Knight-Swift Transportation Holdings Inc. Q1 FY2026 earnings call

• Industry has more optimism with truckload market benefiting from capacity removal. - Truckload market shows improving metrics like load tenders, tender rejections, spot pricing. - Pricing activity busy with bid season and mini bids. - LTL freight mix improving and rate renewals at mid-single digit. - Logistics business leveraging technology for cost efficiencies.

Truckload segment: Excluding negative impacts from severe winter weather and fuel challenges, most operational metrics improved. Revenue per loaded mile (excluding fuel surcharge and intersegment transactions) was stronger than expected. Year-over-year, revenue excluding fuel surcharge was essentially flat. Adjusted operating income declined $7.6 million. LTL business: Revenue excluding fuel surcharge grew 2.6% year-over-year, driven by weight and length of haul increases. Adjusted operating ratio was 96.2%. Logistics segment: Revenue declined 9.9% year-over-year, but adjusted operating ratio was 96.2%. Intermodal segment: Revenue grew 2.7% and operating ratio improved 50 basis points. All Other Segments: Revenue increased 13.5%, but had operating loss.

Projected adjusted EPS for Q2 2026 is in the range of 45 cents to 49 cents, reflecting improving freight market fundamentals and recent trends in volumes, spot rates, and bid activity.

• Regulatory enforcement may impact capacity and business operations. - Difficulty in sourcing third-party carrier capacity in logistics. - Uncertainty in freight market dynamics affecting margins.

Q: Chris Weatherby asks about margin opportunities in truckload business.

A: Adam Miller discusses potential to capture rates, improve equipment utilization, and grow seated trucks to return to normalized earnings.

Q: Richa Harnane follows up on normalized margins.

A: Adam Miller talks about truckload business aiming for mid-80s normalized earnings, LTL expected to improve margins, and logistics's relation to truckload cycle.

Q: Ken Hoekster asks about rate reviews in truckload and LTL.

A: Brad Stewart explains reviewing stale rates and LTL pricing renewals at mid-single digits.

Q: Ravi Shankar asks about supply side catalysts.

A: Adam Miller discusses regulatory efforts to remove non-compliant capacity.

Q: Scott Group asks about seated tractors and shipper preferences.

A: Adam Miller talks about driver sourcing investments and shipper bias towards asset-based carriers.

Q: Jonathan Chappell asks about LTL cadence and cost alignment.

A: Adam Miller and Andrew Hess discuss LTL volume build and cost efficiency progress.

Q: Dan Moore asks about U.S. Express leverage.

A: Adam Miller discusses U.S. Express cost and rate improvement opportunities.

Q: Brian Ostenbeck asks about logistics carrier reduction and hair follicle testing.

A: Adam Miller and Brad Stewart talk about carrier reduction and hair follicle testing progress.

Q: Ari Rosa asks about U.S. Express tractor shed decision.

A: Adam Miller explains adjusting U.S. Express network and driver standards leading to tractor shedding