Cargojet (CJT) Q2 2025 earnings summary

Executive summary

• Renewed long-term contracts with Amazon (to 2031) and DHL (to 2033, with options to 2037), reinforcing strategic partnerships and growth opportunities.

• Total revenues rose 3.2% year-over-year to $238.2 million, driven by 14% growth in Domestic and 22% in Charter revenues.

• Domestic network posted 14% year-over-year revenue growth in Q2, driven by strong e-commerce demand across all major customers.

• Charter business grew 22% year-over-year, highlighting the stickiness and expansion of new trade lanes.

• Management remains optimistic about resilience and growth despite global trade uncertainties and economic headwinds.

Financial highlights

• Adjusted EBITDA margin reached 33.7% in Q2, up 140 basis points sequentially from Q1.

• Adjusted EBITDA increased 1.4% to $80.2 million, with a 140 basis-point sequential margin improvement.

• Adjusted net earnings more than doubled to $15.7 million, up 124.3% year-over-year.

• 704,533 shares repurchased for $73 million under NCIB, including $1.4 million in buyback tax.

• Year-to-date free cash flow was $118.4 million, but free cash flow turned negative at ($72.5) million in the quarter due to higher capital expenditures.

Outlook and guidance

• Expectation for stronger performance in all segments (domestic, ACMI, charter) in the back half of the year, with typical seasonality and a solid peak season anticipated.

• ACMI block hours and charter revenues are expected to recover and grow in Q3 and Q4.

• EU-US trade deal expected to reopen corridor, generating new ACMI and charter opportunities in coming quarters.

• Continued focus on cost management and productivity to deliver shareholder value in any economic cycle.

• Ongoing rationalization of costs and capital expenditures to generate cash and strengthen customer relationships.