Jason Seidl

Scott Group

Daniel Imbro

Jeffrey Kauffman

Jeff Kauffman

Michael Vermut

Reed Say

Dan Moore

David Floyd

Elliot Alper

- **Q3 2025 financial results** for Covenant Logistics Group showed consolidated freight revenue increased by **4%** to **$268.9 million**, but consolidated adjusted operating income **shrank by 22.5%** to **$15 million**, primarily due to margin compression in asset-based truckload operations.  **[0000928658_2201032_1]** 
- **Net indebtedness increased by $48.6 million** to **$268.3 million** as of September 30, 2025, leading to an adjusted leverage ratio of approximately **2.1 times** and a debt-to-capital ratio of **38.8%**.  **[0000928658_2201032_1]** 
- Management expects **Q4 2025 to be challenging** due to a soft freight market, increased claims accruals, and impacts from the U.S. government shutdown and customer bankruptcies.  **[0000928658_2201032_2]** 
- Despite short-term headwinds, the CEO expressed **strong optimism for the next two to three years**, driven by government policies accelerating capacity exit, anticipated interest rate reductions, and early signs of **rate increases (2.5% to 4%)** and **bid activity up 17%** since August.  **[0000928658_2201032_2]** **[0000928658_2201032_4]** **[0000928658_2201032_5]**

Covenant Logistics Group Reports Increased Q3 2025 Revenue Amidst Margin Compression and Anticipates Challenging Q4

- Covenant Logistics Group reported a **4% increase** in consolidated freight revenue to **$268.9 million** for Q3 2025, but consolidated adjusted operating income **shrank by 22.5% to $15 million** due to margin compression from an inflationary cost environment, high claims, and unproductive equipment.  **[0000928658_2201146_1]** 
- The company anticipates a **challenging Q4 2025** due to a soft freight market and specific headwinds, including the U.S. government shutdown's impact on Department of Defense freight.  **[0000928658_2201146_2]**  Despite short-term challenges, management is **optimistic about a longer-term freight market recovery** driven by accelerated capacity exits from government policies on non-domiciled drivers and ELD enforcement.  **[0000928658_2201146_2]** **[0000928658_2201146_4]** 
- Management noted a significant **reduction in new carrier entries**, with weekly MC number declines of **50-100, and over 400** in the last reported week, indicating tightening capacity.  **[0000928658_2201146_10]**  Net indebtedness increased by **$48.6 million to $268.3 million** as of September 30, 2025, leading to an adjusted leverage ratio of **2.1x**.  **[0000928658_2201146_1]**

Covenant Logistics Group Reports Q3 2025 Results, Anticipates Challenging Q4

- Covenant Logistics Group reported **diluted earnings per share of $0.35** and **Adjusted earnings per share of $0.44** for the third quarter ended September 30, 2025, which are lower than $0.47 and $0.54, respectively, in the prior year quarter.  **[928658_bc92d747bf56435095c2c6688a047f38_0]** **[928658_bc92d747bf56435095c2c6688a047f38_1]** 
- **Total revenue for Q3 2025 increased 3.1%** to **$296.889 million**, up from $287.885 million in Q3 2024.  **[928658_bc92d747bf56435095c2c6688a047f38_1]** **[928658_bc92d747bf56435095c2c6688a047f38_16]** 
- The company's **net indebtedness increased by $48.7 million** to approximately **$268.3 million** as of September 30, 2025, primarily due to acquisition-related payments of $19.2 million and repurchasing approximately $36.2 million of common stock.  **[928658_bc92d747bf56435095c2c6688a047f38_8]** 
- Management expects **Adjusted EPS for Q4 2025 to be sequentially lower** than Q3 2025, citing factors such as lower profits from their minority investment in Transport Enterprise Leasing (TEL) due to customer bankruptcies, the impact of the U.S. government shutdown, and the loss of a large Managed Freight customer.  **[928658_bc92d747bf56435095c2c6688a047f38_8]**

Covenant Logistics Group Reports Q3 2025 Financial and Operating Results

COVENANT LOGISTICS GROUP (CVLG)