Leasing services company GATX (NYSE: GATX) reported Q4 CY2025 results beating Wall Street’s revenue expectations, with sales up 8.6% year on year to $449 million. Its non-GAAP profit of $2.44 per share was 0.7% above analysts’ consensus estimates.

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Company Overview

Originally founded to ship beer, GATX (NYSE: GATX) provides leasing and management services for railcars and other transportation assets globally.

Revenue Growth

Examining a company’s long-term performance can provide clues about its quality. Any business can put up a good quarter or two, but the best consistently grow over the long haul. Thankfully, GATX’s 7.6% annualized revenue growth over the last five years was decent. Its growth was slightly above 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. GATX’s annualized revenue growth of 11.1% over the last two years is above its five-year trend, suggesting its demand recently accelerated.

GATX also discloses its number of active railcars, which reached 100,593 in the latest quarter. Over the last two years, GATX’s active railcars were flat. Because this number is lower than its revenue growth during the same period, we can see the company’s monetization has risen.

This quarter, GATX reported year-on-year revenue growth of 8.6%, and its $449 million of revenue exceeded Wall Street’s estimates by 0.9%.

Looking ahead, sell-side analysts expect revenue to grow 33.6% over the next 12 months, an improvement versus the last two years. This projection is eye-popping and implies its newer products and services will fuel better top-line performance.

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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.

GATX has been a well-oiled machine over the last five years. It demonstrated elite profitability for an industrials business, boasting an average operating margin of 29.5%. This result isn’t surprising as its high gross margin gives it a favorable starting point.

Analyzing the trend in its profitability, GATX’s operating margin rose by 14.3 percentage points over the last five years, as its sales growth gave it immense operating leverage.

This quarter, GATX generated an operating margin profit margin of 55%, up 25.2 percentage points year on year. The increase was solid, and because its operating margin rose more than its gross margin, we can infer it was more efficient with expenses such as marketing, R&D, and administrative overhead.

Earnings Per Share

Revenue trends explain a company’s historical growth, but the long-term change in earnings per share (EPS) points to the profitability of that growth – for example, a company could inflate its sales through excessive spending on advertising and promotions.

GATX’s EPS grew at a spectacular 15.7% compounded annual growth rate over the last five years, higher than its 7.6% annualized revenue growth. This tells us the company became more profitable on a per-share basis as it expanded.

We can take a deeper look into GATX’s earnings to better understand the drivers of its performance. As we mentioned earlier, GATX’s operating margin expanded by 14.3 percentage points over the last five years. This was the most relevant factor (aside from the revenue impact) behind its higher earnings; interest expenses and taxes can also affect EPS but don’t tell us as much about a company’s fundamentals.

Like with revenue, we analyze EPS over a shorter period to see if we are missing a change in the business.

For GATX, its two-year annual EPS growth of 10.9% was lower than its five-year trend. We still think its growth was good and hope it can accelerate in the future.

In Q4, GATX reported adjusted EPS of $2.44, up from $1.93 in the same quarter last year. This print was close to analysts’ estimates. Over the next 12 months, Wall Street expects GATX’s full-year EPS of $8.75 to grow 14.1%.

Key Takeaways from GATX’s Q4 Results

We were impressed by how significantly GATX blew past analysts’ EBITDA expectations this quarter. We were also happy its revenue narrowly outperformed Wall Street’s estimates. Overall, we think this was a solid quarter with some key areas of upside. The stock remained flat at $190.35 immediately following the results.

GATX put up rock-solid earnings, but one quarter doesn’t necessarily make the stock a buy. Let’s see if this is a good investment. 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).