ARCBEST CORP /DE/

Previous wording

ArcBest Corporation™ (together with its subsidiaries, the “Company,” “ArcBest®,” “we,” “us,” and “our”) is a multibillion-dollar integrated logistics company that leverages technology and a full suite of solutions to meet our customers’ supply chain needs. Our operations are conducted through two reportable operating segments: Asset-Based, which consists of ABF Freight System, Inc. and certain other subsidiaries (“ABF Freight”); and Asset-Light, which includes MoLo Solutions, LLC (“MoLo”), Panther Premium Logistics®, and certain other subsidiaries. References to the Company, including “we,” “us,” and “our,” in this Quarterly Report on Form 10-Q, are primarily to the Company and its subsidiaries on a consolidated basis.

Current wording

ArcBest Corporation™ (together with its subsidiaries, the “Company,” “ArcBest®,” “we,” “us,” and “our”) is a multibillion-dollar integrated logistics company that leverages technology and a full suite of solutions across multiple modes of transportation to meet our customers’ supply chain needs. Our operations are conducted through two reportable operating segments: Asset-Based, which consists of ABF Freight System, Inc. and certain other subsidiaries (“ABF Freight”); and Asset-Light, which includes MoLo Solutions, LLC (“MoLo”), Panther Premium Logistics®, and certain other subsidiaries. References to the Company, including “we,” “us,” and “our,” in this Quarterly Report on Form 10-Q, are primarily to the Company and its subsidiaries on a consolidated basis.

Previous wording

Management’s Discussion and Analysis of Financial Condition and Results of Operations (“MD&A”) is provided to assist readers in understanding our financial performance during the periods presented and significant trends which may impact our future performance, including the principal factors affecting our results of operations, liquidity and capital resources, and critical accounting policies. This discussion should be read in conjunction with the accompanying quarterly unaudited consolidated financial statements and the related notes thereto included in Part I, Item 1 of this Quarterly Report on Form 10-Q and with our Annual Report on Form 10-K for the year ended December 31, 2024. Our 2024 Annual Report on Form 10-K includes additional information about significant accounting policies, practices, and the transactions that underlie our financial results, as well as a detailed discussion of the most significant risks and uncertainties to which our financial and operating results are subject.

Current wording

Management’s Discussion and Analysis of Financial Condition and Results of Operations (“MD&A”) is provided to assist readers in understanding our financial performance during the periods presented and significant trends which may impact our future performance, including the principal factors affecting our results of operations, liquidity and capital resources, and critical accounting policies. This discussion should be read in conjunction with the accompanying quarterly unaudited consolidated financial statements and the related notes thereto included in Part I, Item 1 of this Quarterly Report on Form 10-Q and in our Annual Report on Form 10-K for the year ended December 31, 2025. Our 2025 Annual Report on Form 10-K includes additional information about significant accounting policies, practices, and the transactions that underlie our financial results, as well as a detailed discussion of the most significant risks and uncertainties to which our financial and operating results are subject.

Previous wording

The following table reflects the Company’s consolidated results, including segment revenues and operating income (loss) from continuing operations:

Current wording

The following table reflects the Company’s consolidated results, including segment revenues and operating income (loss):

Previous wording

Our consolidated revenues decreased 1.4% and 4.4% for the three and nine months ended September 30, 2025, respectively, compared to the same prior year periods. The revenue decline is primarily attributable to lower market rates and for the nine months ended September 30, 2025, decreased shipment levels for our Asset-Light shipping and logistics services in a soft market environment, which resulted in decreases in our Asset-Light revenues of 7.6% and 10.5% for the three and nine months ended September 30, 2025, respectively. For our Asset-Based segment, higher shipment levels partially offset the impact of lower revenue per shipment for the third quarter of 2025, compared to the same prior year period. The year-over-year decline in consolidated revenues for the nine months ended September 30, 2025 also reflects a decrease in our Asset-Based revenues of 0.4%, compared to the same period of 2024, while consolidated revenues were positively impacted by an increase in Asset-Based revenues of 2.4% for the three months ended September 30, 2025. The elimination of intersegment revenues reported in the “Other and eliminations” line of consolidated revenues increased 7.1% and 9.2%, respectively, for the three and nine months ended September 30, 2025, compared to the same periods of 2024, reflecting year-over-year changes in intersegment business levels among our operating segments.

Current wording

Our consolidated revenues increased 3.3% for the three months ended March 31, 2026, compared to the same prior year period. The revenue improvement is primarily attributable to higher shipment levels, which resulted in increases in Asset‑Light revenues of 6.1% and Asset-Based revenues of 1.3% for the three months ended March 31, 2026, compared to the same period of 2025, offsetting the impact of lower revenue per shipment in our Asset-Light segment and lower billed revenue per hundredweight in our Asset-Based segment. The elimination of intersegment revenues reported in the “Other and eliminations” line of consolidated revenues decreased 3.3% for the three months ended March 31, 2026, compared to the same period of 2025, reflecting year-over-year changes in intersegment business levels among operating segments.

Previous wording

Asset-Based billed revenue per hundredweight, including fuel surcharges, decreased 1.1% and 0.9% for the three and nine months ended September 30, 2025, respectively, compared to the same prior year periods. The decreases were driven by a shift in freight profile, including fewer shipments in the manufacturing sector and the decrease in fuel surcharge revenue associated with lower fuel prices during the nine months ended September 30, 2025. Tonnage per day increased for the three and nine months ended September 30, 2025, compared to the same periods of 2024, supported by higher daily

Current wording

Asset-Based tonnage per day increased for the three months ended March 31, 2026, compared to the same period of 2025, supported by higher daily shipment volumes. This growth occurred despite rising fuel prices, continued geopolitical conflicts, and ongoing tariff volatility. Billed revenue per hundredweight, including fuel surcharges, decreased 3.9% for the three months ended March 31, 2026, compared to the same prior year period. The decrease was driven by a shift in freight profile, including heavier shipments, offset by the increase in fuel surcharge revenue associated with higher fuel prices during the three months ended March 31, 2026.

Previous wording

The decrease in revenues of our Asset-Light segment for the three and nine months ended September 30, 2025, compared to the same prior year periods, was impacted by a decline in revenue per shipment associated with soft market conditions, changes in business mix, and a decline in shipments per day versus the nine months ended September 30, 2024. Our Asset-Light segment generated approximately 33% and 34% of our total revenues before other revenues and intercompany eliminations for the three and nine months ended September 30, 2025, respectively, compared to 35% and 36% for the same periods of 2024.

Current wording

Higher shipment volumes in our Asset-Light segment for the three months ended March 31, 2026, compared to the same prior-year period, contributed to increased segment revenues; however, average revenue per shipment declined as a higher mix of managed transportation business, which typically carries smaller shipment sizes and lower revenue per shipment, more than offset the improved rates associated with tightening capacity and higher fuel costs. Our Asset-Light segment generated approximately 37% of total revenues before other revenues and intercompany eliminations for the three months ended March 31, 2026, compared to 36% for the same period of 2025.

Previous wording

Consolidated operating income declined year-over-year for both the three and nine months ended September 30, 2025, reflecting the decreases in revenues; increases in Asset-Based segment salaries, wages and benefits; and the reduction in the contingent earnout consideration accrual during the third quarter of 2024, offset by lower purchased transportation expense and lower employee costs in our Asset-Light segment. The year-over-year comparisons of consolidated operating income were also impacted by gains on sales of two service centers in our Asset-Based segment. Segment operating expenses are further described in the Asset-Based Segment Results and Asset-Light Segment Results sections of Results of Operations. In addition to the results of our operating segments, the year-over-year comparison of consolidated operating income was also impacted by items described in the following paragraphs.

Current wording

Consolidated operating income declined year-over-year for the three months ended March 31, 2026, primarily due to increases in Asset-Based segment salaries, wages and benefits and depreciation expense, which were partially offset by the increase in revenue.

Previous wording

We report our financial results in accordance with U.S. generally accepted accounting principles (“GAAP”). However, management believes that certain non-GAAP performance measures and ratios, such as Adjusted EBITDA, utilized for internal analysis provide analysts, investors, and others the same information that we use internally for purposes of assessing our core operating performance. These measures provide meaningful comparisons between current and prior period results, as well as important information regarding performance trends. Accordingly, using these measures improves comparability in analyzing our performance because it removes the impact of items from operating results that, in management’s opinion, do not reflect our core operating performance. Management uses Adjusted EBITDA as a key measure of performance and for business planning. The measure is particularly meaningful for analysis of our operating performance, because it excludes amortization of acquired intangibles and software of the Asset-Light segment and changes in the fair value of contingent earnout consideration and our equity investment, which are significant expenses or gains resulting from strategic decisions or other factors rather than core daily operations. Additionally, Adjusted EBITDA is a primary component of the financial covenants contained in our Fourth Amended and Restated Credit Agreement (see Note F to our consolidated financial statements included in Part I, Item 1 of this Quarterly Report on Form 10-Q). Other companies may calculate Adjusted EBITDA differently; therefore, our calculation of Adjusted EBITDA may not be comparable to similarly titled measures of other companies. Non-GAAP financial measures should be viewed in addition to, and not as an alternative for, our reported results. Adjusted EBITDA should not be construed as a better measurement than operating income, net income, or earnings per share, as determined under GAAP. The following table presents a reconciliation of Adjusted EBITDA to our net income from continuing operations, which is the most directly comparable GAAP measure for the periods presented.

Current wording

We report financial results in accordance with U.S. generally accepted accounting principles (“GAAP”). However, management believes that certain non-GAAP financial measures and ratios, such as Adjusted EBITDA, utilized internally to assess core performance offer analysts, investors, and others insights into performance trends by excluding items from operating results that management believes do not reflect our core operating performance. Adjusted EBITDA is used for business planning and as a key performance measure, particularly because it excludes certain significant expenses resulting from strategic decisions or other factors rather than core daily operations, such as amortization of acquired intangibles and software of the Asset-Light segment. Our calculation of Adjusted EBITDA may not be comparable to similarly titled measures of other companies as other companies may calculate Adjusted EBITDA differently. Non*‑*GAAP financial measures should be viewed in addition to, and not as an alternative for or better measurement than net income (loss), as determined under GAAP, which is the most directly comparable GAAP measure for the periods presented. The following table presents a reconciliation of Adjusted EBITDA to our net income (loss).

Previous wording

The Asset-Based segment consists of ABF Freight System, Inc., one of North America’s largest less-than-truckload (“LTL”) carriers and a wholly owned subsidiary of ArcBest Corporation, and certain other subsidiaries. Our customers trust the LTL solutions ABF Freight has provided for over a century and rely on our unwavering commitment to quality, safety, and customer service to solve their transportation challenges through market disruptions and rapidly changing economic conditions. We are strategically investing in our Asset-Based operations to utilize technology to drive efficiency and productivity. We are also committed to our deepening customer relationships to navigate challenges now and in the future.

Current wording

The Asset-Based segment consists of ABF Freight, one of North America’s largest less-than-truckload (“LTL”) carriers and a wholly owned subsidiary of the Company, and certain other subsidiaries. Our customers have relied on ABF Freight’s LTL solutions for over a century, trusting our unwavering commitment to quality, safety, and customer service to solve their transportation challenges, including through market disruptions and rapidly changing economic conditions. We are strategically investing in our Asset-Based operations to leverage technology that enhances efficiency and productivity, along with significant capital investments renovating and modernizing our service centers to strengthen our network infrastructure and support our operations.

Previous wording

Our Asset-Based operations are affected by general economic conditions, as well as a number of other competitive factors that are more fully described in Item 1 (Business) and in Item 1A (Risk Factors) of Part I of our 2024 Annual Report on Form 10-K. See Note I to our consolidated financial statements included in Part I, Item 1 of this Quarterly Report on Form 10-Q for a description of the Asset-Based segment and additional segment information, including revenues, operating expenses, and operating income for the three and nine months ended September 30, 2025 and 2024.

Current wording

Our Asset-Based operations are affected by general economic conditions, as well as a number of other competitive factors that are more fully described in Part I, Items 1 and 1A of our 2025 Annual Report on Form 10-K. See Note I to our consolidated financial statements included in Part I, Item 1 of this Quarterly Report on Form 10-Q for a description of the Asset-Based segment and additional segment information, including revenues, operating expenses, and operating income for the three months ended March 31, 2026 and 2025.

Previous wording

The key indicators necessary to understand the operating results of our Asset-Based segment are described in the Asset-Based Segment Overview within the Asset-Based Operations section of Results of Operations in Item 7 (MD&A) of Part II of our 2024 Annual Report on Form 10-K. These key indicators are used by management to evaluate segment operating performance and measure the effectiveness of strategic initiatives in the results of our Asset-Based segment. We quantify certain key indicators using key operating statistics, which are important measures in analyzing segment operating results from period to period.

Current wording

Key indicators necessary to understand the operating results of our Asset-Based segment are described in Part II, Item 7 of our 2025 Annual Report on Form 10-K. Management uses these key indicators and related operating statistics to evaluate segment performance and assess the effectiveness of strategic initiatives. These statistics are important measures in analyzing period-to-period segment operating results.

Previous wording

Other companies within our industry may present different key performance indicators or operating statistics, or they may calculate their measures differently; therefore, our key performance indicators or operating statistics may not be comparable to similarly titled measures of other companies. Key performance indicators or operating statistics should be viewed in addition to, and not as an alternative for, our reported results. Our key performance indicators or operating statistics should not be construed as better measurements of our results than operating income, operating cash flow, net income, or earnings per share, as determined under GAAP.

Current wording

Other companies in our industry may present different key performance indicators or operating statistics, or they may calculate their measures differently; therefore, our measures may not be comparable to similarly titled measures of other companies. These measures should be viewed in addition to, and not as an alternative for, our reported results, and should not be construed as better measurements of our results than operating income (loss), net income (loss), or earnings per share, as determined under GAAP.

Previous wording

As of September 2025, approximately 81% of our Asset-Based segment’s employees were covered under the ABF National Master Freight Agreement (“2023 ABF NMFA”), the collective bargaining agreement with the International Brotherhood of Teamsters (“IBT”), which will remain in effect through June 30, 2028. The terms of the 2023 ABF NMFA continue to provide some of the best wages and benefits in the industry to our contractual employees. The combined contractual wage and benefits top hourly rate is estimated to increase approximately 4.2% on a compounded annual basis over the term of the agreement, with potential profit-sharing bonuses representing additional costs under the 2023 ABF NMFA. The contractual wage rate under the 2023 ABF NMFA increased effective July 1, 2025, and the health, welfare, and pension benefit contribution rate increased, effective primarily on August 1, 2025, resulting in a combined contractual wage and benefits top hourly rate increase of approximately 2.9%.

Current wording

As of March 2026, approximately 81% of our Asset-Based segment’s employees were covered under the ABF National Master Freight Agreement (“2023 ABF NMFA”), the collective bargaining agreement and other related supplemental agreements with the International Brotherhood of Teamsters (the “IBT”), which will remain in effect through June 30, 2028. The terms of the 2023 ABF NMFA continue to provide some of the best wages and benefits in the industry to our contractual employees. The combined contractual wage and benefits top hourly rate is estimated to increase approximately 4.2% on a compounded annual basis over the term of the agreement, with potential profit-sharing bonuses representing additional costs under the 2023 ABF NMFA. The contractual wage rate under the 2023 ABF NMFA increased effective July 1, 2025, and the health, welfare, and pension benefit contribution rate increased, effective primarily on August 1, 2025, resulting in a combined contractual wage and benefits top hourly rate increase of approximately 2.9%.

Previous wording

The following table provides a comparison of key operating statistics for the Asset-Based segment, as previously defined in the 2024 Form 10-K Asset-Based Segment Overview section:

Current wording

The following table provides a comparison of key operating statistics for the Asset-Based segment, as previously defined in our 2025 Annual Report on Form 10-K:

Previous wording

Asset-Based segment revenues for the three and nine months ended September 30, 2025, totaled $726.5 million and $2,086.1 million, respectively, compared to $709.7 million and $2,093.9 million, for the same periods of 2024. The revenue increase for the three months ended September 30, 2025, compared to the prior year period, was driven by higher daily tonnage and shipment levels, which offset the impact of the lower billed revenue per hundredweight and weight per shipment. Billed revenue increased 1.2% on a per-day basis for the three months ended September 30, 2025, compared to the same period of 2024, due to a 2.3% increase in tonnage per day, offset partially by 1.1% decrease in billed revenue per hundredweight, including fuel surcharges. The decrease in revenue for the nine months ended September 30, 2025, compared to the prior year period, primarily reflects lower billed revenue per hundredweight and weight per shipment. Billed revenue decreased 0.1% on a per-day basis year-over-year for the nine months ended September 30, 2025, compared to the same prior year period, primarily reflecting a decrease in billed revenue per hundredweight, including fuel surcharges, due to changes in business mix as discussed further below, despite an increase in daily tonnage due to higher

Current wording

Asset-Based segment revenues for the three months ended March 31, 2026, totaled $655.0 million, compared to $646.3 million for the same period of 2025. The revenue increase for the three months ended March 31, 2026, compared to the prior year period, was driven by increases in daily tonnage, weight per shipment, and shipment levels, which offset

Previous wording

shipment levels. The number of workdays was greater by half of a day in the third quarter of 2025, versus the third quarter of 2024, and fewer by half of a day in the nine months ended September 30, 2025, versus the same period of 2024.

Current wording

the impact of the lower billed revenue per hundredweight. Billed revenue increased on a per-day basis for the three months ended March 31, 2026, compared to the same period of 2025, due to the increase in daily tonnage due to higher shipment levels, offset partially by the decrease in billed revenue per hundredweight, including fuel surcharges, due to an increase in weight per shipment and changes in freight profile as discussed further below. The number of workdays was fewer by half of a day in the first quarter of 2026, versus the first quarter of 2025.

Previous wording

The decrease in billed revenue per hundredweight, including fuel surcharges, for the three and nine months ended September 30, 2025, compared to the same periods of 2024, was driven by the shift in freight profile, and for the nine-month period, lower fuel surcharge revenue associated with lower fuel prices, partially offset by lower weight per shipment, which generally increases revenue per hundredweight. The pricing environment continues to be rational. Excluding the impact of fuel surcharges, billed revenue per hundredweight decreased in the low single digits for the three and nine months ended September 30, 2025, compared to the same periods of 2024. Prices on accounts subject to deferred pricing agreements and annually negotiated contracts that were renewed during the three and nine months ended September 30, 2025, both increased an average of 4.5%. The Asset-Based segment implemented nominal general rate increases on its LTL base rate tariffs of 5.9% effective on August 4, 2025, although the rate changes vary by lane and shipment characteristics.

Current wording

Billed revenue per hundredweight decreased for the three months ended March 31, 2026, compared to the same prior year period driven by the shift in freight profile and higher weight per shipment. This decline occurred despite higher fuel surcharge revenue from increased fuel prices. The pricing environment remains rational. Excluding the impact of fuel surcharges, billed revenue per hundredweight decreased in the low-to-mid-single digits for the three months ended March 31, 2026, compared to the same period of 2025. Prices on accounts subject to deferred pricing agreements and annually negotiated contracts that were renewed during the three months ended March 31, 2026, increased an average of 6.3%. The Asset-Based segment implemented nominal general rate increases on its LTL base rate tariffs of 5.9% effective on August 4, 2025, although the rate changes vary by lane and shipment characteristics.

Previous wording

For the three and nine months ended September 30, 2025, the Asset-Based segment’s average nominal fuel surcharge rate was in line with the same periods of 2024. During periods of changing diesel fuel prices, the fuel surcharge and associated direct diesel fuel costs also vary by differing degrees. Depending upon the rate of these changes and the impact on costs in other fuel- and energy-related areas, operating margins could be impacted. Whether fuel prices fluctuate or remain constant, operating results may be adversely affected if competitive pressures limit our ability to recover fuel surcharges. In periods of declining fuel prices, fuel surcharge percentages also decrease, which negatively impacts the total billed revenue per hundredweight measure and, consequently, revenues. The revenue decline may be disproportionate to the change in our fuel costs. The segment’s operating results will continue to be impacted by further changes in fuel prices and related fuel surcharges.

Current wording

The Asset-Based segment’s average nominal fuel surcharge rate increased approximately 4 percentage points on an absolute basis in the three-month period ended March 31, 2026, compared to the same period of 2025. The segment’s operating results are impacted by changes in fuel prices and related fuel surcharges. Operating results may be adversely affected if competitive pressures limit our ability to recover fuel surcharges. During periods of changing diesel fuel prices, the fuel surcharge and associated direct diesel fuel costs vary by differing degrees. In periods of declining fuel prices, fuel surcharge percentages also decrease, which negatively impacts the total billed revenue per hundredweight measure and, consequently, revenues. The revenue decline may be disproportionate to the change in our fuel costs, which could impact operating margins.

Previous wording

The Asset-Based segment generated operating income of $70.2 million and $147.6 million for the three and nine months ended September 30, 2025, respectively, compared to $64.0 million and $190.3 million, for the same periods of 2024. The Asset-Based segment’s operating ratio for the three and nine months ended September 30, 2025 was positively impacted by the gain on the sale of property and equipment of $15.9 million, including gains on two service center sales, which partially offset the decline in billed revenue per shipment despite the growth in shipment levels, compared to the respective 2024 periods.

Current wording

The Asset-Based segment generated operating income of $17.5 million for the three months ended March 31, 2026, compared to $26.4 million for the same period of 2025. The Asset-Based segment’s operating ratio for the three months ended March 31, 2026 was impacted by the total increase in operating expenses, partially offset by the increase in billed revenue per shipment, compared to the respective 2025 period.

Previous wording

Labor costs, which are reported in operating expenses as salaries, wages, and benefits, amounted to 51.0% and 51.8%, respectively, of Asset-Based segment revenues for the three- and nine-month periods ended September 30, 2025, compared to 50.5% and 50.4%, for the same periods of 2024. Salaries, wages, and benefits increased $11.7 million and $24.1 million, respectively, for the three and nine months ended September 30, 2025, compared to the same periods of 2024, primarily reflecting contract rate increases under the 2023 ABF NMFA, including a 2.4% wage rates increase on July 1, 2025, and a 3.6% health, welfare and benefits rates increase on August 1, 2025, for a blended increase of 2.9% in 2025, and an increase in headcount to align with higher shipment levels and increased tonnage. Workers’ compensation expenses also increased year-over-year for each period due to higher claims costs and increased retention levels. The increase in labor costs which also included the effect of rising healthcare costs during the three- and nine-month periods ending September 30, 2025, compared to the same periods of 2024, was partially offset by lower accruals of annual incentives in both periods, improved productivity, as measured by shipments per DSY hour, and by higher utilization of purchased transportation as discussed later in this section.

Current wording

Labor costs, which are reported in operating expenses as salaries, wages, and benefits, amounted to 54.2% of Asset-Based segment revenues for the three-month period ended March 31, 2026, compared to 53.2% for the same period of 2025. Salaries, wages, and benefits increased $11.0 million for the three months ended March 31, 2026, compared to the same period of 2025, primarily reflecting contract rate increases under the 2023 ABF NMFA, including a 2.4% wage rates increase on July 1, 2025, and a 3.6% health, welfare and benefits rates increase on August 1, 2025, for a blended increase of 2.9%, and increases in headcount to align with higher daily shipment levels and tonnage.

Previous wording

The Asset-Based segment manages costs with shipment levels; however, a number of factors impact DSY productivity, including the effect of freight profile and mix changes, utilization of local delivery agents, and efficiency of personnel. Shipments per DSY hour improved for the three and nine months ended September 30, 2025, compared to the same periods of 2024, primarily due to continued investments in technology and the Asset-Based network and ongoing training and development at certain key locations as the ABF Freight process compliance team continues to reinforce operational best practices throughout the Asset-Based network. For the three and nine months ended September 30, 2025, the year-over-year increase in pounds per mile of 0.9% and 1.0%, respectively, reflects an improvement in linehaul efficiency and an increase in the utilization of purchased transportation, partially offset by lower weight per shipment.

Current wording

The Asset-Based segment manages costs with shipment levels; however, a number of factors impact dock, street, and yard (“DSY”) productivity, including the effect of freight profile and mix changes, utilization of local delivery agents, and efficiency of personnel. Shipments per DSY hour declined for the three months ended March 31, 2026, compared to the same period of 2025, primarily due to severe weather and changes in freight profile, offsetting the positive impact from continued investments in technology and the Asset-Based network and ongoing training and development at certain key locations. For the three months ended March 31, 2026, the year-over-year increase in pounds per mile of 3.6% reflects an improvement in linehaul efficiency and increases in weight per shipment.

Previous wording

Depreciation and amortization as a percentage of revenue increased 1.0 percentage point and 0.8 percentage points for the three and nine months ended September 30, 2025, respectively, compared to the same periods of 2024, primarily due to increases in revenue equipment depreciation expense per unit as a result of increased equipment costs and due to recent service center renovations.

Current wording

Depreciation and amortization as a percentage of revenue increased 0.8 percentage points for the three months ended March 31, 2026, compared to the same period of 2025, primarily due to increases in revenue equipment depreciation expense per unit as a result of increased equipment costs and due to recent service center renovations.

Previous wording

Our Asset-Light segment is a key component of our strategy to offer a single source of integrated logistics solutions, designed to satisfy customers’ complex supply chain needs and unique shipping requirements. We are focused on growing and making strategic investments in our Asset-Light segment that enhance our service offerings and strengthen our customer relationships. Throughout our operations, we are seeking opportunities to expand our revenues by deepening existing customer relationships, securing new customers, and adding capacity options for our customers.

Current wording

Our Asset-Light segment is a key component of our strategy to provide customers with a single, integrated source of logistics solutions that satisfies increasingly complex supply chain requirements. Through strategic investments in our Asset-Light segment, we continue to enhance service offerings and improve productivity. Across the segment, we are seeking opportunities to expand our revenues by deepening existing customer relationships, securing new customers, and broadening capacity options available to shippers.

Previous wording

As supply chains become more complex, most shippers use a mix of modes to keep their supply chains moving, and our managed transportation solutions seamlessly connect these modes to build better supply chains. We continue to develop our managed transportation solutions as part of our strategic efforts to cross-sell our service offerings and meet the demand for services that increase operational efficiencies, reduce costs, and provide better supply chain visibility. We expect to benefit from this and other strategic initiatives as we continue to deliver innovative solutions to customers.

Current wording

As supply chains become more complex, shippers increasingly rely on multimodal solutions, and our managed transportation solution efficiently connects these modes to build resilient supply chains. The continued development of our managed transportation solution exemplifies our strategy to cross-sell services and meet the demand for services that improve operational efficiency, reduce costs, and enhance supply chain visibility. We expect these and other strategic initiatives to support future growth as we deliver innovative solutions to our customers.

Previous wording

Our Asset-Light operations are affected by general economic conditions, as well as several other competitive factors that are more fully described in Item 1 (Business) and in Item 1A (Risk Factors) of Part I of our 2024 Annual Report on Form 10-K. See Note I to our consolidated financial statements included in Part I, Item 1 of this Quarterly Report on Form 10-Q for descriptions of the Asset-Light segment and additional segment information, including revenues, operating expenses, and operating income (loss) for the three and nine months ended September 30, 2025 and 2024.

Current wording

Our Asset-Light operations are affected by general economic conditions, as well as several other competitive factors that are more fully described in Part I, Item 1 of our 2025 Annual Report on Form 10-K. See Note I to our consolidated financial statements included in Part I, Item 1 of this Quarterly Report on Form 10-Q for descriptions of the Asset-Light segment and additional segment information, including revenues, operating expenses, and operating income (loss) for the three months ended March 31, 2026 and 2025.

Previous wording

Key indicators are used by management to evaluate segment operating performance and measure the effectiveness of strategic initiatives in the results of our Asset-Light segment. The key indicators necessary to understand our Asset-Light segment operating results are outlined in the Asset-Light Segment Overview within the Asset-Light Operations section of Results of Operations in Item 7 (MD&A) of Part II of our 2024 Annual Report on Form 10-K. We quantify certain key indicators using key operating statistics which are important measures in analyzing segment operating results from period to period.

Current wording

Management uses key indicators to evaluate segment operating performance and measure the effectiveness of strategic initiatives in the results of our Asset-Light segment. The key indicators necessary to understand our Asset-Light segment operating results are outlined in the Asset-Light Segment Overview within the Asset-Light Operations section of Results of Operations in Part II, Item 7 of our 2025 Annual Report on Form 10-K. We quantify certain key indicators using key operating statistics which are important measures in analyzing segment operating results from period to period.

Previous wording

Other companies within our industry may present different key performance indicators or they may calculate their key performance indicators differently; therefore, our key performance indicators may not be comparable to similarly titled measures of other companies. Key performance indicators should be viewed in addition to, and not as an alternative for, our reported results. Our key performance indicators should not be construed as better measurements of our results than operating income, operating cash flow, net income, or earnings per share, as determined under GAAP.

Current wording

Other companies within our industry may present different key performance indicators or they may calculate their key performance indicators differently; therefore, our key performance indicators may not be comparable to similarly titled measures of other companies. Key performance indicators should be viewed in addition to, and not as an alternative for, our reported results. Our key performance indicators should not be construed as better measurements of our results than operating income (loss), net income (loss), or earnings per share, as determined under GAAP.

Previous wording

The following table provides a comparison of key operating statistics for the Asset-Light segment, as previously defined in the 2024 Form 10-K Asset-Light Segment Overview section:

Current wording

The following table provides a comparison of key operating statistics for the Asset-Light segment, as defined in our 2025 Annual Report on Form 10-K:

Previous wording

The Asset-Light segment operating loss totaled $1.6 million and $5.4 million for the three and nine months ended September 30, 2025, respectively, compared to operating income of $84.8 million and $60.0 million for the same periods of 2024. The year-over-year decline in operating results reflects lower revenues, along with changes in operating expenses discussed in the paragraphs below, including the impact of reductions in the contingent earnout consideration liability for the three and nine months ended September 30, 2024 of $91.9 million and $80.7 million, respectively.

Current wording

Asset-Light segment operating income totaled $0.2 million for the three months ended March 31, 2026, compared to operating loss of $4.4 million for the same period of 2025. The year-over-year improvement in operating results reflects higher revenues, along with changes in operating expenses discussed in the paragraphs below.

Previous wording

Purchased transportation costs as a percentage of revenue decreased 1.0 percentage point and 1.2 percentage points, respectively, for the three and nine months ended September 30, 2025, compared to the same prior year periods, reflecting reductions in purchased transportation costs for the three and nine months ended September 30, 2025 of $28.8 million and $119.0 million, respectively. Changes in market capacity impact the cost of purchased transportation and may not correspond to the timing of revisions to customer pricing and revenue per shipment. There can be no assurance that we will be able to secure prices from our customers that will allow us to maintain or improve our margins on the cost of sourcing carrier capacity.

Current wording

Purchased transportation costs as a percentage of revenue increased 0.6 percentage points for the three months ended March 31, 2026, compared to the same prior year period, reflecting an increase in purchased transportation costs of $21.1 million year-over-year. Changes in market capacity, fuel cost, and freight mix impact the cost of purchased transportation and may not correspond to the timing of revisions to customer pricing and revenue per shipment. There can be no assurance that we will be able to secure prices from our customers that will allow us to maintain or improve our margins on the cost of sourcing carrier capacity.

Previous wording

Salaries, wages, and benefits decreased $5.2 million and $15.4 million, respectively, and as a percentage of revenue, decreased 0.8 percentage points and 0.6 percentage points for the three and nine months ended September 30, 2025, respectively, compared to the same prior year periods, as the segment continued efforts to align staffing levels with business levels. Shipments per employee per day improved 32.6% and 23.6%, respectively, for the three and nine months ended September 30, 2025, compared to the same prior year periods, as a result of these efforts, combined with changes in business mix and technology advancements from digital roadmap initiatives.

Current wording

Salaries, wages, and benefits decreased $2.8 million and as a percentage of revenue, decreased 1.2 percentage points for the three months ended March 31, 2026, compared to the same prior year period, as the segment aligned staffing levels with business levels and improved efficiencies. Shipments per employee per day improved for the three months ended March 31, 2026, compared to the same prior year period, as a result of these efforts, combined with changes in business mix and technology advancements from digital enhancements.

Previous wording

We report our financial results in accordance with GAAP. However, management believes that certain non-GAAP performance measures and ratios, such as Asset-Light Adjusted EBITDA, which is utilized for internal analysis, provide analysts, investors, and others the same information that we use internally for purposes of assessing our core operating performance and provides meaningful comparisons between current and prior period results, as well as important information regarding performance trends. The use of certain non-GAAP measures improves comparability in analyzing our performance because it removes the impact of items from operating results that, in management’s opinion, do not reflect our core operating performance. Management uses Asset-Light Adjusted EBITDA as a key measure of performance and for business planning. This measure is particularly meaningful for analysis of our Asset-Light segment, because it excludes amortization of acquired intangibles and software and changes in the fair value of contingent earnout consideration, which are significant expenses or gains resulting from strategic decisions or other factors rather than core daily operations. Management also believes Asset-Light Adjusted EBITDA to be relevant and useful information, as EBITDA is a standard measure commonly reported and widely used by analysts, investors, and others to measure financial performance of asset-light businesses and the ability to service debt obligations. Other companies may calculate adjusted EBITDA differently; therefore, our calculation of Asset-Light Adjusted EBITDA may not be comparable to similarly titled measures of other companies. Non-GAAP financial measures should be viewed in addition to, and not as an alternative for, our reported results. Asset-Light Adjusted EBITDA should not be construed as a better measurement than operating income (loss), as determined under GAAP.

Current wording

We report financial results in accordance with GAAP. However, management believes that certain non-GAAP financial measures and ratios, such as Asset-Light Adjusted EBITDA, utilized internally to assess core performance offer analysts, investors, and others insights into performance trends by excluding items from operating results that management believes do not reflect our core operating performance. Asset-Light Adjusted EBITDA is used for business planning and as a key performance measure, particularly because it excludes certain significant expenses resulting from strategic decisions or other factors rather than core daily operations, such as amortization of acquired intangibles and software. Management also believes Asset-Light Adjusted EBITDA to be relevant and useful, as EBITDA is a standard measure commonly reported and widely used by analysts, investors, and others to measure financial performance of asset*‑*light businesses. Our calculation of Asset-Light Adjusted EBITDA may not be comparable to similarly titled measures of other companies as other companies may calculate adjusted EBITDA differently. Non-GAAP financial measures should be viewed in addition to, and not as an alternative for or better measurement than operating income (loss), as determined under GAAP.

Previous wording

The U.S. economy continued to expand during third quarter 2025 after rebounding in the second quarter. In response to signs of economic softening, the Federal Reserve cut interest rates by 25 basis points in both September and October, which generally results in increased consumer spending and business investment. However, shifting trade and tariff policies along with persistent inflation, elevated interest rates, supply chain disruptions, and a slowing labor market, continue to affect business confidence and contribute to stock market volatility.

Current wording

The U.S. economy continued to expand during the first quarter of 2026. Shifting trade and tariff policies, persistent but moderating inflation, elevated interest rates, ongoing supply chain disruptions, and a slowing labor market continue to affect business confidence and contribute to market volatility. Geopolitical conflicts present uncertain and potentially increasing economic impacts in 2026. Certain economic factors stabilized or improved during the first quarter of 2026.

Previous wording

Although we secured increases on deferred pricing agreements and annually negotiated contracts during the three and nine months ended September 30, 2025, there can be no assurance that the economic environment, including the impact of interest rates on consumer demand, will be favorable for our freight services in future periods.

Current wording

Although we secured increases on deferred pricing agreements and annually negotiated contracts during the three months ended March 31, 2026, there can be no assurance that the economic environment, including the impact of interest rates on consumer demand, or fluctuations in fuel costs, will be favorable for our freight services in future periods.

Previous wording

Given the uncertainties of current economic conditions, there can be no assurance that our estimates and assumptions regarding the pricing environment and economic conditions, which are made for purposes of impairment tests related to operating assets and deferred tax assets, will prove to be accurate. Extended periods of economic disruption and resulting declines in industrial production and manufacturing and consumer spending could negatively impact demand for our services and have an adverse effect on our results of operations, financial condition, and cash flows. The soft freight environment and increased mix of managed transportation shipments contributed to a year-over-year decline in revenue per shipment for our Asset-Light segment during the three and nine months ended September 30, 2025, compared to the same periods of 2024. There can be no assurance that we will be able to secure adequate prices from new business or from our existing customers to maintain or improve our operating results. Significant declines in our business levels or other changes in cash flow assumptions or other factors that negatively impact the fair value of the operations of our reporting units could result in impairment and a resulting noncash write-off of a significant portion of the goodwill and intangible assets of our Asset-Light segment, which would have an adverse effect on our financial condition and operating results.

Current wording

services and have an adverse effect on our results of operations, financial condition, and cash flows. Changes in fuel prices can significantly affect our operating expenses, and while we strive to offset these costs through fuel surcharges and pricing strategies, sustained increases may still impact our margins and overall financial performance. There can be no assurance that we will be able to secure adequate prices from new or existing customers to maintain or improve our operating results. Significant declines in our business levels or other changes in cash flow assumptions or other factors that negatively impact the fair value of the operations of our reporting units could result in impairment and a resulting noncash write-off of a significant portion of the goodwill and intangible assets of our Asset-Light segment, which would have an adverse effect on our financial condition and operating results.

Previous wording

Inflation remains above the Federal Reserve’s long-term target inflation rate of 2%. Elevated costs across a broad array of consumer goods continue to be driven by global supply chain volatility and labor and energy shortages, in addition to the impact of federal monetary policy. The consumer price index (“CPI”) increased 3.0%, before seasonal adjustment, year-over-year in September 2025 following a 0.3% rise from August 2025. While CPI has declined from the level reached in June 2022 due to market response to the Federal Reserve’s tighter monetary policy implemented in March 2022, recent CPI readings continue to indicate an ongoing challenge in achieving the Federal Reserve’s target inflation rate. Most of our expenses are affected by inflation. While an increase in inflation generally results in increased operating costs, there can be no assurances of the impact of inflationary conditions on our business, including demand for our transportation services.

Current wording

Inflation remains above the Federal Reserve’s long-term target inflation rate of 2%. Elevated costs across a broad array of consumer goods continue to be driven by global supply chain volatility and labor and energy shortages, in addition to the impact of federal monetary policy. The consumer price index increased 3.3%, before seasonal adjustment, year-over-year in March 2026 following a 0.9% rise from February 2026. Most of our expenses are affected by inflation. While an increase in inflation generally results in increased operating costs, the potential impact of inflationary conditions on our business, including demand for our transportation services, remains uncertain.

Previous wording

Generally, inflationary increases in labor and operating costs related to our Asset-Light operations have historically been offset through price increases. Productivity improvements as measured by shipments per employee per day and disciplined cost management have helped mitigate the impact of rising operating costs. The pricing environment, however, generally becomes more competitive during economic downturns, which may, as it has in the past, affect the ability to obtain price increases from customers both during and following such periods. The pricing environment remains competitive, and we believe that Asset-Light pricing has stabilized at the bottom of the truckload market cycle. The impact of excess capacity in the truckload market continued in first nine months of 2025, however, carriers are slowly exiting the market driven by prolonged economic pressures as demand remains weak and margins have thinned.

Current wording

Generally, inflationary increases in labor and operating costs related to our Asset-Light operations have historically been offset through price increases and efficiency. Productivity improvements, as measured by shipments per employee per day, and disciplined cost management have helped mitigate the impact of rising operating costs. The pricing environment, however, generally becomes more competitive during economic downturns, which may, as it has in the past, affect the ability to obtain price increases from customers both during and following such periods. The pricing environment remains competitive, and we believe that Asset-Light pricing has stabilized at the bottom of the truckload market cycle. Tightening capacity in the truckload market during the first quarter of 2026 led to higher spot rates as carriers continue to slowly exit the market driven by prolonged economic pressures. However, demand remains weak and margins thin.

Previous wording

The market continues to adjust to the impact of supply chain disruptions and recent changes in trade and tariff policy. The prices for our revenue equipment (tractors and trailers) used in our business operations have increased partly as a result of inflationary pressures and will likely continue to be replaced at higher per-unit costs, which could result in higher depreciation charges on a per-unit basis. We consider these costs in setting our pricing policies, although the overall freight rate structure is governed by market forces. In addition to general effects of inflation, the motor carrier freight transportation industry continues to face rising costs related to insurance claims, compliance with government regulations on safety, equipment design and maintenance, driver utilization, emissions, and fuel economy.

Current wording

The market continues to adjust to the impact of supply chain disruptions, including as a result of geopolitical conflicts and changes in trade and tariff policies. The prices for our revenue equipment (tractors and trailers) have also increased, partly as a result of inflationary pressures, and will very likely continue to be replaced at higher per-unit costs, which could result in higher depreciation charges on a per-unit basis. We consider these costs in setting our pricing policies, although the overall freight rate structure is governed by market forces. In addition to general effects of inflation, the motor carrier freight transportation industry faces rising costs related to insurance claims, compliance with government regulations on safety, equipment design and maintenance, driver utilization, emissions, and fuel economy.

Previous wording

Physical effects from climate change, including more frequent and severe weather events, have the potential to adversely impact our business levels and employee working conditions, cause shipping delays or disruption to our operations, increase our operating costs, and cause damage to our property and equipment. Due to the uncertainty of these matters, we cannot estimate the impact of climate-related developments on our operations or financial condition at this time. These and other matters related to climate change and the related risks to our business are further discussed in Part I, Item 1 (Business) and Part I, Item 1A (Risk Factors) of our 2024 Annual Report on Form 10-K. We continue our commitment to advance sustainability issues that are critical to our business and our customers’ businesses by investing in innovative technologies, developing our employees, and enhancing our capabilities and services for customers.

Current wording

increase our operating costs, and cause damage to our property and equipment. Due to the uncertainty of these matters, we cannot estimate the effect of any future climate-related developments on our operations or financial condition at this time. These and other matters related to climate change and the related risks to our business are further discussed in Part I, Item 1 and Item 1A of our 2025 Annual Report on Form 10-K. We continue to advance sustainability initiatives by investing in innovative technologies, developing our employees, and enhancing our capabilities and services for customers.

Previous wording

We are involved in various legal actions, the majority of which arise in the ordinary course of business. We maintain liability insurance against certain risks arising out of the normal course of our business, subject to certain self-insured retention limits. We routinely establish and review the adequacy of reserves for estimated legal, environmental, and self‑insurance exposures. While management believes that amounts accrued in the consolidated financial statements are adequate, estimates of these liabilities may change as circumstances develop. Considering amounts recorded, routine legal matters are not expected to have a material adverse effect on our financial condition, results of operations, or cash flows. See Note J to our consolidated financial statements included in Part I, Item 1 of this Quarterly Report on Form 10‑Q for further discussion of the legal matters in which we are currently involved.

Current wording

We are involved in various legal actions, the majority of which arise in the ordinary course of business. We maintain liability insurance against certain risks arising out of the normal course of our business, subject to certain self-insured retention limits. We routinely establish and review the adequacy of reserves for estimated legal, environmental, and self-insurance exposures. While management believes that amounts accrued in the consolidated financial statements are adequate, estimates of these liabilities may change as circumstances develop. Considering amounts recorded, routine legal matters are not expected to have a material adverse effect on our financial condition, results of operations, or cash flows.