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Knight-Swift Transportation Holdings Inc. (KNX)·Q2 2025 Earnings Summary

Executive Summary

  • Q2 2025 delivered resilient results in a volatile freight backdrop: total revenue $1.862B (+0.8% YoY), GAAP EPS $0.21 (+61.5% YoY), and Adjusted EPS $0.35 (+45.8% YoY), with consolidated Adjusted OR improving 80 bps to 93.8% .
  • Management initiated Q3 2025 Adjusted EPS guidance of $0.36–$0.42 and cut FY 2025 net cash capex to $525–$575M (from $575–$625M), highlighting cost discipline and near-term uncertainty around trade policy and seasonality .
  • Truckload margins strengthened despite soft demand and mix pressure; Adjusted Operating Income rose 87.5% YoY and Adjusted OR improved 260 bps to 94.6% on cost-per-mile reductions and productivity gains .
  • LTL volumes and pricing were strong (shipments/day +21.7% YoY; revenue xFSC +28.4% YoY), but early-stage network expansion and DHE integration costs weighed on margins (Adjusted OR 93.1%, +720 bps YoY) .
  • Catalysts: cost-out momentum, Q3 EPS guidance initiation, continued LTL network scaling, and intermodal cost initiatives (private chassis conversion); watch tariff/macro clarity and West Coast imports normalization .

What Went Well and What Went Wrong

  • What Went Well

    • Truckload margin expansion despite softer rates/mix: Adjusted Operating Income +87.5% YoY; Adjusted OR 94.6% (−260 bps YoY) as cost-per-mile initiatives and productivity lifted miles per tractor +4.0% YoY .
    • Logistics improved profitability with disciplined pricing: gross margin 18.9% (+100 bps YoY) and Adjusted OR 94.8% (−70 bps YoY) despite revenue −2.6% YoY; revenue per load +10.6% .
    • Clear Q3 guidance and capital discipline: Adjusted EPS $0.36–$0.42; FY 2025 net cash capex cut to $525–$575M; effective tax rate (adjusted) ~27–28% for Q3 .
    • Management quote: “We leveraged our cost initiatives and the agility of our over-the-road model…Truckload segment sequentially improved operating income and operating margin despite a sequential decline in revenue per mile.” — Adam Miller (CEO) .

  • What Went Wrong

    • LTL margin headwinds from expansion/integration: Adjusted OR 93.1% (+720 bps YoY) as start-up and DHE integration costs offset strong volume/pricing; Adjusted Operating Income −36.8% YoY .
    • Intermodal pressured by West Coast import weakness: load count −12.4% YoY, revenue per load −1.6%, OR 104.1% (+230 bps YoY) despite cost reductions and network balance efforts .
    • Revenue per loaded mile declined sequentially in Truckload (−1.4%) due to mix changes and spot market weakness; broader second-quarter seasonality failed to materialize amid trade policy uncertainty .

Financial Results

  • Consolidated sequential comparison
MetricQ4 2024Q1 2025Q2 2025
Total Revenue ($USD Millions)$1,864.3 $1,824.4 $1,861.9
Revenue ex Truckload/LTL FSC ($USD Millions)$1,676.5 $1,633.0 $1,672.2
Operating Income ($USD Millions)$78.0 $66.7 $72.6
Operating Ratio (%)95.8% 96.3% 96.1%
Adjusted Operating Income ($USD Millions)$106.1 $86.6 $103.8
Adjusted Operating Ratio (%)93.7% 94.7% 93.8%
Net Income Attributable ($USD Millions)$69.5 $30.6 $34.2
Diluted EPS ($USD)$0.43 $0.19 $0.21
Adjusted EPS ($USD)$0.36 $0.28 $0.35
  • YoY comparison (Q2)
MetricQ2 2024Q2 2025
Total Revenue ($USD Millions)$1,846.7 $1,861.9
Operating Income ($USD Millions)$63.5 $72.6
Operating Ratio (%)96.6% 96.1%
Adjusted Operating Income ($USD Millions)$88.5 $103.8
Adjusted Operating Ratio (%)94.6% 93.8%
Net Income Attributable ($USD Millions)$20.3 $34.2
Diluted EPS ($USD)$0.13 $0.21
Adjusted EPS ($USD)$0.24 $0.35
  • Segment breakdown (Q2 YoY)
SegmentRevenue BasisQ2 2024Q2 2025Change
TruckloadRevenue ex FSC & intersegment ($MM)$1,102.8 $1,073.3 −2.7%
TruckloadAdjusted Operating Income ($MM)$31.2 $58.4 +87.5%
TruckloadAdjusted OR (%)97.2% 94.6% −260 bps
LTLRevenue ex FSC ($MM)$263.1 $337.7 +28.4%
LTLAdjusted Operating Income ($MM)$37.0 $23.4 −36.8%
LTLAdjusted OR (%)85.9% 93.1% +720 bps
LogisticsRevenue ($MM)$131.7 $128.3 −2.6%
LogisticsAdjusted Operating Income ($MM)$5.9 $6.7 +13.3%
LogisticsAdjusted OR (%)95.5% 94.8% −70 bps
IntermodalRevenue ($MM)$97.5 $84.1 −13.8%
IntermodalOperating Loss ($MM)$(1.7) $(3.4) −99.7%
IntermodalOR (%)101.8% 104.1% +230 bps
  • KPIs (Q2 YoY)
KPIQ2 2024Q2 2025
Truckload: Miles per tractor20,518 21,335
Truckload: Avg revenue per tractor ($)$48,309 $50,364
Truckload: Non-paid empty miles (%)14.0% 13.9%
LTL: Shipments per day20,482 24,918
LTL: Revenue xFSC per hundredweight ($)$17.22 $18.93
LTL: Avg length of haul (miles)585 666
Logistics: Revenue per load ($)$1,831 $2,025
Logistics: Gross margin (%)17.9% 18.9%
Intermodal: Load count37,290 32,682
Intermodal: Avg revenue per load ($)$2,615 $2,572

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Adjusted EPSQ3 2025N/A (none provided in Q1) $0.36–$0.42 Initiated
Net Cash CapexFY 2025$575–$625M $525–$575M Lowered
Gain on SaleQ3 2025N/A$18–$23M Initiated
Effective Tax Rate (Adjusted)Q3 2025N/A (Q1 guided full-year 24.5–25.5%) ~27–28% Raised vs full-year benchmark
DividendQ2 2025$0.18 declared (Apr 30) Paid Jun 23, 2025 Maintained

Segment guidance highlights for Q3 2025:

  • Truckload: revenue up low-single-digit % sequentially; margins slightly improved; revenue/loaded mile recovers slightly; tractor count/utilization largely stable .
  • LTL: revenue xFSC +20–25% YoY; Adjusted OR improves 100–200 bps sequentially as cost initiatives/operating leverage offset normal seasonal degradation .
  • Logistics: revenue and Adjusted OR fairly stable sequentially .
  • Intermodal: load count improves high-single-digit % sequentially; operating loss improves on cost initiatives/volume leverage .
  • All Other: Q3 operating income (pre $11.7M intangible amortization) ~$15–$20M; Q4 step-down similar to prior year .

Earnings Call Themes & Trends

TopicPrevious Mentions (Q4 2024, Q1 2025)Current Period (Q2 2025)Trend
Tariffs/macro demandQ4: Gradual recovery expected; choppy conditions . Q1: Tariff drag dampened seasonality; customers delaying decisions .Policy uncertainty; limited normal seasonality; early peak discussions; demand modestly firmer late Q2 .Cautiously improving but fluid; planning remains conservative .
Truckload margins & cost per mileQ4: Legacy TL back to 80s Adjusted OR; cost/mile −2.2% YoY . Q1: Adjusted OR 95.6%; cost/mile improvement continued .Adjusted OR 94.6%; TTM cost/mile −1.5% (3¢/mile); productivity/miles per tractor +4% YoY .Structural cost-out progressing; margins expanding in soft market .
LTL expansion/integration (DHE)Q4: System integration completed; near-term cost headwinds . Q1: 7 service centers added; 26.7% revenue xFSC growth; margin pressured .3 new sites added; shipments/day +21.7%; pricing stronger; margin still pressured but sequential OR improvement (−110 bps) .Network scaling with price discipline; focus on cost normalization .
Logistics strategyQ4: Adj. OR 93.7%; leveraging power-only . Q1: Adj. OR 95.5%; tech-enabled quoting; trailer tracking .Adj. OR 94.8%; gross margin 18.9%; price discipline; carrier qualification .Resilient margin profile via tech/power-only integration .
Intermodal West Coast importsQ4: OR improvement; load count up YoY . Q1: OR 102.0%; load count +4.6% YoY .OR 104.1% on import softness; load count −12.4% YoY; private chassis conversion in five markets .Near-term headwinds; cost actions underway; expected sequential load growth .
Technology/AI investmentsQ1: Trailer tracking; dynamic quoting .Safety AI partnership with Netradyne (Driver•i deployment across ~15,500 trucks) to enhance safety/driver engagement .Continued tech-enablement to support cost/service differentiation .

Management Commentary

  • Strategic posture: “We have invested significant effort into taking our service, technology-enablement, cost efficiency, and cross-brand collaboration to new levels and are well-positioned to execute on peak season and the opportunities that the next cycle will produce.” — CEO .
  • LTL focus: “We are taking actions to accelerate the realization of cost efficiencies and to better align our resources with shifting volumes and freight flows…drive improvements in cost and yield.” — CEO .
  • Truckload execution: “Flexibility of our over-the-road model and meaningful progress improving our cost structure helped our Truckload segment improve its adjusted operating ratio by 260 bps…grow adjusted operating income 87.5% YoY.” — CFO .
  • Cost program: “Our realized cost per total mile has declined 1.5%…we made meaningful progress reducing fixed costs…variable cost per mile reductions in insurance, maintenance, and fuel.” — CFO .
  • Outlook caution: “Customers continue to navigate an uncertain policy landscape…Discussions are beginning around a few projects, but it is too early to have a good read.” — CEO .

Q&A Highlights

  • Supply/demand equilibrium: Capacity exits continue modestly; customers increasingly wary of broker service reliability; early strength noted in mid-July vs expectations, but management remains cautious on back-half trajectory .
  • Truckload mid-cycle margin potential: KNX targets mid-80s OR at mid-cycle, low-80s/high-70s at peak; cost structure improvements and one-way scale expected to drive outsized gains as spot tightens .
  • LTL pricing/tonnage: West build progressing; renewals steady in mid-to-upper single digits; near-term cost normalization initiatives (labor scheduling, pickup/delivery software, linehaul optimization) to lift margins despite growth-driven cost onboarding .
  • Gain on sale cadence: Expected stronger Q3 on inventory timing and small-carrier demand; back-half variability remains given equipment mix and market dynamics .
  • Broker dynamics: Greater market price transparency from third-party datasets; mini-bids increasingly replacing failed lanes from broker/small carrier exposure; KNX positioned to capture higher-priced lanes with scale .
  • Productivity: Miles per tractor +4% YoY aided by asset optimization and higher seeded productivity, signaling gradual improvement as market normalizes .

Estimates Context

  • S&P Global Wall Street consensus for Q2 2025 EPS and revenue was unavailable via our data pull; therefore, we cannot declare an EPS or revenue beat/miss versus consensus. Values retrieved from S&P Global.*
  • Contextual comparison: KNX’s Q2 Adjusted EPS of $0.35 fell within Q1-issued guidance of $0.30–$0.38, and management initiated Q3 Adjusted EPS guidance of $0.36–$0.42 .

Key Takeaways for Investors

  • Cost-out momentum is tangible: Truckload Adjusted OR improved 260 bps YoY with TTM cost/mile −1.5%—positioning KNX for operating leverage as demand normalizes; sustained focus on fixed and variable cost controls should support margin expansion .
  • LTL is scaling with strong demand/pricing but needs cost normalization: shipment growth and pricing strength are offset near-term by expansion/integration costs; sequential OR improvement indicates early margin recovery efforts are taking hold .
  • Intermodal is the swing factor: West Coast import softness pressured Q2; private chassis conversion and expected sequential load growth are levers for loss reduction—monitor bid outcomes and volume normalization .
  • Capital allocation prudence: FY 2025 net cash capex cut to $525–$575M improves FCF resiliency in uncertain macro/trade policy conditions .
  • Near-term setup: Q3 EPS guide $0.36–$0.42 suggests stable-to-modestly improving conditions with limited seasonality; watch for any tariff policy resolution and peak season project wins as upside catalysts .
  • Structural advantages: KNX’s scale in one-way TL, cross-brand asset flexibility, and logistics power-only integration enhance responsiveness to mini-bid failures and high-value lanes—potential to gain share as broker exposure recedes .
  • Safety/technology investments (e.g., Netradyne deployment) should continue to support claim costs, driver engagement, and service differentiation—reinforcing the cost and margin story over time .