FWRD

Overall Quarterly Performance

• Forward Air delivered record operating revenue of $673 million in Q2 2026, up from $619 million in Q2 2025, and consolidated EBITDA of $93 million, the highest result in two and a half years, up from $79 million YoY.
• The integration and stabilization of the two legacy companies (completed two and a half years after the merger) is now finished, leaving the company in its strongest financial position since the transaction closed.
• LTM (last twelve months) consolidated EBITDA as of Q2 2026 was $319 million, and adjusted EBITDA improved $18 million YoY to $92 million, signaling improving earnings quality.
• Operating cash flow used was $5 million in Q2 2026, an $8 million improvement YoY. First half 2026 operating cash flow provided was $41 million, a $14 million improvement YoY. Total ending liquidity was $401 million ($139 million cash, $261 million revolver availability), flat sequentially despite a $34 million semi-annual interest payment in the quarter.

Non-Core Asset Divestiture

• The company completed the sale of two small non-core businesses from the legacy Omni segment during Q2 and early July 2026, for a combined sales price of ~$27 million. These businesses were largely breakeven on an EBITDA basis, and the sale simplifies the company's portfolio and monetizes underperforming assets.
• The sale of the intermodal segment, the remaining planned divestiture, is progressing on schedule with an expected closing by the end of 2026. Intermodal is currently performing at its highest margins in recent history.
• All divestiture proceeds will be used to de-lever the balance sheet, streamline operations, and enhance shareholder value.

Large Customer Retention Update

• The company signed a Memorandum of Understanding (MOU) with one of its largest Omni segment customers, which was planning to transition a portion of its business to other providers as part of its own supplier diversification strategy (unrelated to Forward Air's service quality during the 20-year relationship).
• Under the MOU, Forward Air expects to retain at least 50% of the customer's 2025 $250 million annual revenue, with the potential to retain an additional 25% (up to 75% total). The contract for retained services is extended for a minimum of two years.
• The planned transition of non-retained business will begin later in 2026, with most activity occurring in December 2026 and throughout 2027. The customer has continued to grow its business with Forward Air organically during 2026.

Market and Strategy Update

• Freight market fundamentals are improving: capacity is tightening due to regulatory enforcement and carrier exits, with seven consecutive months of manufacturing PMI expansion, lean retail inventories that may support a future restocking cycle, and rising truckload spot rates and tender rejection rates. The company expects a gradual, non-linear freight market recovery. The company's strategic focus on improving network density and freight characteristics has driven margin improvements, including intentional adjustments to pricing for higher-weight shipments to fill excess capacity on core lanes.

• Management maintained its expectation of a gradual, gradual freight market recovery, and noted that the company is at a tipping point for operating leverage: as market fundamentals improve and if diesel prices remain at current elevated levels, incremental shipments will disproportionately flow through to the bottom line.
• No changes to full-year 2026 guidance were explicitly announced, but management reaffirmed that the intermodal segment sale remains on schedule for closing by the end of 2026.
• Management expects continued progress on retaining additional revenue from the large customer under negotiation, with a potential decision on the additional 25% retention expected by the end of 2026.

1. Expedited Freight Segment: Q2 2026 EBITDA was $43 million, a 43% increase year-over-year from $30 million in Q2 2025. Margin improved 200 basis points to 13.6% YoY, up from 11.6% in the prior year quarter. This segment contributed the strongest revenue and operating income performance in company history for the quarter.
2. Omni Logistics Segment: Including a $244 million non-cash goodwill impairment charge, Q2 2026 reported EBITDA was a loss of $206 million. Excluding the impairment, Q2 2026 EBITDA was $38 million (11.2% margin), which is the best result for the segment in two and a half years, compared to $30 million (9% margin) in Q2 2025. The impairment charge was a non-cash accounting entry with no impact on cash or liquidity.
3. Intermodal Segment: Q2 2026 EBITDA was $10 million, the best result in five quarters, up from $9 million in Q2 2025. Margin came in at 16.7%, the best in six quarters, a 160 basis point improvement YoY from 15.1% in the prior year quarter. This performance follows strategic rate increases on underperforming accounts.

• Macroeconomic uncertainty remains, including geopolitical tensions and diesel price volatility, which could weigh on industrial activity and delay freight demand recovery.
• The potential transition of a portion of revenue from the large Omni customer creates uncertainty around future segment revenue, though management expects to retain a majority of the business and has already accounted for this uncertainty in the goodwill impairment charge.
• Freight market recoveries are typically non-linear, so improvements may not be consistent quarter over quarter.

Q: What is the current state of core pricing and how are you balancing competitive dynamics with the pricing opportunity, particularly after the intentional yield adjustments in the expedited segment? / A: Management confirmed that the lower revenue per hundredweight yield was a fully intentional strategic decision to attract higher-weight shipments to fill open capacity on existing dedicated lanes. The strategy has already delivered positive results, including higher load factors, lower empty miles, and a 200 basis point improvement in segment margin. Management noted that no single KPI (such as yield per hundredweight) should be evaluated in isolation, and the mix shift to longer length of hauls also supports the updated strategy.

Q: What progress have you made on intermodal repricing, what business was lost due to the rate increases, and how are regulatory truckload changes impacting intermodal capacity? / A: Management stated that the majority of strategic rate increases for underperforming intermodal accounts were implemented in Q1 and took full effect in Q2, and the repricing process is now largely complete. No customers were lost as a result of the rate increases, which only affected a small handful of underperforming accounts. Volume improvements in Q2 stem from improved sourcing patterns and new large customer additions, not rate-related changes.

Q: How sensitive are your earnings to changes in diesel prices, and how have current elevated prices impacted results? / A: Management noted that diesel prices have increased 51% since March 2026 and remain elevated, and current performance in July has continued the trend seen in Q2. EIA projections do not expect diesel prices to return to prior lower levels until early 2027, so the fuel tailwind is expected to continue for the foreseeable future, and like peers, Forward Air benefits from elevated diesel prices.

Q: Is the increase in average shipment weight driven by improving market conditions, or is it a sustained strategic shift? Will higher weight continue going forward? / A: Management confirmed that the higher average shipment weight is a fully intentional, targeted strategic decision to fill excess lane capacity, not a result of broader PMI-driven industry changes. Since the strategy has proven successful, the company will continue to prioritize this optimization going forward, with ongoing network adjustments to maximize profitability.