ARCBEST CORP /TX/

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 shipping and logistics solutions across multiple modes of transportation to meet 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 connected technology, flexible capacity, and a full suite of shipping and logistics solutions across multiple modes of transportation to meet 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, the Company’s logistics operations. 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

In July 2026, the Company announced a restructuring plan designed to realign our operating structure, reduce costs and simplify brand architecture through a series of organizational changes designed to create a more seamless customer experience and position the Company for long-term growth and profitability. Effective August 1, 2026, the MoLo® Panther® brands and certain other subsidiaries will operate under the ArcBest® brand. The series of organizational changes included the discontinuation of Vaux Freight Movement System, as the Company focuses Vaux operations on the Vaux Smart Autonomy product offering. During the second quarter of 2026, the Company recorded asset impairment charges of $25.7 million to write off the remaining carrying value of the indefinite-lived Panther trade name and $50.8 million in asset impairment charges related to the discontinuation of the Vaux Freight Movement System.

Current wording

In July 2026, the Company announced a restructuring plan to realign our operating structure, reduce costs and simplify brand architecture, create a more seamless customer experience, and position the Company for long-term growth and profitability. Effective August 1, 2026, the Company unified the MoLo® and Panther® brands and certain other subsidiaries under the ArcBest® brand. The organizational changes included the immediate discontinuation of the Vaux Freight Movement System, as the Company focuses on the Vaux Autonomy™ product offering. During the second quarter of 2026, the Company recorded asset impairment charges of $25.7 million to write off the remaining carrying value of the indefinite-lived Panther trade name and $50.8 million related to the discontinuation of the Vaux Freight Movement System.

Previous wording

These actions also include a reduction of approximately 2% of total positions through workforce reductions and the elimination of certain open positions, as well as the proposed closure of ten ABF Freight service centers, which represent approximately 1% of our network doors. The consolidation of service centers constitutes a change of operations under our collective bargaining agreement (the “2023 ABF NMFA”) with the International Brotherhood of Teamsters (the “IBT”) and closure is subject to approval by the joint union-management Change of Operations Committee pursuant to the terms of the 2023 ABF NMFA. The Company evaluated the remaining restructuring actions for impairment and does not currently expect additional material impairment charges related to the restructuring plan. During the second quarter of 2026, the Company recorded $2.2 million of restructuring charges for severance and related costs included in operating expenses. The Company currently expects to record approximately $4.0 million of additional restructuring charges during the third quarter related to this restructuring plan. We expect these measures to improve operational efficiency and generate approximately $40.0 million in annualized run-rate cost savings while maintaining ArcBest’s commitment to premium service.

Current wording

The restructuring plan eliminates approximately 2% of the Company’s total positions through workforce reductions and the elimination of certain open positions and includes the closure of ten ABF Freight service centers, collectively representing approximately 1% of our network doors. The service center consolidations constituted a change of operations under our collective bargaining agreement (the “2023 ABF NMFA”) with the International Brotherhood of Teamsters (the “IBT”). The joint union-management Change of Operations Committee approved the consolidations pursuant to the 2023 ABF NMFA, and the closures are expected to be completed during the fourth quarter of 2026. The Company evaluated the remaining restructuring actions for impairment and does not currently expect additional material impairment charges related to the restructuring plan. During the three and nine months ended September 30, 2026, the Company recorded $4.3 million and $6.5 million, respectively, of restructuring charges for severance and related costs, which were included in operating expenses.

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 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.

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 related notes thereto included in Part I, Item 1 of this Quarterly Report on Form 10-Q and in the audited consolidated financial statements and related notes thereto included 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

Our consolidated revenues increased 15.9% for the three months ended June 30, 2026 and 9.8% for the six months ended June 30, 2026, compared to the same prior-year periods. The revenue increase is primarily attributable to higher fuel prices, improved market rates, and for our Asset-Light segment, higher shipment levels. Consolidated revenues for the three months ended June 30, 2026 were positively impacted by increases in Asset-Light revenues of 28.3% and Asset-Based revenues of 9.9%, compared to the same period of 2025. For the six months ended June 30, 2026, Asset-Light revenues increased 17.0% while Asset-Based revenues increased 5.8%, compared to the corresponding prior-year periods. Asset-Based billed revenue per day increased 9.3% for the three months ended June 30, 2026 and 6.1% for the six months ended June 30, 2026, primarily due to increases in billed revenue per hundredweight, including fuel surcharges, and weight per shipment in both periods of 2026 when compared to the same periods of 2025. The elimination of intersegment revenues reported in the “Other and eliminations” line of consolidated revenues increased 15.6% for the three-month period ended June 30, 2026 and 5.8% for the six-month period ended June 30, 2026, compared to the same periods of 2025, reflecting year-over-year changes in intersegment business levels among operating segments.

Current wording

Our consolidated revenues increased 15.5% for the three months ended September 30, 2026 and 11.7% for the nine months ended September 30, 2026, compared to the same prior-year periods. The increases were primarily attributable to improved market rates, higher fuel prices, and for our Asset-Light segment, higher shipment levels. For the three months ended September 30, 2026, Asset-Light revenues increased 25.4% and Asset-Based revenues increased 9.9%, compared to the same period of 2025. For the nine months ended September 30, 2026, Asset-Light revenues increased 19.8% while Asset-Based revenues increased 7.2%, compared to the corresponding prior-year period. Asset-Based billed revenue per day increased 10.8% for the three months ended September 30, 2026 and 7.7% for the nine months ended September 30, 2026, primarily due to increases in billed revenue per hundredweight, including fuel surcharges, and weight per shipment in both periods of 2026 when compared to the same periods of 2025. The elimination of intersegment revenues reported in the “Other and eliminations” line of consolidated revenues increased 7.5% for the three-month period ended September 30, 2026 and 6.4% for the nine-month period ended September 30, 2026, compared to the same periods of 2025, reflecting year-over-year changes in intersegment business levels.

Previous wording

Asset-Based tonnage per day increased for the three and six months ended June 30, 2026, compared to the same periods of 2025, supported by higher weight per shipment. This tonnage growth occurred despite lower daily shipment volumes and ongoing uncertainty associated with geopolitical conflicts and tariff volatility. Billed revenue per hundredweight, including fuel surcharges, increased 4.2% for the three months ended June 30, 2026 and 0.3% for the six months ended June 30, 2026, compared to the same prior year periods. These increases were primarily driven by higher fuel surcharge revenue resulting from increased fuel prices during the three- and six-month periods ended June 30, 2026, partially offset by a shift in freight profile toward heavier shipments, which generally reduces billed revenue per hundredweight.

Current wording

Asset-Based tonnage per day increased for the three and nine months ended September 30, 2026, compared to the same periods of 2025, supported by higher weight per shipment. This tonnage growth occurred despite lower daily shipment volumes and ongoing uncertainty associated with geopolitical conflicts and tariff volatility. Billed revenue per hundredweight, including fuel surcharges, increased for the three and nine months ended September 30, 2026, compared to the same prior-year periods. These increases were primarily driven by higher fuel surcharge revenue resulting from increased fuel prices during the three- and nine-month periods ended September 30, 2026, partially offset by a shift in freight profile toward heavier shipments, which generally reduces billed revenue per hundredweight.

Previous wording

Higher shipment volumes and an increase in average revenue per shipment in our Asset-Light segment for the three and six months ended June 30, 2026, compared to the same prior-year periods, contributed to increased segment revenues. Improved rates associated with tightening capacity and higher fuel cost more than offset a higher mix of managed transportation business, which typically carries smaller shipment sizes and lower revenue per shipment. Our Asset-Light segment generated approximately 36% of total revenues before other revenues and intercompany eliminations for the three and six months ended June 30, 2026, compared to 32% and 34% for the same respective periods of 2025.

Current wording

An increase in average revenue per shipment and higher shipment volumes in our Asset-Light segment for the three and nine months ended September 30, 2026, compared to the same prior-year periods, contributed to increased segment revenues. Improved rates associated with tightening capacity and higher fuel costs more than offset a higher mix of managed logistics business, which typically carries smaller shipment sizes and lower revenue per shipment. Our Asset-Light segment generated approximately 36% of total revenues before other revenues and intercompany eliminations for the three and nine months ended September 30, 2026, compared to 33% and 34% for the same respective periods of 2025.

Previous wording

The Company recognized noncash asset impairment charges totaling $85.3 million during the second quarter of 2026, including $50.8 million related to the write-off of certain Freight Movement System assets associated with Vaux, $25.7 million to write off the remaining carrying value of the indefinite-lived Panther trade name as part of the strategic brand consolidation decision, and $8.8 million in lease-related impairment charges associated with the probable sublease of a portion of leased office space. Asset impairment charges reduced operating results by $85.3 million (pre-tax), or $64.2 million (after-tax), and $2.86 per diluted share for both the three and six months ended June 30, 2026. These asset impairment charges are further described within Notes B and C, to our consolidated financial statements included in Part I, Item 1 of this Quarterly Report on Form 10-Q.

Current wording

The Company recognized noncash asset impairment charges totaling $85.3 million during the second quarter of 2026, including $50.8 million related to the write-off of certain Freight Movement System assets associated with Vaux®, $25.7 million to write off the remaining carrying value of the indefinite-lived Panther trade name as part of a strategic brand consolidation decision, and $8.8 million in lease-related impairment charges associated with certain leased office space. Asset impairment charges reduced operating results by $85.3 million (pre-tax), or $64.2 million (after-tax) and $2.86 per diluted share for the nine months ended September 30, 2026. These asset impairment charges are further described within Notes B, C, and E to our consolidated financial statements included in Part I, Item 1 of this Quarterly Report on Form 10-Q.

Previous wording

Restructuring charges, as previously described, reduced operating results by $2.2 million (pre-tax), or $1.6 million (after-tax), and $0.07 per diluted share for both the three and six months ended June 30, 2026.

Current wording

Restructuring charges, as previously described, reduced operating results by $4.3 million (pre-tax), or $3.2 million (after-tax) and $0.14 per diluted share for the third quarter of 2026 and $6.5 million (pre-tax), or $4.9 million (after-tax) and $0.22 per diluted share for the nine months ended September 30, 2026.

Previous wording

Consolidated operating results benefited from the sale of a service center during the second quarter of 2026, which resulted in a gain of $2.9 million (pre-tax), or $2.2 million (after-tax) and $0.10 per diluted share for both the three and six months ended June 30, 2026.

Current wording

Consolidated operating results benefited from the sales of certain properties. These sales resulted in a gain of $2.9 million (pre-tax), or $2.2 million (after-tax) and $0.10 per diluted share for the nine months ended September 30, 2026, compared to net gains of $15.7 million (pre-tax), or $11.8 million (after-tax) and $0.52 and $0.51 per diluted share for the three and nine months ended September 30, 2025, respectively.

Previous wording

During the second quarter of 2025, the Company reduced the contingent earnout consideration liability for the MoLo acquisition to zero as the earnout calculation did not meet the then-current projections which indicated that the adjusted earnings before interest, taxes, depreciation, and amortization threshold for the 2025 earnout period would not be achieved. This quarterly remeasurement of the contingent earnout consideration increased operating results by $2.7 million (pre-tax), or $2.0 million (after-tax) and $0.09 per diluted share for the three and six months ended June 30, 2025.

Current wording

During the second quarter of 2025, the Company reduced the contingent earnout consideration liability for the MoLo acquisition to zero as the earnout calculation did not meet the then-current projections which indicated that the adjusted earnings before interest, taxes, depreciation, and amortization threshold for the 2025 earnout period would not be achieved. This quarterly remeasurement of the contingent earnout consideration increased operating results by $2.7 million (pre-tax), or $2.0 million (after-tax) and $0.09 per diluted share for the nine months ended September 30, 2025.

Previous wording

In addition to the above items, the year-over-year changes in consolidated net income and earnings per share were impacted by changes in the cash surrender value of variable life insurance policies, tax benefits from the vesting of share-based compensation awards, and other changes in the effective tax rate as described within the Income Taxes section of MD&A. A portion of our variable life insurance policies have investments, through separate accounts, in equity and fixed income securities and, therefore, are subject to market volatility. Changes in the cash surrender value of life insurance policies, which are reported below the operating income line in the consolidated statements of operations, increased consolidated net income by $2.5 million, or $0.11 per diluted share, and $1.8 million, or $0.08 per diluted share, for the three and six months ended June 30, 2026, respectively, compared to $1.4 million, or $0.06 per diluted share, and $0.7 million, or $0.03 per diluted share, for the same respective prior-year periods. The vesting of restricted stock units resulted in a tax benefit of $1.3 million, or $0.06 per diluted share, and $1.4 million, or $0.06 per diluted share, for the three and six months ended June 30, 2026, respectively, compared to a tax expense of $1.0 million, or $0.04 per diluted share, for both the three and six months ended June 30, 2025, respectively.

Current wording

In addition to the above items, the year-over-year changes in consolidated net income and earnings per share were impacted by changes in the cash surrender value of variable life insurance policies, tax effects from the vesting of share-based compensation awards, and other changes in the effective tax rate described in the Income Taxes section of MD&A. Certain variable life insurance policies are invested, through separate accounts, in equity and fixed income securities and, therefore, are subject to market volatility. Changes in the cash surrender value of life insurance policies, which are reported below operating income in the consolidated statements of operations, increased consolidated net income by $2.0 million, or $0.09 per diluted share, and $3.8 million, or $0.17 per diluted share, for the three and nine months ended September 30, 2026, respectively, compared to $2.3 million, or $0.10 per diluted share, and $3.1 million, or $0.13 per diluted share, for the same respective prior-year periods. The vesting of restricted stock units resulted in a tax benefit of $1.5 million, or $0.07 per diluted share, for the nine months ended September 30, 2026 compared to a tax expense of $1.0 million, or $0.04 per diluted share, for the same prior-year period. A small number of restricted stock units vested during the three months ended September 30, 2026 and 2025, resulting in an immaterial tax benefit and an immaterial tax expense, respectively.

Previous 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, asset impairment charges, and changes in the fair value of contingent consideration. 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).

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 interest and other financing costs, income taxes, depreciation and amortization, share-based compensation expense, and certain significant expenses resulting from strategic decisions or other factors rather than core daily operations, such as amortization of acquired intangibles of the Asset-Light segment, asset impairment charges, and changes in the fair value of contingent consideration. 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, 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.

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 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 and six months ended June 30, 2026 and 2025.

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 and nine months ended September 30, 2026 and 2025.

Previous 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.

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, net income, or earnings per share, as determined under GAAP.

Previous wording

As of June 2026, approximately 81% of our Asset-Based segment’s employees were covered under the 2023 ABF NMFA and other related supplemental agreements with 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%.

Current wording

As of September 2026, approximately 82% of our Asset-Based segment’s employees were covered under the 2023 ABF NMFA and other related supplemental agreements with 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, 2026, and the health, welfare, and pension benefit contribution rate increased, effective primarily on August 1, 2026, resulting in a combined contractual wage and benefits top hourly rate increase of approximately 3.2%.

Previous wording

Asset-Based segment revenues for the three and six months ended June 30, 2026, totaled $783.7 million and $1,438.7 million, respectively, compared to $713.3 million and $1,359.6 million for the same periods of 2025. Revenue growth for the three and six months ended June 30, 2026 was driven by higher daily tonnage and billed revenue per hundredweight, including fuel surcharges, which more than offset the impact of lower shipment levels and resulted in higher billed revenue on a per-day basis compared to the prior-year periods. The tonnage increase was driven by a higher weight per shipment, reflecting a continued shift in profile, partially offset by fewer shipments per day, while the increase in billed revenue per hundredweight was primarily due to higher fuel surcharge revenue resulting from increased fuel prices. The number of workdays remained the same in the second quarter of 2026 and decreased by one-half day in the first half of 2026, compared to the same respective periods of 2025.

Current wording

Asset-Based segment revenues for the three and nine months ended September 30, 2026, totaled $798.6 million and $2,237.3 million, respectively, compared to $726.5 million and $2,086.1 million for the same periods of 2025. Revenue growth for both 2026 periods was driven by higher daily tonnage and billed revenue per hundredweight, including fuel surcharges, which more than offset lower shipment levels and resulted in higher billed revenue per day. The tonnage increase was driven by higher weight per shipment, reflecting a continued shift in freight profile, partially offset by fewer shipments per day. The increase in billed revenue per hundredweight was primarily due to higher fuel surcharge revenue resulting from increased fuel prices. The number of workdays was unchanged in the third quarter of 2026 and was lower by one-half day for the nine months ended September 30, 2026, compared to the same respective periods of 2025.

Previous wording

The pricing environment remained rational. Excluding fuel surcharges, billed revenue per hundredweight decreased in the low-single digits for the six months ended June 30, 2026, compared to the same period of 2025 but remained consistent when comparing second quarter 2026 to second quarter 2025. Prices on accounts subject to deferred pricing agreements and annually negotiated contracts that were renewed during the three and six months ended June 30, 2026, increased an average of 5.8% and 6.1%, respectively. The Asset-Based segment implemented nominal general rate increases on its LTL base rate tariffs of 5.9% effective on August 4, 2025 and June 22, 2026, although the rate changes vary by lane and shipment characteristics.

Current wording

The pricing environment remained rational. Excluding fuel surcharges, billed revenue per hundredweight decreased in the low-single digits for the three and nine months ended September 30, 2026, compared to the same periods of 2025. Prices on accounts subject to deferred pricing agreements and annually negotiated contracts that were renewed during the three and nine months ended September 30, 2026, increased an average of 5.1% and 5.8%, respectively. The Asset-Based segment implemented nominal general rate increases on its LTL base rate tariffs of 5.9% effective on August 4, 2025 and June 22, 2026, although the rate changes vary by lane and shipment characteristics.

Previous wording

The Asset-Based segment’s average nominal fuel surcharge rate increased by approximately 18 percentage points for the second quarter of 2026 and 11 percentage points in the first half of 2026, compared to the same periods 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.

Current wording

The Asset-Based segment’s average nominal fuel surcharge rate increased by approximately 17 percentage points for the third quarter of 2026 and 13 percentage points for the nine months ended September 30, 2026, compared to the same periods 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.

Previous wording

The Asset-Based segment generated operating income of $74.3 million in the second quarter of 2026, compared to $51.0 million in the prior-year quarter, and $91.7 million in the six months ended June 30, 2026, compared to $77.4 million in the same prior-year period. The Asset-Based segment’s operating ratio for the three and six months ended June 30, 2026 reflected the benefit of increased billed revenue per shipment, partially offset by higher operating expenses, compared to the respective 2025 periods.

Current wording

The Asset-Based segment generated operating income of $75.6 million in the third quarter of 2026, compared to $70.2 million in the prior-year quarter, and $167.3 million in the nine months ended September 30, 2026, compared to $147.6 million in the same prior-year period. The Asset-Based segment’s operating ratio for both 2026 periods benefited from increased billed revenue per shipment, partially offset by higher operating expenses. The 2025 periods included $15.7 million in net gains on the sales of property and equipment, including gains on two service center sales.

Previous wording

Labor costs, which are reported in operating expenses as salaries, wages, and benefits, increased $8.2 million for the three months ended June 30, 2026 and $19.2 million for the six months ended June 30, 2026, compared to the corresponding 2025 periods, primarily reflecting contract rate increases under the 2023 ABF NMFA, including a 2.4% wage rate increase

Current wording

Labor costs, which are reported in operating expenses as salaries, wages, and benefits, increased $13.6 million for the three months ended September 30, 2026 and $32.8 million for the nine months ended September 30, 2026, compared to the corresponding 2025 periods, primarily reflecting contract rate increases under the 2023 ABF NMFA, including a 2.4% wage rate increase effective July 1, 2026, and a 4.3% increase in health, welfare and pension rates effective primarily on

Previous wording

effective July 1, 2025, and a 3.6% increase in health, welfare and pension rates effective August 1, 2025, for a blended increase of 2.9%, and increases in headcount to align with higher tonnage. Labor costs decreased as a percentage of revenue in both 2026 periods, compared to the corresponding 2025 periods, primarily due to higher revenues.

Current wording

August 1, 2026, for a blended increase of 3.2%, and increases in headcount to align with higher tonnage. Labor costs decreased as a percentage of revenue in both 2026 periods, compared to the corresponding 2025 periods, primarily due to higher revenues.

Previous wording

Fuel, supplies, and expenses increased $18.0 million, or 1.2 percentage points as a percentage of revenue, in the second quarter of 2026 and $21.9 million, or 0.8 percentage points, in the first six months of 2026, compared to the same prior-year periods, as the segment’s average fuel price per gallon (excluding taxes) increased approximately 68% and 40% during the three- and six-month periods ended June 30, 2026, respectively, compared to the same periods of 2025.

Current wording

Fuel, supplies, and expenses increased $20.3 million, or 1.5 percentage points as a percentage of revenue, in the third quarter of 2026 and $42.2 million, or 1.1 percentage points, for the nine months ended September 30, 2026, compared to the same prior-year periods, as the segment’s average fuel price per gallon (excluding taxes) increased approximately 68% and 50% during the three- and nine-month periods ended September 30, 2026, respectively, compared to the same periods of 2025.

Previous 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 and six months ended June 30, 2026, compared to the same period of 2025, primarily due to changes in freight profile and mix, offsetting the positive impact from continued investments in technology and in the Asset-Based network, and ongoing training and development at certain key locations. The six-month period was also affected by severe weather experienced in the first quarter of 2026. Pounds per mile increased 1.2% for the three months ended June 30, 2026 and 2.3% for the six months ended June 30, 2026, compared to the respective periods of 2025, reflecting an improvement in linehaul efficiency and increases in 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 changes, utilization of local delivery agents, and efficiency of personnel. Shipments per DSY hour declined for the three and nine months ended September 30, 2026, compared to the same periods of 2025, primarily due to changes in freight profile, offset in part by the positive impact from continued investments in technology and in the Asset-Based network and ongoing training and development at certain key locations. The nine-month period was also affected by severe weather experienced in the first quarter of 2026. Pounds per mile increased 6.6% for the three months ended September 30, 2026 and 3.8% for the nine months ended September 30, 2026, compared to the respective periods of 2025, reflecting increased weight per shipment and improved linehaul efficiency.

Previous wording

Rents and purchased transportation as a percentage of revenue increased 0.8 percentage points for the three months ended June 30, 2026 and 0.4 percentage points for the six months ended June 30, 2026, compared to the same periods of 2025, primarily due to higher rail fuel surcharge cost per mile from increased utilization of rail and linehaul purchased transportation. Rail miles increased approximately 3% in the second quarter of 2026 and 1% in the first half of 2026, compared to the same 2025 periods.

Current wording

Rents and purchased transportation as a percentage of revenue increased 0.4 percentage points for both the three and nine months ended September 30, 2026, compared to the same periods of 2025. These costs increased $11.7 million in the third quarter of 2026 and $27.1 million for the nine months ended September 30, 2026, compared to the same prior-year periods, primarily due to higher rail fuel surcharge costs per mile and increased utilization of rail and linehaul purchased transportation. Rail miles increased approximately 4% in the third quarter of 2026 and 2% in the nine months ended September 30, 2026, compared to the same 2025 periods.

Previous wording

As supply chains become more complex, shippers increasingly rely on multimodal solutions, and our managed transportation solution efficiently connects these modes to help 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.

Current wording

As supply chains become more complex, shippers increasingly rely on multimodal solutions. Our managed logistics solution efficiently connects these modes to help build resilient supply chains. Its continued development exemplifies our strategy to cross-sell services and meet demand for solutions 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 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 and six months ended June 30, 2026 and 2025.

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

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 (loss), net income (loss), 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, or earnings per share, as determined under GAAP.

Previous wording

Asset-Light segment revenues increased 28.3% to $438.7 million for the three months ended June 30, 2026, from $341.9 million in the prior-year period, and increased 17.0% to $816.5 million for the six months ended June 30, 2026, from $697.9 million in the prior-year period. Revenue growth was driven by higher average daily shipments, led by growth in managed solutions, and increased revenue per shipment. Revenue per shipment improvement was driven by higher spot rates amid tightening truckload capacity and rising fuel costs, reflecting a shift in the freight environment conditions following an extended period of freight market softness.

Current wording

Asset-Light segment revenues increased 25.4% to $446.3 million for the three months ended September 30, 2026 from $356.0 million in the prior-year period. Revenues increased 19.8% to $1,262.7 million for the nine months ended September 30, 2026 from $1,053.9 million in the prior-year period. Revenue growth was driven by increased revenue per shipment and higher average daily shipments, led by growth in our managed logistics business. The increase in revenue per shipment was driven by higher spot rates amid tightening truckload capacity and rising fuel costs, reflecting a shift in the freight environment following an extended period of market softness.

Previous wording

Asset-Light segment operating loss totaled $31.3 million for the three months ended June 30, 2026, including $34.5 million of asset impairment charges and $0.7 million of restructuring charges recorded during second quarter 2026, compared to operating income of $0.6 million for the prior-year period. Asset-Light segment operating loss totaled $31.1 million for the six months ended June 30, 2026, compared to $3.8 million for the same prior-year period. The year-over-year decrease in operating results also reflects higher operating expenses, discussed in the paragraphs below, including increased purchased transportation costs associated with higher shipment volumes.

Current wording

Asset-Light segment operating income totaled $12.5 million for the three months ended September 30, 2026, compared to an operating loss of $1.6 million for the prior-year period. Asset-Light segment operating loss totaled $18.7 million for the nine months ended September 30, 2026, including $34.5 million of asset impairment charges and $0.9 million of restructuring charges, compared to an operating loss of $5.4 million for the same prior-year period. Operating results reflected revenue growth, disciplined cost management, and productivity improvements, partially offset by higher year-over-year operating expenses, including increased purchased transportation costs associated with higher shipment volumes, discussed in the paragraphs below.

Previous wording

Operating expenses increased $128.7 million, or 7.3 percentage points as a percentage of revenue, during the second quarter 2026, and $145.8 million, or 3.3 percentage points as a percentage of revenue in the six months ended June 30, 2026, compared to the same prior year periods of 2025. The increase included $34.5 million of asset impairment charges and $0.7 million of restructuring charges recorded during the second quarter of 2026. The asset impairment charges represented 7.9 percentage points of revenue for the three months ended June 30, 2026, and 4.2 percentage points of revenue for the six months ended June 30, 2026. Additional information regarding the impairment charges is included in Notes B and C to the consolidated financial statements in Part I, Item 1 of this Quarterly Report on Form 10-Q.

Current wording

Operating expenses increased $76.3 million in the third quarter of 2026, compared to the third quarter of 2025, primarily due to higher business levels. As a percentage of revenue, operating expenses decreased 3.2 percentage points, primarily due to higher revenue. For the nine months ended September 30, 2026, operating expenses increased $222.1 million, or 1.0 percentage point as a percentage of revenue, compared to the same prior-year period. The increase primarily reflected higher business levels and included $34.5 million of asset impairment charges and $0.9 million of restructuring charges recorded during the nine months ended September 30, 2026. The asset impairment charges represented 2.7 percentage points of revenue for the nine months ended September 30, 2026. Additional information regarding the impairment charges is included in Notes B, C and E to the consolidated financial statements in Part I, Item 1 of this Quarterly Report on Form 10-Q.

Previous wording

Purchased transportation costs increased $90.7 million, or 2.1 percentage points as a percentage of revenue for the three months ended June 30, 2026 and $111.8 million, or 1.3 percentage points as a percentage of revenue for six months ended June 30, 2026, compared to the same prior year periods. Increases primarily reflect higher purchased transportation costs associated with higher fuel costs driven by rising diesel prices, as well as increased shipment volumes. 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 customers sufficient to maintain or improve margins on the cost of sourcing carrier capacity.

Current wording

Purchased transportation costs increased $76.9 million, or 0.1 percentage points as a percentage of revenue, for the three months ended September 30, 2026 and $188.7 million, or 0.9 percentage points as a percentage of revenue for the nine months ended September 30, 2026, compared to the same prior-year periods. The increase in purchased transportation costs, including as a percentage of revenue, primarily reflected higher fuel costs driven by rising diesel prices, as well as increased shipment volumes and tightening capacity. Changes in market capacity, fuel costs, 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 customers sufficient to maintain or improve margins on the cost of sourcing carrier capacity.

Previous wording

Salaries, wages, and benefits decreased as a percentage of revenue by 0.9 percentage points for both the three and six months ended June 30, 2026, compared with the same prior year periods, reflecting primarily the impact of higher revenues. Shipments per employee per day improved 35.3% for the three months ended June 30, 2026, and 30.6%, for the six months ended June 30, 2026, compared to the same prior year periods, as a result of efforts to align staffing levels with business levels and improve efficiencies, combined with changes in business mix and technology advancements from digital enhancements.

Current wording

Salaries, wages, and benefits decreased as a percentage of revenue by 1.5 percentage points for the three months ended September 30, 2026 and 1.1 percentage points for the nine months ended September 30, 2026, compared with the same prior-year periods, reflecting primarily higher revenues. Shipments per person per day improved for the three and nine months ended September 30, 2026, compared to the same prior-year periods. The improvement was attributable to efforts to align staffing with business levels and improve efficiency, combined with changes in business mix and technology-enabled process improvements.

Previous wording

Shared services as a percentage of revenue decreased 2.3 percentage points for the three months ended June 30, 2026 and 1.3 percentage points for the six months ended June 30, 2026, compared to the same prior-year periods, primarily reflecting the impact of higher revenues and efficiency gains achieved through process improvements and technology-enabled productivity enhancements during the three and six months ended June 30, 2026.

Current wording

Shared services as a percentage of revenue decreased 1.1 percentage points for the three months ended September 30, 2026 and 1.2 percentage points for the nine months ended September 30, 2026, compared to the same prior-year periods, primarily reflecting the impact of higher revenues and efficiency gains from process improvements and technology-enabled productivity enhancements.

Previous wording

Depreciation and amortization as a percentage of revenue decreased 0.5 percentage points for the three months ended June 30, 2026 and 0.3 percentage points for the six months ended June 30, 2026, compared to the same periods of 2025, reflecting higher revenues and lower amortization expense resulting from the full amortization of the finite-lived MoLo trade name at December 31, 2025.

Current wording

Depreciation and amortization as a percentage of revenue decreased 0.6 percentage points for the three months ended September 30, 2026 and 0.4 percentage points for the nine months ended September 30, 2026, compared to the same periods of 2025, reflecting higher revenues and lower amortization expense resulting from the full amortization of the finite-lived MoLo trade name at December 31, 2025.

Previous 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, asset impairment charges and changes in the fair value of contingent consideration. 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.

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, asset impairment charges, and changes in the fair value of contingent consideration. 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 grew in the second quarter of 2026, with real gross domestic product increasing at an annual rate of 1.5%, according to an advance estimate released on July 30, 2026. Growth was driven by increases in consumer spending, investment, and exports, partially offset by a decrease in government spending. Persistent inflation, elevated interest rates, and a slowing labor market continue to affect business confidence and contribute to market volatility. Geopolitical conflicts, including military conflicts and fluctuating trade and tariff policies, as well as inflation, continue to present risks to economic activity and freight demand.

Current wording

The U.S. economy grew in the third quarter of 2026, with real gross domestic product increasing at an annual rate of 3.4%, according to an advance estimate released on October 29, 2026. Growth was driven by increases in investment and consumer and government spending, partially offset by a decrease in exports and an increase in imports. Persistent inflation, including fuel price volatility, elevated interest rates, and a slowing labor market continue to affect business confidence and contribute to market volatility. Geopolitical conflicts and fluctuating trade and tariff policies continue to present risks to economic activity and freight demand.

Previous wording

The manufacturing sector, as measured by the Purchasing Managers’ Index, expanded in June 2026 for the sixth consecutive month after a period of nearly continuous contraction since November 2022. Although we secured increases on deferred pricing agreements and annually negotiated contracts during the six months ended June 30, 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.

Current wording

on deferred pricing agreements and annually negotiated contracts during the nine months ended September 30, 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

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. 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. During second quarter 2026, we recorded an asset impairment charge related to our indefinite-lived Panther trade name within the Asset-Light reporting unit. See Notes B and C to our consolidated financial statements included in Part I, Item 1 of this Quarterly Report on Form 10-Q for further discussion of the impairment valuation.

Current wording

Significant declines in our business levels or other factors that negatively impact the fair value 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. During the second quarter of 2026, we recorded an asset impairment charge related to our indefinite-lived Panther trade name within the Asset-Light reporting unit. See Notes B and C to our consolidated financial statements included in Part I, Item 1 of this Quarterly Report on Form 10-Q for further discussion of the impairment valuation.

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 increased 3.5%, before seasonal adjustment, year-over-year in June 2026 despite a 0.4% decline from May 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.

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 supply chain volatility, labor and energy shortages, geopolitical developments, and trade and tariff policies, in addition to the impact of federal monetary policy. The consumer price index increased 3.7%, before seasonal adjustment, year-over-year in September 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. In September 2026, in response to continued inflationary pressures, the Federal Reserve raised the target range for the federal funds rate for the first time since July 2023. This action followed a series of rate reductions in 2025.