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PA

Proficient Auto Logistics, Inc (PAL)·Q2 2025 Earnings Summary

Executive Summary

  • Q2 2025 delivered a record revenue quarter at $115.5M, up 21.4% q/q and 8.4% y/y, with total units up 28% q/q and 24% y/y; profitability improved sequentially (Adjusted Operating Income $3.8M; Adjusted OR 96.7%) but remains below prior-year levels due to lower revenue per unit and higher depreciation from asset step-up .
  • Versus consensus, PAL posted a clear revenue beat (actual $115.5M vs $105.7M*), but missed on EPS (GAAP −$0.06 vs +$0.105*) and EBITDA (actual ~$10.0M* vs $11.4M*); the company and SPGI “actual” EPS differ due to normalization vs GAAP, which management did not present as non-GAAP EPS .
  • Guidance signals seasonal softness in Q3: management expects ~25% sequential revenue decline but intends to maintain Adjusted OR despite lower volume; full-year 2025 revenue growth guided to 5–10%, with FY25 CapEx trimmed to ~$10M and free cash flow run-rate targeted at $30–35M after CapEx .
  • Strategic execution themes: market share gains, Brothers integration complete, higher mix of company-delivered revenue (37%) aiding asset utilization; July SAAR 16.4M and tariff-policy clarity cited as constructive for demand stabilization and bid cadence resumption .

What Went Well and What Went Wrong

  • What Went Well

    • Record quarterly revenue and sequential profitability improvement: Adjusted Operating Income $3.8M and Adjusted OR 96.7% (from 98.7% in Q1), driven by share gains and Brothers acquisition; “adjusted operating income … greater than the prior three quarters combined” .
    • Asset utilization improved: company-delivered revenue mix rose to 37% (35% in Q1; 32% in Q2-24), average weekly revenue per company driver +7% q/q; “integration of Brothers … gone smoothly” with common systems deployed .
    • Bid pipeline and contract renewals: retained important OEM contracts at flat-to-up pricing; Toyota Logistics Services 2025 Quality Award underscores service differentiation .

  • What Went Wrong

    • Yield pressure: revenue per unit down ~3% q/q and ~13% y/y due to customer mix and fewer spot opportunities; dedicated fleet revenue fell to $3.8M (vs $7.3M in Q2-24) .
    • Margin compression y/y: Adjusted OR worsened to 96.7% from 91.8% in Q2-24; Adjusted EBITDA margin fell to 9.8% (from 11.6% in Q2-24), reflecting lower RPU and higher D&A from asset step-up .
    • Near-term headwinds: management guides ~25% sequential revenue decline for Q3 despite stronger July; SAAR volatility and tariff/macro uncertainty continue to cap pricing power and spot/dedicated contributions .

Financial Results

MetricQ2 2024Q1 2025Q2 2025
Total Operating Revenue ($USD Millions)$106.607 $95.206 $115.547
Operating Income (Loss) ($USD Millions)$7.041 $(2.363) $0.125
Adjusted Operating Income ($USD Millions)$8.730 $1.236 $3.801
Adjusted Operating Ratio (%)91.8% 98.7% 96.7%
Adjusted EBITDA ($USD Millions)$12.414 $7.764 $11.279
Adjusted EBITDA Margin (%)11.6% 8.2% 9.8%
GAAP EPS (Basic & Diluted, $)—$(0.12) $(0.06)

KPIs and Mix

KPI / MixQ2 2024Q1 2025Q2 2025
Total Units Delivered152,714 + 354,998 = 507,712 163,754 + 330,755 = 494,509 220,578 + 410,848 = 631,426
Revenue/Unit – Company Deliveries ($)$212.25 $185.38 $178.82
Revenue/Unit – Subhaulers ($)$190.77 $173.14 $166.50
Revenue Mix – Company Deliveries (%)32% 35% 37%
Revenue Mix – Subhaulers (%)68% 65% 63%
Dedicated Fleet Revenue ($USD Millions)$7.3 $4.3 $3.8
OEM Contract Revenue (% of transportation revenue)—91% 93%

Balance Sheet Snapshot (end of Q2 2025)

  • Cash $13.6M; Total Debt $90.2M; Net Debt ~$76.6M; Net leverage ~2.2x TTM Adjusted EBITDA ($35.2M) .
  • Equity $339.5M; Shares outstanding ~27.74M .

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Sequential RevenueQ3 2025—~25% decline vs Q2 2025 New (introduced)
Adjusted Operating RatioQ3 2025—Maintain AOR despite lower revenue New (introduced)
Full-Year Revenue GrowthFY 2025“Outpace 2024” (qualitative) 5–10% y/y growth Narrowed to 5–10%
CapEx (equipment)FY 2025~$15M ~$10M Lowered
Free Cash Flow (after CapEx)Run-rate—$30–$35M run-rate New (introduced)
Dedicated Fleet RevenueH2 2025 (quarterly)$4–5M/quarter ~$4M/quarter Lowered/maintained low end

Earnings Call Themes & Trends

TopicQ4 2024 (Q-2)Q1 2025 (Q-1)Q2 2025 (Current)Trend
Tariffs / Macro (SAAR)Weak spot market; SAAR >16M in Dec; early-’25 uncertainty Tariff-driven demand volatility; SAAR forecasts cut to ~15.4–15.6M July SAAR 16.4M; policy clarity seen as constructive Improving clarity; cautious demand
Pricing / Spot PremiumSpot premium collapsed from >100% to ~16%; episodic opportunities RPU stabilization hoped later in ’25; spot ~4.3% of rev RPU down ~3% q/q, ~13% y/y; spot 2.7% of rev Ongoing yield pressure
Company vs Subhaul MixCompany 37%, subhaul 63% Company 35%, subhaul 65% Company 37%, subhaul 63%; utilization up Shift toward company assets aiding margins
Bids / Market ShareAnticipated OEM bid cycles; share opportunities ~$60M annualized new wins ramping; ongoing bids Retained contracts at flat-to-up pricing; multiple OEM bids active Pipeline supportive
Integration / TechCommon TMS; ongoing accounting/HR integration Brothers to common systems by Q2; accounting by July Brothers integration largely complete; common systems across ops Execution milestone
Capacity / CapExFleet CapEx $25–35M contemplated FY25 CapEx ~$15M; equipment availability reasonable FY25 CapEx ~$10M; optionality if bids awarded More disciplined spend
Legal/Regulatory——Investor investigation press releases (class action inquiries) emerged in July–Sept Potential sentiment overhang

Management Commentary

  • “Adjusted operating income for the second quarter was greater than the prior three quarters combined, demonstrating operational improvements and strategic execution in what has been an uncertain environment.” — CEO Rick O’Dell .
  • “In the quarter, we successfully retained a number of important OEM contracts at flat to up pricing levels… our commitment to service excellence was recently recognized by Toyota Logistics Services with their 2025 Quality Award…” — CEO Rick O’Dell .
  • “Our current annualized run rate for free cash flow from operations will be between $30,000,000 and $35,000,000 after CapEx… a differentiator in our industry.” — CFO Brad Wright .
  • “We expect a sequential revenue decline of between 25%… and we expect to maintain adjusted operating ratio even on this lower projected revenue. For the full year, we now expect top line growth year over year between 5–10%.” — CFO Brad Wright .

Q&A Highlights

  • Cost actions and margin trajectory: targeted procurement, facility consolidation, personnel synergies, empty miles reduction; long-term mid-to-high-80s OR aspiration, near-term aim to reach ~90 OR as market normalizes .
  • Yield drivers: sequential deterioration primarily portfolio/customer mix and length-of-haul, not Brothers-specific; expectation for RPU stabilization as comps lap last year’s spot/dedicated step-down .
  • Free cash flow: run-rate after CapEx $30–35M; EBITDA-to-CFO bridge limited by cash taxes/interest in near term .
  • Bid market: mix of defending incumbency and pursuing new volume; OEMs optimizing cost/service amid changing production and import mix—opportunities for share gains .
  • M&A: disciplined posture; monitoring distressed assets; near-term deleveraging via cash generation prioritized .

Estimates Context

  • Q2 2025 vs SPGI consensus: Revenue beat ($115.5M actual vs $105.7M*); EPS miss (GAAP −$0.06 vs +$0.105*; SPGI “actual” normalized EPS +$0.0537*); EBITDA miss (~$10.0M* actual vs $11.4M*). Values retrieved from S&P Global.* .
  • Forward estimates imply softer H2 then modest recovery: Q3 2025 Revenue $110.3M*, EPS $0.0725*; Q4 2025 Revenue $105.33M*, EPS $0.095*; build into 1H 2026 with Q2 2026 Revenue $121.83M*, EPS $0.1667*. Values retrieved from S&P Global.*

Comparison Table (Q2 2025)

MetricConsensus*Actual
Revenue ($USD)$105,675,000*$115,546,586
Primary EPS ($)$0.105*GAAP: $(0.06) ; SPGI “actual” (normalized): $0.0537*
EBITDA ($USD)$11,404,000*~$9,991,884*

Values retrieved from S&P Global.*

Key Takeaways for Investors

  • Mixed quarter with strong execution: revenue/volume outperformance and sequential margin improvement, but yields remain pressured; y/y margins below prior-year given RPU reset and higher D&A .
  • Near-term setup: Q3 seasonal softness (~25% q/q revenue decline) and muted spot/dedicated contributions could cap EPS/EBITDA; maintaining Adjusted OR is a key watchpoint .
  • Structural levers: growing company-asset mix, network density, and cost initiatives (procurement/facilities/personnel/empty miles) underpin medium-term margin path to ~90 OR and potentially high-80s as demand normalizes .
  • Share gains/bids: active OEM bid cycle and resumed cadence post tariff-policy clarity are catalysts for incremental volume—monitor contract wins and Brothers integration synergies .
  • Cash generation and discipline: FY25 CapEx cut to ~$10M; run-rate FCF $30–35M post CapEx supports deleveraging and optionality for targeted growth investments .
  • Legal overhang: investor class-action investigation press releases in July–Sept may weigh on sentiment; no company-specific press release beyond earnings noted .
  • Trade tactically around updates: watch Q3 revenue progression vs ~25% decline guide, OR resilience, bid outcomes, RPU stabilization, and any tariff/macro developments referenced by management .