Executive Summary

Q3 2024 was a strong step-up in activity and profitability: revenue rose 37% YoY to $3.00B, operating income rose 40% YoY to $0.30B, and diluted EPS rose 41% YoY to $1.63, driven by broad-based volume gains and elevated ocean/air activity amid Red Sea rerouting and pre-holiday pull-forward .
Sequentially, revenue grew 23% vs Q2 ($3.00B vs $2.44B), operating income grew 35% ($0.30B vs $0.22B), and EPS increased 32% ($1.63 vs $1.24), reflecting higher tonnage/volumes and operating leverage as headcount remained flat .
Management highlighted continued volatility from geopolitical events, Red Sea avoidance, and rate uncertainty; however, operating efficiency (OI as a % of net revenue) is back to the 30% target year-to-date, and capital returns remained active (Q3 buybacks $140M; YTD $603M; semi-annual dividend $0.73) .
Consensus comparison: S&P Global quarterly consensus (EPS/Revenue) was unavailable in-session; estimate-based beats/misses cannot be determined. As a result, estimate comparisons are labeled N/A in tables (S&P Global data not available) [GetEstimates error noted].

What Went Well and What Went Wrong

What Went Well

Significant volume-led top-line acceleration: airfreight tonnage +19% YoY and ocean FEU +12% YoY; revenue +37% YoY to $3.00B; operating income +40% YoY to $302M; EPS +41% YoY to $1.63 .
Broad-based demand tailwinds: CEO cited “pulling freight forward” ahead of potential port actions/geopolitical disruptions and holiday builds; strength in direct e-commerce on North Asia exports and sea-to-air conversions from South Asia .
Efficiency and cost control: headcount flat while handling higher volumes; operating efficiency (OI as % of net revenue) back to the 30% YTD target; $140M in Q3 buybacks (YTD $603M) .

Key quotes:

“These positive third-quarter results reflect those efforts in securing higher tonnage and volumes…boosted as some shippers pulled freight forward…” — CEO Jeff Musser .
“Our measure of operating efficiency…is now back to our 30% target for the year to date.” — CFO Brad Powell .

What Went Wrong

Pricing volatility and margin mix risk persist: management again cautioned that ocean rates may decline if demand softens and capacity increases; freight markets remain volatile .
Gross margin compression YoY as buy-rate dynamics and ocean costs increased faster than sell rates earlier in the year: gross margin ~30.2% in Q3’24 vs ~36.0% in Q3’23 (derived from revenue less directly related costs) (calculation from ).
Limited visibility/guidance: Company does not issue formal financial guidance; management reiterated short-term unpredictability given Red Sea, labor actions, and macro uncertainty, constraining estimate anchoring and investor visibility .

Financial Results

Core P&L metrics vs prior year, prior quarter, and estimates

Metric	Q3 2023	Q2 2024	Q3 2024	Consensus (S&P Global)
Revenue ($USD Billions)	$2.19	$2.44	$3.00	N/A (data unavailable via S&P Global)
Operating Income (EBIT) ($USD Billions)	$0.22	$0.22	$0.30	N/A (data unavailable via S&P Global)
Diluted EPS ($)	$1.16	$1.24	$1.63	N/A (data unavailable via S&P Global)
Gross Margin % (rev – direct costs)	36.0% (calc)	32.8% (calc)	30.2% (calc)	N/A
EBIT Margin %	9.9% (calc)	9.2% (calc)	10.1% (calc)	N/A
Net Income Margin %	7.8% (calc)	7.2% (calc)	7.7% (calc)	N/A

Notes: Gross margin % = (Revenue – Directly related costs)/Revenue; EBIT margin % = Operating income/Revenue; Net income margin % = Net earnings attributable to shareholders/Revenue (all derived from cited source tables).

YoY and QoQ deltas

Change vs	Revenue	EBIT	Diluted EPS
YoY (Q3’24 vs Q3’23)	+37%	+40%	+41%
QoQ (Q3’24 vs Q2’24)	+23.0% (calc)	+34.6% (calc)	+31.5% (calc)

Product mix (Revenue)

Product Revenue ($USD Millions)	Q3 2023	Q3 2024	YoY %
Airfreight services	$724.3	$987.0	+36.3% (calc)
Ocean freight & ocean services	$560.3	$1,017.6	+81.7% (calc)
Customs brokerage & other services	$905.4	$995.6	+10.0% (calc)
Total	$2,190.0	$3,000.1	+37.0%

Regional performance (Revenue and Operating Income)

Region	Revenue Q3 2023 ($M)	Revenue Q3 2024 ($M)	YoY %	Operating Income Q3 2023 ($M)	Operating Income Q3 2024 ($M)	YoY %
United States	784.5	854.7	+9.0% (calc)	101.7	157.3	+54.6% (calc)
Other North America	106.3	114.3	+7.5% (calc)	4.3	11.4	+162% (calc)
Latin America	47.3	62.0	+31.0% (calc)	2.5	4.4	+75.2% (calc)
North Asia	515.3	914.4	+77.5% (calc)	50.1	64.1	+28.0% (calc)
South Asia	207.0	445.3	+115.0% (calc)	19.6	24.1	+23.1% (calc)
Europe	410.9	433.7	+5.5% (calc)	26.9	27.5	+2.1% (calc)
MEAI	119.8	177.1	+47.8% (calc)	10.9	12.8	+17.6% (calc)

KPIs

KPI	July YoY	Aug YoY	Sept YoY	Q3 Total YoY
Airfreight kilos	+20%	+17%	+20%	+19%
Ocean FEU	+8%	+14%	+15%	+12%
Share repurchases				$140M in Q3; $603M YTD
Dividend				$0.73 semi-annual declared Nov 4, 2024

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Revenue	FY/Q4 outlook	None provided	None provided	Maintained: no formal guidance
Margins/Operating efficiency	YTD/FY	Target ~30% on net revenue efficiency reiterated	Efficiency “now back to our 30% target for the year to date”	Maintained/achieved YTD target
OpEx/Headcount	Near-term	Ongoing alignment with activity	Headcount flat in Q3; continued cost control	Maintained discipline
Tax/Other financial items	Near-term	None provided	None provided	N/A
Dividends	2H 2024	Semi-annual cadence historically	Declared $0.73 payable Dec 16, 2024	Announced cash dividend

Note: Expeditors does not issue formal revenue/EPS guidance; management provides qualitative outlook and efficiency targets .

Earnings Call Themes & Trends

Note: The company does not host traditional earnings calls; it issues press releases and later files an 8-K “Responses to Selected Questions.” Themes below synthesize Q1–Q3 2024 releases and Jan 13, 2025 Q&A (reflecting Q3 productivity commentary).

Topic	Q-2 (Q2’24) Mentions	Q-1 (Q1’24) Mentions	Current Period (Q3’24)	Trend
Technology/security investments	IS headcount primary area of increase; invest in tech/network/security	IS headcount up; bolster network security	Efficiency at 30% target YTD; cost control; headcount flat	Improving efficiency; continued disciplined tech spend
Supply chain disruptions	Red Sea rerouting, blank sailings, congestion	Red Sea, Baltimore bridge, Panama Canal disruptions	Red Sea avoidance, potential port strikes; volatility persists	Persistent, with adaptation
Air capacity & e‑commerce	E-commerce demand constrained capacity; buy > sell rates	Passenger recovery added capacity, pressured cargo rates	Direct e‑commerce absorbed capacity; rates higher across regions	Tight in lanes, supporting rates
Tariffs/de minimis/regulatory	—	—	Management Q&A later: scrutiny of de minimis; changing tariffs/complexity often favorable to EXPD	Heightened oversight; complexity a tailwind
Regional trends	Asia export lanes volatile; sea-to-air rising	Sequential improvement in ocean profit/container; air profit/kilo improved vs Q4’23	North/South Asia strength; South Asia sea-to-air conversions	Asia exposure supportive

Management Commentary

CEO: “Air tonnage and rates increased across all regions. Direct e-commerce continued to absorb available air freight capacity… manufacturing relocations and sea-to-air conversions drove higher rates on exports from South Asia.”
CEO: “We…believe that ocean rates may decline if demand softens and capacity increases…global freight markets and pricing are likely to remain volatile for some time.”
CFO: “Our measure of operating efficiency…is now back to our 30% target for the year to date. We continue to control and carefully manage our cash, while working to improve operational efficiencies and return capital to investors.”
Capital returns: “Repurchased $140 million in common stock during the third quarter of 2024, and $603 million year to date.”
Dividend: Declared semi-annual cash dividend of $0.73 per share (payable Dec 16, 2024) .

Q&A Highlights

Note: No live earnings call; Expeditors publishes post-quarter “Responses to Selected Questions.” Selections relevant to the Q3 context:

Productivity/efficiency: “In the third quarter, we handled more shipments per-person than…in the same quarter of 2019…maximiz[e] the usage of technology and processes…without adding unnecessary headcount.”
Air capacity outlook: “In general we do not see an end to tight air capacity any time soon” (lane-dependent; Vietnam highlighted) .
Red Sea resolution: Even if conflict ended, return to normal would take time; added capacity could reduce rates; near-term port congestion possible on reopening .
Tariffs/de minimis: Greater scrutiny of de minimis; complexity historically benefits Expeditors; potential rule changes could create additional opportunities .

Estimates Context

S&P Global consensus EPS and Revenue for Q3 2024 were not retrievable in this session due to data limits; thus, beat/miss vs consensus cannot be stated. All estimate columns are marked N/A pending access to S&P Global data (S&P Global consensus unavailable at time of analysis) [GetEstimates errors].

Key Takeaways for Investors

Volume-led reacceleration: Double-digit air and ocean growth, especially in Asia, drove a 37% YoY revenue surge and 41% EPS growth; sequential momentum also strong in Q3 .
Operating leverage returning: OI margin improved to ~10.1% and efficiency back to 30% YTD as management held headcount flat and controlled OpEx .
Mix/pricing risk persists: Gross margin compressed YoY on higher direct costs; management warns ocean rates could fall if capacity/demand rebalance; volatility remains a key variable .
Capital returns remain supportive: $140M buybacks in Q3, $603M YTD, and a $0.73 semi-annual dividend enhance total shareholder yield .
No formal guidance: Visibility limited; monitoring Red Sea developments, de minimis scrutiny, and tariff policy changes is critical for rate/volume path and estimate revisions .
Near-term trading setup: Positive narrative around volume strength and efficiency improvement; watch for any signs of rate normalization that could pressure gross margins despite volume growth .
Medium-term thesis: Non-asset model, complexity advantage (customs/ancillary fees), and disciplined cost control position EXPD to compound through cycles; Asia exposure and tech-enabled productivity gains are key differentiators .

EXPEDITORS INTERNATIONAL OF WASHINGTON INC (EXPD)·Q3 2024 Earnings Summary