WABASH NATIONAL Corp (WNC)·Q2 2025 Earnings Summary

Executive Summary

• Q2 revenue of $458.8M and adjusted EPS of $(0.15) both beat Wall Street consensus on modestly stronger shipments and cost containment; backlog ended at ~$1.0B as customers remain cautious on capex .
• Guidance was cut again: FY25 revenue to ~$1.6B and adjusted EPS to $(1.30)-$(1.00); Q3 guide implies revenue $390–$430M and EPS $(0.20)-$(0.30) .
• Parts & Services continued to offset cycle pressure with +8.8% YoY revenue and ~17% adjusted segment EBITDA margin; Transportation Solutions margins compressed sharply YoY .
• Management reiterated muted 2025 industry shipments (below replacement demand) but is “cautiously optimistic” about 2026 returning to growth; free cash flow expected near breakeven for 2025 excluding TaaS investments .

What Went Well and What Went Wrong

• What Went Well

  • Parts & Services growth and margins: revenue +8.8% YoY and +15% sequential; adjusted segment EBITDA margin ~17% in Q2, supporting portfolio resilience .
  • Operational execution and cost discipline: adjusted EPS of $(0.15) beat consensus due to “slightly higher revenue and cost containment actions” .
  • Strategic initiatives advancing: TaaS progress (Echo partnership), TrailerHawk app v1.2, and Preferred Partner Network expansion (>110 locations), positioning for secular growth .
  • Management quote: “We still expect to be near free cash flow breakeven for 2025…we’re cautiously optimistic that 2026 will reflect a return to growth.” – Brent Yeagy .

• What Went Wrong

  • Top-line and margins under pressure: revenue -16.7% YoY, consolidated gross margin 9.0%; Transport Solutions margin 7.1% vs 15.0% YoY .
  • FY25 outlook reduced again: revenue cut to ~$1.6B (from $1.8B in Q1, $2.0B initial) and adjusted EPS to $(1.30)-$(1.00) (from $(0.85)-$(0.35) in Q1) amid industry forecast downgrades .
  • Free cash flow negative YTD on working capital and TaaS investments; Q2 FCF $(22.8)M and H1 $(51.9)M .
  • Analyst concerns: ASP declines driven by mix (more dry vans) and shipment timing; net leverage 6.2x raised attention on balance-sheet flexibility .

Financial Results

Values with asterisk retrieved from S&P Global.

Segment Breakdown (YoY)

KPIs and Operating Metrics

Note: In the release narrative, TS “operating loss of $12.5M” conflicts with the table showing $12.5M operating income; consolidated math aligns to TS operating income, suggesting the narrative is a typographical error .

Guidance Changes

Earnings Call Themes & Trends

Management Commentary

• “Demand remains muted across the trailer industry…we now expect midpoints of $1.6 billion in revenue and ($1.15) of adjusted EPS…we’re cautiously optimistic that 2026 will reflect a return to growth.” – Brent Yeagy, CEO .
• “Adjusted net income…was -$6.1 million, or -$0.15 per diluted share, beating expectations due to slightly higher revenue and cost containment actions.” – Pat Keslin, CFO .
• “In the second quarter…the segment grew 15% sequentially and 8.8% year-over-year, while seeing EBITDA margins return to the high teens…we’re opening two new upfit centers…putting us on pace to exceed 2,000 units in 2025.” – Mike Pettit, Chief Growth Officer .

Q&A Highlights

• Cycle outlook (2026): Management sees normalization back to replacement demand as capacity exits; a modest improvement in spot rates could catalyze 2026 spending .
• Parts & Services growth durability: Upfit and PPN expansion driving secular growth; management expects H2 to be ~20% better than H1 .
• ASP dynamics: Sequential ASP declines driven by mix (more dry vans vs tanks); like-for-like ASP stable .
• Shipments timing/working capital: Large June shipments created collection timing drag; Q2 shipments stronger than expected .
• Capital allocation to TaaS: H1 spend ~$21M; fleet >1,000 units; expected growth in H2 is market-dependent .

Estimates Context

• Q2 2025: Revenue $458.8M vs consensus $433.8M* (beat by ~$25.0M); Adjusted EPS $(0.15) vs EPS consensus $(0.34)* (beat by ~$0.19). EBITDA reported (company adjusted) $16.3M; S&P “EBITDA” actual 9.3M* vs consensus 8.3M* (note definitional differences) .
• FY 2025: Company guide revenue ~$1.6B vs consensus $1.546B*; company adjusted EPS midpoint $(1.15) vs consensus $(1.97)*, implying the Street is below management on profitability assumptions .
  Values with asterisk retrieved from S&P Global.

Key Takeaways for Investors

• Q2 delivered upside vs consensus on revenue and EPS through shipments and cost control despite harsh cycle conditions; expect this beat to temper near-term estimate cuts .
• Guidance reset embeds industry forecast downgrades; Street EPS is below management’s midpoint, leaving potential for relative outperformance if Parts & Services continues to scale and costs remain contained .
• Parts & Services is a structural offset with rising scale (PPN, upfit) and margin profile; track H2 sequential growth and EBITDA margin sustainability in high-teens .
• Watch pricing and mix: 2026 price increases anticipated to offset inflation; ASP mix will influence TS margins near-term .
• Balance sheet/liquidity provide flexibility (liquidity $312M; net leverage 6.2x); capex flexed to $30–$40M, with disciplined buybacks/dividend continuation .
• TaaS builds optionality for the upturn (Echo partnership; TrailerHawk app v1.2; fleet >1,000); monitor capital intensity and unit economics as deployment scales .
• Near-term trading: stock likely sensitive to industry shipment revisions and any backlog/orderbook signals; catalysts include H2 Parts & Services growth prints and Q3 execution versus guide .