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WABASH NATIONAL Corp (WNC)·Q1 2025 Earnings Summary

Executive Summary

  • Q1 2025 revenue of $380.9M and adjusted diluted EPS of $(0.58) both missed consensus; GAAP EPS was $5.36 due to a $342M legal gain from a reduced verdict . Revenue fell 26.1% year over year and gross margin compressed to 5.0% on weaker Transportation Solutions demand and labor inefficiencies .
  • Management cut FY25 guidance to ~$1.8B revenue and adjusted EPS range of $(0.85)–$(0.35), citing tariff-related uncertainty that is delaying customers’ CapEx and slowing order flow; backlog ended Q1 at ~$1.2B (seq +5%, YoY −32%) .
  • Parts & Services grew revenue 5.5% YoY to $52.0M, with continued momentum in Trailers as a Service (TaaS) and upfit, while segment margins declined vs prior year on mix; Transportation Solutions posted an operating loss .
  • Near-term catalysts: clarity on tariffs/regulation, stabilization of order activity, and execution on Parts & Services/TaaS initiatives (including TrailerHawk.ai integration and UP.Labs AI tools) .

What Went Well and What Went Wrong

What Went Well

  • Parts & Services delivered sequential and year-over-year revenue growth to $52.0M, supported by doubled upfit volumes and expanding TaaS fleet (>1,000 trailers deployed) .
  • Strategic progress in technology and services: acquisition of TrailerHawk.ai to enhance cargo security and TaaS, and UP.Labs partnership to build AI-powered configuration and parts intelligence tools .
  • Backlog held at ~$1.2B (seq +5%), providing visibility despite industry uncertainty; management emphasized long-term tailwinds from potential revitalization of U.S. manufacturing .

Management quotes:

  • “Non-GAAP adjusted EPS was $(0.58)…revenue came in below our expectations…We have since reduced direct labor to align cost with market conditions.” – CEO Brent Yeagy .
  • “We expect sequential growth in Parts & Services through Q2, Q3 and Q4.” – Chief Growth Officer Mike Pettit .
  • “We’re collaborating [with UP.Labs] to build…an AI-powered equipment configuration tool…and parts intelligence to optimize inventory levels.” – Mike Pettit .

What Went Wrong

  • Transportation Solutions demand weakened materially; segment net sales fell 26.3% YoY and posted a $(9.8)M operating loss; gross margin compressed to 2.4% from 13.4% .
  • Labor overexposure and poor fixed-cost absorption as anticipated quick-turn equipment demand failed to materialize late in the quarter; gross margin fell to 5.0% at the consolidated level .
  • Tariff-related uncertainty led customers to delay equipment investments, driving guidance reductions for FY25 and muted near-term order flow; backlog down 32% YoY .

Financial Results

Summary Financials (GAAP and Adjusted)

MetricQ3 2024Q4 2024Q1 2025
Revenue ($USD Millions)$464.0 $416.8 $380.9
Gross Profit ($USD Millions)$56.0 $42.959 $19.003
Gross Margin %12.1% 10.3% 5.0%
Operating Income (Loss) - GAAP ($USD Millions)$(433.0) $3.586 $314.551
Adjusted Operating Income (Loss) ($USD Millions)$16.972 $3.586 $(27.449)
Diluted EPS - GAAP ($)$(7.53) $(0.02) $5.36
Adjusted Diluted EPS ($)$0.19 $(0.02) $(0.58)

Actual vs Consensus (Q1 2025)

MetricActualConsensusDelta
Revenue ($USD Millions)$380.9 $409.85*Miss
Adjusted Diluted EPS ($)$(0.58) $(0.28)*Miss
EPS Estimates Count—2*—
Revenue Estimates Count—2*—

Values retrieved from S&P Global.*

Segment Performance (Quarterly)

Segment MetricQ1 2024Q1 2025
Transportation Solutions Net Sales ($USD Thousands)$470,428 $346,803
Transportation Solutions Gross Profit ($USD Thousands)$63,112 $8,414
Transportation Solutions Operating Margin %9.4% (2.8)%
Parts & Services Net Sales ($USD Thousands)$49,234 $51,955
Parts & Services Gross Profit ($USD Thousands)$13,334 $10,589
Parts & Services Operating Margin %21.4% 13.3%

KPIs

KPIQ1 2024Q1 2025
Trailers Shipped (units)8,500 6,290
Truck Bodies Shipped (units)3,690 3,000
Backlog ($USD Billions)~$1.8 (implied, given −32% YoY from $1.2B) ~$1.2

Notes: Backlog ended Q1 2025 at ~$1.2B (seq +5%, YoY −32%) .

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Revenue ($USD Billions)FY 2025$1.9–$2.1 ~$1.8 Lowered
Adjusted EPS ($)FY 2025$0.85–$1.05 $(0.85)–$(0.35) Lowered
Revenue ($USD Millions)Q2 2025—$420–$460 New
EPS ($)Q2 2025—$(0.25)–$(0.35) New
Dividend per share ($)Quarterly$0.08 $0.08 (declared) Maintained

Management attributed reductions to weaker demand and tariff-related uncertainty inhibiting customers’ CapEx decisions .

Earnings Call Themes & Trends

TopicQ3 2024 (Prior-2)Q4 2024 (Prior-1)Q1 2025 (Current)Trend
Tariffs/MacroLegal charge overshadowed operations; demand caution Measured FY25 outlook; backlog up sequentially “Tariff-related uncertainty causing customers to delay equipment investment”; U.S.-centric footprint mitigates direct tariff exposure Worsening near term
Parts & ServicesGP margin 21.9%; segment resilience Revenue $48.6M; margin 9.2% Revenue $52.0M; upfit volumes doubled; TaaS >1,000 units Improving growth; margin mixed
Technology/AI——UP.Labs AI configuration and parts intelligence in development Building
TaaS/Recurring—TaaS platform highlighted Trailers >1,000; Echo partnership expanding drop trailer program (post-Q1) Scaling
Manufacturing footprint/supplyDomestic sourcing/agreements emphasized; capacity investments Backlog visibility; truck bodies/Parts expected stronger Domestic manufacturing footprint; right-sizing labor after demand shortfall Operational adjustment
Regulatory/legal$450M charge (Q3) Initial FY25 guide Court reduced punitive damages to $108M; GAAP EPS uplift from $342M gain Legal overhang moderating

Management Commentary

  • “While tariff-related uncertainty has caused customers to delay equipment investment decisions, it’s important to highlight the growth in our Parts & Services segment.” – CEO Brent Yeagy .
  • “We doubled upfit volumes in Q1…added customers to TaaS…over 1,000 trailers deployed.” – Chief Growth Officer Mike Pettit .
  • “We’ve taken action to right-size direct labor and production support costs.” – CFO Pat Keslin .
  • “Our manufacturing footprint is almost entirely U.S.-based and 95% of materials are sourced domestically.” – CEO Brent Yeagy .

Q&A Highlights

  • Margin trajectory and decrementals: CFO noted commodity pricing pressures embedded in FY guide; Q1 margin weakness tied to sudden demand drop and labor imbalance late in quarter, now right-sized .
  • Parts & Services outlook: Management expects sequential revenue growth through Q2–Q4 and high-teens EBITDA for the year despite Q1 mix pressure .
  • TaaS adoption: Fleet now “just over 1,000” units with 20–25 engaged customers; capabilities expanding alongside demand .
  • Deliveries underpinning Q2 guide: Slight step-up in trailer and truck body shipments; nothing “heroic” implied .
  • Liquidity: ~$310M liquidity (cash + revolver); capital allocation flexible across CapEx, dividend, buybacks, TaaS investments .
  • H2 EPS positive assumption: Based on cost actions and stabilization rather than demand recovery; assumes uncertainty does not worsen .

Estimates Context

  • Q1 2025 miss vs Street: Revenue $380.9M vs $409.85M*, adjusted EPS $(0.58) vs $(0.28)* .
  • FY 2025 consensus sits below guidance: Revenue $1.55B* vs company ~$1.8B; normalized EPS $(1.97)* vs company $(0.85)–$(0.35), implying Street is more cautious than management .
  • Near-term estimate revisions likely reflect reduced FY guide and Q2 loss guidance; watch for Parts & Services/TaaS scaling to temper downside in out-quarters .

Values retrieved from S&P Global.*

Key Takeaways for Investors

  • Cycle trough dynamics: Orders have contracted for eight consecutive quarters with backlog down 32% YoY; tariff uncertainty is inhibiting CapEx and delaying purchases .
  • Guidance reset: FY25 revenue cut to ~$1.8B and adjusted EPS to $(0.85)–$(0.35); Q2 guided loss of $(0.25)–$(0.35) with $420–$460M revenue .
  • Cost actions: Labor and SG&A right-sizing executed; management expects H2 modestly positive EPS without assuming demand recovery, contingent on uncertainty not worsening .
  • Strategic buffer: Parts & Services/TaaS provide recurring revenue and resilience; upfit growth and tech integrations (TrailerHawk.ai, UP.Labs) are structurally positive .
  • Legal overhang improved: Court reduced punitive damages; Q1 GAAP EPS benefited from $342M gain; appeals ongoing, but capital allocation priorities remain intact .
  • Trading implications: Near-term sentiment tied to tariff/regulatory clarity and order stabilization; upside optionality if uncertainty subsides and H2 volumes stabilize at right-sized cost base .
  • Medium-term thesis: If FY25 shipments undercut replacement, fleet aging sets up catch-up demand; Wabash’s domestic footprint and services platform should leverage any manufacturing-led freight rebound .