Hub Group, Inc. Q4 FY2025 earnings call

• Identified a calculation error resulting in understatement of purchase transportation costs and accounts payable, but no impact on total cash and cash equivalents or operating cash flow; steps taken to strengthen controls.
• 2025 performed well in challenging market cycle, delivered record service levels, managed costs, added new business wins, and invested in business while maintaining strong balance sheet and cash flow profile. 2025 preliminary operating cash flow approximately $194 million.
• In ITS, focused on cost management and operational discipline, intermodal had strong performance with volume and service gains. In Logistics, saw various trends in different segments like CFX space utilization improvement and Final Mile onboarding challenges.
• 2026 sees signs of tightening capacity due to regulations and market conditions, but demand and inventory balanced, consumer resilient; well positioned with best-in-class service, efficient cost structure, financial flexibility, and strategic investments.

ITS: Fourth quarter ITS revenue declined slightly year over year. Intermodal performance remained strong, with fourth quarter volumes increasing 1% year over year, revenue per load flat but up 3% sequentially. Transcon volume up 1%, Local East down 4%, Local West down 1%, refrigerated volumes up 150%, Mexico volumes up 33%. Dedicated revenue declined in the fourth quarter due to lost sites but was partially offset by operational and service improvements. Logistics: Fourth quarter Logistics segment revenue reflects softer demand across business lines, partially offset by new business wins. CFX saw a 630 basis point improvement year over year in space utilization. Final Mile is in the process of onboarding significant new business wins but volume underperformed in the fourth quarter due to onboarding delays. Brokerage volumes declined 10% year over year, revenue per load down 4%, but fourth quarter productivity improved 41% year over year. Managed transportation performed well in 2025 and is expected to continue in 2026 with a strong pipeline of growth opportunities.

• 2026 revenue projected to be between $3.65 billion to $3.95 billion.
• ICS segment revenue largely driven by intermodal volume growth; Dedicated performance slightly lower in 2026 due to lost customer sites.
• Logistics excluding brokerage expected to have recovering revenue through 2026 due to new business wins and improving profitability; brokerage expected to have volume pressure weighing on Logistics segment profitability.
• 2026 capital expenditures expected to be $35 million to $45 million, with no plan to purchase containers; continue to return capital to shareholders through dividend and share repurchases.

• Identified a calculation error in purchase transportation costs and accounts payable which led to delay in finalizing financial results; will restate earlier quarters in 2020 when filing 10-K; though no expected impact on total cash and cash equivalents or operating cash flow, preliminary results may differ from final results.