RADIANT LOGISTICS, INC (RLGT)·Q2 2025 Earnings Summary

Executive Summary

• Q2 FY2025 revenue rose 31.5% year over year to $264.5M and 29.9% sequentially; adjusted EBITDA increased 55.8% YoY to $12.0M and 26.3% QoQ, with adjusted EBITDA margin up to 19.0% from 16.4% in Q1 .
• GAAP diluted EPS was $0.13 (vs. $0.02 YoY, $0.07 QoQ), while adjusted diluted EPS was $0.22 (vs. $0.11 YoY, $0.16 QoQ); management highlighted non-recurring project work (49 charter flights delivering ~8M units of IV fluid) as a key driver .
• Management cautioned about near-term headwinds, including newly introduced tariffs with China, Mexico, and Canada and seasonal softness in March quarter, tempering extrapolation of Q2 results into a run-rate .
• Balance sheet remains strong (~$20M cash, no meaningful debt, untapped $200M credit facility), with continued M&A pipeline and agent conversions to drive margin expansion; buybacks were paused this quarter .

What Went Well and What Went Wrong

What Went Well

• Strong top-line and earnings: Revenue $264.5M (+31.5% YoY, +29.9% QoQ); adjusted EBITDA $12.0M (+55.8% YoY, +26.3% QoQ); adjusted diluted EPS $0.22 (vs. $0.11 YoY) .
• Project execution: “Chartering 49 flights to bring approximately 8 million units of IV fluid to the U.S.” supported results in the quarter, demonstrating operational agility in humanitarian logistics .
• Margin expansion and pipeline: Adjusted EBITDA margin improved to 19.0%, aided by agent conversions; management emphasized ongoing conversions and tuck-ins (Foundation, Focus, TCB) to support profitable growth .

What Went Wrong

• Gross margin pressure: GAAP gross profit margin fell to 22.5% (from 26.6% in Q1 and 27.8% in Q4), reflecting mix dynamics despite revenue strength .
• Limited repeatability: Management cautioned that project-driven upside should not be annualized; same-store was “relatively flat,” indicating underlying softness persists .
• Macro headwinds: Newly introduced tariffs and seasonal March-quarter softness are expected to frustrate near-term results; buybacks did not occur in Q2 as focus remained on deals .

Financial Results

YoY Q2 (selected metrics):

• Revenue: $264.5M vs. $201.1M (+31.5%) .
• Adjusted EBITDA: $12.0M vs. $7.7M (+55.8%) .
• GAAP diluted EPS: $0.13 vs. $0.02 .

KPIs

Segment breakdown: Not disclosed in Q2 materials; results are presented at consolidated level .

Guidance Changes

Note: Company does not provide formal quantitative guidance ranges in these materials .

Earnings Call Themes & Trends

Management Commentary

• “Generated $12.0 million in adjusted EBITDA…generally ahead of results from the comparable prior year period as well as our most recent previous quarter…including chartering 49 flights to bring approximately 8 million units of IV fluid to the U.S.” — Bohn Crain, CEO .
• “Near-term results could also be further frustrated by the recently introduced tariffs with China, Mexico and Canada, as we head into our slowest seasonal quarter…” — Bohn Crain .
• “We continue to enjoy a strong balance sheet with approximately $20.0 million of cash on hand…no meaningful debt, and an untapped $200 million credit facility…focused on delivering profitable growth through…agent conversions, tuck-ins, and stock buy-backs.” — Bohn Crain .
• “Agent station conversions…reduce commission expense…incremental EBITDA…byproduct is margin expansion (EBITDA/gross margin).” — Bohn Crain .
• “Dimensionally…$2–$3 million of incremental EBITDA contribution” anticipated from TCB acquisition over time — Bohn Crain .

Q&A Highlights

• Outperformance drivers: Project work tied to Hurricane Milton (IV fluids), with some modest tariff-related pull-forward; management cautioned not to annualize the quarter .
• M&A contributions: Agent conversions primarily flow through reduced commissions (margin expansion) rather than top-line; TCB expected to add ~$2–$3M EBITDA over time; only ~1 month impact in Q2 .
• Customs brokerage/Technology: Navigate platform enabling bundled PO/vendor management and brokerage solutions; cross-selling across international clients; “punching above our weight” .
• Near-term outlook: Seasonally soft March quarter; ocean strength in January but overall softness; tariffs remain wildcard .
• Currency: FX impact was small and not meaningful to reported EBITDA this quarter .
• Buybacks: No buyback activity in Q2 given focus on deals .

Estimates Context

• Wall Street consensus (S&P Global) for Q2 FY2025 revenue and EPS was unavailable due to data access limits; therefore, estimate comparison cannot be presented at this time. Values retrieved from S&P Global were unavailable.
• Implications: Given management’s caution on non-recurring project activity and March-quarter seasonality, we expect sell-side models to avoid annualizing Q2 strength and to reflect tariff-related near-term risk .

Key Takeaways for Investors

• Do not annualize Q2: Results benefited from humanitarian project work and modest tariff pull-forward; same-store was “relatively flat,” underscoring underlying softness .
• Margin strategy is working: Adjusted EBITDA margin rose to 19.0% via agent conversions and disciplined cost management; further conversions should support margins even in softer markets .
• Strong balance sheet and dry powder: ~$20M cash, no meaningful debt, and a $200M undrawn facility enable continued tuck-ins and agent conversions; buybacks remain opportunistic but paused in Q2 .
• Watch March quarter: Management guides to seasonal softness similar to last year; tariffs are a key wildcard for near-term demand and pricing .
• M&A synergy: TCB enhances intermodal (40-foot competency), with potential ~$2–$3M EBITDA contribution over time; broader pipeline remains robust .
• Technology differentiation: Navigate platform (global trade management + customs brokerage) provides a bundled solution to deepen customer relationships and cross-sell .
• Trading implications: Near-term consolidation likely as the market digests tariffs and seasonality; medium term, margin expansion from conversions and accretive M&A underpinned by balance sheet strength are supportive for the thesis .