Executive Summary

Q2 2025 revenue was $1.02B (-5% y/y) with GAAP diluted EPS of $1.12 and non-GAAP diluted EPS of $1.36; consolidated non-GAAP operating income was $45.0M, down from $64.2M y/y .
Asset-Based volumes strengthened (shipments/day +5.6%, tonnage/day +4.3%), but operating ratio worsened to 92.8% (+300 bps y/y) on mix (lower weight/shipment), lower fuel surcharge revenue, and higher labor/purchased transportation costs .
Asset-Light returned to non-GAAP profitability for the first time since Q2 2023 ($1.1M), driven by margin improvements and disciplined cost control despite soft rates and a higher mix of smaller managed shipments; Adjusted EBITDA was $2.5M .
Management announced a 5.9% general rate increase (GRI) effective August 4 and expects ABF’s non-GAAP OR to improve ~70 bps from Q2 to Q3; Asset-Light guided Q3 non-GAAP operating income to breakeven–$1M .
Catalysts: Investor Day (Sep 29), CEO transition (McReynolds retiring year-end; Runser CEO-elect), EV semi pilot progress, and continued technology-driven optimization (AI-driven routing, dock software, Vaux Vision) .

What Went Well and What Went Wrong

What Went Well

Asset-Based volume growth and onboarding of >100 new core LTL accounts; ABF shipments/day averaged ~21,000 (+6%) with productivity gains lowering cost per shipment y/y and sequentially .
Asset-Light returned to non-GAAP operating income and improved margins (Shipments/Employee/Day +14.8% y/y), supported by strategic mix shifts and cost control; Adjusted EBITDA was positive .
Pricing discipline: Contract renewals/deferred agreements averaged +4% in Q2; announced 5.9% GRI (effective Aug 4), with management noting rational industry pricing .
Quote: “We’re executing with discipline and agility across our network, leveraging our integrated capabilities to deliver value in every market.” — Seth Runser .
Quote: “We’re leveraging AI and predictive analytics to optimize labor planning, delivery routing, and dock operations in real time… our most productive quarter since 2021.” — Judy McReynolds .

What Went Wrong

Yield pressure from lower weight/shipment (-1.2% y/y) and fewer manufacturing/household goods moves; revenue/CWT -3.1% y/y (low-single-digit ex-fuel) .
Asset-Based OR deteriorated to 92.8% (+300 bps y/y) amid higher labor (union contract increases) and purchased transportation costs during peak vacation season .
Asset-Light daily revenue -12.9% y/y on soft rates and mix (managed shipments smaller); truckload volumes reduced strategically, dampening top-line .
EPS and revenue came in below consensus for Q2 (see Estimates Context); non-GAAP operating income fell y/y *.
Analyst concerns: seasonality, GRI impact, and tonnage trends (July tonnage down ~5% sequentially vs June but generally in-line with history); workers’ comp +$3M y/y impacted cost .

Financial Results

Metric	Q4 2024	Q1 2025	Q2 2025
Revenue ($USD Millions)	$1,001.6*	$967.1	$1,022.3
GAAP Diluted EPS ($)	$1.33*	$0.13	$1.12
Non-GAAP Diluted EPS ($)	—	$0.51	$1.36
Operating Income ($USD Millions, GAAP)	—	$6.6	$37.3
Non-GAAP Operating Income ($USD Millions)	—	$17.3	$45.0

S&P Global disclaimer: *Values retrieved from S&P Global.

Segment performance and margins:

Segment	Q2 2024	Q1 2025	Q2 2025
Asset-Based Revenue ($MM)	$712.7	$646.3	$713.3
Asset-Based Operating Income ($MM)	$72.8	$26.4	$51.0
Asset-Based Operating Ratio (%)	89.8	95.9	92.8
Asset-Light Revenue ($MM)	$395.8	$356.0	$341.9
Asset-Light Operating Income ($MM, GAAP)	($9.5)	($4.4)	$0.6
Asset-Light Operating Income ($MM, Non-GAAP)	($2.5)	($1.2)	$1.1
Asset-Light Adjusted EBITDA ($MM)	($0.6)	$0.2	$2.5

Key LTL KPIs:

KPI	Q2 2024	Q1 2025	Q2 2025
Shipments/Day	19,934	19,491	21,051
Tonnage/Day	11,186	10,466	11,666
Revenue/CWT ($)	50.09	49.40	48.54
Revenue/Shipment ($)	562.17	530.49	537.94
Weight/Shipment (lbs)	1,122	1,074	1,108

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Asset-Based non-GAAP OR vs prior quarter	Q3 2025	Historically ~70 bps improvement (context from prior commentary)	Expect ~70 bps improvement from Q2 to Q3	Maintained
General Rate Increase (LTL)	Effective Aug 4, 2025	—	5.9% GRI announced July 14	New
Asset-Light non-GAAP Operating Income	Q2 2025	($1)–($2)M loss	Actual: $1.1M profit	Raised vs prior guide (actual beat)
Asset-Light non-GAAP Operating Income	Q3 2025	—	Breakeven to +$1M	New
2025 Net Capex (incl. financed)	FY 2025	$225–$275M; expect lower end	$225–$275M; expect lower end	Maintained
2025 Non-GAAP Effective Tax Rate	FY 2025	27%–28%	25.5%–26.5%	Lowered
Share Repurchase Authorization Remaining	As of date noted	$27.9M (as of Apr 28)	$9.1M (as of Jul 28)	Decreased (usage)
Quarterly Dividend	Ongoing	$0.12/share	$0.12/share [26 slide shows current dividend]	Maintained

Earnings Call Themes & Trends

Topic	Previous Mentions (Q4 2024 and Q1 2025)	Current Period (Q2 2025)	Trend
AI/Technology optimization (routing, dock, labor planning)	ABF optimization portfolio expanding; training driving savings	“Most productive quarter since 2021”; City Route Optimization Phases 2–3 rollout; Dock software; $14M savings 1H25	Strengthening execution
Pricing/GRI	Contract/deferred +4.9% in Q1; rational pricing	Contract/deferred +4%; 5.9% GRI effective Aug 4	Firming price posture
Macro (manufacturing/housing softness)	Weight/shipment down; tonnage down; soft rates in Asset-Light	Continued pressure on yield/weight; daily revenue softer; managed growth offsets in Asset-Light	Ongoing headwind
NMFC code changes	Preparing for classification change; Vaux Vision development	“Mostly a non-event” due to preparation; improved rate accuracy; minor bill-of-lading hiccups	Transition achieved
Managed solutions growth	Record shipments in Q1	Record managed revenue in Q2; pipeline strong	Accelerating
EV/Sustainability	EV yard tractors/forklifts noted previously	Pilot of Tesla Semi: 4,494 miles, 1.55 kWh/mile; good performance, infra gaps remain	Early progress
Leadership/Board	—	CEO retirement at YE2025; Runser CEO-elect; Thom Albrecht joins board; Spinner retiring Oct 31	Governance transition

Management Commentary

“We generated just over $1 billion in revenue and $45 million in non-GAAP operating income… leveraging AI and predictive analytics to optimize labor planning, delivery routing, and dock operations in real time.” — Judy McReynolds .
“We added over 100 new core LTL accounts… pipeline is stronger… daily quote volume over 200,000, sharpening pricing intelligence.” — Seth Runser .
“ABF OR improved 310 bps sequentially… productivity gains allowed us to onboard new business efficiently while maintaining service; cost per shipment improved y/y and sequentially.” — Matt Beasley .
“NMFC change has been a non-event because of preparation; Vaux Vision and space-based pricing support accurate rates.” — Seth Runser .

Q&A Highlights

Seasonality and volumes: July tonnage down ~5% sequentially vs June, generally in line with history; shipments likely to outperform historical trend due to commercial wins .
SMB focus: Less price sensitivity than large enterprise; stickier relationships; mixed freight profile across verticals .
Stickiness/competition: New business viewed as sticky; integrated solutions and trusted partnerships differentiate; discipline on profitable growth and mix .
GRI impact: Timing aligned with peak season; coverage smaller than prior years; expected modest margin benefit .
Cost puts/takes: Higher workers’ comp (+$3M y/y) affected costs; continuous optimization and staffing agility helped cost per shipment .

Estimates Context

Metric	Q4 2024 Consensus	Q4 2024 Actual	Beat/Miss	Q1 2025 Consensus	Q1 2025 Actual	Beat/Miss	Q2 2025 Consensus	Q2 2025 Actual	Beat/Miss
Revenue ($USD Millions)	$995.0*	$1,001.6*	Beat	$986.1*	$967.1	Miss	$1,042.8*	$1,022.3	Miss
Primary EPS ($)	$1.05*	$1.33*	Beat	$0.52*	$0.13 (GAAP) / $0.51 (non-GAAP)	In line (non-GAAP) / Miss (GAAP)	$1.46*	$1.12 (GAAP) / $1.36 (non-GAAP)	Miss (GAAP) / Slight miss (adj.)

Notes: We present GAAP and non-GAAP EPS where relevant; consensus is Primary EPS. S&P Global disclaimer: *Values retrieved from S&P Global.

Implications: Q2 2025 was a revenue and EPS miss versus consensus; asset-based volume strength did not offset yield pressure and higher operating costs. If pricing (GRI) holds and weight/mix normalizes, consensus revisions may modestly move down near-term but stabilize with stronger Q3 seasonality and operational improvements .

Key Takeaways for Investors

Volume-led recovery in Asset-Based is real; watch yield/weight per shipment and manufacturing/housing indicators for margin translation. Sequential OR improvement and cost per shipment gains are constructive .
Pricing power intact: +4% contract renewals and a 5.9% GRI set the stage for Q3; monitor customer acceptance and realized yield ex-fuel .
Asset-Light inflecting: Mix shift and cost discipline are driving profitability despite soft rates; managed solutions at record levels augur network synergy benefits .
Execution edge via technology: AI-driven routing, dock management, and Vaux Vision underpin productivity—key for sustaining margin expansion into peak season .
Governance and events: CEO transition planning reduces risk; Investor Day (Sep 29) could be a catalyst with longer-term targets and innovation roadmap .
Capital allocation: Expect capex at lower end of $225–$275M; continued opportunistic repurchases (remaining authorization $9.1M) and dividend maintenance .
Near-term trading: Stock may be sensitive to yield prints and Q3 volume cadence; watch July/August trends and GRI realization. Medium-term thesis hinges on integrated model driving cross-sell, pricing intelligence, and efficiency gains .

S&P Global disclaimer: Where marked with an asterisk (*), values were retrieved from S&P Global.

ARCBEST CORP /DE/ (ARCB)·Q2 2025 Earnings Summary