Summary of Werner Enterprises FY Conference Call (November 11, 2025) Industry Overview - The freight industry has experienced significant volatility in 2025, with challenges including inventory front-loading, government shutdowns, and regulatory developments [2][3][4] - The current economic environment for freight is described as benign, but there are signs of improvement as the year progresses [3][4] - The peak season for freight is expected to resemble pre-COVID levels, indicating a potential upside compared to the previous year [3][4][6] Company Performance and Strategy - Werner Enterprises has maintained a long-term investment strategy despite the challenging market conditions, focusing on enhancing its portfolio across various service areas [9][10] - The company is well-positioned with a robust fleet setup, which is crucial given the anticipated constrained OEM market in 2026 [10][11] - The tax rebate expected in 2026 is seen as a significant stimulus for the consumer base that Werner serves, potentially benefiting the company's operations [12] Regulatory Environment - Increased enforcement of regulations, particularly regarding English language proficiency (ELP) and non-domicile CDLs, is viewed positively by Werner, as it addresses safety and capacity issues in the industry [14][15][19] - The company has been proactive in maintaining ELP standards during driver onboarding, positioning itself favorably amidst regulatory changes [15][18] Freight Rates and Inflation - The company has experienced five consecutive quarters of modest rate increases, but acknowledges the need for more substantial rate recovery to offset inflationary pressures [22][23] - Inflation has impacted financial returns across the industry, and Werner emphasizes the importance of pursuing higher rates as demand improves [21][22][23] Dedicated Market Insights - Demand in the dedicated market remains strong, and Werner is focused on maintaining fleet size while selectively expanding into true dedicated services [28][29] - The company aims to avoid irregular route freight being misclassified as dedicated, ensuring stability in its dedicated operations [29][30] Used Equipment Market - The used equipment market has shown signs of recovery, with resale values improving significantly from two-year lows to two-year highs [35] - Factors such as tariffs and OEM manufacturing constraints are expected to support used equipment values in the long term [36] Conclusion - Werner Enterprises is optimistic about the future, with a strong portfolio and strategic focus on regulatory compliance, dedicated services, and rate recovery amidst a challenging freight environment [10][12][21][28]

Financial Performance - Operating revenues for Q3 2025 were $771,499,000, an increase from $745,701,000 in Q3 2024, representing a growth of 3.4%[12] - Net loss for Q3 2025 was $(20,575,000), compared to a net income of $6,565,000 in Q3 2024, indicating a significant decline[12] - Total operating expenses increased to $784,520,000 in Q3 2025 from $728,106,000 in Q3 2024, a rise of 7.8%[12] - For the three months ended September 30, 2025, Werner Enterprises reported a net loss attributable to the company of $20,575,000, compared to a net income of $6,565,000 for the same period in 2024, indicating a significant decline in performance[20]. - The company reported a net loss of $20.575 million for the three months ended September 30, 2025, compared to a net income of $6.565 million for the same period in 2024[85] - Total revenues for the three months ended September 30, 2025, were $771.5 million, an increase from $745.7 million in the same period of 2024, representing a growth of 3.9%[32] - For the nine months ended September 30, 2025, total revenues were $2.24 billion, compared to $2.28 billion for the same period in 2024, indicating a decrease of 1.8%[32] Cash Flow and Liquidity - The company reported a net cash provided by operating activities of $119,539,000 for the nine months ended September 30, 2025, down from $258,700,000 in the same period of 2024[19] - Cash and cash equivalents at the end of Q3 2025 were $50,984,000, an increase from $40,752,000 at the end of 2024[16] - The company paid dividends of $25.7 million during the nine months ended September 30, 2025, compared to $26.4 million in the same period of 2024[159] - The company has committed to property and equipment purchases totaling approximately $82.1 million as of September 30, 2025[77] Debt and Financing - Long-term debt increased to $725,000,000 as of September 30, 2025, compared to $630,000,000 at the end of 2024[16] - The company entered into a $1.075 billion unsecured credit facility scheduled to mature on December 20, 2027[63] - The maximum funding available under the Loan Security Agreement (LSA) was $300 million, which increased to $325 million after an amendment on October 7, 2025[69] - Outstanding debt increased to $725.0 million as of September 30, 2025, with net borrowings of $75.0 million during the nine months ended September 30, 2025[159] Shareholder Equity and Stock Activity - The total stockholders' equity as of September 30, 2025, was $1,395,587,000, down from $1,448,557,000 as of September 30, 2024, reflecting a decrease of approximately 3.7% year-over-year[21]. - The company repurchased 2,113,007 shares of common stock during the nine months ended September 30, 2025, at a total cost of $55,562,000[21]. - A new stock repurchase program was approved on August 7, 2025, allowing the company to repurchase up to 5,000,000 shares of common stock[161] Operating Segments Performance - The Werner Logistics segment reported operating revenues of $232,585 thousand for the three months ended September 30, 2025, up from $206,774 thousand in 2024, marking a 12.5% increase[111] - Reportable segment operating income (loss) for Truckload Transportation Services was $(13.832) million, while Werner Logistics reported an operating income of $3.014 million for the three months ended September 30, 2025[92] - The TTS segment experienced an operating loss of $13,832 thousand for the three months ended September 30, 2025, compared to an operating income of $21,607 thousand in the same period of 2024[109] - Operating income for the Werner Logistics segment was $3,014 thousand for the three months ended September 30, 2025, compared to a loss of $345 thousand in 2024[111] Expenses and Cost Management - Salaries, wages, and benefits increased by $10.4 million (4.0%) in Q3 2025, influenced by an $18.0 million litigation settlement[120] - Insurance and claims expenses rose by $10.4 million (37.5%) in Q3 2025, reflecting higher costs for small and large dollar liability claims[129] - Rent and purchased transportation expense increased by $31.4 million, or 14.9%, in Q3 2025 compared to Q3 2024, rising to 85.8% of Werner Logistics revenues from 85.2%[134] Taxation - The effective income tax rate increased to 48.2% for the nine months ended September 30, 2025, up from 26.7% in 2024, primarily due to return to provision adjustments of $4.7 million[76] - The company recorded a provision for income taxes of $4.7 million due to changes in deferred tax assets and liabilities for certain acquired entities[76] Future Outlook and Strategic Plans - The company expects the adoption of ASU 2023-09 to impact disclosures but not the results of operations, cash flows, and financial condition, effective for the annual period ending December 31, 2025[27] - The company plans to adopt ASU 2025-06 for the fiscal year beginning January 1, 2028, and does not expect a material effect upon adoption[30][31] - Operating results for the three and nine months ended September 30, 2025, are not necessarily indicative of the results that may be expected for the year ending December 31, 2025[25]

Core Insights - Werner Enterprises, Inc. (WERN) reported a third-quarter 2025 loss per share of 3 cents, missing the Zacks Consensus Estimate of earnings of 15 cents per share, compared to earnings of 15 cents per share in the same quarter last year [1][10] Financial Performance - Total revenues for the quarter were $771.5 million, exceeding the Zacks Consensus Estimate of $768.1 million, and reflecting a year-over-year increase of 3.5% driven by a $25.8 million (12%) rise in Logistics revenues, partially offset by a $3.0 million (1%) decline in Truckload Transportation Services (TTS) revenues, with a portion of the TTS decline attributed to a $3.3 million decrease in fuel surcharge revenues [2][10] - Adjusted operating income was reported at $10.91 million, a decrease of 50% year over year, with an adjusted operating margin of 1.4%, down 150 basis points from the previous year [3] - In the TTS segment, revenues fell 1% year over year to $519.78 million, with adjusted operating income dropping 63% to $8.95 million and an adjusted operating margin declining 300 basis points to 1.7%. Conversely, Logistics revenues increased 12% year over year to $232.58 million, with adjusted operating income rising over 100% to $4.16 million and an adjusted operating margin increasing 140 basis points to 1.8% [4][10] Liquidity and Capital Expenditure - As of September 30, 2025, Werner had cash and cash equivalents of $50.98 million, slightly down from $51.42 million at the end of the previous quarter. Long-term debt remained stable at $725 million. The company generated $44.1 million in cash from operations during the third quarter, with net capital expenditure amounting to $35.2 million [5] - No share repurchases were made in the third quarter, with 5.0 million shares remaining under the new share repurchase authorization as of September 30, 2025 [6] Outlook - For 2025, Werner anticipates TTS truck growth to decline from breakeven to 2%, down from a prior estimate of 1-4%. Net capital expenditure is now projected to be between $155 million and $175 million, revised from $145 million to $185 million. The company expects dedicated revenues per truck per week to rise from breakeven to 1.5%, up from a previous estimate of 0-3%. The full-year 2025 tax rate is now expected to be in the range of 26%-27%, revised from 25%-26% [7]

Group 1 - The Trump administration has tightened trucking regulations, making ELP violations an out-of-service offense and increasing ID requirements for immigrant CDL holders [3][4] - Approximately 30,000 drivers could be placed out of service due to ELP enforcement, with an estimated 200,000 non-domiciled CDL holders nationwide, impacting market dynamics significantly [4] - Werner Enterprises has reported a 1% decline in Q3 revenue to $520 million and a 63% drop in operating income to $8.9 million, facing higher operating costs and muted freight demand [5] Group 2 - Spot rates have softened since the Fourth of July, but there is optimism for improvement as stricter enforcement removes more drivers and trucks from the market [7] - The CEO of Werner Enterprises believes that the pace of driver exits will accelerate due to stricter enforcement of federal policies regarding English language proficiency and cabotage restrictions [7] - The company supports increased enforcement on the aforementioned issues, indicating confidence in its fleet position [7]

Core Insights - The focus is on producing objective, data-driven research primarily about small- to mid-cap companies, which are often overlooked by many investors [1] Group 1 - The analysis occasionally includes large-cap companies to provide a broader perspective on the equity markets [1]

Core Insights - The focus is on producing objective, data-driven research primarily about small- to mid-cap companies, which are often overlooked by many investors [1] Group 1 - The analysis occasionally includes large-cap companies to provide a broader perspective on the equity markets [1]

Core Points - The article emphasizes the importance of enabling Javascript and cookies in browsers to prevent access issues [1] - It highlights that users with ad-blockers may face restrictions when trying to access content [1] Summary by Categories Technical Requirements - Users are advised to enable Javascript and cookies in their browsers to ensure proper functionality [1] - The presence of ad-blockers can lead to blocked access, necessitating their temporary disablement [1]

Core Insights - Werner Enterprises reported revenue of $771.5 million for the quarter ended September 2025, marking a year-over-year increase of 3.5% and exceeding the Zacks Consensus Estimate of $768.08 million by 0.45% [1] - The company experienced an EPS of -$0.03, a significant decline from $0.15 a year ago, resulting in an EPS surprise of -120% compared to the consensus estimate of $0.15 [1] Financial Performance Metrics - The operating ratio was reported at 101.7%, significantly higher than the three-analyst average estimate of 97.3% [4] - Truckload Transportation Services had an operating ratio of 102.7%, compared to the average estimate of 96.7% based on three analysts [4] - Werner Logistics generated revenues of $232.59 million, surpassing the estimated $219.2 million by three analysts, reflecting a year-over-year increase of 12.5% [4] - Truckload Transportation Services reported revenues of $519.79 million, slightly below the average estimate of $532.82 million, with a year-over-year change of -0.6% [4] - Trucking fuel surcharge revenues were $59.46 million, lower than the estimated $64.13 million, representing a year-over-year decline of 5.3% [4] - Non-trucking and other revenues in Truckload Transportation Services were $8.37 million, below the average estimate of $10.43 million, showing a year-over-year decrease of 17.9% [4] - Trucking revenues, net of fuel surcharge, were reported at $451.96 million, slightly below the estimate of $458.23 million, with a year-over-year change of 0.5% [4] - Dedicated trucking revenues, net of fuel surcharge, were $292.46 million, compared to the estimate of $296.75 million, reflecting a year-over-year increase of 2.5% [4] - One-Way Truckload trucking revenues were $159.5 million, below the average estimate of $164.09 million, indicating a year-over-year decline of 3.1% [4] Stock Performance - Shares of Werner have returned 3.5% over the past month, slightly underperforming the Zacks S&P 500 composite's return of 3.6% [3] - The stock currently holds a Zacks Rank 4 (Sell), suggesting potential underperformance relative to the broader market in the near term [3]

Core Insights - Werner Enterprises reported a quarterly loss of $0.03 per share, missing the Zacks Consensus Estimate of $0.15, and a decline from earnings of $0.15 per share a year ago, resulting in an earnings surprise of -120.00% [1] - The company posted revenues of $771.5 million for the quarter ended September 2025, exceeding the Zacks Consensus Estimate by 0.45% and showing an increase from $745.7 million year-over-year [2] - Werner shares have decreased by approximately 25.1% since the beginning of the year, contrasting with the S&P 500's gain of 17.2% [3] Earnings Outlook - The future performance of Werner's stock will largely depend on management's commentary during the earnings call and the company's earnings outlook [4] - The current consensus EPS estimate for the upcoming quarter is $0.23 on revenues of $787.28 million, and for the current fiscal year, it is $0.36 on revenues of $3.02 billion [7] Industry Context - The Transportation - Truck industry, to which Werner belongs, is currently ranked in the bottom 3% of over 250 Zacks industries, indicating potential challenges ahead [8] - Empirical research suggests a strong correlation between near-term stock movements and trends in earnings estimate revisions, which could impact Werner's stock performance [5]

Core Insights - The CEO of Werner Enterprises indicated that ongoing enforcement actions and capacity exits may lead to a more balanced freight market by 2026 [1] - The company reported a third-quarter loss of $20.6 million due to a challenging freight environment and legal settlement costs [1] Industry Overview - The freight market is currently experiencing softness, but enforcement actions against non-domiciled and B-1 visa drivers could significantly reduce the number of operators in the market [2][3] - The enforcement appetite is expected to remain strong, leading to more meaningful capacity exits than previously observed [3] Company Strategy - Technology investments, particularly in automation and AI, are central to Werner's cost-saving strategy, allowing the company to add volume without a proportional increase in operating costs [4] - AI is being utilized across various functions such as recruiting, billing, and collections to enhance efficiency [5] - The company's dedicated fleet pipeline is robust, with new fleet launches primarily deferred to early 2026, focusing on difficult-to-serve, defensible fleets [5][6]