Core Viewpoint - Werner Enterprises has shown a positive trend in its stock performance, with shares increasing by approximately 4.5% since the last earnings report, outperforming the S&P 500. The upcoming earnings release will be crucial in determining if this trend continues or if a pullback is expected [1]. Financial Performance - In Q2 2025, Werner reported earnings per share of 11 cents, exceeding the Zacks Consensus Estimate of 5 cents, but reflecting a 36% decline from the previous year [2]. - Total revenues reached $753.14 million, surpassing the Zacks Consensus Estimate of $736.7 million, but decreased by 1% year-over-year due to a 4% drop in Truckload Transportation Services (TTS) revenues, partially offset by a 6% increase in Logistics revenues [3]. - Adjusted operating income was $16.55 million, down 22% year-over-year, with an adjusted operating margin of 2.2%, a decline of 60 basis points from the previous year [4]. Segment Results - TTS segment revenues fell by 4% year-over-year to $517.64 million, with adjusted operating income dropping 45% to $12.77 million due to increased insurance and claims expenses and lower fuel surcharge revenues [5]. - Logistics revenues increased by 6% year-over-year to $221.17 million, with adjusted operating income rising to $5.87 million from $1.69 million in the prior year, and an adjusted operating margin increase of 190 basis points to 2.7% [6]. Liquidity and Capital Expenditure - As of June 30, 2025, Werner had cash and cash equivalents of $51.42 million, a slight decrease from $51.95 million in the previous quarter. Long-term debt rose to $725 million from $640 million [7]. - The company generated $46 million in cash from operations in Q2 2025, with net capital expenditure amounting to $65.6 million [7]. Share Repurchase - During Q2, Werner repurchased 2.1 million shares for $55 million, leaving 1.8 million shares remaining under its share repurchase authorization as of June 30, 2025 [8]. Outlook - For 2025, Werner anticipates TTS truck growth to improve in the range of 1-4%, with net capital expenditure now estimated between $145-$185 million [9]. - The company projects dedicated revenues per truck per week to rise from breakeven to 3% in 2025, with a full-year tax rate expected to be between 25%-26% [9]. Estimate Trends - There has been a downward trend in estimates for Werner, with a consensus estimate shift of -15.3% noted [10][11]. - The stock currently holds a Zacks Rank 3 (Hold), indicating expectations for an in-line return in the coming months [13]. Industry Comparison - Werner operates within the Zacks Transportation - Truck industry, where competitor JB Hunt has seen a 1.3% gain over the past month, reporting revenues of $2.93 billion with a year-over-year change of 0% [14].

Core Insights - Werner Enterprises, Inc. (WERN) has approved a new share repurchase program allowing the repurchase of up to 5 million shares, replacing the previous authorization which had 1.8 million shares remaining as of June 30, 2025 [1][2] - The board also declared a regular quarterly cash dividend of 14 cents per share, payable on October 22, 2025, to shareholders of record as of October 6, 2025 [3] - WERN's current dividend yield stands at 2.15%, with a five-year dividend growth rate of 10.12%, indicating a commitment to enhancing shareholder returns [4] Financial Performance - In 2022, WERN paid dividends totaling $32.1 million and repurchased shares worth $110.4 million; in 2023, dividends increased to $34.2 million with no share repurchases; in 2024, dividends rose to $35.1 million with $67.1 million in share repurchases; during the first half of 2025, dividends were $17.32 million and share repurchases amounted to $55.56 million [5] Market Reaction - Following the announcement of the new share repurchase program, WERN's share price closed at $27.54 on July 12, 2025, reflecting a 5.80% increase from the previous day's closing, indicating positive investor sentiment [7] Industry Context - Other companies in the transportation sector, such as Union Pacific Corporation and Ryder System, Inc., have also announced shareholder-friendly initiatives in 2025, including dividend hikes, showcasing a broader trend within the industry to reward shareholders [8][9][10]

Summary of Werner Enterprises (WERN) 2025 Conference Call Company Overview - **Company**: Werner Enterprises - **Industry**: Transportation and Logistics - **Key Metrics**: - Founded nearly 69 years ago - Operates with approximately 13,000 associates, 7,500 trucks, and 28,000 trailing assets - One of the largest trucking and logistics companies in the U.S. with a dedicated fleet ranking sixth in size - Logistics segment accounts for nearly 30% of total revenues [6][5][22] Core Business Segments - **Trucking Transportation Services (TTS)**: - Represents about 70% of total revenues - Two-thirds of TTS is dedicated business, characterized by long-term contracts and high service requirements [7][6] - Remaining third focuses on One Way Truckload business, including expedited services and cross-border operations with Mexico [8][6] - **Logistics Segment**: - Fastest growing segment, contributing about 30% of total revenues - Includes truckload brokerage, intermodal, and dedicated final mile solutions [9][6] - Truckload logistics constitutes 75% of the logistics segment [9][6] Financial Performance - **2024 Revenue**: $3 billion, with a diverse customer base including top U.S. retailers and manufacturing sectors [13][6] - **Q2 2025 Results**: - Revenues of $753 million, down 1% year-over-year - Adjusted EPS of $0.11, improved from Q1 [16][6] - Notable improvements in logistics lines of business and gains on sale of nearly $6 million, marking the first year-over-year improvement in nine quarters [17][6] Strategic Priorities - **Growth in Core Business**: Focus on dedicated fleet growth and winning new customers [18][6] - **Operational Excellence**: Emphasis on safety and hiring quality drivers [20][6] - **Capital Efficiency**: Strong operating cash flow and optimized working capital [21][6] Demand Environment - **Demand Trends**: - Seasonally stable demand in One Way, with rising demand in Dedicated and Logistics [26][6] - Notable increase in logistics driven by technology investments and cross-selling opportunities [28][6] - **Customer Sentiment**: Shift towards quality and reliability, with customers seeking dependable providers [34][6] Supply Chain Dynamics - **Supply Side**: - Employment data returning to pre-COVID levels, with rising bankruptcies in the industry [44][6] - Regulatory enforcement expected to impact supply positively [50][6] Technology and Innovation - **Technological Advances**: - Development of Edge TMS platform to improve visibility and customer service in logistics [12][6] - Transitioning One Way and Dedicated business to the same platform for better load visibility [63][6] Cost Management - **Cost Reduction Initiatives**: - Increased cost-cutting target to $45 million for 2025, with $20 million achieved in the first half [79][6] - Operational expenses in logistics down 9% year-over-year [80][6] Capital Allocation - **Share Repurchase Plan**: - Announced an increase in share repurchase plan amounting to 8% of market cap, with $55 million in repurchases in Q2 [96][6] Conclusion - **Outlook**: - Confidence in achieving low double-digit margins in the long term through structural changes and technology investments [94][6] - Positive trends in demand and operational efficiency expected to continue [95][6]

[PART I – FINANCIAL INFORMATION](index=4&type=section&id=PART%20I%20%E2%80%93%20FINANCIAL%20INFORMATION) [Cautionary Note Regarding Forward-Looking Statements](index=4&type=section&id=Cautionary%20Note%20Regarding%20Forward-Looking%20Statements) This section advises readers that the report contains forward-looking statements, which are subject to risks, uncertainties, and assumptions that could cause actual results to differ materially - Forward-looking statements are based on current management information and are subject to known and unknown risks, uncertainties, and assumptions that could cause actual results to differ materially[9](index=9&type=chunk) [Item 1. Financial Statements](index=5&type=section&id=Item%201.%20Financial%20Statements) This section presents the unaudited consolidated financial statements for Werner Enterprises, Inc., including statements of income, comprehensive income, balance sheets, cash flows, and stockholders' equity, prepared in accordance with SEC instructions and GAAP [Consolidated Statements of Income](index=5&type=section&id=Consolidated%20Statements%20of%20Income) | Metric (in thousands, except per share) | 3 Months Ended June 30, 2025 | 3 Months Ended June 30, 2024 | % Change (YoY) | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | % Change (YoY) | | :------------------------------------ | :--------------------------- | :--------------------------- | :-------------- | :--------------------------- | :--------------------------- | :-------------- | | Operating revenues | $753,148 | $760,798 | (1.0)% | $1,465,262 | $1,529,878 | (4.2)% | | Total operating expenses | $686,827 | $741,187 | (7.3)% | $1,404,773 | $1,494,679 | (6.0)% | | Operating income | $66,321 | $19,611 | 238.2% | $60,489 | $35,199 | 71.8% | | Income before income taxes | $59,090 | $12,131 | 387.1% | $45,702 | $21,446 | 113.1% | | Net income attributable to Werner | $44,062 | $9,465 | 365.5% | $33,964 | $15,777 | 115.3% | | Basic EPS | $0.72 | $0.15 | 380.0% | $0.55 | $0.25 | 120.0% | | Diluted EPS | $0.72 | $0.15 | 380.0% | $0.55 | $0.25 | 120.0% | [Consolidated Statements of Comprehensive Income](index=6&type=section&id=Consolidated%20Statements%20of%20Comprehensive%20Income) | Metric (in thousands) | 3 Months Ended June 30, 2025 | 3 Months Ended June 30, 2024 | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | | :-------------------- | :--------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | | Net income | $43,622 | $9,200 | $33,401 | $15,448 | | Other comprehensive income (loss) | $2,164 | $(5,339) | $668 | $(4,721) | | Comprehensive income | $45,786 | $3,861 | $34,069 | $10,727 | | Comprehensive income attributable to Werner | $46,226 | $4,126 | $34,632 | $11,056 | [Consolidated Condensed Balance Sheets](index=7&type=section&id=Consolidated%20Condensed%20Balance%20Sheets) | Metric (in thousands) | June 30, 2025 | December 31, 2024 | | :-------------------- | :------------ | :---------------- | | Total current assets | $559,482 | $541,773 | | Property and equipment, net | $1,878,106 | $1,934,236 | | Goodwill | $129,104 | $129,104 | | Intangible assets, net | $71,372 | $76,407 | | Total assets | $2,946,375 | $3,052,237 | | Total current liabilities | $334,333 | $355,749 | | Long-term debt, net of current portion | $725,000 | $630,000 | | Total liabilities | $1,488,586 | $1,558,361 | | Total stockholders' equity | $1,420,924 | $1,455,932 | [Consolidated Statements of Cash Flows](index=8&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows) | Metric (in thousands) | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | | :-------------------- | :--------------------------- | :--------------------------- | | Net cash provided by operating activities | $75,395 | $197,657 | | Net cash used in investing activities | $(63,921) | $(119,409) | | Net cash used in financing activities | $(1,846) | $(67,768) | | Net increase in cash and cash equivalents | $10,668 | $8,725 | | Cash and cash equivalents, end of period | $51,420 | $70,448 | [Consolidated Statements of Stockholders' Equity and Temporary Equity - Redeemable Noncontrolling Interest](index=9&type=section&id=Consolidated%20Statements%20of%20Stockholders%27%20Equity%20and%20Temporary%20Equity%20-%20Redeemable%20Noncontrolling%20Interest) - Stockholders' equity decreased from **$1,455.9 million** at December 31, 2024, to **$1,420.9 million** at June 30, 2025, primarily due to common stock repurchases and dividends, partially offset by net income[17](index=17&type=chunk)[21](index=21&type=chunk) Key Changes in Stockholders' Equity (Six Months Ended June 30, 2025) | Item (in thousands) | Amount | | :------------------ | :----- | | Net income attributable to Werner | $33,964 | | Repurchases of common stock | $(55,562) | | Dividends on common stock | $(17,046) | | Non-cash equity compensation expense | $4,907 | [Notes to Consolidated Financial Statements (Unaudited)](index=12&type=section&id=Notes%20to%20Consolidated%20Financial%20Statements%20(Unaudited)) This section provides unaudited consolidated financial statements, prepared under SEC and GAAP guidelines, with results not indicative of the full year - The financial statements are unaudited and prepared in accordance with SEC instructions to Form 10-Q and U.S. GAAP, reflecting all normal recurring adjustments[24](index=24&type=chunk) - Operating results for the three and six months ended June 30, 2025, are not necessarily indicative of the full year's expected results[25](index=25&type=chunk) [(1) Basis of Presentation and Recent Accounting Pronouncements](index=12&type=section&id=(1)%20Basis%20of%20Presentation%20and%20Recent%20Accounting%20Pronouncements) The interim consolidated financial statements are unaudited and prepared in accordance with SEC instructions to Form 10-Q and U.S. GAAP, reflecting normal recurring adjustments - The interim consolidated financial statements are unaudited and prepared in accordance with SEC instructions to Form 10-Q and U.S. GAAP, reflecting normal recurring adjustments[24](index=24&type=chunk) - Operating results for the three and six months ended June 30, 2025, are not necessarily indicative of the full year's expected results[25](index=25&type=chunk) - The company is evaluating ASU 2023-09 (Income Taxes) and ASU 2024-03 (Expense Disaggregation Disclosures), expecting them to impact disclosures but not results of operations, cash flows, or financial condition[27](index=27&type=chunk)[28](index=28&type=chunk) [(2) Revenue](index=13&type=section&id=(2)%20Revenue) - Revenues are recognized over time as control of promised services is transferred to customers[29](index=29&type=chunk) Revenues Disaggregated by Source (in thousands) | Revenue Source | 3 Months Ended June 30, 2025 | 3 Months Ended June 30, 2024 | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | | :------------- | :--------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | | Truckload Transportation Services | $517,647 | $537,069 | $1,019,522 | $1,088,195 | | Werner Logistics | $221,177 | $208,912 | $416,735 | $411,394 | | Total revenues | $753,148 | $760,798 | $1,465,262 | $1,529,878 | Revenues Disaggregated by Geographic Area (in thousands) | Geographic Area | 3 Months Ended June 30, 2025 | 3 Months Ended June 30, 2024 | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | | :-------------- | :--------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | | United States | $715,677 | $716,559 | $1,390,919 | $1,438,419 | | Mexico | $33,557 | $36,165 | $67,168 | $75,285 | | Canada | $3,914 | $8,074 | $7,175 | $16,174 | | Total revenues | $753,148 | $760,798 | $1,465,262 | $1,529,878 | [(3) Goodwill and Intangible Assets](index=14&type=section&id=(3)%20Goodwill%20and%20Intangible%20Assets) - No changes in the carrying amount of goodwill by segment for the six months ended June 30, 2025[34](index=34&type=chunk) Acquired Intangible Assets (in thousands) | Intangible Asset | June 30, 2025 Net Carrying Amount | December 31, 2024 Net Carrying Amount | | :--------------- | :-------------------------------- | :------------------------------------ | | Customer relationships | $54,180 | $58,191 | | Trade names | $17,192 | $18,216 | | Total intangible assets | $71,372 | $76,407 | - Amortization expense on intangible assets was **$2.5 million** for Q2 2025 and **$5.0 million** for 6M 2025; estimated future amortization is **$5.0 million** for the remainder of 2025 and **$10.1 million** for each of the next five fiscal years[36](index=36&type=chunk) [(4) Leases](index=14&type=section&id=(4)%20Leases) - The company primarily uses operating leases for real estate, with terms ranging from 2 to 18 years, some including renewal options[37](index=37&type=chunk) Operating Lease Information (in thousands) | Metric | June 30, 2025 | December 31, 2024 | | :----- | :------------ | :---------------- | | Right-of-use assets | $44,176 | $49,599 | | Total operating lease liabilities | $46,545 | $51,758 | | Weighted-average remaining lease term | 4.58 years | 4.75 years | | Weighted-average discount rate | 4.9 % | 5.0 % | - Operating lease expense was **$6.6 million** for Q2 2025 (vs **$4.9 million** in Q2 2024) and **$13.3 million** for 6M 2025 (vs **$9.4 million** in 6M 2024)[42](index=42&type=chunk) - As a lessor, the company leases tractors and trailers, generating revenues of **$2.9 million** for Q2 2025 (vs **$2.3 million** in Q2 2024) and **$5.5 million** for 6M 2025 (vs **$4.8 million** in 6M 2024)[43](index=43&type=chunk) [(5) Fair Value](index=15&type=section&id=(5)%20Fair%20Value) - The company uses a fair value hierarchy (Level 1, 2, 3) to measure assets and liabilities, prioritizing observable inputs[48](index=48&type=chunk)[49](index=49&type=chunk)[50](index=50&type=chunk)[51](index=51&type=chunk) Fair Value Hierarchy for Assets and Liabilities (in thousands) | Item | Level | June 30, 2025 | December 31, 2024 | | :--- | :---- | :------------ | :---------------- | | **Assets:** | | | | | Pay-fixed interest rate swaps | 2 | $— | $1,162 | | Equity securities | 1 | $106 | $141 | | **Liabilities:** | | | | | Pay-fixed interest rate swaps (current) | 2 | $11 | $134 | | Pay-fixed interest rate swaps (long-term) | 2 | $3,961 | $2,420 | | Contingent consideration associated with acquisition | 3 | $— | $9,315 | - The contingent earnout liability related to the Baylor Trucking, Inc. acquisition was finalized and paid in April 2025, resulting in a net favorable change of **$7.9 million** for Q2 2025 and **$7.8 million** for 6M 2025[53](index=53&type=chunk) [(6) Investments](index=17&type=section&id=(6)%20Investments) - Strategic equity investments without readily determinable fair values, primarily in MLSI, totaled **$109.9 million** at June 30, 2025 (vs **$103.9 million** at Dec 31, 2024); cumulative upward adjustments on these equity securities totaled **$64.9 million**[56](index=56&type=chunk)[57](index=57&type=chunk) - The company holds a strategic minority equity investment in an autonomous technology company, valued at **$0.1 million** at June 30, 2025[58](index=58&type=chunk) - Investment in Autotech Fund (equity method) was **$9.3 million** at June 30, 2025 (vs **$6.7 million** at Dec 31, 2024); capital contributions for 6M 2025 were **$1.76 million**, and loss from equity method investment was **$(842) thousand** for 6M 2025[60](index=60&type=chunk)[61](index=61&type=chunk) [(7) Debt and Credit Facilities](index=18&type=section&id=(7)%20Debt%20and%20Credit%20Facilities) - The company has a **$1.075 billion** unsecured credit facility maturing in December 2027, with compliance with financial covenants as of June 30, 2025[62](index=62&type=chunk)[64](index=64&type=chunk) - A new Loan Security Agreement (LSA) was entered into on March 27, 2025, providing up to **$300.0 million** (potentially **$350.0 million**) in secured borrowing collateralized by eligible receivables[67](index=67&type=chunk)[68](index=68&type=chunk) Total Debt (in thousands) | Debt Type | June 30, 2025 | December 31, 2024 | | :-------- | :------------ | :---------------- | | 2022 Credit Agreement | $430,000 | $650,000 | | LSA | $295,000 | $— | | Total debt | $725,000 | $650,000 | - Total available borrowing capacity was **$644.1 million** as of June 30, 2025, including **$639.1 million** under the 2022 Credit Agreement and **$5.0 million** under the LSA[70](index=70&type=chunk) - The company uses variable-for-fixed interest rate swap agreements to limit exposure to interest rate increases, with **$355.0 million** of variable debt effectively fixed at **5.97%** at June 30, 2025[65](index=65&type=chunk)[163](index=163&type=chunk) [(8) Commitments and Contingencies](index=20&type=section&id=(8)%20Commitments%20and%20Contingencies) - The company has committed to property and equipment purchases of approximately **$116.4 million** at June 30, 2025[73](index=73&type=chunk) - On June 27, 2025, the Texas Supreme Court reversed an adverse **$92.0 million** jury verdict from a 2014 accident, effectively ending the case in Werner's favor, resulting in a **$45.7 million** liability reversal through insurance and claims expense in Q2 2025[75](index=75&type=chunk)[76](index=76&type=chunk) - The company is involved in class action litigation regarding meal/rest breaks, unpaid wages, and unauthorized deductions, with an inability to reasonably estimate liability at this time for certain claims[77](index=77&type=chunk) [(9) Earnings Per Share](index=20&type=section&id=(9)%20Earnings%20Per%20Share) - Basic EPS is computed by dividing net income attributable to Werner by weighted average common shares outstanding; diluted EPS includes the effect of dilutive potential common shares[78](index=78&type=chunk) Earnings Per Share Calculation (in thousands, except per share amounts) | Metric | 3 Months Ended June 30, 2025 | 3 Months Ended June 30, 2024 | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | | :----- | :--------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | | Net income attributable to Werner | $44,062 | $9,465 | $33,964 | $15,777 | | Weighted average common shares outstanding | 60,888 | 62,706 | 61,386 | 63,089 | | Diluted EPS | $0.72 | $0.15 | $0.55 | $0.25 | [(10) Segment Information](index=21&type=section&id=(10)%20Segment%20Information) - The company operates two reportable segments: Truckload Transportation Services (TTS) and Werner Logistics[80](index=80&type=chunk) - TTS includes Dedicated and One-Way Truckload operating segments, focusing on consumer nondurable products and specialized services; Werner Logistics provides non-asset-based transportation and logistics services through Truckload Logistics, Intermodal, and Final Mile divisions[81](index=81&type=chunk)[82](index=82&type=chunk) Segment Revenues and Operating Income (Three Months Ended June 30, 2025 vs 2024, in thousands) | Segment | 2025 Revenues | 2024 Revenues | % Change | 2025 Operating Income | 2024 Operating Income | % Change | | :------ | :------------ | :------------ | :------- | :-------------------- | :-------------------- | :------- | | TTS | $517,647 | $537,069 | (3.6)% | $64,089 | $20,998 | 205.2% | | Werner Logistics | $221,177 | $208,912 | 5.9% | $4,328 | $550 | 686.9% | Segment Revenues and Operating Income (Six Months Ended June 30, 2025 vs 2024, in thousands) | Segment | 2025 Revenues | 2024 Revenues | % Change | 2025 Operating Income | 2024 Operating Income | % Change | | :------ | :------------ | :------------ | :------- | :-------------------- | :-------------------- | :------- | | TTS | $1,019,522 | $1,088,195 | (6.3)% | $63,173 | $41,838 | 51.0% | | Werner Logistics | $416,735 | $411,394 | 1.3% | $3,853 | $(1,779) | N/A | [(11) Subsequent Events](index=25&type=section&id=(11)%20Subsequent%20Events) - In July 2025, two variable-for-fixed interest rate swap agreements with an aggregate notional amount of **$40.0 million** matured, and two new agreements with an aggregate notional amount of **$60.0 million**, maturing in July 2028, were entered into[91](index=91&type=chunk) - The One Big Beautiful Bill Act (OBBBA) was enacted on July 4, 2025, which will impact deferred tax balances in Q3 2025; the company expects a favorable impact on cash flows due to the reinstatement of **100%** bonus depreciation for qualified property[93](index=93&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=26&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) This section provides management's perspective on the company's financial condition, results of operations, liquidity, and other factors, and should be read in conjunction with the 2024 Form 10-K - The MD&A summarizes financial statements from management's perspective, covering financial condition, results of operations, liquidity, and other factors[94](index=94&type=chunk) [Overview](index=26&type=section&id=Overview) - The company operates in the truckload and logistics sectors, focusing on consumer nondurable products in truckload and providing non-asset-based logistics services[95](index=95&type=chunk) - Success depends on efficient resource management, adaptability to customer demand, and capital investments in equipment or securing third-party capacity[95](index=95&type=chunk) - Key resource requirements include company drivers, independent contractors, tractors, trailers for TTS, and qualified third-party capacity for Werner Logistics; the company is self-insured for a significant portion of claims[97](index=97&type=chunk) - The operating ratio is a key industry measure for profitability, with significant variable expenses including driver salaries, fuel, and purchased transportation[99](index=99&type=chunk) [Results of Operations](index=28&type=section&id=Results%20of%20Operations) [Three Months Ended June 30, 2025 Compared to Three Months Ended June 30, 2024](index=30&type=section&id=Three%20Months%20Ended%20June%2030%2C%202025%20Compared%20to%20Three%20Months%20Ended%20June%2030%2C%202024) - Operating revenues decreased by **1.0%** to **$753.1 million**, while operating income significantly increased by **238.2%** to **$66.3 million**, with the operating margin rising to **8.8%** from **2.6%**[102](index=102&type=chunk)[107](index=107&type=chunk) - Consolidated and TTS segment operating results were positively impacted by a **$45.7 million** liability reversal from a favorable lawsuit decision and a **$7.9 million** net favorable change to the contingent earnout liability[107](index=107&type=chunk) - TTS segment revenues decreased **3.6%**, while Werner Logistics revenues increased **5.9%**; TTS operating income increased to **$64.1 million** (**12.4%** margin) from **$21.0 million** (**3.9%** margin); Werner Logistics operating income increased to **$4.3 million** (**2.0%** margin) from **$0.6 million** (**0.3%** margin)[107](index=107&type=chunk)[109](index=109&type=chunk)[113](index=113&type=chunk) - Trucking revenues, net of fuel surcharge, decreased **1.6%** due to a **1.8%** decrease in average tractors in service; TTS average revenues per tractor per week, net of fuel surcharge, increased **0.3%**[109](index=109&type=chunk) - Fuel expense decreased **16.1%** due to lower average diesel fuel prices and fewer company tractor miles; insurance and claims expense decreased **121.4%** primarily due to the **$45.7 million** liability reversal[118](index=118&type=chunk)[124](index=124&type=chunk) - Rent and purchased transportation expense increased **8.5%**, driven by higher logistics revenues and more independent contractor miles in TTS, shifting costs from other categories[129](index=129&type=chunk)[130](index=130&type=chunk) - Other operating expenses decreased **288.0%** primarily due to the **$7.9 million** favorable change in contingent earnout liability and higher gains on sales of property and equipment[102](index=102&type=chunk)[132](index=132&type=chunk) [Six Months Ended June 30, 2025 Compared to Six Months Ended June 30, 2024](index=34&type=section&id=Six%20Months%20Ended%20June%2030%2C%202025%20Compared%20to%20Six%20Months%20Ended%20June%2030%2C%202024) - Operating revenues decreased by **4.2%** to **$1,465.3 million**, while operating income increased by **71.8%** to **$60.5 million**, with the operating margin rising to **4.1%** from **2.3%**[102](index=102&type=chunk)[136](index=136&type=chunk) - TTS segment revenues decreased **6.3%**, primarily due to a **4.3%** decrease in average tractors in service and a **0.5%** decrease in average revenues per tractor per week; Werner Logistics revenues increased **1.3%** due to higher volumes in Truckload Logistics[136](index=136&type=chunk) - Salaries, wages and benefits decreased **6.0%** due to fewer company tractor miles, decreased non-driver pay, and lower benefit costs; fuel expense decreased **17.5%** due to lower average diesel fuel prices and fewer company tractor miles[138](index=138&type=chunk)[139](index=139&type=chunk) - Insurance and claims decreased **45.8%** primarily due to the **$45.7 million** liability reversal from the favorable lawsuit decision[141](index=141&type=chunk) - Rent and purchased transportation expense increased due to higher logistics revenues and more independent contractor miles in TTS; other operating expenses decreased due to the favorable contingent earnout liability change and higher gains on equipment sales[143](index=143&type=chunk)[144](index=144&type=chunk) - Net interest expense increased **$1.0 million** due to replacing lower-cost debt with higher-cost debt and an increase in average debt outstanding[145](index=145&type=chunk) [Liquidity and Capital Resources](index=35&type=section&id=Liquidity%20and%20Capital%20Resources) - The company's financial position is strong with **$51.4 million** in cash and cash equivalents and **$1.4 billion** in stockholders' equity as of June 30, 2025[149](index=149&type=chunk) - Total available borrowing capacity was **$644.1 million** under existing credit facilities[149](index=149&type=chunk) - Net cash provided by operating activities decreased by **$122.3 million** to **$75.4 million** for the six months ended June 30, 2025, primarily due to working capital changes[151](index=151&type=chunk) - Net capital expenditures guidance for full-year 2025 was adjusted down to a range of **$145 million** to **$185 million** (from **$185 million**-**$235 million**), driven by a higher inventory of new tractors and a shift to a more asset-light operational mix[152](index=152&type=chunk) - Financing activities for 6M 2025 included **$75.0 million** in net debt borrowings, **$17.3 million** in dividends, and **$55.6 million** in stock repurchases (**2,113,007** shares)[153](index=153&type=chunk)[154](index=154&type=chunk) [Regulations](index=37&type=section&id=Regulations) - California voluntarily withdrew the Advanced Clean Fleets (ACF) waiver request, and Congress rescinded previously granted waivers for Advanced Clean Trucks (ACT), creating uncertainty for these regulations[156](index=156&type=chunk) - The rescission of these waivers could potentially impact tractor prices, availability, performance, and efficiency[156](index=156&type=chunk) [Critical Accounting Estimates](index=38&type=section&id=Critical%20Accounting%20Estimates) - Estimates of accrued liabilities for insurance and claims for bodily injury and property damage are a critical accounting estimate[159](index=159&type=chunk) - There have been no material changes to critical accounting estimates from those discussed in the 2024 Form 10-K[159](index=159&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=38&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) This section discusses the company's exposure to market risks from changes in commodity prices (diesel fuel), foreign currency exchange rates (primarily Mexican Peso), and interest rates - The company is exposed to commodity price risk from diesel fuel fluctuations, recovering a majority but not all increases through fuel surcharges; no derivative financial instruments were used for fuel price hedging as of June 30, 2025[161](index=161&type=chunk) - Foreign currency exchange rate risk primarily relates to changes in the value of revenue equipment owned by a Mexican subsidiary, with most foreign revenues denominated in U.S. Dollars[162](index=162&type=chunk) - Interest rate risk is managed through a mix of variable interest rate debt and interest rate swap agreements; a hypothetical one-percentage point increase in SOFR and commercial paper rate would increase interest expense by approximately **$3.5 million** for the next 12 months[163](index=163&type=chunk) [Item 4. Controls and Procedures](index=38&type=section&id=Item%204.%20Controls%20and%20Procedures) Management, including the CEO and CFO, evaluated the effectiveness of disclosure controls and procedures, concluding they are effective at a reasonable assurance level - Disclosure controls and procedures were evaluated and deemed effective at a reasonable assurance level as of June 30, 2025[164](index=164&type=chunk) - No changes in internal control over financial reporting materially affected, or are reasonably likely to materially affect, internal control over financial reporting during the most recent fiscal quarter[166](index=166&type=chunk) [PART II – OTHER INFORMATION](index=39&type=section&id=PART%20II%20%E2%80%93%20OTHER%20INFORMATION) [Item 1. Legal Proceedings](index=39&type=section&id=Item%201.%20Legal%20Proceedings) This section refers to Note 8 in the Notes to Consolidated Financial Statements for information regarding legal proceedings - Information regarding legal proceedings is detailed in Note 8 of the Consolidated Financial Statements[169](index=169&type=chunk) [Item 1A. Risk Factors](index=39&type=page&id=Item%201A.%20Risk%20Factors) This section advises readers to consider the risk factors discussed in the 2024 Form 10-K, noting no material changes from those previously disclosed - Readers should carefully consider risk factors from the 2024 Form 10-K, with no material changes reported in this period[170](index=170&type=chunk)[171](index=171&type=chunk) [Item 2. Unregistered Sales of Equity Securities, Use of Proceeds, and Issuer Purchases of Equity Securities](index=39&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%2C%20Use%20of%20Proceeds%2C%20and%20Issuer%20Purchases%20of%20Equity%20Securities) This section details the company's stock repurchase program, including shares purchased during the second quarter of 2025 - The company has a stock repurchase program authorized for up to **5,000,000** shares, with **1,783,342** shares remaining available as of June 30, 2025[172](index=172&type=chunk) Issuer Purchases of Equity Securities (Second Quarter 2025) | Period | Total Number of Shares Purchased | Average Price Paid per Share | Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs | Maximum Number of Shares that May Yet Be Purchased Under the Plans or Programs | | :----- | :------------------------------- | :--------------------------- | :----------------------------------------------------------------------------- | :----------------------------------------------------------------------------- | | April 1-30, 2025 | — | $— | — | 3,896,349 | | May 1-31, 2025 | 1,729,868 | $25.83 | 1,729,868 | 2,166,481 | | June 1-30, 2025 | 383,139 | $27.02 | 383,139 | 1,783,342 | | Total | 2,113,007 | $26.05 | 2,113,007 | | [Item 5. Other Information](index=40&type=section&id=Item%205.%20Other%20Information) This section states that no Company director or officer adopted or terminated a "Rule 10b5-1 trading arrangement" or "non-Rule 10b5-1 trading arrangement" during the second quarter of 2025 - No Company director or officer adopted or terminated a Rule 10b5-1 or non-Rule 10b5-1 trading arrangement during Q2 2025[176](index=176&type=chunk) [Item 6. Exhibits](index=40&type=section&id=Item%206.%20Exhibits) This section lists the exhibits filed with the Quarterly Report on Form 10-Q, including certifications, financial statements in iXBRL, and the cover page - The report includes various exhibits, such as Restated Articles of Incorporation, Revised and Restated By-Laws, CEO/CFO certifications (302 and 906), and unaudited financial information in iXBRL format[177](index=177&type=chunk)

Core Insights - Werner Enterprises, Inc. (WERN) reported second-quarter 2025 earnings per share (EPS) of 11 cents, exceeding the Zacks Consensus Estimate of 5 cents but down 36% from the same quarter last year [1][10]. Financial Performance - Total revenues reached $753.14 million, surpassing the Zacks Consensus Estimate of $736.7 million, but decreased by 1% year-over-year due to a $19.4 million (4%) decline in Truckload Transportation Services (TTS) revenues, partially offset by a $12.3 million (6%) increase in Logistics revenues [2][10]. - Adjusted operating income was $16.55 million, a 22% decline year-over-year, with an adjusted operating margin of 2.2%, down 60 basis points from the previous year [3][10]. Segment Performance - TTS segment revenues fell 4% year-over-year to $517.64 million, with adjusted operating income down 45% to $12.77 million, impacted by an $8.5 million increase in insurance and claims expenses and lower fuel surcharge revenues [5]. - Logistics revenues totaled $221.17 million, up 6% year-over-year, with adjusted operating income rising to $5.87 million from $1.69 million in the prior year, and adjusted operating margin increasing by 190 basis points to 2.7% [6]. Management Commentary - The CEO highlighted significant improvement over the first quarter, with operational and strategic progress, particularly in Dedicated services and Logistics, driven by cost management and increased volumes [4]. Liquidity and Capital Expenditure - As of June 30, 2025, cash and cash equivalents were $51.42 million, with long-term debt totaling $725 million. The company generated $46 million in cash from operations during the quarter, with net capital expenditure at $65.6 million [7]. Share Repurchase - During the second quarter, WERN repurchased 2.1 million shares for $55 million, leaving 1.8 million shares remaining under its repurchase authorization as of June 30, 2025 [8]. Outlook - For 2025, WERN anticipates TTS truck growth to improve in the range of 1-4%, with net capital expenditure estimated between $145-$185 million. The company projects dedicated revenues per truck per week to rise from breakeven to 3% [11].

Group 1 - Werner Enterprises, Inc. (WERN) is recognized as a prominent trucking company with a well-maintained fleet and useful technology [1] - The company has a growing side business that does not rely on owning assets, indicating diversification in its revenue streams [1] - The focus of the research is primarily on small- to mid-cap companies, which are often overlooked by many investors, while also occasionally analyzing large-cap companies for a broader market perspective [1]

Core Insights - Werner Enterprises reported revenue of $753.15 million for the quarter ended June 2025, a decrease of 1% year-over-year, with EPS at $0.11 compared to $0.17 in the same quarter last year [1] - The revenue exceeded the Zacks Consensus Estimate of $736.75 million by 2.23%, while the EPS surprised by 120% against the consensus estimate of $0.05 [1] Financial Performance Metrics - Operating Ratio was reported at 91.2%, significantly better than the three-analyst average estimate of 98.3% [4] - Truckload Transportation Services had an Operating Ratio of 87.6%, compared to the average estimate of 97.2% [4] - Average trucks in service for Dedicated segment were 4,855, slightly below the two-analyst average estimate of 4,902 [4] - One-Way Truckload reported an average percentage of empty miles at 15.5%, better than the two-analyst average estimate of 15.8% [4] - Year-over-year revenue change for One-Way Truckload per total mile was +2.7%, compared to the estimated -1.4% [4] Revenue Breakdown - Werner Logistics revenues were $221.18 million, exceeding the average estimate of $204.72 million, representing a year-over-year increase of 5.9% [4] - Truckload Transportation Services' trucking fuel surcharge revenues were $55.2 million, below the average estimate of $58.43 million, reflecting a year-over-year decline of 21.1% [4] - Total revenues for Truckload Transportation Services were $517.65 million, slightly above the average estimate of $517.5 million, marking a year-over-year decrease of 3.6% [4] - Non-trucking and other revenues in Truckload Transportation Services were $11.54 million, surpassing the average estimate of $9.87 million, with a year-over-year increase of 28.8% [4] - Trucking revenues, net of fuel surcharge, were $450.9 million, slightly above the average estimate of $449.23 million, showing a year-over-year decline of 1.6% [4] - Dedicated trucking revenues, net of fuel surcharge, were $286.82 million, below the average estimate of $290.38 million, reflecting a year-over-year decrease of 0.7% [4] - One-Way Truckload trucking revenues, net of fuel surcharge, were $164.08 million, exceeding the average estimate of $156.38 million, with a year-over-year decline of 3.1% [4] Stock Performance - Werner's shares returned +4.6% over the past month, outperforming the Zacks S&P 500 composite's +3.6% change [3] - The stock currently holds a Zacks Rank 4 (Sell), indicating potential underperformance relative to the broader market in the near term [3]

分组1 - Werner Enterprises reported quarterly earnings of $0.11 per share, exceeding the Zacks Consensus Estimate of $0.05 per share, but down from $0.17 per share a year ago, representing an earnings surprise of +120.00% [1] - The company posted revenues of $753.15 million for the quarter ended June 2025, surpassing the Zacks Consensus Estimate by 2.23%, but down from $760.8 million year-over-year [2] - Over the last four quarters, Werner has surpassed consensus EPS estimates only once and has topped consensus revenue estimates just once [2] 分组2 - The stock has underperformed, losing about 20.4% since the beginning of the year, compared to the S&P 500's gain of 8.6% [3] - The current consensus EPS estimate for the coming quarter is $0.20 on revenues of $762.19 million, and $0.36 on $3 billion in revenues for the current fiscal year [7] - The Zacks Industry Rank for Transportation - Truck is currently in the bottom 13% of over 250 Zacks industries, indicating potential underperformance compared to higher-ranked industries [8] 分组3 - The estimate revisions trend for Werner was unfavorable ahead of the earnings release, resulting in a Zacks Rank 4 (Sell) for the stock, suggesting expected underperformance in the near future [6] - Old Dominion Freight Line, another company in the same industry, is expected to report quarterly earnings of $1.29 per share, reflecting a year-over-year change of -12.8% [9] - Old Dominion's revenues are projected to be $1.42 billion, down 5.6% from the year-ago quarter [10]

Financial Data and Key Metrics Changes - Revenues totaled $753 million, down 1% year over year, while revenues net of fuel increased by 1% [22][13] - Adjusted EPS was $0.11, a decrease of $0.06 compared to the previous year [23] - Adjusted operating margin was 2.2%, with TTS adjusted operating margin at 2.8% net of fuel surcharges [22][13] Business Line Data and Key Metrics Changes - Truckload Transportation Services (TTS) revenue was $518 million, down 4%, with revenues net of fuel surcharges decreasing by 1% to $462 million [25] - Logistics revenue was $221 million, representing 30% of total revenues, with a 6% year-over-year increase and a 13% sequential increase [30] - Dedicated revenue net of fuel was $287 million, down 0.7%, while One Way trucking revenue net of fuel was $164 million, a decrease of 3% [26][28] Market Data and Key Metrics Changes - The freight market faces ongoing uncertainty due to shifting global trade policies and regulatory issues [4] - Spot rates have weakened since the July 4 holiday, with expectations for normal seasonal patterns for the remainder of the year [21] - Long haul truckload employment is below prior peak levels, with ongoing capacity attrition anticipated [20] Company Strategy and Development Direction - The company is focused on providing superior and diversified solutions through technology investments and operational improvements [4][5] - Key priorities include driving growth in core business, operational excellence, and capital efficiency [5][11] - The company aims to maintain a strong balance sheet while strategically reinvesting in the business and returning capital to shareholders [35][36] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the potential for an upcycle driven by supply rather than demand, with expectations for stable truckload fundamentals [19][50] - The company anticipates ongoing customer conversations and positive outlooks from strategic customers [49] - Management highlighted the importance of safety improvements and technology investments in driving operational efficiency [6][10] Other Important Information - The Texas Supreme Court ruled in favor of the company, reversing a $90 million jury verdict, which positively impacted GAAP operating income [23][7] - The company is adjusting its full-year net CapEx guidance to a range of $145 million to $185 million [38] - The company has a strong liquidity position with $695 million available, including $51 million in cash [34] Q&A Session Summary Question: Thoughts on the cycle and potential upcycle shape - Management indicated that the current cycle has been prolonged and painful, with expectations for a supply-driven upcycle rather than demand-driven [48][50] Question: Temporary elevated demand from certain customers - Management noted that the elevated demand reflects a flight to quality, with customers seeking reliable partners during uncertain times [52][54] Question: Capacity impacts from ELP enforcement - Management does not expect impacts on their fleet but noted that enforcement is ramping up and could lead to exits of non-compliant operators [60][62] Question: Broader market shifts in capacity procurement - Management observed a trend towards a portfolio approach among customers, with less enthusiasm for private fleet growth compared to previous years [68] Question: Impact of the Texas Supreme Court ruling on court reform - Management expressed cautious optimism about the ruling being a potential start for broader court reform, while emphasizing the need for ongoing efforts [72][74] Question: Demand pressure on nondiscretionary goods - Management indicated that their customer mix remains resilient, with some customers experiencing increased volumes despite broader market pressures [78][80]

Financial Performance - Revenues decreased by 1% to $753 million in 2Q25 [12, 28], while revenues net of fuel surcharge increased by 1% or $7 million [15, 28] - GAAP EPS increased by 380% to $0.72 in 2Q25 [12, 27], while adjusted EPS decreased by 36% to $0.11 [12, 25] - Adjusted operating income decreased by 22% to $16.6 million in 2Q25 [12, 28], and adjusted operating margin decreased by 60 bps to 2.2% [12, 28] Truckload Transportation Services (TTS) - TTS revenues decreased by 4% to $517.6 million in 2Q25 [29], and revenues net of fuel surcharge decreased by 1% to $462.4 million [29] - TTS adjusted operating income decreased by 45% to $12.8 million in 2Q25 [29], and adjusted operating margin decreased by 220 bps to 2.8% [29] - Dedicated fleet represents 65% of total TTS trucks at quarter end [32]; revenue per truck per week increased 0.2% Y/Y [32] Werner Logistics - Werner Logistics revenues increased by 6% to $221.2 million in 2Q25 [41], and revenues less purchased transportation expense increased by 3% to $32.9 million [41] - Werner Logistics adjusted operating income increased by 246% to $5.9 million in 2Q25 [41], and adjusted operating margin increased by 190 bps to 2.7% [41] - Truckload Logistics revenues (77% of Logistics revenues) increased 9% [44] Cost Savings and Capital Allocation - The company is increasing its 2025 cost savings target from $40 million to $45 million+ [15, 49], with $20 million achieved through 2Q25 [49] - Net Capital Expenditures YTD25 is $58 million, down >50% Y/Y [58, 64] - The company has total liquidity of $695 million, including $644 million available credit and $51 million cash [55, 62]