[Q2 2025 Earnings Overview](index=1&type=section&id=Knight-Swift%20Transportation%20Holdings%20Inc.%20Reports%20Second%20Quarter%202025%20Revenue%20and%20Earnings) Knight-Swift Transportation Holdings Inc. reported its second quarter 2025 financial results, highlighting revenue growth and significant profitability improvements [Key Financial Highlights](index=1&type=section&id=Key%20Financial%20Highlights) Knight-Swift reported consolidated total revenue of **$1.9 billion** for Q2 2025, a **0.8%** increase year-over-year, with operating income growing **14.4%** to **$72.6 million** and significant EPS increases Q2 2025 Consolidated Financial Results (vs. Q2 2024) | Financial Metric | Q2 2025 | Q2 2024 | Change | | :--- | :--- | :--- | :--- | | Total Revenue | $1,861.9M | $1,846.7M | +0.8% | | Operating Income | $72.6M | $63.5M | +14.4% | | Adjusted Operating Income | $103.8M | $88.5M | +17.2% | | Net Income (attributable to KNX) | $34.2M | $20.3M | +68.7% | | Adjusted Net Income (attributable to KNX) | $57.2M | $39.4M | +45.2% | | Diluted EPS | $0.21 | $0.13 | +61.5% | | Adjusted EPS | $0.35 | $0.24 | +45.8% | - The consolidated operating ratio for Q2 2025 was **96.1%**, an improvement of **50 basis points**, while the Adjusted Operating Ratio was **93.8%**, an **80 basis point** improvement over Q2 2024[2](index=2&type=chunk) [CEO Commentary](index=3&type=section&id=CEO%20Commentary) CEO Adam Miller emphasized leveraging cost initiatives to overcome a soft truckload market, noting progress in U.S. Xpress profitability and strong LTL volume growth despite integration costs - The company successfully navigated a soft truckload market by focusing on cost initiatives and operational agility, leading to sequential improvement in the Truckload segment's operating income and margin[7](index=7&type=chunk) - The LTL segment is experiencing strong customer response and shipment growth due to its service quality, but is also facing cost pressures from the integration of DHE and organic network expansion[7](index=7&type=chunk) - Customer uncertainty regarding the macroeconomic and policy landscape is making it challenging to forecast demand and plan for peak season activities[8](index=8&type=chunk) [Other Financial Items (Income, Taxes, Dividend)](index=3&type=section&id=Other%20Financial%20Items) Q2 2025 saw a significant increase in "Other income, net" to **$13.2 million**, a reduced effective tax rate, and a declared quarterly cash dividend of **$0.18** per share - Other income, net was **$13.2 million** in Q2 2025, compared to **$4.9 million** in Q2 2024[8](index=8&type=chunk) - The effective tax rate for Q2 2025 was **29.2%** on GAAP results and **28.0%** on non-GAAP results, down from **37.2%** and **31.1%** respectively in Q2 2024[9](index=9&type=chunk) - The board of directors declared a quarterly cash dividend of **$0.18** per share, which was paid on June 23, 2025[10](index=10&type=chunk) [Segment Financial Performance](index=4&type=section&id=Segment%20Financial%20Performance) This section details the financial and operational performance of Knight-Swift's individual business segments, including Truckload, LTL, Logistics, Intermodal, and other services [Truckload Segment](index=4&type=section&id=Truckload%20Segment) The Truckload segment significantly improved profitability with **87.5%** Adjusted Operating Income growth and a **260 basis point** Adjusted Operating Ratio improvement, driven by cost reductions and increased productivity Truckload Segment Financials (Q2 2025 vs. Q2 2024) | Metric | Q2 2025 | Q2 2024 | Change | | :--- | :--- | :--- | :--- | | Revenue (ex-fuel/intersegment) | $1,073.3M | $1,102.8M | -2.7% | | Adjusted Operating Income | $58.4M | $31.2M | +87.5% | | Adjusted Operating Ratio | 94.6% | 97.2% | -260 bps | - The improvement in operating ratio was driven by cost-reduction efforts, with U.S. Xpress improving its margin by **300 basis points**[4](index=4&type=chunk)[13](index=13&type=chunk) - Productivity increased, with miles per tractor improving **4.0%** year-over-year due to efforts to reduce underutilized assets[13](index=13&type=chunk) [LTL Segment](index=5&type=section&id=LTL%20Segment) The LTL segment achieved strong **28.4%** revenue growth but faced profitability challenges from DHE integration and network expansion, resulting in a **720 basis point** deterioration in Adjusted Operating Ratio LTL Segment Financials (Q2 2025 vs. Q2 2024) | Metric | Q2 2025 | Q2 2024 | Change | | :--- | :--- | :--- | :--- | | Revenue (ex-fuel surcharge) | $337.7M | $263.1M | +28.4% | | Adjusted Operating Income | $23.4M | $37.0M | -36.8% | | Adjusted Operating Ratio | 93.1% | 85.9% | +720 bps | - Key growth drivers included a **21.7%** increase in shipments per day and a **9.9%** increase in revenue per hundredweight (excluding fuel)[14](index=14&type=chunk) - The company opened three new service centers and replaced one during the quarter, contributing to a **27.5%** year-over-year growth in door count[15](index=15&type=chunk) [Logistics Segment](index=6&type=section&id=Logistics%20Segment) The Logistics segment improved profitability with a **13.3%** increase in Adjusted Operating Income and a **70 basis point** improvement in Adjusted Operating Ratio, driven by gross margin gains despite lower load volume Logistics Segment Financials (Q2 2025 vs. Q2 2024) | Metric | Q2 2025 | Q2 2024 | Change | | :--- | :--- | :--- | :--- | | Revenue | $128.3M | $131.7M | -2.6% | | Adjusted Operating Income | $6.7M | $5.9M | +13.3% | | Adjusted Operating Ratio | 94.8% | 95.5% | -70 bps | - Profitability was driven by operating efficiency and a **100 basis point** improvement in gross margin, which reached **18.9%**[4](index=4&type=chunk)[17](index=17&type=chunk) - A **11.7%** decline in load count was largely offset by a **10.6%** increase in revenue per load[17](index=17&type=chunk) [Intermodal Segment](index=6&type=section&id=Intermodal%20Segment) The Intermodal segment experienced a **13.8%** revenue decline and an operating loss of **$3.4 million** due to weak import volumes, leading to a **104.1%** operating ratio Intermodal Segment Financials (Q2 2025 vs. Q2 2024) | Metric | Q2 2025 | Q2 2024 | Change | | :--- | :--- | :--- | :--- | | Revenue | $84.1M | $97.5M | -13.8% | | Operating Loss | $(3.4)M | $(1.7)M | -99.7% | | Operating Ratio | 104.1% | 101.8% | +230 bps | - The revenue decrease was primarily due to a **12.4%** drop in load count, which was impacted by a decline in import volumes on the West coast[18](index=18&type=chunk) [All Other Segments](index=6&type=section&id=All%20Other%20Segments) The "All Other" segments, including warehousing and leasing, reported strong results with **9.0%** revenue growth and **73.6%** operating income growth year-over-year All Other Segments Financials (Q2 2025 vs. Q2 2024) | Metric | Q2 2025 | Q2 2024 | | :--- | :--- | :--- | | Revenue | $74.4M | $68.3M | | Operating Income | $6.7M | $3.9M | - The growth in revenue and operating income was primarily driven by the company's warehousing and leasing businesses[20](index=20&type=chunk) [Financial Position and Outlook](index=7&type=section&id=Consolidated%20Liquidity%2C%20Capital%20Resources%2C%20and%20Earnings%20Guidance) This section outlines Knight-Swift's liquidity, capital resources, and forward-looking earnings guidance, reflecting market uncertainties and strategic capital expenditure adjustments [Liquidity and Capital Resources](index=7&type=section&id=Liquidity%20and%20Capital%20Resources) As of June 30, 2025, Knight-Swift maintained strong liquidity with **$1.0 billion** in cash and available liquidity, **$2.6 billion** in Net Debt, and **$153.7 million** in year-to-date Free Cash Flow Year-to-Date Cash Flow Summary (as of June 30) | Cash Flow Item (in thousands) | 2025 | 2024 | | :--- | :--- | :--- | | Net cash provided by operating activities | $325,929 | $310,700 | | Net cash used in investing activities | $(189,617) | $(258,841) | | Net cash used in financing activities | $(161,586) | $(182,288) | - The company generated **$153.7 million** in Free Cash Flow for the year-to-date period ended June 30, 2025[23](index=23&type=chunk) - Full-year 2025 net cash capital expenditure guidance has been lowered to **$525 million - $575 million**, down from the original range of **$575 million - $625 million**[23](index=23&type=chunk) [Q3 2025 Earnings Guidance](index=8&type=section&id=Guidance) Due to market uncertainty, Q3 2025 Adjusted EPS is projected between **$0.36** and **$0.42**, with expectations for sequential improvements in Truckload and LTL segments - Q3 2025 Adjusted EPS is expected to range from **$0.36** to **$0.42**[25](index=25&type=chunk) - Guidance highlights by segment for Q3 2025: - **Truckload:** Revenue to be up low single-digit percent sequentially - **LTL:** Revenue (ex-fuel) to grow **20% - 25%** YoY, with Adjusted Operating Ratio improving **100-200 basis points** sequentially - **Logistics:** Revenue and Adjusted Operating Ratio to be fairly stable sequentially - **Intermodal:** Load count to improve high single-digit percent sequentially[26](index=26&type=chunk)[29](index=29&type=chunk) - The expected effective tax rate on adjusted income for Q3 2025 is approximately **27%** to **28%**[29](index=29&type=chunk) [Financial Statements and Reconciliations](index=11&type=section&id=Financial%20Statements) This section provides the unaudited consolidated financial statements, including income statements and balance sheets, along with detailed segment operating statistics and non-GAAP financial reconciliations [Condensed Consolidated Financial Statements](index=11&type=section&id=Condensed%20Consolidated%20Statements%20of%20Comprehensive%20Income%20(Unaudited)) This section presents the unaudited Condensed Consolidated Statements of Comprehensive Income and Balance Sheets for periods ending June 30, 2025, detailing the company's financial position and performance Year-to-Date Financial Summary (as of June 30, 2025) | Metric (in thousands) | YTD 2025 | YTD 2024 | | :--- | :--- | :--- | | Total Revenue | $3,686,302 | $3,669,121 | | Operating Income | $139,279 | $84,015 | | Net Income Attributable to Knight-Swift | $64,882 | $17,665 | | Total Assets | $12,523,435 | N/A | | Total Liabilities | $5,390,517 | N/A | | Total Stockholders' Equity | $7,132,918 | N/A | [Segment Operating Statistics](index=13&type=section&id=Segment%20Operating%20Statistics%20(Unaudited)) This section provides unaudited operating statistics for each segment, offering insights into performance drivers such as miles per tractor, shipments per day, and load counts Q2 2025 Key Operating Metrics (vs. Q2 2024) | Segment & Metric | Q2 2025 | Q2 2024 | Change | | :--- | :--- | :--- | :--- | | **Truckload** - Miles per tractor | 21,335 | 20,518 | +4.0% | | **LTL** - Shipments per day | 24,918 | 20,482 | +21.7% | | **Logistics** - Revenue per load | $2,025 | $1,831 | +10.6% | | **Intermodal** - Load count | 32,682 | 37,290 | -12.4% | [Non-GAAP Financial Reconciliations](index=14&type=section&id=Non-GAAP%20Financial%20Measures%20and%20Reconciliations) This section explains and reconciles non-GAAP financial measures like Adjusted Operating Income and Adjusted EPS, used by management to assess core operating performance by excluding specific non-recurring or non-cash items - The company uses non-GAAP measures to improve comparability by removing items that, in management's opinion, do not reflect core operating performance, such as amortization, impairments, and certain legal or severance costs[40](index=40&type=chunk) Q2 2025 Reconciliation of GAAP Net Income to Adjusted Net Income | Item (in thousands) | Amount | | :--- | :--- | | **GAAP: Net income attributable to Knight-Swift** | **$34,243** | | Amortization of intangibles (pre-tax) | $19,621 | | Impairments (pre-tax) | $10,584 | | Severance expense (pre-tax) | $941 | | Provision for income tax expense at effective rate | $(22,203) | | **Non-GAAP: Adjusted Net Income Attributable to Knight-Swift** | **$57,179** |

Core Viewpoint - Analysts expect Knight-Swift Transportation Holdings (KNX) to report quarterly earnings of $0.34 per share, reflecting a year-over-year increase of 41.7%, with revenues projected at $1.87 billion, up 1.2% from the previous year [1]. Earnings Estimates - Revisions to earnings estimates are crucial for predicting investor actions, with empirical research showing a strong correlation between earnings estimate trends and short-term stock performance [2]. - The consensus EPS estimate has been revised 5.1% lower over the last 30 days, indicating a collective reevaluation by analysts [1]. Revenue Projections - Revenue, excluding truckload and LTL fuel surcharge, is projected to reach $1.67 billion, indicating a year-over-year change of +1.8% [4]. - Truckload and LTL fuel surcharge is expected to be $194.42 million, reflecting a decrease of -5.1% from the year-ago quarter [4]. Operating Revenue and Ratios - Analysts estimate 'Operating revenue- LTL' at $383.17 million, a +25% increase from the previous year [5]. - The average prediction for 'Revenue, excluding fuel surcharge- LTL Segment' is $330.41 million, indicating a +25.6% change from the prior-year quarter [5]. - The consensus estimate for 'Adjusted Operating Ratio' is 93.6%, compared to 94.6% from the previous year [5]. Additional Metrics - 'Operating Ratio' is forecasted to reach 94.7%, down from 96.6% year-over-year [6]. - 'Adjusted Operating Ratio - Logistics' is expected to be 95.8%, slightly up from 95.5% last year [6]. - 'Adjusted Operating Ratio - Truckload' is estimated at 94.1%, down from 97.2% in the same quarter last year [6]. - 'Adjusted Operating Ratio - LTL' is projected at 92.2%, compared to 85.9% from the previous year [7]. - Average revenue per load - Intermodal is expected to be $2619.25, slightly up from $2615.00 year-over-year [7]. - Average tractors - Truckload is forecasted to be 21,374, down from 22,828 in the same quarter last year [7]. - Load count - Intermodal is expected to reach 35,366, down from 37,290 in the same quarter last year [8]. Stock Performance - Over the past month, Knight-Swift shares have recorded returns of +0.9%, compared to the S&P 500 composite's +5.9% change [8].

Core Viewpoint - Knight-Swift Transportation Holdings (KNX) is positioned well to continue its trend of beating earnings estimates in the upcoming quarterly report [1]. Group 1: Earnings Performance - Knight-Swift has a strong history of beating earnings estimates, particularly in the last two quarters, with an average surprise of 10.55% [2]. - In the last reported quarter, Knight-Swift achieved earnings of $0.28 per share, exceeding the Zacks Consensus Estimate of $0.25 per share, resulting in a surprise of 12.00% [3]. - For the previous quarter, the company was expected to post earnings of $0.33 per share but delivered $0.36 per share, yielding a surprise of 9.09% [3]. Group 2: Earnings Estimates and Predictions - Estimates for Knight-Swift have been trending higher, influenced by its history of earnings surprises [6]. - The company currently has a positive Zacks Earnings ESP (Expected Surprise Prediction) of +3.22%, indicating bullish sentiment among analysts regarding its earnings prospects [9]. - The combination of a positive Earnings ESP and a Zacks Rank of 3 (Hold) suggests a high likelihood of another earnings beat [9]. Group 3: Earnings ESP Insights - Research indicates that stocks with a positive Earnings ESP and a Zacks Rank of 3 or better have a nearly 70% chance of producing a positive surprise [7]. - The Zacks Earnings ESP compares the Most Accurate Estimate to the Zacks Consensus Estimate, with the Most Accurate Estimate reflecting the latest analyst revisions [8]. - The next earnings report for Knight-Swift is expected to be released on July 23, 2025 [9].

Company Overview - Knight-Swift Transportation Holdings (KNX) is expected to report quarterly earnings of $0.34 per share, reflecting a year-over-year increase of +41.7% [3] - Revenues are anticipated to reach $1.87 billion, which is a 1.4% increase from the same quarter last year [3] Earnings Expectations - The earnings report is scheduled for release on July 23, and the stock may rise if the results exceed expectations, while a miss could lead to a decline [2] - The consensus EPS estimate has been revised down by 5.08% over the last 30 days, indicating a reassessment by analysts [4] Earnings Surprise Potential - Knight-Swift has a positive Earnings ESP of +3.22%, suggesting analysts are optimistic about the company's earnings prospects [12] - The company has a Zacks Rank of 3, indicating a neutral outlook, but the combination of a positive Earnings ESP and this rank suggests a likelihood of beating the consensus EPS estimate [12] Historical Performance - In the last reported quarter, Knight-Swift exceeded the expected earnings of $0.25 per share by delivering $0.28, resulting in a surprise of +12.00% [13] - Over the past four quarters, the company has surpassed consensus EPS estimates three times [14] Industry Context - Heartland Express (HTLD), a competitor in the trucking industry, is expected to report a loss of $0.08 per share, marking a year-over-year change of -100% [18] - Heartland's revenues are projected to decline by 13.9% to $236.65 million, with a significant downward revision of 800% in the consensus EPS estimate over the last 30 days [19]

Group 1 - The logistics sector has seen significant engagement from investors, particularly in the ASEAN and US markets, with a focus on banks, telecommunications, logistics, and hotels [1] - The popularity of insurance companies in the Philippines has influenced investment strategies, leading to diversification beyond traditional savings in banks and properties [1] - The trend of investing in blue-chip companies has evolved, with a broader portfolio now including various industries and market capitalizations [1] Group 2 - The entry into the US market has been a strategic move, with insights gained from using a relative's trading account before establishing an independent account [1] - The analysis of US market stocks, particularly in banking, hotels, shipping, and logistics, has been compared to the Philippine market, indicating a cross-market investment strategy [1] - The engagement with platforms like Seeking Alpha has facilitated knowledge sharing and enhanced market analysis capabilities for investors [1]

Most investors develop their own investment ideas so that they understand where and why the price action might impact their portfolio performance once a position is opened. However, sometimes, the market is too quiet or too noisy to always have a clear picture of what is happening behind the scenes. It is okay to look to professionals in times like these for guidance or inspiration. Now, not everyone is worth listening to in the market, especially in today's world of easy access to information and authority ...

A month has gone by since the last earnings report for Knight-Swift Transportation Holdings (KNX) . Shares have added about 7.8% in that time frame, outperforming the S&P 500.Will the recent positive trend continue leading up to its next earnings release, or is Knight-Swift due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important drivers.How Have Estimates Been Movin ...

Group 1: Knight-Swift Transportation - Goldman Sachs highlights Knight-Swift as a notable company with increased hedge fund ownership, indicating potential for strong performance in the transportation sector [1] - Knight-Swift is the largest truckload carrier in the U.S., and its diversified operations include truckload, less-than-truckload (LTL), logistics, and intermodal services, which may provide stability during economic downturns [4] - The company is projected to recover from a -3.86% growth dip in 2023 to a 3.76% increase in 2024, maintaining a 1.66% annual dividend yield of $0.18 per share [5] - Knight-Swift's Q1 2025 earnings report showed Earnings Per Share (EPS) of $0.28, slightly below the $0.29 estimates, while Q2 EPS guidance was lowered to $0.30–$0.38 due to uncertainties in trade policy [5][6] Group 2: Industry Outlook - The transportation industry, particularly companies like Knight-Swift, is viewed as resilient during economic slowdowns, making it an attractive investment option [6] - The ongoing trade wars and tariff discussions are influencing the current economic landscape, which could impact the transportation sector [4]

Investment Rating - The report does not explicitly state an investment rating for the transportation and logistics industry Core Insights - The report highlights a positive trend in U.S. imports, with a 6.1% week-over-week increase as of May 18, outperforming seasonal expectations by 980 basis points and showing a 2.8% year-over-year increase [2] - Spot rates for truckload transportation have surged, with dry van rates increasing by 6.1% week-over-week, outperforming historical averages [3] - There are concerns regarding potential freight demand impacts due to tariffs, with expectations of a flat outlook for dry van spot rates in 2026 [6] Summary by Sections Import & Congestion Monitor - Container bookings from China to the U.S. are at five-year lows, down 27% compared to 2023, indicating subdued future demand [2] - The report notes a recovery in container imports at the Port of LA/LB, which increased by 24% week-over-week [2] Truckload and Rail Data - Spot rates for dry van, reefers, and flatbed have all increased week-over-week, with dry van rates now 4% higher year-over-year [3] - The dry van load-to-truck ratio increased by 57% week-over-week, indicating a tightening market [6] - Rail management teams express skepticism about the feasibility of transcontinental mergers due to regulatory barriers [7] Airfreight & Surface Transportation - Airfreight rates have been monitored closely due to tariff implications, with significant declines observed in key freight lanes, particularly the China-U.S. lane, which fell by 6% week-over-week [10] - The overall airfreight market is experiencing broad-based weakness, with all major lanes underperforming seasonal expectations year-to-date [10] Rail Performance - The report card for railroads indicates varying performance levels, with some railroads rated as excellent while others are fair or poor [9] - Regulatory challenges are highlighted as a significant barrier to potential mergers in the rail industry, with environmental impact studies being particularly burdensome [7]

Financial Performance - Consolidated operating income increased 224.3% to $66.7 million for the quarter ended March 31, 2025, compared to the same period last year [107]. - Net income attributable to Knight-Swift rose 1262.8% to $30.6 million for the quarter ended March 31, 2025 [107]. - Total revenue for the quarter was $1,824.4 million, slightly up from $1,822.5 million in the previous year [109]. - The company reported a $33.3 million increase in net income to $30.6 million in the first quarter of 2025, compared to a $2.6 million loss in the same period last year [128]. - Adjusted Operating Income increased by 59.7% year-over-year to $46,485, while GAAP Operating Income rose 92.7% to $44,600 [142]. - Adjusted Net Income attributable to Knight-Swift for Q1 2025 was $45,372,000, compared to $19,774,000 in Q1 2024 [207]. - Adjusted EPS for Q1 2025 was $0.28, up from $0.12 in Q1 2024 [208]. - Total revenue for Q1 2025 was $1,824,362,000, slightly up from $1,822,467,000 in Q1 2024 [212]. Segment Performance - Truckload segment achieved a 96.3% operating ratio, with revenue per loaded mile increasing 1.5% year-over-year for the first time in 10 quarters [108]. - LTL segment's operating ratio was 96.4%, with a 420 basis points year-over-year deterioration due to start-up costs and integration expenses [108]. - Logistics segment reported an 11.8% year-over-year revenue increase, with a gross margin of 18.1% [108]. - Intermodal segment's operating ratio was 102.0%, with a 1.1% decline in revenue per load year-over-year [108]. - Truckload Segment revenue increased by a low single-digit percent sequentially in the second quarter, with operating margins remaining stable [119]. - LTL Segment revenue, excluding fuel surcharge, grew by 25% - 30% year-over-year in the second quarter, driven by shipment count growth and yield improvement [119]. - Logistics Segment revenue decreased by a low single-digit percent sequentially in the second quarter, while the Adjusted Operating Ratio remained stable [125]. - Total revenue for the Truckload Segment was $1,192,550, a decrease of 5.6% from $1,263,015 in the same quarter of 2024 [216]. - Total revenue for the LTL Segment rose to $352,401, representing a 25% increase from $282,122 in the same quarter of 2024 [219]. - Total revenue for the Logistics Segment increased to $141,621, up 11.8% from $126,729 in the same quarter of 2024 [220]. Cash Flow and Liquidity - Generated $109.4 million in operating cash flows and $70.0 million in Free Cash Flow during the quarter [108]. - Free Cash Flow for the quarter ended March 31, 2025, was $69,991, reflecting a strong cash generation capability [222]. - Total unrestricted liquidity as of March 31, 2025, was $1,020,155, including cash and cash equivalents of $209,480 [223]. - Net cash provided by operating activities increased by $72,154 to $109,429 compared to the same quarter in 2024 [234]. - The working capital deficit improved to $193.8 million as of March 31, 2025, from $258.0 million as of December 31, 2024 [233]. Expenses and Costs - Salaries, wages, and benefits increased by $28,752,000 to $721,659,000, representing a 4.1% rise year-over-year [167]. - Fuel expenses decreased by $27,343,000 to $207,246,000, a decline of 11.7% compared to $234,589,000 in the previous year [170]. - Insurance and claims expenses dropped by $30,221,000 to $92,225,000, a decrease of 24.7% from $122,446,000 in Q1 2024 [176]. - Operating taxes and licenses increased by $3,037,000 to $34,366,000, reflecting a 9.7% rise year-over-year [181]. - Depreciation and amortization of property and equipment decreased by $4,386,000 to $177,479,000, a decline of 2.4% from $181,865,000 in the previous year [186]. - Amortization of intangibles increased by $703,000 to $19,246,000, a rise of 3.8% compared to $18,543,000 in Q1 2024 [189]. - Rental expense for Q1 2025 was $42,866,000, a decrease of 0.3% compared to Q1 2024 [190]. - Purchased transportation expense remained flat at $277,294,000, accounting for 15.2% of total revenue in Q1 2025 [194]. - Miscellaneous operating expenses decreased by 15.4% to $45,535,000, primarily due to an $8.9 million increase in gain on sales of property and equipment [197]. - Interest expense decreased by 2.5% to $40,203,000 in Q1 2025, attributed to lower interest rates despite higher debt balances [200]. - Income tax expense increased by 380.4% to $10,303,000, reflecting a higher pretax income with an effective tax rate of 25.4% [202]. Market Outlook and Strategic Initiatives - The company anticipates a cautious market outlook due to uncertainties in trade policy and potential impacts on freight volumes [114]. - The Truckload segment is expected to pursue opportunities through a decentralized operating model and further expand its network following the DHE Acquisition [123]. - The company anticipates an increase in depreciation and amortization expense as a percentage of revenue due to planned purchases of revenue equipment in 2025 [124]. - The company expects labor costs to remain inflationary, leading to potential future pay increases for driving associates [168]. - The company anticipates a lower pace of facility expansion in 2025 compared to 2024, focusing on revenue and margin expansion [151]. Debt and Financing - As of March 31, 2025, Knight-Swift had $209.5 million in unrestricted cash and $2.6 billion in outstanding debt [108]. - The 2021 Term Loan A-2 has an outstanding balance of $349.3 million, due September 2026 [236]. - The 2021 Term Loan A-3 has an outstanding balance of $769.5 million, due September 2026 [236]. - The 2023 Term Loan has an outstanding balance of $249.5 million, due September 2026 [236]. - Finance lease obligations total $566.9 million [236]. - The company reported a $10.4 million increase in cash used for acquisitions of leased properties [238]. - Net cash used in financing activities increased by $54.1 million, driven by an $87.0 million decrease in net borrowings on the 2021 Revolver [239]. Operational Challenges - The company experienced a qualified driver shortage, leading to increased compensation for driving associates [241]. - Operating expenses are sensitive to inflation, impacting costs for new equipment acquisition and maintenance [241]. - There have been no material changes in market risks as discussed in the previous annual report [243].