Core Insights - Schneider National reported quarterly earnings of $0.21 per share, matching the Zacks Consensus Estimate, and consistent with the previous year's earnings [1] - The company posted revenues of $1.42 billion for the quarter ended June 2025, slightly missing the Zacks Consensus Estimate by 0.24%, but showing an increase from $1.32 billion year-over-year [2] - The stock has underperformed, losing approximately 16.3% since the beginning of the year, while the S&P 500 has gained 8.2% [3] Earnings Outlook - The company's earnings outlook is crucial for investors, with current consensus EPS estimates at $0.23 for the upcoming quarter and $0.86 for the current fiscal year, with revenues expected to be $1.46 billion and $5.79 billion respectively [7] - The trend of estimate revisions for Schneider National has been unfavorable, resulting in a Zacks Rank 4 (Sell), indicating expected underperformance in the near future [6] Industry Context - The Transportation - Services industry, to which Schneider National belongs, is currently ranked in the bottom 9% of over 250 Zacks industries, suggesting a challenging environment for stocks in this sector [8] - Another company in the same industry, RXO, is expected to report a quarterly earnings decline of 33.3% year-over-year, with revenues projected to be $1.45 billion, reflecting a 56% increase from the previous year [9][10]

Financial Performance - Operating revenues increased to $1421 million in 2Q25 from $1317 million in 2Q24[77] - Revenues excluding fuel surcharge were $1282 million in 2Q25, compared to $1168 million in 2Q24[77] - Adjusted income from operations improved by 9% year-over-year[82] - Adjusted EBITDA increased from $153 million in 2Q24 to $166 million in 2Q25[77] Segment Results - Truckload revenues excluding fuel surcharge increased 15% year-over-year due to the Cowan acquisition and higher revenue per truck per week[87] - Dedicated average trucks grew 27% year-over-year, primarily driven by the Cowan acquisition[87] - Intermodal revenues excluding fuel surcharge increased 5% year-over-year due to a 5% volume growth[91] - Logistics revenues excluding fuel surcharge increased 7% year-over-year due to the Cowan Systems acquisition and Power Only growth[94] Capital Allocation and Strategy - The company announced a $150 million, 3-year share repurchase program in February 2023, with approximately $46.1 million remaining as of June 30, 2025[61] - Dividends have increased 90% since the IPO in April 2017[61]

Executive Summary & Consolidated Financial Highlights [Q2 2025 Announcement and CEO Commentary](index=1&type=section&id=Schneider%20National%2C%20Inc.%20Announces%20Second%20Quarter%202025%20Results) Schneider National, Inc. announced Q2 2025 results, reporting earnings growth driven by strong execution in Truckload and Intermodal segments - Schneider National, Inc. announced results for the three months ended June 30, 2025, reporting another quarter of earnings growth[1](index=1&type=chunk)[2](index=2&type=chunk)[3](index=3&type=chunk) - CEO Mark Rourke attributed growth to solid execution in Truckload and Intermodal segments, structural business improvements, strategic growth priorities, and acquisitions[3](index=3&type=chunk) - Truckload segment achieved **double-digit earnings improvement**, while Intermodal saw continued **volume momentum and earnings improvement** from network optimization[3](index=3&type=chunk) [Consolidated Results Summary](index=1&type=section&id=Results%20of%20Operations%20%28unaudited%29) Q2 2025 operating revenues increased 8% to $1,420.5 million, net income rose 2% to $36.0 million, with diluted and adjusted EPS flat Q2 2025 Consolidated Financial Highlights (YoY Change) | Metric | Q2 2025 (Millions) | Q2 2024 (Millions) | Change | | :-------------------------------- | :----------------- | :----------------- | :----- | | Operating revenues | $1,420.5 | $1,316.7 | 8% | | Revenues (excluding fuel surcharge) | $1,282.0 | $1,167.9 | 10% | | Income from operations | $55.0 | $51.0 | 8% | | Adjusted income from operations | $56.8 | $52.3 | 9% | | Net income | $36.0 | $35.3 | 2% | | Adjusted net income | $37.4 | $36.3 | 3% | | Adjusted EBITDA | $166.3 | $152.9 | 9% | | Diluted earnings per share | $0.20 | $0.20 | —% | | Adjusted diluted earnings per share | $0.21 | $0.21 | —% | - For the six months ended June 30, 2025, operating revenues increased **7% to $2,822.3 million**, income from operations increased **22% to $97.1 million**, and net income increased **15% to $62.1 million**[5](index=5&type=chunk) [Enterprise Results](index=2&type=section&id=Enterprise%20Results) Enterprise income from operations for Q2 2025 increased 8% to $55.0 million, with diluted and adjusted EPS remaining flat - Enterprise income from operations for Q2 2025 was **$55.0 million**, an **8% increase** ($4.0 million) compared to Q2 2024[7](index=7&type=chunk) - Diluted earnings per share and Adjusted diluted earnings per share were **$0.20** and **$0.21**, respectively, for both Q2 2025 and Q2 2024[7](index=7&type=chunk) [Cash Flow and Capitalization](index=2&type=section&id=Cash%20Flow%20and%20Capitalization) As of June 30, 2025, total debt was $526.2 million, cash $160.7 million, and free cash flow increased $10.1 million Cash Flow and Capitalization Highlights (June 30, 2025) | Metric | Amount (Millions) | | :-------------------------------- | :---------------- | | Total debt and finance lease obligations | $526.2 | | Cash and cash equivalents | $160.7 | | Free cash flow increase (YoY) | $10.1 | - Net capital expenditures were lower compared to the prior year resulting from reduced purchases of transportation equipment[8](index=8&type=chunk) - The Company repurchased **$103.9 million** of Class B shares under its **$150.0 million** stock repurchase program and declared two quarterly dividends of **$0.095 per share**[9](index=9&type=chunk) Segment Performance Analysis [Truckload Segment](index=2&type=section&id=Truckload) Truckload revenues (excl. fuel surcharge) increased 15% to $622.2 million, with income from operations up 31% to $40.1 million Truckload Segment Performance (Q2 2025 vs Q2 2024) | Metric | Q2 2025 (Millions) | Q2 2024 (Millions) | Change | | :-------------------------------- | :----------------- | :----------------- | :----- | | Revenues (excl. fuel surcharge) | $622.2 | $540.3 | 15% | | Income from operations | $40.1 | $30.7 | 31% | | Operating ratio | 93.6% | 94.3% | 70 bps improvement | - Dedicated volume increased **23%** primarily due to the acquisition of Cowan Systems, partially offset by lower Network volume[10](index=10&type=chunk) - Revenue per truck per week increased **1% to $3,964** due to improved rate per mile[10](index=10&type=chunk) [Intermodal Segment](index=2&type=section&id=Intermodal) Intermodal revenues (excl. fuel surcharge) rose 5% to $265.1 million, with income from operations increasing 10% to $16.1 million Intermodal Segment Performance (Q2 2025 vs Q2 2024) | Metric | Q2 2025 (Millions) | Q2 2024 (Millions) | Change | | :-------------------------------- | :----------------- | :----------------- | :----- | | Revenues (excl. fuel surcharge) | $265.1 | $253.1 | 5% | | Income from operations | $16.1 | $14.6 | 10% | | Operating ratio | 93.9% | 94.2% | 30 bps improvement | - Volume growth of **5%** was the primary driver for revenue increase, with revenue per order remaining roughly flat[12](index=12&type=chunk) - Lower purchased transportation costs contributed to the earnings growth[13](index=13&type=chunk) [Logistics Segment](index=2&type=section&id=Logistics) Logistics revenues (excl. fuel surcharge) increased 7% to $339.6 million, but income from operations decreased 29% to $7.9 million Logistics Segment Performance (Q2 2025 vs Q2 2024) | Metric | Q2 2025 (Millions) | Q2 2024 (Millions) | Change | | :-------------------------------- | :----------------- | :----------------- | :----- | | Revenues (excl. fuel surcharge) | $339.6 | $318.8 | 7% | | Income from operations | $7.9 | $11.2 | (29%) | | Operating ratio | 97.7% | 96.5% | 120 bps decrease | - Revenue increase primarily due to the acquisition of Cowan Systems, partially offset by lower brokerage volume and revenue per order[14](index=14&type=chunk) - Lower brokerage volume was the main driver for the decrease in income from operations[15](index=15&type=chunk) Business Outlook [Business Outlook](index=3&type=section&id=Business%20Outlook) Schneider updated full-year 2025 adjusted diluted EPS guidance to $0.75 - $0.95, with net capital expenditures unchanged Full Year 2025 Guidance Update | Metric | Prior Guidance | Current Guidance | | :-------------------------------- | :------------- | :--------------- | | Adjusted diluted earnings per share | $0.75 - $1.00 | $0.75 - $0.95 | | Net capital expenditures (millions) | $325 - $375 | $325 - $375 | - The company expects year-over-year earnings improvement in 2025, driven by controlling costs, enhancing asset efficiency, diligent customer allocations, differentiation, and accretive acquisitions[16](index=16&type=chunk) - Uncertainties include the timing and impact of trade, legislative, and regulatory policy, and ongoing industry cost inflation[16](index=16&type=chunk) Non-GAAP Financial Measures & Reconciliations [Explanation of Non-GAAP Measures](index=3&type=section&id=Explanation%20of%20Non-GAAP%20Measures) Non-GAAP measures like adjusted income from operations are presented to clarify core operating performance by excluding non-core items - Non-GAAP measures are used to assist investors in understanding the business by removing the impact of items not reflecting core operating performance and providing comparable financial results between periods[17](index=17&type=chunk)[45](index=45&type=chunk) - Revenues (excluding fuel surcharge) are useful as they isolate volume, price, and cost changes related to industry demand from fluctuating fuel prices[45](index=45&type=chunk) - Management primarily relies on GAAP results in addition to using non-GAAP measures, acknowledging their limitations as analytical tools[46](index=46&type=chunk) [Reconciliation of Revenues (excluding fuel surcharge)](index=10&type=section&id=Revenues%20%28excluding%20fuel%20surcharge%29) This section reconciles GAAP operating revenues to non-GAAP revenues excluding fuel surcharge, isolating fuel price impact on core performance Reconciliation of Revenues (excluding fuel surcharge) | Metric | Three Months Ended June 30, 2025 (Millions) | Three Months Ended June 30, 2024 (Millions) | Six Months Ended June 30, 2025 (Millions) | Six Months Ended June 30, 2024 (Millions) | | :-------------------------------- | :------------------------------------------ | :------------------------------------------ | :------------------------------------------ | :------------------------------------------ | | Operating revenues | $1,420.5 | $1,316.7 | $2,822.3 | $2,635.7 | | Less: Fuel surcharge revenues | 138.5 | 148.8 | 282.0 | 304.7 | | Revenues (excluding fuel surcharge) | $1,282.0 | $1,167.9 | $2,540.3 | $2,331.0 | [Reconciliation of Adjusted Income from Operations](index=11&type=section&id=Adjusted%20income%20from%20operations) This reconciliation adjusts GAAP income from operations by excluding acquisition costs and intangible asset amortization for core performance Reconciliation of Adjusted Income from Operations | Metric | Three Months Ended June 30, 2025 (Millions) | Three Months Ended June 30, 2024 (Millions) | Six Months Ended June 30, 2025 (Millions) | Six Months Ended June 30, 2024 (Millions) | | :-------------------------------- | :------------------------------------------ | :------------------------------------------ | :------------------------------------------ | :------------------------------------------ | | Income from operations | $55.0 | $51.0 | $97.1 | $79.7 | | Acquisition-related costs | — | — | 0.2 | — | | Amortization of intangible assets | 1.8 | 1.3 | 3.7 | 2.6 | | Adjusted income from operations | $56.8 | $52.3 | $101.0 | $82.3 | [Reconciliation of Adjusted Operating Ratio](index=11&type=section&id=Adjusted%20operating%20ratio) The adjusted operating ratio normalizes operational efficiency by excluding fuel surcharge, acquisition costs, and intangible asset amortization Reconciliation of Adjusted Operating Ratio | Metric | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :-------------------------------- | :------------------------------- | :------------------------------- | :------------------------------- | :------------------------------- | | GAAP Operating ratio | 96.1 % | 96.1 % | 96.6 % | 97.0 % | | Revenues (excluding fuel surcharge) | $1,282.0 | $1,167.9 | $2,540.3 | $2,331.0 | | Adjusted total operating expenses, net of fuel surcharge revenues | $1,225.2 | $1,115.6 | $2,439.3 | $2,248.7 | | Adjusted operating ratio | 95.6 % | 95.5 % | 96.0 % | 96.5 % | [Reconciliation of Adjusted Net Income](index=12&type=section&id=Adjusted%20net%20income) This reconciliation adjusts GAAP net income by adding back acquisition costs and intangible asset amortization, with tax effect, for core profitability Reconciliation of Adjusted Net Income | Metric | Three Months Ended June 30, 2025 (Millions) | Three Months Ended June 30, 2024 (Millions) | Six Months Ended June 30, 2025 (Millions) | Six Months Ended June 30, 2024 (Millions) | | :-------------------------------- | :------------------------------------------ | :------------------------------------------ | :------------------------------------------ | :------------------------------------------ | | Net income | $36.0 | $35.3 | $62.1 | $53.8 | | Acquisition-related costs | — | — | 0.2 | — | | Amortization of intangible assets | 1.8 | 1.3 | 3.7 | 2.6 | | Income tax effect of non-GAAP adjustments | (0.4) | (0.3) | (0.9) | (0.6) | | Adjusted net income | $37.4 | $36.3 | $65.1 | $55.8 | [Reconciliation of Adjusted EBITDA](index=12&type=section&id=Adjusted%20EBITDA) Adjusted EBITDA is reconciled from net income by adding back interest, taxes, depreciation, amortization, and acquisition costs for operational cash flow Reconciliation of Adjusted EBITDA | Metric | Three Months Ended June 30, 2025 (Millions) | Three Months Ended June 30, 2024 (Millions) | Six Months Ended June 30, 2025 (Millions) | Six Months Ended June 30, 2024 (Millions) | | :-------------------------------- | :------------------------------------------ | :------------------------------------------ | :------------------------------------------ | :------------------------------------------ | | Net income | $36.0 | $35.3 | $62.1 | $53.8 | | Interest expense, net | 6.6 | 3.4 | 12.8 | 6.6 | | Provision for income taxes | 11.4 | 11.7 | 20.1 | 17.9 | | Depreciation and amortization | 112.3 | 102.5 | 225.9 | 205.3 | | Acquisition-related costs | — | — | 0.2 | — | | Adjusted EBITDA | $166.3 | $152.9 | $321.1 | $283.6 | [Reconciliation of Free Cash Flow](index=12&type=section&id=Free%20cash%20flow) Free cash flow is net cash from operating activities less capital expenditures, serving as a key liquidity measure Reconciliation of Free Cash Flow | Metric | Three Months Ended June 30, 2025 (Millions) | Three Months Ended June 30, 2024 (Millions) | Six Months Ended June 30, 2025 (Millions) | Six Months Ended June 30, 2024 (Millions) | | :-------------------------------- | :------------------------------------------ | :------------------------------------------ | :------------------------------------------ | :------------------------------------------ | | Net cash provided by operating activities | $175.5 | $182.6 | $267.2 | $280.2 | | Net capital expenditures | (52.5) | (69.7) | (149.6) | (181.6) | | Free cash flow | $123.0 | $112.9 | $117.6 | $98.6 | [Reconciliation of Adjusted Diluted Earnings Per Share](index=13&type=section&id=Adjusted%20diluted%20earnings%20per%20share) This reconciliation adjusts GAAP diluted EPS by incorporating tax-effected non-GAAP adjustments for an adjusted view of per-share profitability Reconciliation of Adjusted Diluted Earnings Per Share | Metric | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :-------------------------------- | :------------------------------- | :------------------------------- | :------------------------------- | :------------------------------- | | Diluted earnings per share | $0.20 | $0.20 | $0.35 | $0.31 | | Non-GAAP adjustments, tax effected | 0.01 | 0.01 | 0.02 | 0.01 | | Adjusted diluted earnings per share | $0.21 | $0.21 | $0.37 | $0.32 | Company Profile & Investor Information [About Schneider National, Inc.](index=3&type=section&id=About%20Schneider%20National%2C%20Inc.) Schneider National, Inc. is a leading North American surface transportation and logistics provider, offering multimodal services and leveraging AI for optimization - Schneider is among the largest providers of surface transportation and logistics solutions in North America, offering a multimodal portfolio of services[19](index=19&type=chunk) - The company leverages artificial intelligence, data science, and analytics to provide innovative solutions that coordinate the timely, safe, and effective movement of customer products[19](index=19&type=chunk) - Service offerings include transportation of full-truckload freight, intermodal services with major North American rail carriers, and comprehensive logistics services[20](index=20&type=chunk) [Conference Call and Contact Information](index=4&type=section&id=Conference%20Call%20and%20Webcast%20Information) Schneider hosted an earnings conference call and webcast on July 31, 2025, with investor relations contact information provided - An earnings conference call and webcast was held on July 31, 2025, at 10:30 a.m. Eastern Time[21](index=21&type=chunk) - Contact for investor relations is Christyne McGarvey, Vice President of Investor Relations and Corporate Finance[22](index=22&type=chunk) GAAP Financial Statements [Consolidated Statements of Income](index=5&type=section&id=SCHNEIDER%20NATIONAL%2C%20INC.%20CONSOLIDATED%20STATEMENTS%20OF%20INCOME%20%28Unaudited%29) Q2 2025 consolidated statements of income show operating revenues of $1,420.5 million, net income of $36.0 million, and diluted EPS of $0.20 Consolidated Statements of Income (Q2 2025 vs Q2 2024) | Metric | Three Months Ended June 30, 2025 (Millions) | Three Months Ended June 30, 2024 (Millions) | | :-------------------------------- | :------------------------------------------ | :------------------------------------------ | | Operating revenues | $1,420.5 | $1,316.7 | | Total operating expenses | $1,365.5 | $1,265.7 | | Income from operations | $55.0 | $51.0 | | Net income | $36.0 | $35.3 | | Diluted earnings per share | $0.20 | $0.20 | [Condensed Consolidated Balance Sheets](index=6&type=section&id=SCHNEIDER%20NATIONAL%2C%20INC.%20CONDENSED%20CONSOLIDATED%20BALANCE%20SHEETS%20%28Unaudited%29) As of June 30, 2025, total assets were $4,956.4 million, with cash at $160.7 million and shareholders' equity at $3,012.9 million Condensed Consolidated Balance Sheets (June 30, 2025 vs Dec 31, 2024) | Metric | June 30, 2025 (Millions) | December 31, 2024 (Millions) | | :-------------------------------- | :------------------------- | :--------------------------- | | Cash and cash equivalents | $160.7 | $117.6 | | Total Assets | $4,956.4 | $4,933.7 | | Long-term debt and finance lease obligations | $512.7 | $420.8 | | Shareholders' Equity | $3,012.9 | $2,986.9 | | Total Liabilities and Shareholders' Equity | $4,956.4 | $4,933.7 | [Condensed Consolidated Statements of Cash Flows](index=6&type=section&id=SCHNEIDER%20NATIONAL%2C%20INC.%20CONDENSED%20CONSOLIDATED%20STATEMENTS%20OF%20CASH%20FLOWS%20%28Unaudited%29) For the six months ended June 30, 2025, net cash from operations was $267.2 million, resulting in a $43.1 million net increase in cash Condensed Consolidated Statements of Cash Flows (Six Months Ended June 30) | Metric | 2025 (Millions) | 2024 (Millions) | | :-------------------------------- | :-------------- | :-------------- | | Net cash provided by operating activities | $267.2 | $280.2 | | Net cash used in investing activities | $(180.0) | $(178.1) | | Net cash used in financing activities | $(44.1) | $(101.3) | | Net increase in cash and cash equivalents | $43.1 | $0.8 | | Net capital expenditures | $(149.6) | $(181.6) | Segment Financials and Key Performance Indicators [Revenues by Segment](index=7&type=section&id=Revenues%20by%20Segment) Q2 2025 segment revenues were Truckload $622.2 million, Intermodal $265.1 million, and Logistics $339.6 million, all showing growth Revenues by Segment (Q2 2025 vs Q2 2024) | Segment | Q2 2025 (Millions) | Q2 2024 (Millions) | | :-------------------------------- | :----------------- | :----------------- | | Truckload | $622.2 | $540.3 | | Intermodal | $265.1 | $253.1 | | Logistics | $339.6 | $318.8 | | Other | $96.8 | $95.6 | | Fuel surcharge | $138.5 | $148.8 | | Operating revenues | $1,420.5 | $1,316.7 | [Income (Loss) from Operations by Segment](index=7&type=section&id=Income%20%28Loss%29%20from%20Operations%20by%20Segment) Q2 2025 Truckload income from operations rose 31% to $40.1 million, Intermodal 10% to $16.1 million, while Logistics decreased 29% to $7.9 million Income (Loss) from Operations by Segment (Q2 2025 vs Q2 2024) | Segment | Q2 2025 (Millions) | Q2 2024 (Millions) | | :-------------------------------- | :----------------- | :----------------- | | Truckload | $40.1 | $30.7 | | Intermodal | $16.1 | $14.6 | | Logistics | $7.9 | $11.2 | | Other | $(9.1) | $(5.5) | | Income from operations | $55.0 | $51.0 | [Key Performance Indicators by Segment](index=8&type=section&id=Key%20Performance%20Indicators%20by%20Segment) [Truckload KPIs](index=8&type=section&id=Truckload%20KPIs) Truckload average truck count increased to 12,224 in Q2 2025, with Dedicated trucks up 27%; revenue per truck per week rose 1% to $3,964 Truckload Segment Key Performance Indicators (Q2 2025 vs Q2 2024) | Metric | Q2 2025 | Q2 2024 | Change | | :-------------------------------- | :------ | :------ | :----- | | Dedicated Revenues (excl. fuel surcharge) | $440.4M | $346.4M | 27% | | Dedicated Average trucks | 8,518 | 6,683 | 27% | | Dedicated Revenue per truck per week | $4,026 | $4,025 | 0% | | Network Revenues (excl. fuel surcharge) | $181.9M | $193.8M | (6%) | | Network Average trucks | 3,706 | 3,982 | (7%) | | Network Revenue per truck per week | $3,821 | $3,778 | 1% | | Total Truckload Average trucks | 12,224 | 10,665 | 15% | | Total Truckload Revenue per truck per week | $3,964 | $3,933 | 1% | | Operating ratio | 93.6% | 94.3% | 70 bps improvement | - Cowan Systems' dedicated operations are included in Dedicated beginning in the fourth quarter of 2024, contributing to the significant increase in Dedicated metrics[32](index=32&type=chunk) [Intermodal KPIs](index=9&type=section&id=Intermodal%20KPIs) Intermodal orders increased 5% to 108,218 in Q2 2025, with revenue per order stable at $2,443 and operating ratio improving to 93.9% Intermodal Segment Key Performance Indicators (Q2 2025 vs Q2 2024) | Metric | Q2 2025 | Q2 2024 | Change | | :-------------------------------- | :------ | :------ | :----- | | Orders | 108,218 | 103,088 | 5% | | Containers | 26,462 | 26,695 | (1%) | | Trucks | 1,442 | 1,408 | 2% | | Revenue per order | $2,443 | $2,446 | 0% | | Operating ratio | 93.9% | 94.2% | 30 bps improvement | [Logistics KPIs](index=9&type=section&id=Logistics%20KPIs) The Logistics segment's operating ratio decreased by 120 basis points to 97.7% in Q2 2025, reflecting lower operational efficiency Logistics Segment Key Performance Indicators (Q2 2025 vs Q2 2024) | Metric | Q2 2025 | Q2 2024 | Change | | :-------------------------------- | :------ | :------ | :----- | | Operating ratio | 97.7% | 96.5% | 120 bps decrease | - Cowan Systems' logistics operations are included in Logistics beginning in the fourth quarter of 2024[40](index=40&type=chunk) Forward-Looking Statements [Forward-Looking Statements](index=14&type=section&id=Special%20Note%20Regarding%20Forward-Looking%20Statements) This section contains cautionary forward-looking statements, noting actual results may differ materially due to various risks and uncertainties - The earnings release contains forward-looking statements reflecting current expectations, beliefs, plans, or forecasts, which are not guarantees of future performance[64](index=64&type=chunk) - Actual results could differ materially due to risks and uncertainties such as unfavorable economic and market conditions, competitive pressures, operational challenges, and regulatory impacts[65](index=65&type=chunk) - The Company undertakes no obligation to publicly release any revision to its forward-looking statements[66](index=66&type=chunk)

Summary of Schneider National (SNDR) 2025 Conference Call Company Overview - **Company**: Schneider National (SNDR) - **Date**: June 10, 2025 - **Speakers**: Mark Rourke (President and CEO), Daryl Campbell (EVP and CFO), Christine McGarvey (VP of Investor Relations) Current Market Conditions - **Market Sentiment**: There was significant uncertainty at the macro level, but the worst-case scenarios have not materialized, indicating a resilient consumer demand [6][7][8] - **Volume Trends**: A downturn in West Coast volumes was noted, but strength was observed in other regions, particularly in Mexico and the Midwest [9][10] - **Customer Expectations**: Mixed signals from customers regarding future demand, with some expecting a surge while others anticipate steady activity [10] Business Segments Performance - **Intermodal**: Less reliance on imports compared to truckload, with steady domestic demand. Productivity enhancements are being pursued [12][13] - **Capacity and Pricing**: The market is approaching equilibrium with modest price increases observed despite ongoing challenges [18][20] - **Used Truck Market**: Prices for used trucks, especially sleepers, have been healthy, indicating stress in the market for small carriers [22][24] Pricing Dynamics - **Contract Rates**: Contractual improvements are being maintained, with a focus on not signing unfavorable agreements [29][30] - **Spot vs. Contract Rates**: A significant disparity exists between spot and contract rates, with contract rates showing flat to positive trends [31][32] Cost Management and Productivity - **Cost Control**: The company has focused on cost management and productivity improvements, resulting in year-over-year margin improvements [38][40] - **Acquisition Synergies**: The recent Cowen acquisition is expected to yield synergistic opportunities, particularly in cost management [42][64] Regulatory Environment - **English Language Provision**: New enforcement guidelines for the English language requirement could disrupt the market, particularly for smaller carriers [46][50] - **B1 Mexican Program**: Increased enforcement may tighten capacity around the border, impacting operations [50][52] Intermodal Growth - **Market Position**: Schneider National is optimistic about intermodal growth, particularly in the Mexico market, with strong service performance noted [54][56] - **Pricing Trends**: Intermodal pricing remains flat to slightly up, with expectations for continued stability [63] Capital Allocation Strategy - **Growth Focus**: The company prioritizes organic growth but remains open to strategic acquisitions, particularly in dedicated and intermodal segments [64][66] - **Leverage Profile**: The company is comfortable with a leverage ratio of up to 2.5 times for the right acquisitions [70][72] Guidance and Outlook - **Earnings Guidance**: EPS guidance is set between $0.75 and $1.00, reflecting a more optimistic outlook than previously anticipated [80][82] - **Market Sentiment**: The negative forward sentiment has moderated, leading to a more favorable industry outlook [92] Key Takeaways - **Resilience in Demand**: The company is experiencing steady demand despite macroeconomic uncertainties - **Focus on Cost Management**: Continuous efforts in cost control and productivity enhancements are yielding positive results - **Strategic Growth Opportunities**: Schneider National is well-positioned for growth in intermodal and dedicated segments, with a balanced approach to capital allocation and acquisitions.

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]

Core Insights - Schneider National, Inc. reported first-quarter 2025 earnings per share (EPS) of 16 cents, exceeding the Zacks Consensus Estimate of 14 cents and reflecting a 45% year-over-year improvement [1] - Operating revenues reached $1.40 billion, slightly below the Zacks Consensus Estimate of $1.44 billion, but showed a 6.2% year-over-year increase [1] - The company experienced a decline in consumer sentiment and market expectations due to increasing economic uncertainty [2] Financial Performance - Income from operations (adjusted) grew 47% year-over-year to $44.2 million [2] - Truckload revenues (excluding fuel surcharge) were $613.7 million, up 14% year-over-year, driven by the acquisition of Cowan Systems and improved revenue per truck per week [3] - Intermodal revenues (excluding fuel surcharge) increased 5% year-over-year to $260.4 million, supported by a 4% volume growth [5] - Logistics revenues (excluding fuel surcharge) reached $332.0 million, a 2% year-over-year increase [7] Segment Highlights - Truckload income from operations was $25.1 million, up 68% year-over-year, with an operating ratio improvement to 95.9% from 97.2% [4] - Intermodal income from operations surged 97% year-over-year to $13.8 million, with an operating ratio of 94.7% [6] - Logistics income from operations grew 50% year-over-year to $8.1 million, with an operating ratio of 97.6% [7] Liquidity and Cash Flow - Cash and cash equivalents at the end of the first quarter were $106.2 million, down from $117.6 million in the previous quarter [8] - Long-term debt increased to $565.8 million from $420.8 million [8] - The company generated $91.7 million in cash from operations during the quarter [8] Shareholder Returns and Guidance - Schneider announced a $150.0 million stock repurchase program, having repurchased 4.1 million Class B shares for $103.9 million as of March 31, 2025 [9] - A dividend of $0.095 per share was declared, payable on July 10, 2025 [9] - The company updated its 2025 adjusted EPS guidance to a range of 75 cents to $1.00, down from the previous range of 90 cents to $1.20 [10][11]

[PART I. FINANCIAL INFORMATION](index=6&type=section&id=PART%20I.%20FINANCIAL%20INFORMATION) This section provides the unaudited consolidated financial information for Schneider National, Inc., including financial statements, management's discussion and analysis, market risk disclosures, and controls and procedures [Financial Statements](index=6&type=section&id=ITEM%201.%20Financial%20Statements) This section presents the unaudited consolidated financial statements for Schneider National, Inc. for the quarter ended March 31, 2025, including comprehensive income, balance sheets, cash flows, and detailed notes [Consolidated Statements of Comprehensive Income](index=6&type=section&id=Consolidated%20Statements%20of%20Comprehensive%20Income%20(Unaudited)) For the first quarter of 2025, the company reported operating revenues of $1,401.8 million, an increase from $1,319.0 million in the prior year period, with net income rising to $26.1 million, or $0.15 per diluted share Consolidated Statements of Comprehensive Income (Q1 2025 vs Q1 2024) | Metric (in millions, except per share data) | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Operating revenues | $1,401.8 | $1,319.0 | | Income from operations | $42.1 | $28.7 | | Net income | $26.1 | $18.5 | | Diluted earnings per share | $0.15 | $0.10 | [Consolidated Balance Sheets](index=7&type=section&id=Consolidated%20Balance%20Sheets%20(Unaudited)) As of March 31, 2025, total assets were $4,978.5 million, a slight increase from year-end 2024, with total liabilities increasing to $1,990.3 million primarily due to a rise in long-term debt Consolidated Balance Sheet Highlights (as of March 31, 2025) | Metric (in millions) | March 31, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Total current assets | $1,165.0 | $1,115.3 | | Net property and equipment | $2,875.5 | $2,869.4 | | Goodwill | $339.6 | $377.9 | | **Total Assets** | **$4,978.5** | **$4,933.7** | | Total current liabilities | $614.2 | $704.5 | | Long-term debt and finance lease obligations | $565.8 | $420.8 | | **Total Liabilities** | **$1,990.3** | **$1,946.8** | | **Total Shareholders' Equity** | **$2,988.2** | **$2,986.9** | [Consolidated Statements of Cash Flows](index=8&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows%20(Unaudited)) Net cash provided by operating activities was $91.7 million for the first quarter of 2025, a decrease from the prior year, while net cash used in investing activities increased to $126.7 million Cash Flow Summary (Q1 2025 vs Q1 2024) | Activity (in millions) | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Net cash provided by operating activities | $91.7 | $97.6 | | Net cash used in investing activities | $(126.7) | $(102.1) | | Net cash provided by (used in) financing activities | $23.6 | $(30.6) | | **Net decrease in cash and cash equivalents** | **$(11.4)** | **$(35.1)** | [Notes to Consolidated Financial Statements](index=10&type=section&id=Notes%20to%20Consolidated%20Financial%20Statements%20(Unaudited)) The notes detail key accounting policies and events during the quarter, including the acquisition of Cowan, the company's debt structure, and segment performance breakdowns - On December 2, 2024, the company acquired Cowan for approximately **$398.6 million**, financed through cash and borrowings under a **$400.0 million** delayed-draw term loan facility[29](index=29&type=chunk) - Goodwill decreased from **$377.9 million** to **$339.6 million** in Q1 2025 due to a **$38.3 million** adjustment related to the Cowan acquisition[62](index=62&type=chunk) Debt and Credit Facilities (as of March 31, 2025) | Facility (in millions) | March 31, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Unsecured senior notes | $50.0 | $145.0 | | Revolving credit agreement | $50.0 | $— | | Receivables purchase agreement | $70.0 | $70.0 | | Delayed-draw term loan facility | $400.0 | $300.0 | | **Total debt and credit facilities** | **$570.0** | **$515.0** | [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=22&type=section&id=ITEM%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses the financial results for Q1 2025, highlighting a 6% increase in operating revenues and a 47% increase in income from operations, largely driven by the Cowan acquisition and improved Intermodal performance - Enterprise net income increased by **$7.6 million** (41%) in Q1 2025 compared to Q1 2024, driven by a **$13.4 million** increase in income from operations[122](index=122&type=chunk) - Operating revenues increased by **$82.8 million** (6%) in Q1 2025, primarily due to a **$75.6 million** increase in Truckload revenues (driven by the Cowan acquisition) and a **$13.2 million** increase in Intermodal revenues[124](index=124&type=chunk)[129](index=129&type=chunk) - Key operating expense increases in Q1 2025 vs Q1 2024 include a **$44.9 million** (13%) rise in salaries, wages, and benefits and a **$10.8 million** (11%) increase in depreciation, both primarily due to the Cowan acquisition[130](index=130&type=chunk) Income from Operations by Segment (Q1 2025 vs Q1 2024) | Segment (in millions) | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Truckload | $25.1 | $14.9 | | Intermodal | $13.8 | $7.0 | | Logistics | $8.1 | $5.4 | | Other | $(4.9) | $1.4 | | **Total Income from operations** | **$42.1** | **$28.7** | [Truckload Segment Analysis](index=28&type=section&id=Truckload%20Segment) The Truckload segment's income from operations increased by 68% to $10.2 million in Q1 2025, driven by a 14% increase in revenues (excluding fuel surcharge) primarily from increased Dedicated volumes following the Cowan acquisition Truckload Segment KPIs (Q1 2025 vs Q1 2024) | Metric | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Revenues (ex-fuel, $M) | $613.7 | $538.1 | | Average trucks | 12,279 | 10,884 | | Revenue per truck per week | $3,953 | $3,853 | | Operating ratio | 95.9% | 97.2% | - Truckload income from operations increased by **$10.2 million** (68%) year-over-year, driven by revenue growth from the Cowan acquisition, partially offset by higher insurance premiums[140](index=140&type=chunk) [Intermodal Segment Analysis](index=29&type=section&id=Intermodal%20Segment) The Intermodal segment's income from operations nearly doubled, increasing 97% to $6.8 million in Q1 2025, due to a 5% increase in revenues (excluding fuel surcharge) driven by volume and revenue per order growth Intermodal Segment KPIs (Q1 2025 vs Q1 2024) | Metric | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Orders | 104,440 | 100,494 | | Revenue per order | $2,467 | $2,442 | | Operating ratio | 94.7% | 97.2% | - Intermodal income from operations increased by **$6.8 million** (97%) year-over-year, attributed to volume growth, higher revenue per order, and a decrease in rail-related costs[146](index=146&type=chunk) [Logistics Segment Analysis](index=29&type=section&id=Logistics%20Segment) The Logistics segment's income from operations grew by 50% to $2.7 million in Q1 2025, primarily due to a higher net revenue per order, which offset lower brokerage volumes - Logistics revenues (excluding fuel surcharge) increased by **$7.1 million** (2%) in Q1 2025, driven by the Cowan acquisition, but offset by lower revenue per order and volume in the brokerage business[149](index=149&type=chunk) - Logistics income from operations increased by **$2.7 million** (50%) year-over-year, mainly due to an increase in net revenue per order[150](index=150&type=chunk) [Liquidity and Capital Resources](index=29&type=section&id=LIQUIDITY%20AND%20CAPITAL%20RESOURCES) The company's primary liquidity source is cash from operations, supplemented by credit facilities, with Q1 2025 seeing a slight decrease in operating cash flow and increased debt to fund the Cowan acquisition - As of March 31, 2025, the company had combined available capacity of **$234.5 million** under its revolving credit and receivables purchase agreements[154](index=154&type=chunk) - Net cash provided by operating activities decreased by **$5.9 million** in Q1 2025 compared to Q1 2024, while net cash used in investing activities increased by **$24.6 million**[161](index=161&type=chunk)[162](index=162&type=chunk) - Financing activities provided **$54.2 million** in cash, a reversal from the prior year, due to proceeds from the delayed-draw term loan and revolving credit agreements, partially offset by a large payment on unsecured senior notes[165](index=165&type=chunk) [Quantitative and Qualitative Disclosures about Market Risk](index=32&type=section&id=ITEM%203.%20Quantitative%20and%20Qualitative%20Disclosures%20about%20Market%20Risk) The company states that its market risks have not changed significantly from those disclosed in its Annual Report on Form 10-K for the fiscal year ended December 31, 2024 - There have been no significant changes to market risks since the last annual report[172](index=172&type=chunk) [Controls and Procedures](index=32&type=section&id=ITEM%204.%20Controls%20and%20Procedures) Based on an evaluation by management, including the CEO and CFO, the company's disclosure controls and procedures were deemed effective as of March 31, 2025, with no material changes in internal control over financial reporting during the quarter - The Chief Executive Officer and Chief Financial Officer concluded that the company's disclosure controls and procedures were effective as of the end of the reporting period[173](index=173&type=chunk) - No changes occurred during the fiscal quarter that have materially affected, or are reasonably likely to materially affect, the company's internal control over financial reporting[174](index=174&type=chunk) [PART II. OTHER INFORMATION](index=33&type=section&id=PART%20II.%20OTHER%20INFORMATION) This section covers legal proceedings, risk factors, and details on unregistered sales of equity securities and use of proceeds [Legal Proceedings](index=33&type=section&id=ITEM%201.%20Legal%20Proceedings) The company is involved in various lawsuits in the ordinary course of business, which are not expected to have a material impact on its operations or financial statements - The Company is party to various lawsuits in the ordinary course of its business, which are not expected to have a material impact[176](index=176&type=chunk)[89](index=89&type=chunk) [Risk Factors](index=33&type=section&id=ITEM%201A.%20Risk%20Factors) There have been no material changes from the risk factors previously disclosed in the company's Annual Report on Form 10-K for the year ended December 31, 2024 - No material changes have occurred to the risk factors disclosed in the 2024 Annual Report on Form 10-K[177](index=177&type=chunk) [Unregistered Sales of Equity Securities and Use of Proceeds](index=33&type=section&id=ITEM%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) During the first quarter of 2025, the company repurchased 337,352 shares under its publicly announced program, with $46.1 million remaining available for future repurchases Share Repurchase Activity (Q1 2025) | Period | Total Shares Purchased | Avg. Price Paid | Shares Purchased as Part of Program | | :--- | :--- | :--- | :--- | | Jan 2025 | — | $— | — | | Feb 2025 | 210,776 | $27.29 | 53,352 | | Mar 2025 | 305,763 | $24.34 | 284,000 | | **Total** | **516,539** | | **337,352** | - As of March 31, 2025, the company had **$46.1 million** remaining under its **$150.0 million** share repurchase authorization[180](index=180&type=chunk)

Core Insights - Schneider National reported $1.4 billion in revenue for Q1 2025, a year-over-year increase of 6.3%, with an EPS of $0.16 compared to $0.11 a year ago, indicating positive growth in earnings [1] - The revenue fell short of the Zacks Consensus Estimate of $1.44 billion, resulting in a surprise of -2.87%, while the EPS exceeded expectations by 14.29% [1] Financial Performance Metrics - The operating ratio for consolidated operations was reported at 97%, slightly better than the average estimate of 97.2% from five analysts [4] - The intermodal operating ratio matched the average estimate of 94.7% from four analysts [4] - The truckload operating ratio was reported at 95.9%, compared to the estimated 96.4% [4] - The logistics operating ratio was 97.6%, slightly better than the estimated 98.1% [4] Revenue Breakdown - Fuel surcharge revenue was $143.50 million, below the average estimate of $150.91 million, representing a year-over-year decline of 8% [4] - Intermodal revenue was $260.40 million, slightly below the average estimate of $263.43 million, but showed a year-over-year increase of 5.3% [4] - Logistics revenue reached $332 million, exceeding the average estimate of $328.31 million, with a year-over-year growth of 2.2% [4] - Other revenues were reported at $88.70 million, below the average estimate of $106.53 million, reflecting a year-over-year decline of 5.9% [4] - Inter-segment eliminations revenue was -$36.50 million, worse than the average estimate of -$30.67 million, with a year-over-year change of -11.8% [4] - Excluding fuel surcharge, total revenues were $1.26 billion, slightly below the estimated $1.29 billion, but represented an 8.2% increase year-over-year [4] - Truckload revenue was $613.70 million, below the average estimate of $630.60 million, but showed a year-over-year increase of 14.1% [4] - Network revenue, excluding fuel surcharge, was $177.90 million, below the average estimate of $203.39 million, with a year-over-year decline of 9.3% [4] Stock Performance - Schneider National's shares have returned -8.8% over the past month, underperforming the Zacks S&P 500 composite, which changed by -0.7% [3] - The stock currently holds a Zacks Rank 5 (Strong Sell), indicating potential underperformance in the near term [3]

Financial Data and Key Metrics Changes - Enterprise revenues excluding fuel surcharge were $1.26 billion, an 8% increase year over year [20] - Adjusted income from operations was $44 million, a 47% increase year over year [20] - Adjusted diluted earnings per share for the first quarter was $0.16 compared to $0.11 last year [21] - Enterprise adjusted operating ratio improved by 90 basis points compared to the first quarter of 2024 [21] Business Line Data and Key Metrics Changes - Truckload revenues excluding fuel surcharge were $614 million, a 14% increase year over year, primarily due to the acquisition of Cowen and higher dedicated and network revenue per truck per week [21] - Intermodal revenues excluding fuel surcharge were $260 million, a 5% increase year over year due to volume growth and increased revenue per order [22] - Logistics revenues excluding fuel surcharge were $332 million, a 2% increase year over year due to the acquisition of Cowen, partially offset by lower revenue per order [23] Market Data and Key Metrics Changes - The market remains highly competitive with truck network achieving low to mid single-digit percentage increases [11] - Intermodal rates remained largely flat year over year, with increased volume allocations in favorable geographies [12] Company Strategy and Development Direction - The company is focused on optimizing capital allocation across strategic growth drivers of dedicated truck, intermodal, and logistics [8] - A commitment to cost containment across all expense categories is critical to enhance competitive position and margins [14] - The company aims to transition to a more variable cost model by expanding owner-operator relationships [16] Management's Comments on Operating Environment and Future Outlook - Management noted that while there is resilience in macroeconomic numbers, forward sentiment for customer freight demand is less clear due to tariff-driven uncertainty [13] - The company expects continued year-over-year improvement in results through 2025, despite moderating expectations for earnings improvement [27][28] Other Important Information - The company has established targets of more than $40 million in additional cost reductions across the enterprise [14] - The updated full-year 2025 guidance for adjusted earnings per share is $0.75 to $1, reflecting current trade policy and economic uncertainty [27] Q&A Session Summary Question: What are you seeing regarding the expected deceleration of imports? - Management indicated that intermodal is approximately 15% to 25% tied to imports and expects a drop-off in volume, but new business wins are anticipated to offset this decline [36] Question: Can you characterize the new business wins within intermodal? - New business wins are expected to ramp up in the second quarter, particularly in Mexico, which is seeing strong growth [44][45] Question: What is the outlook for dedicated growth? - Management believes there is still a long runway for dedicated growth, with many customers pivoting from private fleets to common carriers [109] Question: How much of the targeted $40 million cost reductions has been realized? - The company has been managing variable costs tightly and believes the $40 million target is achievable, though it will not be linear throughout the year [111]

Core Viewpoint - Schneider National reported quarterly earnings of $0.16 per share, exceeding the Zacks Consensus Estimate of $0.14 per share, and showing an increase from $0.11 per share a year ago, representing an earnings surprise of 14.29% [1][2] Financial Performance - The company posted revenues of $1.4 billion for the quarter ended March 2025, which was 2.87% below the Zacks Consensus Estimate, and an increase from $1.32 billion year-over-year [2] - Over the last four quarters, Schneider National has surpassed consensus EPS estimates two times but has not beaten consensus revenue estimates [2] Stock Performance - Schneider National shares have declined approximately 26.6% since the beginning of the year, compared to a decline of 5.3% for the S&P 500 [3] - The current Zacks Rank for Schneider National is 5 (Strong Sell), indicating expectations of underperformance in the near future [6] Earnings Outlook - The current consensus EPS estimate for the upcoming quarter is $0.23 on revenues of $1.47 billion, and for the current fiscal year, it is $0.95 on revenues of $5.95 billion [7] - The trend for estimate revisions ahead of the earnings release was unfavorable, which may impact future stock performance [6] Industry Context - The Transportation - Services industry, to which Schneider National belongs, is currently ranked in the bottom 37% of over 250 Zacks industries, suggesting potential challenges for stocks in this sector [8]