Executive Summary

Q4 revenue was $1.209B (+0.4% YoY) and EPS was $1.31 (down 19% YoY); revenue exceeded the mid-point of guidance while EPS was below due to lower-than-expected variable contribution margin and elevated insurance and claims costs (6.7% of BCO revenue) .
First YoY quarterly revenue growth since Q3 2022, driven by a 1% sequential increase in truck revenue per load and strength in unsided/platform; heavy haul was a standout with FY revenue of ~$498M and Q4 heavy haul revenue +24% YoY on +15% rev/load and +8% volume .
Q1 2025 guidance: revenue $1.075–$1.175B, EPS $1.05–$1.25, VC margin 14.0–14.3%, insurance and claims ~6% of BCO revenue, tax rate 24.5%—implies sequential seasonal softening vs Q4, especially in volumes .
Capital returns remain a support: declared $0.36 quarterly dividend (payable Mar 11, 2025) and paid a $2.00 special dividend in December; repurchased ~$82M of stock in FY24; cash and short-term investments were ~$567M at year-end .

What Went Well and What Went Wrong

What Went Well
- Heavy haul momentum: “approximately $498 million of heavy haul revenue during the 2024 fiscal year, record revenue… driven by a 9% increase in heavy haul revenue per load and a 3% increase in heavy haul volume” .
- Pricing firmed sequentially: truck revenue per load rose 1% vs Q3; unsided/platform revenue per load +8% YoY; BCO revenue per mile for unsided/platform +17% YoY .
- YoY revenue growth resumed: revenue +0.4% YoY; unsided/platform revenue up to $362M from $340M; ocean/air up to $88M from $64M .
What Went Wrong
- Margin pressure: variable contribution margin fell to 13.8% (from 14.8%) on higher rates paid to brokerage carriers (+103 bps YoY) and mix headwinds; gross margin declined to 9.0% (from 10.3%) .
- Elevated insurance and claims: 6.7% of BCO revenue vs 4.7% historical avg (2019–2023), driven by higher cargo theft/fraud and auto liability; included ~$2.2M unfavorable prior-year claim adjustments .
- Capacity/BCO attrition: BCO trucks decreased YoY (8,843 vs 9,809) and active brokerage carriers down (43,718 vs 49,111), reflecting a loose capacity market and pressure on van rates .

Financial Results

YoY comparison (Q4 2023 → Q4 2024)

Metric	Q4 2023	Q4 2024
Revenue ($USD Billions)	$1.204	$1.209
EPS ($)	$1.62	$1.31
Operating Income ($MM)	$74.567	$57.771
Net Income ($MM)	$57.987	$46.193
Gross Profit Margin %	10.3%	9.0%
Variable Contribution Margin %	14.8%	13.8%
Total Truck Loadings (000s)	493.370	476.540
Truck Revenue per Load ($)	$2,199	$2,268
Insurance & Claims (% of BCO revenue)	6.0%	6.7%
Effective Tax Rate (%)	24.1%	21.4%

Sequential comparison (Q2 2024 → Q3 2024 → Q4 2024)

Metric	Q2 2024	Q3 2024	Q4 2024
Revenue ($USD Billions)	$1.225	$1.214	$1.209
EPS ($)	$1.48	$1.41	$1.31
Total Truck Revenue/Load ($)	$2,177	$2,246	$2,268

Segment/service-type revenue (Q4 2023 → Q4 2024)

Segment ($MM)	Q4 2023	Q4 2024
Total Truck Transportation	$1,085.113	$1,080.809
Van (Truckload)	$618.588	$596.573
Unsided/Platform (Truckload)	$339.910	$361.910
LTL	$26.913	$21.926
Other Truck Transportation	$99.702	$100.400
Rail Intermodal	$24.344	$18.347
Ocean & Air Cargo	$64.280	$88.173
Other	$30.708	$22.001

Key KPIs

KPI	Q4 2023	Q4 2024
Total Truck Loadings	493,370	476,540
Truck Revenue per Load ($)	2,199	2,268
Van Revenue per Load ($)	2,113	2,109
Unsided/Platform Revenue per Load ($)	2,948	3,169
BCO Load Revenue ($MM)	$454.774	$447.074
Active Brokerage Carriers	49,111	43,718
BCO Independent Contractors (count)	9,024	8,082
BCO Trucks	9,809	8,843
Insurance & Claims (% of BCO revenue)	6.0%	6.7%
Cash + Short-term Investments ($MM)	$540.704 as of 12/30/23	$566.637 as of 12/28/24

Notes: “Truck revenue per load +1% q/q; unsided/platform rev/mile by BCO +17% YoY; van rev/mile by BCO +3% YoY” .

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Revenue ($B)	Q1 2025	N/A	$1.075–$1.175	N/A
EPS ($)	Q1 2025	N/A	$1.05–$1.25	N/A
Variable Contribution Margin (%)	Q1 2025	N/A	14.0–14.3	N/A
Insurance & Claims (% of BCO revenue)	Q1 2025	N/A	~6.0	N/A
Effective Tax Rate (%)	Q1 2025	N/A	24.5	N/A
Dividend (Regular)	Q1 2025	$0.36 declared prior quarter	$0.36 payable Mar 11, 2025	Maintained
Dividend (Special)	Q4 2024	N/A	$2.00 special dividend paid Jan 21, 2025	One-time

Management also noted a $0.05 tax benefit in Q4 2024 from favorable state items not expected to recur in Q1 2025 .

Earnings Call Themes & Trends

Topic	Previous Mentions (Q2 & Q3 2024)	Current Period (Q4 2024)	Trend
Pricing/Revenue per Load	Q2: sequential revenue growth (+5% q/q) first since 2Q22; freight environment challenging . Q3: truck revenue/Load +3.2% q/q, above seasonality .	Truck revenue/Load +1% q/q; unsided/platform rev/load +8% YoY; BCO rev/mile: unsided/platform +17%, van +3% YoY .	Improving gradually
Heavy Haul/Platform	Not highlighted in Q2/Q3 releases.	FY heavy haul ~$498M (record); Q4 heavy haul +24% YoY on +15% rev/load, +8% volume; tech and leadership investments support growth .	Strong positive
Capacity/BCO Fleet	Ongoing soft demand; capacity readily available .	BCO trucks down ~10% YoY; sequential declines moderating; turnover improving to 34.5% from 41% .	Stabilizing (from weak)
Insurance/Claims	Elevated in 2024; Q3 insurance & claims $30.398M .	6.7% of BCO revenue; higher cargo theft/fraud and unfavorable auto liability development .	Still elevated
Macro/Cycle	Challenging freight backdrop .	“Bottom-ish” point; sentiment improving; still need capacity to exit and demand to firm .	Cautious optimism
Tariffs/Policy	Not highlighted.	Monitoring policy shifts; largest exposure is U.S.–Mexico cross-border (~$540M FY24) .	Watch item
Capital Allocation	Regular dividends and buybacks (Q2/Q3) .	$2.00 special dividend; $0.36 quarterly dividend; ~$82M buybacks in FY24 .	Shareholder-friendly

Management Commentary

CEO: “First year over year quarterly revenue growth since the 2022 third quarter… sequential increase in overall truck pricing… strong revenue performance specific to our unsided/platform service offering.”
CEO on cycle: “At the beginning of the end or the beginning of the beginning… sentiment is clearly more positive… some capacity needs to continue to come out.”
CFO on mix/margins: “VC margin decreased primarily due to a decreased VC margin on revenue generated by truck brokerage carriers… rate paid to brokerage carriers was 103 bps higher… and a mix headwind.”
CEO on heavy haul: “We’ve deployed some new and different technology to make sure that when we do quote something, we understand the full spectrum of services… appropriate rating and routing… high-touch service offering.”
Capital allocation: “Declared a $2 per share special dividend… deployed over $82 million toward buybacks in FY24.”

Q&A Highlights

Where are we in the cycle? Management sees “bottom-ish” conditions with improving sentiment; expects gradual rate improvement in 2025 and further capacity rationalization before a clearer upturn .
BCO fleet trajectory: YoY declines (~10%) but sequential net losses improved; turnover down to 34.5% from 41%; focus on recruiting/retention while maintaining safety standards .
Heavy haul drivers: Broad-based demand (aerospace/defense/government/auto/industrial) plus leadership/talent investments and new technology in rating/routing; Q4 heavy haul +24% revenue YoY .
Tariffs exposure: Primary sensitivity is U.S.–Mexico cross-border (~$540M FY24); Q1 guidance does not assume negative tariff impacts .
Expense outlook: ~$14M 2025 headwind from rebuilding performance-based and stock compensation vs 2024 bear-case; potential offsets include lower contractor bad debt, trailer gains, fleet refresh maintenance savings; continued OpEx discipline .

Estimates Context

S&P Global consensus estimates were unavailable at time of analysis due to data access limits; therefore, we cannot present beat/miss vs consensus for Q4 2024. We will update with S&P Global consensus when accessible.
Management indicated Q4 revenue exceeded the mid-point of guidance, while EPS was below mid-point due to lower-than-anticipated VC margin and elevated insurance and claims, partially offset by a lower tax rate .

Key Takeaways for Investors

The inflection in YoY revenue (+0.4%) combined with sequential pricing momentum (+1% q/q) suggests early-cycle stabilization; unsided/platform and heavy haul are the clear bright spots and likely the strongest lever for near-term mix/pricing gains .
Margin repair is the swing factor: watch VC margin vs guidance (14.0–14.3% in Q1) and insurance/claims normalization (~6% of BCO revenue guided) for EPS sensitivity; mix away from lower-margin brokerage would help .
Q1 guide implies seasonal sequential step-down (volumes −5% to +1% q/q; rev/load down 6% to 1% q/q) and a balanced stance amid macro/policy uncertainty—tone “cautiously optimistic” for 2025 .
Capacity/BCO trends bear watching: sequential stabilization and improving turnover (34.5%) are constructive; a rate upturn should accelerate BCO re-engagement and support margin mix .
Capital returns and balance sheet (cash/ST investments ~$567M) provide downside support; special and regular dividends plus opportunistic buybacks continue .
Heavy haul remains a structural growth vector with tech/process investments; continued outperformance can offset weakness in van/consumer-sensitive freight .
Policy/tariffs risk skew: largest sensitivity is U.S.–Mexico cross-border; monitor U.S. trade policy and industrial activity trajectory for 2H’25 rate inflection potential .

LANDSTAR SYSTEM INC (LSTR)·Q4 2024 Earnings Summary