Key Takeaways Landstar posted Q2 EPS of $1.20, beating estimates but dropping 18.9% year over year on weaker profitability.Truck revenue per load rose 2.6% as unsided platform and van equipment pricing improved.Total revenue fell 1.1% to $1.21B, with air, ocean, and other segments posting double-digit declines.Landstar System, Inc. (LSTR) ) second-quarter 2025 earnings per share (EPS) of $1.20 beat the Zacks Consensus Estimate of $1.16 but fell 18.9% year over year. Revenues of $1.21 billion marginally surp ...

Core Insights - Landstar System (LSTR) reported revenue of $1.21 billion for the quarter ended June 2025, reflecting a year-over-year decline of 1.1% and an EPS of $1.20, down from $1.48 in the same quarter last year [1] - The reported revenue was in line with the Zacks Consensus Estimate, showing a surprise of +0.39%, while the EPS exceeded the consensus estimate by +3.45% [1] Financial Performance Metrics - Revenue per load for Ocean and air cargo carriers was $6,826, below the average estimate of $7,836.56 [4] - Revenue per load for Rail Intermodal was $2,817, compared to the average estimate of $3,011.45 [4] - Total number of loads was 515,770, slightly below the average estimate of 517,459 [4] - Truck Transportation revenue was $1.12 billion, exceeding the average estimate of $1.1 billion, representing a year-over-year increase of +1.1% [4] - Revenue from Ocean and air cargo carriers was $50.79 million, significantly lower than the average estimate of $67.92 million, marking a year-over-year decline of -28.8% [4] - Investment income was reported at $3.73 million, surpassing the average estimate of $3.04 million, with a year-over-year increase of +2.1% [4] Stock Performance - Over the past month, Landstar shares returned +1.6%, while the Zacks S&P 500 composite increased by +3.6% [3] - The stock currently holds a Zacks Rank 3 (Hold), indicating expected performance in line with the broader market [3]

Company Performance - Landstar System (LSTR) reported quarterly earnings of $1.2 per share, exceeding the Zacks Consensus Estimate of $1.16 per share, but down from $1.48 per share a year ago, indicating an earnings surprise of +3.45% [1] - The company posted revenues of $1.21 billion for the quarter ended June 2025, surpassing the Zacks Consensus Estimate by 0.39%, but down from $1.23 billion year-over-year [2] - Over the last four quarters, Landstar has surpassed consensus EPS estimates just once and topped consensus revenue estimates three times [2] Stock Performance - Landstar shares have declined approximately 17.8% since the beginning of the year, contrasting with the S&P 500's gain of 8.6% [3] - The current consensus EPS estimate for the upcoming quarter is $1.35 on revenues of $1.24 billion, and for the current fiscal year, it is $4.86 on revenues of $4.85 billion [7] Industry Outlook - The Transportation - Truck industry, to which Landstar belongs, is currently ranked in the bottom 13% of over 250 Zacks industries, suggesting potential challenges ahead [8] - Empirical research indicates a strong correlation between near-term stock movements and trends in earnings estimate revisions, which could impact Landstar's stock performance [5][6]

Financial Data and Key Metrics Changes - Overall revenue decreased by 1% year over year, while truck revenue increased year over year for the first time since 2022 [7][10] - Truck revenue per load increased by 2.6% compared to the same quarter last year, with a sequential increase of 3.2% from the first quarter of 2025 [15][10] - Gross profit was $109.3 million compared to $120 million in the same quarter last year, with a gross profit margin of 9% [23][24] Business Line Data and Key Metrics Changes - Heavy haul revenue increased by 9% year over year, driven by a 5% increase in revenue per load and a 4% increase in volume [8][17] - Non-truck transportation service revenue decreased by 22% or $21 million compared to the same quarter last year, primarily due to a 20% decrease in ocean revenue per shipment [18][19] - Transportation Logistics segment revenue was down 1% year over year, with a 2% decrease in loadings [19] Market Data and Key Metrics Changes - The freight environment was characterized by soft demand, with truck capacity readily available and market conditions favoring shippers [9][10] - U.S.-Mexico and U.S.-Canada cross-border businesses underperformed compared to domestic revenue performance [19] - Revenue hauled on behalf of other truck transportation companies was 19% below the same quarter last year, indicating accessible capacity in the marketplace [22] Company Strategy and Development Direction - The company remains focused on accelerating its business model and executing strategic growth initiatives despite ongoing challenges [6][10] - Continuous investment in technology solutions and fleet refreshment is prioritized to support independent business owners [11][27] - The company aims to leverage its strong balance sheet and cash generation capabilities to return capital to shareholders through buybacks and dividends [27] Management's Comments on Operating Environment and Future Outlook - Management noted ongoing challenges from volatile federal trade policy and inflation concerns, but expressed optimism about the heavy haul service performance [6][8] - The company will provide revenue commentary for the third quarter instead of formal guidance due to the uncertain economic environment [28] - Management expects to see similar trends in the third quarter, with automotive and construction sectors remaining sluggish [45][46] Other Important Information - The accident frequency rate was reported at 0.67 DOT reportable accidents per million miles, below the national average [12] - The company experienced a decrease in BCO truck count by approximately 6% year over year, but the sequential count was flat, indicating stability [13][14] - Insurance and claims costs increased to $30.4 million in the second quarter, attributed to higher severity of trucking accidents [25][99] Q&A Session Summary Question: Clarification on SG&A outlook for Q3 - Management confirmed that the $3 million decline in SG&A would be off the reported $55.7 million, accounting for the reclassification impact [33][35] Question: Insights on end market performance - Management indicated that automotive remains sluggish, while sectors like data centers and heavy haul are performing positively [45][46] Question: Trends in heavy haul segment - Management expressed optimism about the heavy haul segment, noting broad-based demand across various industries [82][85] Question: Impact of ELP regulations on capacity - Management does not foresee significant exposure to ELP regulations, emphasizing a disciplined approach to recruiting and retaining BCOs [90][91] Question: Trends in insurance costs and claims - Management noted a slight increase in insurance costs due to higher accident severity, but achieved a flat renewal on insurance premiums [99][100]

Financial Data and Key Metrics Changes - Overall revenue decreased by 1% year over year, while truck revenue increased year over year for the first time since 2022 [6][9] - Truck revenue per load increased by 2.6% compared to the second quarter of 2024, with a sequential increase of 3.2% from the first quarter of 2025 [15][27] - Gross profit was $109.3 million compared to $120 million in the second quarter of 2024, with a gross profit margin of 9% [23][27] Business Line Data and Key Metrics Changes - Heavy haul revenue increased by 9% year over year, driven by a 5% increase in revenue per heavy haul load and a 4% increase in heavy haul volume [7][17] - Non-truck transportation service revenue decreased by 22% or $21 million compared to the second quarter of 2024, primarily due to a 20% decrease in ocean revenue per shipment [18][19] - Transportation Logistics segment revenue was down 1% year over year on a 2% decrease in loadings, partially offset by a 1% increase in revenue per load [19] Market Data and Key Metrics Changes - The freight environment in the second quarter of 2025 was characterized by soft demand, with truck capacity readily available and market conditions favoring shippers [8][9] - Revenue hauled on behalf of other truck transportation companies was 19% below the second quarter of 2024, indicating accessible capacity in the marketplace [21] - The U.S.-Mexico and U.S.-Canada cross-border businesses underperformed compared to domestic revenue performance [19] Company Strategy and Development Direction - The company remains focused on accelerating its business model and executing strategic growth initiatives despite ongoing challenges in the freight environment [6][9] - Continuous improvement in service and support for customers, agents, BCOs, and carriers is a priority [8] - The company is committed to investing in technology solutions and refreshing its fleet of trailing equipment [10][27] Management's Comments on Operating Environment and Future Outlook - Management noted ongoing challenges from volatile federal trade policy and inflation concerns but highlighted positive developments in heavy haul services [6][7] - The company will provide revenue commentary for the third quarter instead of formal guidance due to the uncertain economic environment [28] - Management expressed optimism about the performance of heavy haul services and the potential for recovery in the freight market [6][9] Other Important Information - The company reported an accident frequency rate of 0.67 DOT reportable accidents per million miles, below the national average [11] - Cash flow from operations for the first half of 2025 was $63 million, with significant capital returned to stockholders through dividends and share repurchases [27] Q&A Session Summary Question: Clarification on SG&A outlook for Q3 - Management confirmed that the SG&A outlook for Q3 should be adjusted based on the reclassification impact and the expected decline from the agent convention [33][34] Question: Insights on end market performance - Management indicated that automotive demand remains sluggish, while sectors like data centers and heavy haul are performing well [45][46] Question: Trends in insurance and claims costs - Management noted an increase in insurance and claims costs due to higher severity of trucking accidents and strategic cargo theft [25][92] Question: Heavy haul segment outlook - Management expressed confidence in the heavy haul segment's performance, noting broad-based demand across various industries [82][84] Question: Impact of new regulations on capacity - Management stated that they do not foresee unique exposure to new regulations affecting their BCO fleet, maintaining a disciplined approach to recruitment and retention [87][88] Question: Overall freight market trends - Management acknowledged the challenges in sustaining revenue per load increases, attributing fluctuations to unique circumstances in Q2 and tariff uncertainties [62][64] Question: Substitute line haul performance - Management indicated that demand for substitute line haul services is less diversified and influenced by a few key shippers, with expectations for a flat peak season [71][73] Question: Future of non-truck transportation services - Management noted a significant drop in non-truck transportation revenue, primarily due to tariff-related issues, with no immediate improvement expected [74]

Financial Performance - Revenue decreased slightly by 1.1%, from $1,225.0 million in 2Q 2024 to $1,211.4 million in 2Q 2025 [17] - Operating income decreased by 17.3%, from $68.1 million in 2Q 2024 to $56.3 million in 2Q 2025 [17] - Earnings per share decreased by 18.9%, from $1.48 in 2Q 2024 to $1.20 in 2Q 2025 [17] - Variable contribution margin decreased from 14.3% in 2Q 2024 to 14.1% in 2Q 2025 [37, 38] Truckload Operations - Truck revenue was $1.12 billion [22] - Truck loadings totaled 501,000 [22] - Truck revenue per load was $2,234 [22] Capacity Providers - Total available truck capacity providers were 77,358 as of June 28, 2025 [24] - BCO independent contractors numbered 7,844 as of June 28, 2025 [24] - The number of trucks provided by BCO independent contractors was 8,611 as of June 28, 2025 [24] Cash Flow and Returns - Net cash was $340.7 million as of June 28, 2025 [43] - Free cash flow was $58.4 million year-to-date [43] - Share repurchases totaled $102.3 million year-to-date [43]

Exhibit 99.1 (2) Please refer to the Consolidated Statements of Income and Reconciliation of Gross Profit to Variable Contribution included below. Landstar continues to return capital to stockholders through the Company's stock purchase program and dividends. During the 2025 second quarter, Landstar purchased 300,141 shares of its common stock at an aggregate cost of $42.4 million, bringing the total number of common shares purchased during the twenty-six week period ended June 28, 2025, to 686,459 shares a ...

Core Viewpoint - Landstar System, Inc. reported a decline in revenue and earnings per share for the second quarter of 2025 compared to the same period in 2024, while maintaining a strong focus on safety and service in a challenging freight transportation environment [1][2]. Financial Performance - The company reported total revenue of $1.211 billion in Q2 2025, down from $1.225 billion in Q2 2024, representing a decrease of approximately 1.1% [2]. - Basic and diluted earnings per share were $1.20 in Q2 2025, compared to $1.48 in Q2 2024, reflecting a decline of about 19% [1][12]. - Gross profit for Q2 2025 was $109 million, down from $120 million in Q2 2024, indicating a decrease of approximately 9.2% [4][12]. - Variable contribution in Q2 2025 was $170 million, compared to $175 million in Q2 2024, a decline of about 2.9% [4][12]. Revenue Breakdown - Truck transportation revenue accounted for 92% of total revenue in Q2 2025, amounting to $1.118 billion, compared to $1.106 billion (90% of revenue) in Q2 2024 [2]. - Truckload transportation revenue via van equipment was $591 million in Q2 2025, down from $619 million in Q2 2024 [2]. - Revenue from unsided/platform equipment increased to $401 million in Q2 2025 from $381 million in Q2 2024 [2]. - Revenue from other truck transportation services rose to $101 million in Q2 2025, compared to $78 million in Q2 2024 [2]. Operational Metrics - Truck revenue per load increased by 2.6% in Q2 2025 compared to Q2 2024, despite a 1.5% decline in the number of loads hauled [3]. - The number of independent business capacity owners (BCOs) remained flat sequentially, marking the best performance since Q2 2022 [1]. Capital Management - Landstar returned capital to shareholders through stock repurchases and dividends, purchasing 300,141 shares for $42.4 million in Q2 2025, totaling 686,459 shares for approximately $103.3 million in the first half of 2025 [1]. - The Board of Directors declared a quarterly dividend of $0.40 per share, payable on September 9, 2025 [1]. Balance Sheet Strength - As of June 28, 2025, Landstar had cash and short-term investments totaling approximately $426 million [5]. - The trailing twelve-month return on average shareholders' equity was 17%, and return on invested capital was 16% [6].

Core Viewpoint - Bragar Eagel & Squire, P.C. is investigating potential claims against Landstar System, Inc. due to allegations of federal securities law violations and unlawful business practices following a significant supply chain fraud revelation [1][3]. Group 1: Company Overview - Landstar System, Inc. (NASDAQ:LSTR) is facing scrutiny after announcing a significant supply chain fraud that may impact its earnings per share for the first quarter of 2025 by $0.35 to $0.50 [3]. - The company withdrew its previously issued earnings guidance for the first quarter of 2025 due to the fraud [3]. Group 2: Investor Impact - Following the announcement of the fraud, Landstar's stock experienced a decline, which was exacerbated by the company's inability to file its quarterly report on time due to ongoing evaluations of accounting and internal control matters related to the fraud [3]. - Investors who purchased Landstar shares and suffered losses are encouraged to contact Bragar Eagel & Squire for potential legal recourse [1][4].

Company Announcement - Landstar System, Inc. will release its 2025 second quarter results after the market closes on July 29, 2025 [1] - A quarterly conference call with analysts and investors is scheduled for 4:30 p.m. ET on the same day to discuss the results [1] - The conference call will be accessible via webcast and will also have a telephone replay available for 48 hours [1] Company Overview - Landstar System, Inc. is a technology-enabled, asset-light provider of integrated transportation management solutions [2] - The company delivers specialized transportation services to a diverse customer base through a network of agents, third-party capacity providers, and employees [2] - Landstar is certified to ISO 9001:2015 and RC14001:2015 standards for quality management and environmental, health, safety, and security management systems [2]