TFII

Consolidated Performance

• Adjusted diluted EPS was $1.85, beating the guided range of $1.50 to $1.60 and rising 38% year-over-year
• Total revenue before fuel surcharge was $1.9 billion, up 6% year-over-year, with operating income climbing nearly 30% to $220 million
• Operating margin hit 11.6%, up more than 200 basis points year-over-year
• Net cash from operating activities rose to $256 million from $247 million year-over-year
• Generated over $200 million in free cash flow, ended the quarter with a strong balance sheet and funded debt to EBITDA of 2.4x

Strategic and Operational Updates

• Investments in internal operations and strategic M&A made during the recent industry slowdown are now driving improved performance
• The company maintains a balanced, diverse portfolio of operating companies and end markets, with a sustained focus on efficiency and capital allocation
• For U.S. truckload operations, management restructured legacy Daski assets into niche specialized carriers focused on high-growth end markets including aerospace, wind energy, data centers, and steel, consolidating commercial and operational functions under a unified leadership structure
• For U.S. LTL, management is addressing unprofitable low-priced 3PL blanket freight, implementing new pricing software and AI analytics to identify unprofitable lanes and customers for targeted pricing adjustments
• A new in-house claims settlement strategy was implemented, with a Miami-based legal team focused on fast settlement of claims to reduce long-term costs, resulting in a one-time $10.5 million incremental accident reserve in Q2
• Management is actively testing autonomous truck technology for long-haul line haul operations, with initial broker testing starting in 2026 and planned deployment of owned units with autonomous technology in 2027

• Full-year 2026 net capex (excluding real estate) is maintained at $225 million to $250 million, unchanged from prior guidance
• For full-year 2026, management expects year-over-year adjusted operating ratio improvement of 500 to 600 basis points for the truckload segment, 250 to 350 basis points for the logistics segment, and flat comparable operating ratio for the LTL segment
• Guidance assumes no material positive or negative changes to the overall operating environment
• Management expects to restore full-year public guidance once LTL pricing adjustments deliver improved performance, which is currently targeted for the near term

1. LTL (Less-than-Truckload): Revenue before fuel surcharge was $722 million, up 3% year-over-year. This segment accounted for 38% of total segmented revenue. Adjusted operating ratio was 88.5%, operating income hit $86 million, up 17% year-over-year, with return on invested capital of 12%.
2. Truckload: Revenue before fuel surcharge was $761 million, up 7% year-over-year. This segment accounted for 40% of total segmented revenue. Revenue per truck per week (excluding fuel surcharge) rose 13% year-over-year, and brokerage revenue grew 34%. Operating income reached $106 million, up 50% year-over-year. Adjusted operating ratio improved 400 basis points to 86.1%, with return on invested capital of 6.9%.
3. Logistics: Revenue before fuel surcharge was $432 million, up 10% year-over-year. This segment accounted for 23% of total segmented revenue. Operating income expanded 32% to $50 million, with margin up nearly 2 percentage points to 11.5% and return on invested capital of 13.3%.

• LTL segment demand remains soft in both the U.S. and Canada, with current high volumes concentrated in underpriced 3PL blanket freight that is generating excess operational costs and pressuring margins
• Pricing adjustments for underpriced LTL freight are expected to reduce shipment volumes in the near term as the company rightsizes its mix, and full margin improvement for U.S. LTL may take multiple quarters to fully materialize
• Foreign exchange volatility between the U.S. dollar and Canadian dollar negatively impacts Canadian segment profitability, contributing to conservative near-term guidance
• Fuel price uncertainty creates forecasting variability for LTL results
• Persistent weakness in key Canadian end markets including steel and forest products due to U.S. trade tariffs continues to pressure Canadian truckload performance
• New legal precedents for broker liability create incremental risk for brokerage operations, requiring enhanced safety diligence for carrier partners

Q: Scott Group from Wolf Research asked management to confirm if LTL margins are expected to be flat year-over-year, and to share current demand, capacity, and pricing trends for LTL and truckload. / A: Management confirmed LTL demand remains soft with no material improvement, unlike truckload. For TFI's LTL specifically, shipment count grew 7.5% in Q2 but revenue per shipment was down 2%, as volume is concentrated in underpriced 3PL blanket freight; the company is actively working to raise prices to fix this issue. For truckload, pricing growth accelerated through Q2, from 11.1% year-over-year revenue per truck per week in April to 14.4% in June, driven by industry-wide supply constraints rather than surging demand, and the segment's operating ratio improved from 93 in Q1 to 86.1 in Q2.

Q: Ravi Shankar from Morgan Stanley asked how long it will take to reset LTL pricing, and when management expects to restore full-year public guidance. / A: Management noted the pricing issue is isolated to blanket 3PL freight, not SMB or core corporate LTL business, and the commercial team is already actively fixing the mispricing as of Q2. Management said confidence in the truckload cycle has grown due to its supply-driven nature, and full-year guidance will be restored once LTL delivers on its expected profit potential after pricing adjustments.

Q: Forter Brackling from RBC Capital Markets asked if current truckload pricing increases are sustainable given the supply-driven nature of the current rally. / A: Management stated this supply correction is different from past demand-driven cycles, driven by U.S. regulatory changes targeting unqualified, non-compliant carriers that are not quickly reversible. Canadian regulatory changes forcing owner-operator tax reporting have also reduced excess capacity. Management believes this supply rationalization is more permanent than past cycles, so current pricing improvements are likely to be stickier than in previous upturns.

Q: Ari Rosa from Citigroup asked for management's thoughts on autonomous truck development and potential adoption at TFI. / A: Management said autonomous truck development has progressed faster than expected, and the company is currently in talks with a major autonomous technology provider. Initial testing via brokered operations will start in 2026 on U.S. LTL long-haul line haul, and the company plans to purchase and deploy autonomous technology in new trucks starting in 2027. Management noted autonomous trucks offer benefits including 24/7 operation, improved fuel efficiency, zero accidents, and lower driver turnover, and will likely drive further industry consolidation favoring well-capitalized players like TFI.