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FORWARD AIR CORP (FWRD)·Q3 2025 Earnings Summary

Executive Summary

  • Q3 revenue was $631.8M, down 3.7% y/y and up 2.1% q/q; GAAP diluted EPS from continuing operations was $(0.52). Consolidated EBITDA (per credit agreement) was $78M vs $86M y/y and roughly in line with Q2’s $77M after cost-savings reclassifications; liquidity increased to $413M .
  • Segment mix: Omni Logistics delivered its highest revenue and reported EBITDA since the acquisition ($340M, $33M), Expedited Freight held reported EBITDA at $30M with an 11.5% margin, and Intermodal remained steady at $8M reported EBITDA .
  • Versus S&P Global consensus, revenue modestly missed ($639.9M est. vs $631.8M actual), Primary EPS materially beat on a normalized basis (-$0.12 est. vs +$0.07 actual*), while EBITDA compared against “Reported EBITDA” was below consensus ($76.7M est. vs $59.2M actual*). Note: company also reports Consolidated EBITDA used for covenants ($78M) .
  • Management highlighted continued cost actions, pricing discipline in Expedited Freight, improved cash generation ($52.7M CFO; $48.9M FCF), and progress on integration (One Ground Network) while reiterating the strategic alternatives review is ongoing without further updates at this time .

What Went Well and What Went Wrong

  • What Went Well

    • Omni momentum: “highest revenue and reported EBITDA… since the acquisition,” with revenue +$5M y/y to $340M and reported EBITDA +$6M y/y to $33M; margin improved to 9.6% .
    • Expedited Freight pricing and mix: reported EBITDA margin of 11.5% (2nd highest since Q4’23) maintained despite lower volumes; management emphasized “significantly improved pricing programs” and variable-cost flexing .
    • Cash and liquidity: $52.7M cash from ops and $48.9M FCF; liquidity rose to $413M q/q (+$45M), with LTM Consolidated EBITDA of $299M and no long-term maturities until Dec-2030 .

  • What Went Wrong

    • Soft top line and margin compression: consolidated operating margin fell to 2.4% (vs 3.2% in Q2’25; 3.5% in Q3’24) amid freight recession; revenue declined 3.7% y/y .
    • Volume pressure in Expedited LTL: tonnage per day fell 14.1% y/y and shipments per day fell 12.3% y/y; revenue per CWT ex-fuel rose, but weaker volumes capped growth .
    • “Reported EBITDA” below Street: S&P Global EBITDA consensus tracked to reported EBITDA (ex credit-agreement add-backs), where actual $59.2M* lagged $76.7M* est.; high interest expense continues to pressure GAAP EPS and net income .

Financial Results

Consolidated results vs prior year, prior quarter, and estimates

MetricQ3 2024Q2 2025Q3 2025Street (Q3 2025)
Revenue ($M)$655.9 $618.8 $631.8 $639.9*
Operating Income ($M)$22.7 $19.5 $15.0 —
Operating Margin (%)3.5% 3.2% 2.4% —
Diluted EPS – continuing ops ($)$(2.62) $(0.41) $(0.52) Primary EPS: -$0.12* vs +$0.07 actual*
Reported EBITDA ($M)$45.8 $45.0 $59.2 $76.7*
Consolidated EBITDA ($M)$86.1 $73.8 $77.7 —
Cash from Operations ($M)$51.2 $(13.2) $52.7 —
Free Cash Flow ($M)$41.8 $(17.2) $48.9 —
Liquidity ($M)—$368 $413 —
  • Street comparison notes: Revenue modest miss; Primary EPS beat on S&P’s normalized basis; EBITDA miss relative to “Reported EBITDA” definition. Company also highlights Consolidated EBITDA for covenant purposes .
  • Asterisk indicates S&P Global estimates/actuals from GetEstimates. Values retrieved from S&P Global.

Quarterly trend – topline, profitability, EPS

MetricQ1 2025Q2 2025Q3 2025
Revenue ($M)$613.3 $618.8 $631.8
Consolidated EBITDA ($M)$69.0 $73.8 $77.7
Diluted EPS – continuing ops ($)$(1.68) $(0.41) $(0.52)

Segment performance

Segment ($M)Q3 2024 RevenueQ3 2025 RevenueQ3 2024 Op IncQ3 2025 Op IncQ3 2024 Reported EBITDAQ3 2025 Reported EBITDA
Expedited Freight284.7 258.6 19.3 19.4 30 30
Omni Logistics334.5 339.6 1.1 9.7 27 33
Intermodal57.4 58.3 4.1 4.1 9 8
Eliminations(20.7) (24.7) ————

KPIs

KPIQ3 2024Q3 2025y/y
Expedited Freight – Shipments per day (k)13.0 11.4 (12.3%)
Expedited Freight – Pounds per day (k)11,144 9,570 (14.1%)
Expedited Freight – Rev/CWT ex-fuel ($)24.09 24.98 +3.7%
Expedited Freight – Rev/shipment ex-fuel ($)206.73 209.99 +1.6%
Intermodal – Drayage shipments62,616 60,976 (2.6%)
Intermodal – Rev per drayage shipment ($)824 864 +4.9%

Guidance Changes

  • The company did not provide updated formal quantitative guidance this quarter; management discussed operations, integration, and market conditions. The press release includes a standard note that a reconciliation for “2025 Consolidated EBITDA guidance” is not provided, but no numeric ranges were furnished in the materials reviewed .
MetricPeriodPrevious GuidanceCurrent GuidanceChange
Consolidated EBITDAFY 2025Not disclosedNot disclosed—
Revenue/Margins/Other line itemsFY/Q4 2025Not disclosedNot disclosed—

Earnings Call Themes & Trends

TopicPrevious Mentions (Q1 & Q2 2025)Current Period (Q3 2025)Trend
Pricing and margins (Expedited LTL)Q1: Corrective pricing completed in Feb; Rev/CWT ex-fuel up 4.3% seq; EBITDA margin 10.4% . Q2: Highest reported EBITDA margin since Q4’23 .Margin 11.5%, second highest since Q4’23; pricing discipline sustained .Improving margin quality despite lower volume.
Omni integration/performanceQ1/Q2: Omni revenue growth y/y; steady progress post deal .Highest revenue and reported EBITDA since acquisition; margin 9.6% .Positive momentum.
Cash flow/liquidityQ1: Liquidity $393M; FCF $16.4M . Q2: Liquidity $368M; CFO $(13.2)M; FCF $(17.2)M .CFO $52.7M; FCF $48.9M; liquidity $413M .Stronger cash generation q/q.
Tech stack/ERPNoted need to streamline systems .“One ERP” initiative; phased rollout through end of next year .Execution phase.
Strategic alternativesDisclosed process review ongoing .Process ongoing; no further updates; interest from multiple parties .Continuing.
Macro/freight cycleFreight recession backdrop across Q1/Q2 .LTL volumes down; TL “booming” in high-tech; muted port outlook for intermodal .Mixed: stable earnings via mix/cost actions.

Management Commentary

  • “I am pleased with Forward Air’s performance… we reported operating income of $15 million and Consolidated EBITDA of $78 million… implemented additional cost reduction initiatives… rightsizing our business” — CEO Shawn Stewart .
  • “Omni… posted its highest revenue and reported EBITDA… since the acquisition… drivers in a $5 million increase… to $340 million… Reported EBITDA also increased by $6 million to $33 million” — CEO .
  • “Expedited Freight segment’s reported EBITDA margin of 11.5 percent is the second highest since the fourth quarter of 2023… integrating our U.S. and Canadian businesses… One Ground Network” — CEO .
  • “Consolidated EBITDA… was $78 million… Liquidity at the end of the third quarter was $413 million… cash provided by operations totaled $67 million YTD, a $113 million improvement vs last year” — CFO Jamie Pierson .
  • On methodology changes: Q2 consolidated EBITDA revised for cost-savings add-backs per credit agreement; Q3 $78M is “in line” with Q2’s $77M after reclassification — CFO .

Q&A Highlights

  • Omni margins and seasonality: Omni at upper end of peer margin set; warehouse mix tempers seasonality; steady progress since acquisition — CFO .
  • LTL vs TL dynamics: Variable-cost model allows shifting capacity from LTL to TL; TL “booming” with high-tech security-sensitive freight; LTL volumes down but margins stable via pricing and efficiency — CEO/CFO .
  • Cash flow and covenants: Semiannual interest drives seasonal cash cadence; covenant step-downs quarterly to 5.5x by 4Q26; Q3 cash up $45M q/q — CFO .
  • Strategic alternatives: Process ongoing; multiple parties engaged; no further updates — CEO .

Estimates Context

  • S&P Global consensus for Q3’25: Revenue $639.9M vs actual $631.8M (miss); Primary EPS -$0.12 vs actual +$0.07 (beat); EBITDA $76.7M vs “Reported EBITDA” actual $59.2M (miss). Company also reports Consolidated EBITDA for covenant purposes of $77.7M .
  • Implication: Analysts’ EBITDA/“Primary EPS” frameworks differ from GAAP and from the company’s credit-agreement Consolidated EBITDA. Expect models to adjust for the magnitude and mix of add-backs (integration, severance, pro forma savings) and for ongoing interest burden .
  • Asterisk indicates S&P Global estimates/actuals from GetEstimates. Values retrieved from S&P Global.
MetricS&P ConsensusActual
Revenue ($M)639.9*631.8
Primary EPS ($)-0.12*0.07*
EBITDA ($M)76.7*59.2 (Reported EBITDA)

Key Takeaways for Investors

  • Mix and margin resiliency: Despite volume pressure, Expedited Freight maintained 11.5% reported EBITDA margin via pricing and cost controls; Omni momentum offset softness elsewhere .
  • Cash discipline improving: CFO and FCF inflected positively; liquidity rose to $413M with net leverage at 5.5x LTM CEBITDA and no long-term maturities until Dec-2030 .
  • Modeling nuance matters: “Reported EBITDA” (analyst lens) vs “Consolidated EBITDA” (covenant lens) diverge due to add-backs; reconcile frameworks when assessing earnings power and covenants .
  • Strategic alternatives as a catalyst: Process continues; absent updates, near-term stock narrative likely tracks execution on margins, cash flow, and integration milestones .
  • Watch LTL/TL and macro: TL benefiting from high-tech/security freight; LTL volumes pressured but stable earnings via pricing/mix; intermodal steady in a muted port backdrop .
  • Near-term: Focus on sustaining pricing, executing One Ground Network and ERP consolidation, and continued deleveraging via cash generation .

References

  • Q3 2025 earnings press release and 8-K exhibits: revenue, margins, liquidity, segment data, cash flow, non-GAAP reconciliations .
  • Earnings call transcript: strategy, guidance tone, cost actions, segment outlook, covenants .
  • Prior quarters for trend analysis: Q1 2025 and Q2 2025 press releases .
  • Additional Q3-relevant press: Omni Logistics automotive replenishment case (execution capabilities) .

Footnote: Asterisk indicates S&P Global Market Intelligence consensus/actuals from GetEstimates. Values retrieved from S&P Global.