Cintas
CTAS · NasdaqMargin gain came from cost of revenue, not overhead
Cost of revenue grew 8.1% against revenue growth of 10.9%, so gross margin widened 1.27 points while selling costs held their share.
Q1 FY2027, the quarter to Aug 31, 2026 (Cintas's fiscal 2027 ends in May 2027) · 10-Q filed Oct 7, 2026
- Operating margin
- 23.6%
- Net income
- $551.7M
- Free cash flow, quarter
- $464.8M
Largest source of revenue: Uniform Rental and Facility Services, 76.1% of the total.
Where Cintas's money goes
- 01
Margin gain came from cost of revenue, not overhead
Cost of revenue grew 8.1% against revenue growth of 10.9%, so gross margin widened 1.27 points while selling costs held their share.
Why it matters
Gross profit rose 13.7% to $1.55B, and gross margin reached 51.5% against 50.3% a year earlier. Selling and administrative expenses grew 10.5%, almost exactly in step with revenue, and stayed at 27.4% of revenue against 27.5%. Operating income grew 15.2% to $711.9M and operating margin rose 0.89 points to 23.6%.1
The filing attributes the improvement to 'more efficient usage of in-service inventory, strategic sourcing initiatives, efficiency gains and improved leverage of fixed costs.' In the rental segment, cost of revenue was $1.13B, 49.2% of the segment's $2.29B revenue, and that cost includes the amortization of uniforms, mats and towels in service.1
The operating margin gain came after absorbing $14.4M of UniFirst transaction expenses, 0.48% of revenue and 2.0% of operating income. The filing books them in a corporate line, outside the segments, so the segments' own margins widened by more than the consolidated figure shows.1
AnalysisAnalysis: a gain built on using rented stock longer and buying it better has natural limits, since garments wear out and customers notice worn stock. The test in later quarters is whether cost of revenue keeps growing slower than revenue once these practices are fully in place.
- 02
First aid grows fastest and earns the highest margin
First Aid and Safety grew 14.2% organically, against 8.0% for uniform rental, and its 25.6% segment margin is above the rental core's 25.1%.
Why it matters
First Aid and Safety Services earned $99.5M of operating income on $388.5M of revenue, a 25.6% margin. Uniform Rental and Facility Services earned $575.1M on $2.29B, a 25.1% margin. First aid is 12.9% of revenue but 14.0% of operating income.1
The filing attributes first aid's growth to new business sold by sales representatives, penetration of additional products and services into existing customers, price increases and strong customer retention, and its wider gross margin to a favorable sales mix, efficiency gains and strategic sourcing.1
The wider non-uniform group is shifting the mix: other revenue grew 14.7% to $719.2M, with organic growth of 11.9%, and rose 0.79 points to 23.9% of total revenue.1
AnalysisAnalysis: first aid is sold into the same accounts the rental routes already serve, so its growth needs little new customer acquisition. If its faster growth persists, more of the company's profit would depend on sourcing and restocking products than on laundering garments.
- 03
Cash flow outran profit, partly on timing
Free cash flow reached $464.8M against $312.5M a year earlier while net income rose 12.3%, and the filing credits part of it to working capital.
Why it matters
Operating cash flow was $572.3M against $414.5M a year earlier, while net income was $551.7M against $491.1M, so operating cash flow reached 1.04 times net income. Capital spending was $107.5M, 3.6% of revenue and 18.8% of operating cash flow, leaving free cash flow of $464.8M, 15.4% of revenue against 11.5% a year earlier.1
The filing attributes the change to higher net income and favorable working capital, specifically accounts payable, accrued liabilities and income taxes, partly offset by prepaid expenses and other current assets and by accounts receivable.1
The same quarter a year earlier was the weakest of that year for cash: free cash flow of 11.5% of revenue, against 16.7% for the full year, when free cash flow was $1.88B on revenue of $11.26B. This quarter's 15.4% sits close to that full-year level.1
AnalysisAnalysis: payables, accruals and taxes owed tend to move back, so part of this quarter's jump is timing rather than a new level of cash generation. The steadier gauge is free cash flow as a share of revenue across the full year, while the company also funds buybacks, a higher dividend and the pending UniFirst purchase.
- 04
A higher tax rate trimmed the profit gain
Pre-tax income rose 15.8%, but the effective tax rate climbed to 20.0% from 17.6%, so net income grew a slower 12.3%.
Why it matters
Income taxes rose 31.8% to $138.1M on pre-tax income of $689.8M, an effective rate of 20.0% against 17.6% a year earlier. The filing says both periods were moved by discrete items, mainly the tax accounting for stock-based compensation.1
Diluted earnings per share rose to $1.36 from $1.20, and the dividend declared rose to $0.52 per share from $0.45. The filing says earnings per share rose primarily because of the increase in net income.1
AnalysisAnalysis: the stock-compensation effect depends on the share price and on when employees exercise options, so the tax rate can swing between quarters for reasons unrelated to how the business runs. Operating income is the cleaner read of the quarter's performance.
Sources
- 1.Cintas 10-Q for the period to 2026-08-31 (the filing), Oct 7, 2026, read Nov 2, 2026
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Growth, profit and margin
Revenue went from $3.8B in FY2009 to $11.3B in FY2026, the operating margin from 10.8% to 23.1%, over 17 years.
- Revenue$11.3B
- Operating income$2.6B
- Operating margin23.1%
- Period
- Q1 FY2027
- Revenue
- $3.0B
- Operating income
- $711.9M
- Operating margin
- 23.6%
- Net income
- $551.7M
- Free cash flow
- $464.8M
Does the profit turn into cash?
Q1 FY2027: free cash flow of $464.8M against net income of $551.7M in the quarter.
- Operating cash flow$2.3B
- Capital expenditure$395.1M
- Free cash flow$1.9B
- Net income$2.0B
Capital expenditure is drawn below the axis as cash out. Cash conversion is operating cash flow over net income, shown in the tooltip for years with a profit.
Financial data and sources
How the revenue mix has shifted
Each breakdown the filing reports, as shares of revenue, for every period it restates.
CONSOLIDATED CONDENSED STATEMENTS OF INCOME. The filing restates this breakdown for 1 period.
Click a member to isolate it across the years shown.
The figures
Margins, cash and growth for the period, each with what it was computed from.
Where revenue comes from
Every breakdown the filing reports for the period, with each item's share.
Revenue streams
| Uniform Rental and Facility Services | $2.3B | 76.1% |
| Other | $719.2M | 23.9% |
Segments
| Uniform Rental and Facility Services | $2.3B | 76.1% |
| First Aid and Safety Services | $388.5M | 12.9% |
| Fire Protection Services | $252.3M | 8.4% |
| Uniform Direct Sales | $78.4M | 2.6% |
ConsolidationItems
| Operating Segments | $2.3B | 76.1% |
| Corporate | $0 | 0.0% |
These items do not sum to total revenue; the filing states them beside it. Source10-Q, us-gaap:RevenueFromContractWithCustomerExcludingAssessedTax, as reported in the 10-Q filed 2026-10-07
What it costs
The cost lines beneath operating income, each as a share of revenue, then the operating result.
Costs are reported by function: what it cost to make what was sold, then the expenses of selling, developing and administering.
| Cost line | Q1 FY2027 | Of revenue | Source |
|---|---|---|---|
| Cost of revenue | $1.5B | 48.5% | Source10-Q, us-gaap:CostOfRevenue, as reported in the 10-Q filed 2026-10-07 |
| Operating income | $711.9M | 23.6% | Source10-Q, us-gaap:OperatingIncomeLoss, as reported in the 10-Q filed 2026-10-07 |
Operating income by segment
Where the operating profit is earned, as the filing reports it.
Segments
| Uniform Rental and Facility Services | $575.1M | 80.8% |
| First Aid and Safety Services | $99.5M | 14.0% |
| All Other | $51.7M | 7.3% |
Shares of operating income. The segments do not sum to the total; the filing states them beside it. Source10-Q, us-gaap:OperatingIncomeLoss, as reported in the 10-Q filed 2026-10-07
Operating figures the company states
From the text of the filing rather than its statements, each with the sentence that states it.
View source
The organic revenue growth rate, which adjusts for the impact of acquisitions, workday differences and foreign currency exchange rate fluctuations, was 8.9%.
View source
The organic revenue growth rate for the reportable operating segment was 14.2%.
View source
The organic revenue growth rate for other revenue was 11.9%.
View source
The organic revenue growth rate for the reportable operating segment was 8.0%.
The statements, as filed
The income statement, cash flow statement and balance sheet in the company's own order and words. Every line links to the filing.
Income statement17 lines, as presented in the 10-Q
Cash flow statement28 lines, as presented in the 10-Q
Year to date, as a quarterly filing reports it.
Balance sheet32 lines, as presented in the 10-Q
About this data
- Source
- Cintas 10-Q, accession 0000723254-26-000047, filed Oct 7, 2026, read on Nov 2, 2026.
- History
- From the SEC's XBRL company facts, the value from the latest filing that stated each period.
- Reading
- Paragraphs marked Analysis are CXProWealth's reading; everything else is the filing's own numbers and words, or a cited source.
- Version
- methodology business-lens-1.0 · schema 1.2.0 · run business-lens-2026-11-02
What holds Cintas's model up, and what could bend it
Competitive edge
Rental route earns 80.8% of operating profit
Uniform Rental and Facility Services is 76.1% of revenue but 80.8% of operating income, earning a 25.1% margin on its own sales.
The detail
The segment earned $575.1M of the company's $711.9M operating income. The filing says nearly all revenue comes from fees for route servicing performed by a Cintas employee-partner at the customer's location, with the service period matching the monthly invoice.1
AnalysisAnalysis: the truck, the driver's time and the plant behind a route are largely fixed, so each added item on a stop and each added customer on a street brings revenue with little added cost. That is the leverage of fixed costs the filing names, and it is hard for a rival without similar route density to match.
Margins have widened year after year, not just this quarter
Operating margin rose from 16.4% in the earliest year shown to 23.1% in the latest full year, as revenue grew from $6.89B to $11.26B.
The detail
Operating margin has risen in every full year since the second year shown, and gross profit grew from $3.13B to $5.71B over the same span, faster than revenue. This quarter's 23.6% operating margin and 51.5% gross margin extend that line.1
Free cash flow grew from $791.1M to $1.88B over the same years, while capital spending stayed between $143.5M and $409.5M a year.1
AnalysisAnalysis: a margin that widens across years with very different cost conditions points to scale built into the route network, rather than a single cost cut that cannot repeat.
What to watch
UniFirst deal is pending and already costs money
The UniFirst acquisition has not closed, faces an FTC Second Request, and put $14.4M of expenses into this quarter's operating income.
The detail
The FTC issued a Second Request, both companies certified substantial compliance, and they agreed with the FTC not to close before a set date in December unless the FTC ends its review earlier. Cintas says it expects the deal to close before the end of the calendar year, subject to closing conditions.1
The filing lists the deal's risks: it may not close when expected or at all, regulators may impose conditions that hurt the combined company, integration may fail or cost more than planned, the new Cintas shares issued in the deal dilute existing holders, and management's attention is diverted from the business.1
AnalysisAnalysis: UniFirst runs the same kind of route business, so the deal's value rests on folding its routes into Cintas' density without carrying more selling and administrative cost per dollar of revenue. That ratio, 27.4% this quarter, is the line to watch if the deal closes.
Fuel, labor and materials would hit the line that improved
The quarter's gain came from cost of revenue falling to 48.5% of sales, the line the filing's named cost risks would push back up.
The detail
The filing lists energy and fuel, materials and labor including medical costs, higher sourcing or distribution costs, supply chain constraints, tariffs and other limits on trade, and inflationary pressures among the factors that could move results.1
So far the numbers show none of it: cost of revenue grew 8.1% against revenue growth of 10.9% and fell 1.27 points to 48.5% of revenue.1
AnalysisAnalysis: price increases are among the growth drivers the filing names. If costs rose faster than prices could follow, the first sign would be cost of revenue growing faster than revenue, which would undo the source of this quarter's margin gain.
Growth rests on new accounts, retention and price
Organic growth was 8.9%, and the filing credits new business, added products, price increases and retention, each exposed to the demand risks it lists.
The detail
The filing lists lower sales volumes, loss of customers due to outsourcing trends, and competitors' reactions on price and service among the factors that could move results. Organic growth was 8.0% in the rental segment and 14.2% in First Aid and Safety.1
AnalysisAnalysis: rental revenue scales with the number of people in uniform at customer sites, so slower hiring by customers would reach Cintas as fewer wearers per account, and price increases hold only as far as competitors and customers allow.
Sources
- 1.Cintas 10-Q for the period to 2026-08-31 (the filing), Oct 7, 2026, read Nov 2, 2026
Cintas, further in
Member research, then your own questions on ChatGPT.
What could change the outlook
What Cintas's numbers depend on from here, read from the filing: the conditions behind this period's margins and growth, and where a change would show first.
- How long can the gross margin keep widening?
What the quarter's cost gains rest on, which of them can repeat, and the signals in later filings that would show the lever reaching its limit.
- What UniFirst would change in Cintas' numbers
How the deal's cash, new shares and integration costs would flow through margins, cash flow and per-share results, and which lines to read first if it closes.
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Have a question about Cintas?
Explore its profit drivers, competitive edge, risks, or your own investment and business questions with CXProWealth on ChatGPT.
- How much of Cintas' gross margin gain came from using in-service garments more efficiently, and how far can that go?
- Why does Cintas' First Aid and Safety segment earn a higher margin than uniform rental, and what if it keeps growing faster?
- How much of Cintas' jump in operating cash flow this quarter was working capital timing rather than higher profit?
Business Lens describes Cintas from its own filings with the SEC. It is not a view on its shares, a target, or advice to buy, sell or hold anything; figures are as filed and may be restated by the company later. The filing, the dates and the version are under the financial data above.