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WABASH NATIONAL Corp (WNC)·Q3 2025 Earnings Summary

Executive Summary

  • Q3 revenue was $381.6M, below the $390–$430M outlook midpoint and down 17.8% YoY, as Truck Body weakness and lower volumes drove a 4.1% gross margin and adjusted EPS of $(0.51); GAAP EPS was $0.97 due to an $81M legal settlement gain .
  • Results vs consensus: revenue essentially in line (actual $381.6M vs $381.5M estimate*), but adjusted EPS missed (actual $(0.51) vs $(0.39) estimate*) as operational inefficiencies and lower pricing on remaining Q4 backlog pressured profitability .
  • FY25 guidance cut again to revenue ~$1.5B and adjusted EPS $(1.95)–$(2.05); Q4 guide set at revenue $300–$340M and EPS $(0.80)–$(0.70); traditional capex reduced to $25–$30M from $50–$60M to preserve liquidity .
  • Offsets: Parts & Services grew 16.5% YoY in Q3 with 3rd straight sequential growth; free cash flow of $60.6M in Q3; liquidity stood at ~$356M; legal overhang eased with settlement (company outlay ~$30M) .

What Went Well and What Went Wrong

  • What Went Well

    • Parts & Services resilience: net sales up 16.5% YoY to $61.0M; 3rd straight sequential revenue growth, helping stabilize the portfolio; management expects Q4 margins to improve vs Q3 as new upfit centers ramp .
    • Cash discipline: Q3 free cash flow of $60.6M; year-to-date operating cash flow $69.1M despite softer demand .
    • Legal clarity: finalized settlement on Missouri verdict; recorded ~$81M net adjustment; company contribution ~$30M; removes uncertainty overhang (GAAP EPS $0.97 in Q3) .

  • What Went Wrong

    • Demand and mix: Revenue $381.6M came in below guidance; Truck Body demand and medium-duty chassis weakness drove under-absorption and operational inefficiencies; adjusted operating margin was -6.2% and adjusted EBITDA -$5.5M .
    • Transportation Solutions loss: segment revenue down 19.5% YoY to $334.5M; operating loss $(13.1)M with 1.5% gross margin; pricing to fill remaining Q4 backlog came in lower than anticipated .
    • Outlook reset: FY25 revenue cut to ~$1.5B and adjusted EPS to $(1.95)–$(2.05); Q4 guide weak on lower Truck Body shipments (truck bodies ~2,000 units in Q4 vs ~3,065 in Q3) .

Financial Results

  • Consolidated results vs prior year, prior quarter, and estimates
MetricQ3 2024Q2 2025Q3 2025 ActualQ3 2025 Consensus*
Revenue ($M)464.0 458.8 381.6 381.5*
GAAP Diluted EPS ($)(7.53) (0.23) 0.97 —
Adjusted Diluted EPS ($)0.19 (0.15) (0.51) (0.39)*
Gross Profit ($M)56.0 41.4 15.7 —
Gross Margin (%)—9.0% 4.1% —
Adjusted EBITDA ($M)34.1 16.3 (5.5) (3.0)*
  • Segment performance
SegmentQ3 2024 Net Sales ($M)Q3 2024 Op Inc ($M)Q3 2024 GP MarginQ3 2025 Net Sales ($M)Q3 2025 Op Inc ($M)Q3 2025 GP Margin
Transportation Solutions415.5 29.2 10.8% 334.5 (13.1) 1.5%
Parts & Services52.3 8.3 21.2% 61.0 6.6 17.4%
Consolidated464.0 (433.0) —381.6 57.6 (GAAP) —
  • KPIs and cash
KPIQ3 2024Q2 2025Q3 2025
New Trailers Shipped (units)7,585 8,640 6,940
New Truck Bodies Shipped (units)3,630 3,190 3,065
TaaS Units Transferred (units)52 —434
Backlog ($M)—~1,000 ~829
Free Cash Flow ($M)26.8 (22.8) 60.6
Cash & Equivalents ($M)81.8 (9/30/24) 57.4 (6/30/25) 91.7 (9/30/25)
Liquidity ($M)——~356 (cash + available borrowings)

Note: Asterisks (*) denote values from S&P Global consensus; see Estimates Context for disclaimer.

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Revenue ($B)FY 2025~$1.6B (post-Q2) ~$1.5B Lowered
Adjusted EPS ($)FY 2025$(1.30) to $(1.00) (midpoint $(1.15)) $(2.05) to $(1.95) Lowered
Revenue ($M)Q4 2025—$300 to $340 New
EPS ($)Q4 2025—$(0.80) to $(0.70) New
Traditional Capex ($M)FY 2025$50–$60 (initial) $25–$30 Lowered
TaaS Investment ($M)FY 2025—~40 Disclosed
FCFFY 2025Near breakeven ex-TaaS (Q2 commentary) Near breakeven incl. ~$40M TaaS Slightly improved framing

Earnings Call Themes & Trends

TopicPrevious Mentions (Q1 & Q2)Current Period (Q3)Trend
Demand/BacklogDemand below replacement; customers delaying capex; backlog ~$1.2B in Q1; ~$1.0B in Q2 Backlog ~$829M; Q4 expected weakest; cautious into 2026 with gradual recovery potential Worsened near term; cautious optimism for 2026
Tariffs/TradeTariff uncertainty delaying equipment decisions Section 232 on trailers/derivatives seen as medium-term competitive equalizer; minimal direct Q3 impact; ~$1M vendor pass-through Medium-term potential positive; near-term neutral
PricingLower ASPs in some niches vs 18 months ago [implied]Q4 backlog pricing lower than anticipated; pricing environment mixed by niche Slightly weaker near term
Parts & ServicesStrategic growth pillar; sequential growth +16.5% YoY; sequential growth; upfit centers opened; expecting Q4 margin uptick Expanding structurally
TaaS/TechTaaS investments; strategic focus New TaaS Pools/Plus offerings; TrailerHawk.ai integration; advancing predictive analytics & automation Expanding capabilities
Cost ActionsLabor right-sized after Q1 weakness Additional actions to align cost with demand; capex cut; liquidity preservation focus Intensifying discipline
Fleet Capacity—Accelerating capacity exits; potential freight rebalance into 1H26 Potential cyclical tailwind developing

Management Commentary

  • “Demand across the transportation industry remained below expectations… creating further pressure on order activity. This environment contributed to our Q3 performance coming in below plan… We recognize that the coming quarter will remain challenging and we revised our guidance accordingly.” — Brent Yeagy, CEO .
  • “Adjusted EBITDA was -$5 million or -1.4% of sales… Adjusted net income… was -$21.2 million or -$0.51 per diluted share, below expectations primarily due to lower volumes.” — Patrick Keslin, CFO .
  • “Under the terms of the settlement, Wabash payment obligation is approximately $30 million, with the remaining amount covered by insurance… we recorded a net adjustment of approximately $81 million in the third quarter.” — Brent Yeagy .
  • “We did open two new Upfit Centers in the quarter… we would expect margins in Q4 to be higher than Q3 but still below our longer term expectation of high teens EBITDA.” — Mike Pettit, Chief Growth Officer .
  • “Total backlog… approximately $829 million… customers continue to take a wait-and-see approach to capital spending.” — Press Release .

Q&A Highlights

  • Section 232 Tariffs: Management expects the trailer-specific Section 232 to start impacting the market mainly in 1H26, improving relative competitiveness vs Mexico-produced units; minimal direct Q3 impact (~$1M vendor pass-through) with similar Q4 outlook .
  • Q4 Volume Outlook: Truck Body shipments expected to drop to ~2,000 units from ~3,065 in Q3; trailer deliveries “slightly lower” sequentially, aligning with softer Q4 revenue/EPS guidance .
  • Platform Trailers: Stable in 2025 with potential 2026 uptick tied to AI data center/infrastructure spending; currently in quoting/discussion phase for 2026 .
  • Fleet Right-Sizing: Accelerating capacity exits over next six months could rebalance freight and catalyze replacement demand by mid-2026; limited risk from liquidation of lower-tier used assets .

Estimates Context

  • Q3 2025 vs S&P Global consensus: Revenue essentially in line ($381.6M actual vs $381.5M estimate*), but adjusted EPS missed ($(0.51) actual vs $(0.39) estimate*) .
  • Q4 2025 consensus frames: Revenue ~$318.3M* and EPS $(0.76)*, broadly consistent with company guidance of $300–$340M and $(0.80)–$(0.70), respectively .
  • Note: Reported GAAP EBITDA is inflated by the legal settlement gain; adjusted EBITDA is a more indicative operating measure (Q3 adjusted EBITDA $(5.5)M) .

Values marked with an asterisk (*) are from S&P Global.

Key Takeaways for Investors

  • Near-term softness persists: Q4 guide implies further revenue and margin pressure, especially in Truck Body; adjusted EPS remains negative until volumes and pricing stabilize .
  • Structural ballast: Parts & Services continues to grow and cushion cyclicality; sequential improvements in segment margins are expected as new upfit centers scale .
  • Balance sheet protection: Capex and cash deployment pivoted to preserve ~$356M liquidity; FCF near breakeven for FY25 including ~$40M TaaS investment .
  • Legal overhang reduced: Settlement limits cash outlay to ~$30M and removes a significant uncertainty discount; GAAP optics in Q3 are not indicative of underlying earnings power .
  • 2026 setup: Section 232 (trailers) and accelerating capacity exits could support better pricing/mix and replacement demand as early as 1H26; early 2026 order wins already emerging .
  • Stock catalysts: Any signs of order acceleration into year-end, improving Q1 pipeline, or clearer tariff transmission to competitive dynamics could drive re-rating; conversely, further backlog/pricing deterioration would pressure estimates and sentiment .

Additional Context and Cross-Checks

  • Q1 2025: Revenue $380.9M; adjusted EPS $(0.58); backlog ~$1.2B; tariff uncertainty cited for delayed customer capex .
  • Q2 2025: Revenue $458.8M; adjusted EPS $(0.15); backlog ~$1.0B; FY25 guide after Q2 was ~$1.6B revenue and $(1.30)–$(1.00) adjusted EPS .
  • Q3 2025: Revenue $381.6M; adjusted EPS $(0.51); backlog ~$829M; FY25 guide now ~$1.5B revenue and $(2.05)–$(1.95) adjusted EPS .
  • TaaS expansion: Announced TaaS Pools and TaaS Plus, integrating TrailerHawk.ai for analytics and automated workflows—a potential medium-term revenue and margin lever .
  • Parts & Services footprint: New Midwest Parts & Services center opened to support upfit and aftermarket expansion; upfit volumes on track to more than double in 2025 .