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ARCBEST CORP /DE/ (ARCB)·Q1 2025 Earnings Summary

Executive Summary

  • Q1 2025 was resilient in a soft freight market: revenue $0.97B (-6.7% YoY), GAAP EPS $0.13 (vs. -$0.12 YoY), non-GAAP EPS $0.51; Asset‑Based OR deteriorated to 95.9% on lower tonnage and higher insurance/health costs; Asset‑Light loss narrowed on productivity gains .
  • Versus S&P Global consensus, ARCB modestly missed on revenue ($967.1M vs. ~$986.1M*) and was roughly in line/slightly below on EPS ($0.51 vs. ~$0.516*).*
  • Pricing remained rational; customer renewals averaged +4.9%, while April prelims showed AB shipments/day +4% YoY and tonnage/day +1% despite revenue/CWT down ~2% YoY on mix (more easy‑to‑handle freight, less manufacturing, fewer household moves) .
  • Outlook signposts: management expects typical seasonal AB OR improvement of 300–400 bps from Q1 to Q2; Asset‑Light guided to a Q2 non‑GAAP operating loss of $1–$2M; 2025 capex $225–$275M with a bias to the low end; non‑GAAP tax rate 27–28% for 2025 .

Values with asterisk (*) are from S&P Global.

What Went Well and What Went Wrong

What Went Well

  • Pricing and renewals held: AB contract renewals/deferred pricing up 4.9% in Q1; pricing characterized as rational; excluding fuel, revenue/CWT rose low‑ to mid‑single digits YoY .
  • Productivity and execution: AB productivity +1.1% and Asset‑Light shipments/employee/day +23.6% YoY; management highlighted technology, training and network design as key drivers .
  • Managed transportation momentum: record Managed solution shipment levels; Asset‑Light non‑GAAP operating loss improved to $(1.2)M vs. $(4.7)M YoY, with Adjusted EBITDA turning positive $0.2M .

Selected quote: “We are now receiving over 200,000 Dynamic quote requests from customers each day… a 50% increase in revenue per shipment levels for Dynamic business since 2020” — Seth Runser .

What Went Wrong

  • Mix and macro headwinds: AB weight/shipment -3.9% YoY; tonnage/day -4.3% on industrial softness, fewer household moves, and truckload substitution, pressuring yields and OR .
  • Cost inflation in specific lines: non‑union health care and insurance up ~$6M YoY, adding ~90 bps to AB OR in the quarter .
  • Asset‑Light top-line pressure: revenue/day -9.5% YoY; revenue/shipment lower due to soft rates and higher mix of Managed (smaller shipments) despite cost controls .

Financial Results

Consolidated results – trend (oldest → newest)

MetricQ3 2024Q4 2024Q1 2025
Revenue ($USD Billions)$1.063 $1.002 $0.967
GAAP Diluted EPS$4.23 $1.24 $0.13
Non‑GAAP Diluted EPS$1.64 $1.33 $0.51
Adjusted EBITDA ($USD Millions)$86.4 $74.0 $49.3

Q1 2025 vs. S&P Global consensus (actuals from company; consensus from S&P Global)

MetricConsensusActual
Revenue ($USD Millions)986.1*967.1
Primary EPS0.516*0.51

Values with asterisk (*) are from S&P Global.

Segment performance (oldest → newest)

Segment MetricQ1 2024Q4 2024Q1 2025
Asset‑Based Revenue ($MM)671.5 656.2 646.3
Asset‑Based Operating Income ($MM)53.5 52.3 26.4
Asset‑Based Operating Ratio (%)92.0 92.0 95.9
Asset‑Light Revenue ($MM)396.4 375.4 356.0
Asset‑Light Operating Income (Loss) ($MM, GAAP)(15.3) (1.6) (4.4)
Asset‑Light Operating Income (Loss) ($MM, Non‑GAAP)(4.7) (5.9) (1.2)

KPIs and operating stats

KPI (Asset‑Based unless noted)Q4 2024Q1 2025
Billed Revenue / CWT ($)$49.27 $49.40
Shipments / Day19,698 19,491
Tonnage / Day10,758 10,466
Weight / Shipment (lbs)1,092 1,074
Asset‑Light Shipments/Employee/Day (YoY %)+20.8% (Q4) +23.6% (Q1)

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Asset‑Based non‑GAAP OR sequential deltaQ2 2025—Improve 300–400 bps vs. Q1New disclosure
Asset‑Light non‑GAAP operating incomeQ2 2025—Loss of $1–$2MNew disclosure
Capital expenditures (net, incl. financed)FY 2025—$225–$275M; expect at lower endNew/updated color
Non‑GAAP tax rateFY 2025—27%–28%New disclosure
Share repurchase authorization remainingAs of Apr 28, 2025—$27.9M remainingInformational

ArcBest does not provide GAAP forward guidance on certain items due to unpredictability (e.g., contingent consideration) .

Earnings Call Themes & Trends

TopicQ3 2024 (Prior‑2)Q4 2024 (Prior‑1)Q1 2025 (Current)Trend
Pricing & renewalsGRI +5.9% (Sep 9) and renewals +4.6%; pricing rational Renewals +4.5%; rational pricing Renewals +4.9%; April rev/CWT -2% YoY on mix; pricing rational Rational pricing; mix weighs on yield
Weight per shipment-10.7% YoY -6.3% YoY -3.9% YoY Improving but still negative
Managed transportation——Record shipments/revenue; double‑digit growth Strong growth
Technology/optimizationProductivity gains cited Productivity gains cited Dynamic quoting >200k/day; route optimization; Vaux Vision pilots Scaling digital ops
Macro/tariffs——Customers adapting to tariff/trade changes; mixed customer responses Ongoing watch item
Capex/balance sheet—2024 net capex $288M; returned $85M to shareholders 2025 capex $225–$275M (low end); ~$350M liquidity Prudent spend, ample liquidity

Management Commentary

  • “As our customers navigate changes to U.S. tariffs and trade policies, we are focused on helping them quickly adapt… ArcBest’s integrated solutions and innovative technology position us to help customers achieve efficiencies” — Judy McReynolds .
  • “We are now receiving over 200,000 Dynamic quote requests from customers each day… 50% increase in revenue per shipment for Dynamic since 2020” — Seth Runser .
  • “Non‑union health care and insurance‑related expenses increased by $6 million, adding 90 bps to our operating ratio” — Matt Godfrey .
  • “The pricing environment remains rational… Dynamic prices have improved over time as our quote pool expands” — Eduardo Conrado .

Q&A Highlights

  • Seasonality and cost levers: Management expects typical 300–400 bps sequential AB OR improvement into Q2, driven by normal seasonal revenue/day and ongoing cost initiatives; workforce aligned to demand, compliance campaigns continue .
  • Pricing vs. volume: April tonnage +1% MoM; rev/CWT -1% MoM and -2% YoY largely mix‑driven (more easy‑to‑handle freight, less manufacturing, fewer household moves). Dynamic pricing strategy unchanged; pipeline up ~55% YTD .
  • SMB/customer focus: Expanding SMB in Asset‑Light; onboarding/retention improvements; expect normal seasonal pickup May/June .
  • Capital allocation: 2025 capex skewing to low end of range; two facilities acquired via Yellow auction; opportunistic buybacks; ~$350M liquidity .
  • U‑Pack sensitivity: Volumes remain cyclically low given housing/interest rates; consistent with prior downcycles .

Estimates Context

  • Q1 2025: Revenue $967.1M vs. ~$986.1M consensus* (miss); Primary EPS $0.51 vs. ~$0.516* (in line/slight miss). Q4 2024: Revenue $1,001.6M vs. ~$995.0M* (beat); EPS $1.33 vs. ~$1.051* (beat). Values with asterisk (*) are from S&P Global .

Values with asterisk (*) are from S&P Global.

Key Takeaways for Investors

  • Pricing remains disciplined; mix (lighter shipments, less manufacturing, fewer household moves) is the primary headwind to yields, not pricing aggression .
  • Expect Q2 sequential OR improvement at ABF in the typical 300–400 bps range; Asset‑Light to run slightly negative on non‑GAAP operating income in Q2 amid soft truckload rates .
  • Structural productivity gains (dynamic quoting, routing optimization, training) are mitigating cost inflation and should enhance operating leverage when volumes normalize .
  • Managed transportation is a bright spot (record shipments/revenue), supporting Asset‑Light stabilization and cross‑sell across the network .
  • 2025 capex ($225–$275M, low end) balances maintenance and targeted growth projects; liquidity (~$350M) provides flexibility for buybacks and opportunistic investments .
  • April prelims show early green shoots in shipments/tonnage despite lower rev/CWT; monitor manufacturing activity and tariff impacts on mix into Q2 .
  • Near‑term estimate risk resides in yield/mix and Asset‑Light rate environment; medium‑term, OR improvement cadence and volume recovery are key stock movers .

Appendix: Source Highlights

  • Q1 2025 press release and detailed financials (incl. non‑GAAP reconciliations, operating stats) .
  • Form 8‑K with exhibits (press release, supplemental data, slides with April trends and guidance color) .
  • Q1 2025 earnings call transcript (prepared remarks and Q&A) .
  • Prior quarters for trend: Q4 2024 press release (segment detail, KPIs, non‑GAAP) ; Q3 2024 press release (pricing/renewals, KPIs) .

Values with asterisk (*) are from S&P Global.