Radiant Logistics, Inc. Q3 FY2026 earnings call

• Market Conditions

• The third fiscal quarter is Radiant Logistics' seasonally slowest quarter, and management reported solid overall results that reflect the resilience of the company's diversified service offering and network.
• Domestic North American logistics: Capacity is exiting the industry via carrier attrition, tightening driver availability, and structural normalization of over-expanded fleets. Key market indicators including spot rates and tender rejections are moving higher, indicating the market is approaching an inflection point that will benefit future domestic operations.
• International logistics: Global trade faces dual compounding pressures: (1) ongoing U.S. tariff policy transformation, which has created widespread uncertainty, disrupted established trade lanes (especially the China-U.S. corridor), and accelerated nearshoring and supply chain diversification; (2) physical shipping route disruptions from Middle East conflict, including the effective closure of the Straits of Hormuz and closure of the Suez Canal, which have rerouted freight, extended transit times, raised fuel costs, and boosted air freight demand. These disruptions increase demand for experienced, tech-enabled logistics partners to navigate new supply chain structures.

• Strategic & Operational Progress

• The Navigate global trade management platform continues gaining market traction, offering customers enhanced visibility, routing intelligence, and cost optimization that is particularly valued during market dislocation. Its fast deployment (measured in weeks) is a key competitive differentiator.
• The company's new in-house AI-powered agent, Ray, is in early deployment, initially focused on streamlining international quote administration. Management is exploring additional automation for workflows across domestic and international operations to improve response times and service quality as part of the company's ongoing digital transformation.
• The company has expanded its international footprint, opening a new office in Shenzhen to complement existing operations in Shanghai and Hong Kong, and has completed opportunistic acquisitions of NVOCC ocean service businesses during the current market downturn.
• The company maintains a strong net debt-free balance sheet relative to its $200 million credit facility, giving it substantial flexibility for capital allocation.

The transcript does not break out separate financial performance or revenue contribution percentages for individual product or service segments. Overall company results for the quarter ended March 31, 2026 are: total revenue of $214.1 million (flat compared to $214 million in the year-ago quarter); net income of $4.671 million, an 83.8% increase year-over-year; adjusted net income of $5.337 million, a 22.4% decrease year-over-year; adjusted EBITDA of $7.751 million, a 17.5% decrease year-over-year. For the nine-month period ended March 31, 2026: total revenue of $672.9 million, a 1.3% decrease year-over-year; net income of $11.269 million, a 9% decrease year-over-year; adjusted net income of $17.881 million, a 29.8% decrease year-over-year; adjusted EBITDA of $26.322 million, a 14.7% decrease year-over-year.

• Management did not issue formal revised full-year fiscal guidance, but provided qualitative forward-looking outlooks:

• Management expects the current domestic market inflection point and capacity tightening to be reasonably durable, and expects meaningful rate increase opportunities for both truck brokerage and intermodal operations going forward.
• Management expects Navigate to become a meaningful catalyst for long-term organic growth, as the platform's capabilities align with customer demand for supply chain restructuring and tariff impact analysis.
• Management intends to relever the strong balance sheet to create shareholder value via strategic operating partner conversions, synergistic tuck-in acquisitions, and share repurchases, and expects Radiant to emerge stronger from the current period of market volatility.

• Forward-looking statements are subject to known and unknown risks and uncertainties that could cause actual results to differ materially from expectations, including risks outlined in the company's SEC filings and public disclosures.

• Uncertainty around permanent U.S. tariff policy (expected to be finalized before July) continues to disrupt global trade flows and established trade lanes, creating near-term volume headwinds for international operations.
• Ongoing Middle East conflict has created severe, unexpected physical disruptions to major global shipping routes, increasing costs and creating volatility in ocean and air freight markets.
• Traditional retail and luxury goods verticals, as well as ocean freight services, remain soft, pressuring near-term performance in these segments.
• Volume growth in domestic markets remains stagnant despite improving pricing dynamics.

Q: Given early domestic market improvement and capacity exits, what sequential trends are you seeing for the current quarter, and what rate increases are you securing on contract renewals?

A: January and February were slow, but March was much stronger, and positive momentum has continued sequentially. Asset-based carriers have implemented broad rate increases that create positive ripple effects for Radiant's truck brokerage and intermodal businesses. While overall rate increases on contract renewals are not double-digit, management expects high single-digit increases, and is optimistic this market improvement will be reasonably durable.

Q: When will you be able to share sizing and data for the Navigate platform and Ray AI, and can you give any preliminary insights on their impact?

A: Management is actively working on how to disclose performance for these new initiatives, but is not yet ready to share specific sizing or KPIs. Both are still in early stages of rollout, but organizational engagement is strong, and management is confident Navigate will become a meaningful organic growth catalyst and competitive differentiator over time. The homegrown Ray AI development is progressing well relative to external third-party AI solutions pitched to the company.

Q: Pricing is improving domestically, but volume is still stagnant. In which verticals are you seeing volume growth, both domestically and internationally?

A: This is a capacity-driven improvement rather than demand-driven, so overall volumes are still soft. Domestically, Radiant is seeing volume growth in government/military services, data center support projects, and CPG food and beverage, particularly in Canada. Traditional retail and luxury goods remain weak. Internationally, ocean freight markets across the Trans-Pacific remain very challenging, but the company is seeing growing demand for customs brokerage and compliance services as customers restructure their supply chains.

Q: Given the current complexity in international markets, are you seeing new business opportunities, and do you expect Navigate to drive significant organic growth long-term?

A: Yes, the complexity of current trade markets creates meaningful opportunities. Radiant has been opportunistically acquiring NVOCC ocean businesses at market lows, and expanded its Greater China footprint with a new Shenzhen office to position for future growth. Navigate's SKU-level landed cost analysis is extremely valuable to customers diversifying sourcing and assessing tariff impacts, and management expects Navigate to contribute significant incremental organic growth over the next few years, mostly through additional freight volume rather than standalone tech fees.