Pangaea Logistics (NASDAQ: PANL) reported Q2 CY2025 results topping the market’s revenue expectations, with sales up 19.2% year on year to $156.7 million. Its non-GAAP loss of $0.02 per share was in line with analysts’ consensus estimates.

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"Our focused execution and flexible business model continued to deliver premium TCE returns during the second quarter," stated Mark Filanowski, Chief Executive Officer of Pangaea Logistics Solutions.

Company Overview

Established in 1996, Pangaea Logistics (NASDAQ: PANL) specializes in global logistics and transportation services, focusing on the shipment of dry bulk cargoes.

Revenue Growth

Reviewing a company’s long-term sales performance reveals insights into its quality. Any business can experience short-term success, but top-performing ones enjoy sustained growth for years. Unfortunately, Pangaea’s 6.9% annualized revenue growth over the last five years was mediocre. This was below our standard for the industrials sector and is a poor baseline for our analysis.

We at StockStory place the most emphasis on long-term growth, but within industrials, a half-decade historical view may miss cycles, industry trends, or a company capitalizing on catalysts such as a new contract win or a successful product line. Pangaea’s recent performance shows its demand has slowed as its annualized revenue growth of 3.2% over the last two years was below its five-year trend. We also note many other Marine Transportation businesses have faced declining sales because of cyclical headwinds. While Pangaea grew slower than we’d like, it did do better than its peers.

This quarter, Pangaea reported year-on-year revenue growth of 19.2%, and its $156.7 million of revenue exceeded Wall Street’s estimates by 21.2%.

Looking ahead, sell-side analysts expect revenue to grow 4.4% over the next 12 months, similar to its two-year rate. While this projection suggests its newer products and services will spur better top-line performance, it is still below average for the sector.

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Operating Margin

Pangaea has managed its cost base well over the last five years. It demonstrated solid profitability for an industrials business, producing an average operating margin of 10.4%. 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.

Looking at the trend in its profitability, Pangaea’s operating margin decreased by 2.2 percentage points over the last five years. Many Marine Transportation companies also saw their margins fall (along with revenue, as mentioned above) because the cycle turned in the wrong direction. We hope Pangaea can emerge from this a stronger company, as the silver lining of a downturn is that market share can be won and efficiencies found.

This quarter, Pangaea generated an operating margin profit margin of 2.3%, down 3.5 percentage points year on year. Since Pangaea’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.

Pangaea’s unimpressive 7.4% annual EPS growth over the last five years aligns with its revenue performance. This tells us it maintained its per-share profitability as it expanded.

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

Pangaea’s two-year annual EPS declines of 41.1% were bad and lower than its 3.2% two-year revenue growth.

Diving into the nuances of Pangaea’s earnings can give us a better understanding of its performance. Pangaea’s operating margin has declined by 4.3 percentage points over the last two yearswhile its share count has grown 41.9%. This means the company not only became less efficient with its operating expenses but also diluted its shareholders.

In Q2, Pangaea reported adjusted EPS at negative $0.02, down from $0.10 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 Pangaea’s full-year EPS of $0.36 to grow 46.7%.

Key Takeaways from Pangaea’s Q2 Results

We were impressed by how significantly Pangaea blew past analysts’ revenue expectations this quarter. We were also glad its EPS outperformed Wall Street’s estimates. Zooming out, we think this was a solid print. The stock remained flat at $4.85 immediately following the results.

Indeed, Pangaea had a rock-solid quarterly earnings result, but is this stock a good investment here? If you’re making that decision, you should consider the bigger picture of valuation, business qualities, as well as the latest earnings. We cover that in our actionable full research report which you can read here, it’s free.