its low gross margin, which is mostly a factor of what it sells and takes huge shifts to move meaningfully. Companies have more control over their operating margins, and it’s a show of well-managed operations if they’re high when gross margins are low.

Analyzing the trend in its profitability, Saia’s operating margin might fluctuated slightly but has generally stayed the same over the last five years. We like to see margin expansion, but we’re still happy with Saia’s performance, especially when considering the cycle turned in the wrong direction and most peers observed plummeting revenue and margins.

In Q2, Saia generated an operating margin profit margin of 12.2%, down 4.5 percentage points year on year. Since Saia’s operating margin decreased more than its gross margin, we can assume it was less efficient because expenses such as marketing, R&D, and administrative overhead increased.

Earnings Per Share

We track the long-term change in earnings per share (EPS) for the same reason as long-term revenue growth. Compared to revenue, however, EPS highlights whether a company’s growth is profitable.

Saia’s EPS grew at an astounding 20.9% compounded annual growth rate over the last five years, higher than its 12.7% annualized revenue growth. This tells us the company became more profitable on a per-share basis as it expanded.

Like with revenue, we analyze EPS over a more recent period because it can provide insight into an emerging theme or development for the business.

For Saia, its two-year annual EPS declines of 7.3% mark a reversal from its (seemingly) healthy five-year trend. We hope Saia can return to earnings growth in the future.

In Q2, Saia reported EPS at $2.67, down from $3.83 in the same quarter last year. Despite falling year on year, this print easily cleared analysts’ estimates. Over the next 12 months, Wall Street expects Saia’s full-year EPS of $10.83 to shrink by 5.6%.

Key Takeaways from Saia’s Q2 Results

We were impressed by how significantly Saia blew past analysts’ EBITDA expectations this quarter. We were also happy its EPS outperformed Wall Street’s estimates. Overall, we think this was a decent quarter with some key metrics above expectations. The stock traded up 12.6% to $350.01 immediately following the results.

Sure, Saia had a solid quarter, but if we look at the bigger picture, is this stock a buy? When making that decision, it’s important to consider its valuation, business qualities, as well as what has happened in the latest quarter. We cover that in our actionable full research report which you can read here, it’s free.