ARCBEST CORP /DE/ (ARCB)·Q4 2025 Earnings Summary
ArcBest Q4 2025: EPS Miss Overshadows Revenue Beat as LTL Margins Compress
January 30, 2026 · by Fintool AI Agent
ArcBest Corporation (NASDAQ: ARCB) reported Q4 2025 results that beat on revenue but missed on earnings, with shares falling ~4% in after-hours trading. The integrated logistics company posted revenue of $972.7M (+0.5% vs consensus) but non-GAAP EPS of $0.36 (-14% vs $0.42 consensus), as margin compression in the core Asset-Based LTL segment offset volume gains.
Full-year 2025 revenue totaled $4.0B (-4% YoY) with non-GAAP EPS of $3.70 (-41% YoY), reflecting what CEO Seth Runser called "a challenging freight environment" where the company delivered "growth in LTL shipments and tonnage, restored profitability in Asset-Light, and achieved record Asset-Light productivity."
Did ArcBest Beat Earnings?
ArcBest narrowly beat revenue expectations but missed on profitability. The revenue beat was driven by a 2.6% increase in tonnage per day and 2.4% increase in shipments per day in the Asset-Based segment, largely from newly onboarded core LTL customers.
However, EPS fell short due to a 420 basis point deterioration in the Asset-Based operating ratio to 96.2%, driven by:
- Lower pricing yield: Billed revenue per hundredweight declined ~3% YoY despite 5.0% contract renewal increases, as pricing gains were offset by freight mix changes
- Higher labor costs: Additional labor supporting shipment growth and annual union wage adjustments
- Equipment depreciation: Increased depreciation from fleet investments
The quarter also included a $9.1M after-tax noncash impairment charge related to Asset-Light intangible assets.
Ask Fintool AI AgentHow Did Each Segment Perform?
Asset-Based (LTL) — 67% of Revenue
The volume story is encouraging—tonnage and shipment growth reflect successful customer acquisition efforts. However, the operating ratio of 96.2% signals significant margin pressure. Management noted that "LTL industry pricing remains rational," but acknowledged that pricing gains were offset by changes in freight mix as new business carried heavier profiles with lower revenue per hundredweight.
Asset-Light (Brokerage) — 36% of Revenue
Asset-Light showed marked improvement despite the challenging rate environment. Reaching breakeven (vs. a $5.9M non-GAAP operating loss a year ago) demonstrates the impact of "disciplined cost management and productivity gains." The 18.5% improvement in shipments per employee per day reflects operational efficiency initiatives. Full-year 2025 achieved record employee productivity for the segment.
How Did the Stock React?
ARCB shares fell approximately 3.9% in after-hours trading, dropping from $85.31 to ~$82.00 following the earnings release.
The stock has been volatile around earnings:
- Trading near 52-week highs of $103.14 earlier in Q4
- Down from ~$87 at market close on January 29
- The EPS miss and weak Q1 guidance likely drove the after-hours decline
Year-to-date, ARCB had been trading above both its 50-day ($76.69) and 200-day ($72.24) moving averages heading into the print, suggesting the market had priced in a reasonable recovery.
What Did Management Guide?
Q1 2026 Outlook
Asset-Based:
- Operating ratio expected to increase 100-200 bps sequentially from Q4 2025's 96.2%
- This is better than historical seasonality (typically +260 bps Q4 to Q1), but still implies OR near 97-98%
Asset-Light:
- Operating loss of up to $1 million expected
- Excludes ~$3M of purchase accounting amortization
January 2026 Preliminary Trends
Management attributed the tonnage surge partly to winter weather affecting both periods and a reduced mix of truckload-rated shipments in January 2025. The -8% revenue per hundredweight decline reflects this heavier freight mix. CFO Matt Beasley clarified: "You're gonna see that moderate as we look at the full quarter, still up and still up relative to history, but something lower than the 8%, probably more in the 4%-5% range."
2028 Financial Targets Reaffirmed
ArcBest maintained its long-term targets:
- Asset-Based Non-GAAP OR: 87%-90%
- Asset-Light Non-GAAP Operating Income: $40M-$70M
- Non-GAAP Diluted EPS: $12-$15
- Operating Cash Flow: $400M-$500M
- Non-GAAP ROCE: 16%-19%
Demand Bright Spots: Management highlighted pockets of strength including discretionary retail, food and beverage, recreational equipment, SMB truckload, expedite life science, and IT/data center shipments.
Ask Fintool AI AgentWhat Changed From Last Quarter?
The sequential decline in Asset-Based metrics reflects typical seasonality plus "three fewer revenue days" in Q4 vs Q3. The Asset-Light improvement was driven by higher spot rates, though elevated purchased transportation costs pressured margins.
Capital Allocation and Shareholder Returns
2025 Capital Deployment
- Net capex: $198M (including $133M revenue equipment, $31M real estate)
- Shareholder returns: $86M+ through share repurchases and dividends
- Remaining repurchase authorization: $100.8M as of January 28, 2026
2026 Capital Guidance
- Net capex: $150M-$170M (down from $198M in 2025)
- Revenue equipment: $75M-$80M (~$75M to be financed)
- Real estate: $35M-$45M
- D&A on PP&E: ~$180M (up from $158M in 2025)
Management emphasized a "balanced approach to capital allocation" with focus on "high-return, organic investments in real estate, equipment, and innovative projects" while maintaining investment-grade credit metrics.
Key Management Quotes
CEO Seth Runser on 2025 execution:
"ArcBest delivered solid fourth quarter and full-year results... Through it all, our people stayed focused and committed to our long-term strategy, built around our three pillars: growth, efficiency, and innovation."
On strategic positioning:
"As I step into the CEO role, my priorities are clear: sharpen our customer focus, raise the bar on operational excellence, leverage technology to amplify productivity, and maintain cost discipline that drives profitable growth."
New Asset-Light COO Mac Pinkerton (first public comments):
"I'm more excited today than I was three weeks ago... The urgency that this team has relative to improving our TSR is palpable. We've got competitive services and a really strong team. I'm more confident after the three weeks I've been here, that we'll meet our Investor Day targets."
Q&A Highlights
On January weather impact (CEO Seth Runser):
"In terms of service center impact, we think it's going to be one of our worst Januaries in terms of service center closures. The FMCSA actually issued a 40-state waiver that waived hours of service regulations, which speaks to just the size of this storm."
On mix and manufacturing softness (EVP Eddie Yarborough):
"Our business is predominantly manufacturing, industrial production tied to the housing markets, and those three verticals have really been impacted... What we're seeing from an opportunity set is that business does have some softness to it, and that trade-out of that business for new business is really what's driving our mix."
On pricing discipline (EVP Eddie Yarborough):
"Pricing discipline remains rational within the market. We actually have seen a little less bid activity from customers, which actually, to me, is a good sign... Recent bid data tells us that it's actually slowing down."
On dynamic pricing (CEO Seth Runser):
"Since launching Dynamic, our price per shipment has increased by 50%... As that quote pool grows and you need the same amount of shipments in your network, generally, what happens is the price improves."
Full Year 2025 Summary
The year-over-year decline reflects the difficult freight cycle, though Asset-Light's swing from a $17.1M loss to $1.5M profit demonstrates operational improvement. The Asset-Based segment's 310bps OR deterioration was partially offset by $15.7M in net gains from service center sales.
Risks and Concerns
- Margin pressure persists: Asset-Based OR at 96.2% leaves little room for further deterioration before losses
- Freight mix headwind: New customer wins are driving volume but at lower revenue per hundredweight
- Q1 seasonality: Guidance implies continued weakness into early 2026
- Union economics: Annual wage adjustments and multiemployer pension contributions remain structural costs
- Macro uncertainty: Customers remain "cautious" with "general uncertainty around the impacts with tariffs and interest rates"
- Manufacturing exposure: "Our business is predominantly manufacturing, industrial production tied to the housing markets, and those three verticals have really been impacted" — now in fourth year of freight recession
- Weather volatility: January 2026 storm was "one of worst Januaries" for service center closures
Technology and AI Initiatives
Management highlighted significant progress on technology investments that position ArcBest for operating leverage when volumes recover:
Network Capacity: Management added nearly 800 doors to the network, with a Denver expansion completing in Q1 2026 that will "add significant capacity in that market."
Forward Catalysts
- Q1 2026 operating ratio trajectory — Will the 100-200bps sequential increase hold, or will conditions deteriorate further?
- Freight cycle inflection — Any signs of rate improvement in the broader trucking market
- Continuous improvement rollout — $24M achieved in 2025; currently at 60% of network, runway to expand
- Technology ROI — AI agents and automation driving productivity; positioned to scale without adding incremental cost
- Denver facility completion — Q1 2026 opening adds significant capacity in key market
- 2028 target progress — Bridge from current OR to 87%-90% target requires significant improvement
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