Landstar System(LSTR) - 2025 Q2 - Quarterly Results

Q2 2025 Earnings Highlights Financial Performance Summary and CEO Commentary Landstar reported Q2 2025 diluted EPS of $1.20 on $1.211 billion revenue, with sequential improvements in truck revenue per load and BCO count Q2 2025 vs Q2 2024 Key Financials ($ in thousands, except EPS) | Metric | 2Q 2025 | 2Q 2024 | | :--- | :--- | :--- | | Revenue | $1,211,383 | $1,225,005 | | Gross profit | $109,261 | $119,996 | | Variable contribution | $170,450 | $175,131 | | Operating income | $56,280 | $68,059 | | Basic and diluted EPS | $1.20 | $1.48 | - Truck revenue per load increased 3.2% sequentially compared to the 2025 first quarter, outperforming typical seasonality[2] - Net BCO truck count remained essentially flat sequentially, the best performance since the second quarter of 2022[2] Capital Allocation and Shareholder Returns Landstar returned capital to stockholders, repurchasing 300,141 shares for $42.4 million in Q2 2025 and declaring a $0.40 per share dividend Stock Repurchase Program (Q2 2025 & YTD) (Shares, $ in millions) | Period | Shares Purchased | Aggregate Cost | | :--- | :--- | :--- | | 2025 Second Quarter | 300,141 | $42.4 million | | Twenty-six weeks ended June 28, 2025 | 686,459 | $103.3 million | - Company is authorized to purchase up to an additional 1,861,522 shares under its share purchase program[5] - Quarterly dividend of $0.40 per share declared, payable on September 9, 2025[5] Detailed Financial and Operational Review Revenue Analysis by Segment Total revenue for Q2 2025 was $1.211 billion, a slight decrease, with truck transportation dominating despite mixed equipment performance Total Revenue Q2 2025 vs Q2 2024 ($ in millions) | Metric | 2Q 2025 | 2Q 2024 | | :--- | :--- | :--- | | Total Revenue | $1,211 million | $1,225 million | Revenue by Transportation Type (Q2 2025 vs Q2 2024) ($ in millions) | Transportation Type | 2Q 2025 Revenue | 2Q 2024 Revenue | 2Q 2025 % of Total | 2Q 2024 % of Total | | :--- | :--- | :--- | :--- | :--- | | Truck transportation (BCOs & brokerage) | $1,118 million | $1,106 million | 92% | 90% | | Van equipment | $591 million | $619 million | - | - | | Unsided/platform equipment | $401 million | $381 million | - | - | | Other truck transportation | $101 million | $78 million | - | - | | Rail, air and ocean cargo carriers | $73 million | $94 million | 6% | 8% | Profitability Metrics Gross profit and variable contribution both decreased in Q2 2025 compared to Q2 2024, indicating reduced overall profitability Gross Profit and Variable Contribution (Q2 2025 vs Q2 2024) ($ in millions) | Metric | 2Q 2025 | 2Q 2024 | | :--- | :--- | :--- | | Gross profit | $109 million | $120 million | | Variable contribution | $170 million | $175 million | Balance Sheet and Financial Health Landstar maintains a strong balance sheet with $426 million in cash and short-term investments, reporting 17% return on equity and 16% return on invested capital - Cash and short-term investments of approximately $426 million as of June 28, 2025[9] - Trailing twelve-month return on average shareholders' equity was 17%[9] - Return on invested capital, representing net income divided by the sum of average equity plus average debt, was 16%[9] Key Operational Metrics Truck revenue per load increased by 2.6% year-over-year in Q2 2025, despite a 1.5% decline in loads hauled, while capacity providers decreased - Truck revenue per load increased 2.6% in the 2025 second quarter as compared to the 2024 second quarter[7] - The number of loads hauled via truck declined 1.5% over the same period (2Q 2025 vs 2Q 2024)[7] Key Operational Metrics (Q2 2025 vs Q2 2024) (Counts, $) | Metric | 2Q 2025 | 2Q 2024 | | :--- | :--- | :--- | | Total truck transportation loads | 500,510 | 507,950 | | Total loads | 515,770 | 523,700 | | Revenue per load (Total truck transportation) | $2,234 | $2,177 | | BCO Independent Contractors | 7,844 | 8,385 | | Approved and active Truck Brokerage Carriers | 41,842 | 45,382 | | Trucks provided by BCO Independent Contractors | 8,611 | 9,180 | Corporate Information and Disclosures About Landstar System, Inc. Landstar System, Inc. is a technology-enabled, asset-light provider of integrated transportation management solutions, headquartered in Jacksonville, Florida - Landstar is a technology-enabled, asset-light provider of integrated transportation management solutions[11] - Delivers safe, specialized transportation services utilizing a network of agents, third-party capacity providers, and employees[11] - Certified to ISO 9001:2015 quality management system standards and RC14001:2015 environmental, health, safety and security management system standards[11] Non-GAAP Financial Measures Explanation The company uses non-GAAP measures like variable contribution to provide insights into variable costs, facilitate peer comparisons, and aid decision-making - Variable contribution and variable contribution margin are presented as non-GAAP financial measures[12] - These measures are useful for understanding underlying trends, facilitating comparisons with peer companies, and assisting management in decision-making[13] Forward-Looking Statements Disclaimer The press release contains forward-looking statements subject to various uncertainties and risks, including demand, accidents, third-party dependence, and regulatory changes - Statements not based on historical facts are 'forward-looking statements' and are subject to uncertainties and risks[14] - Risks include decreased demand, accidents, dependence on third-party insurance/agents/capacity providers, competition, system disruptions, cyber incidents, and regulatory changes[14] - The Company undertakes no obligation to publicly update or revise any forward-looking statements[14] Investor Relations and Corporate Contact Landstar will host a live webcast of its quarterly earnings conference call, with details available on its investor relations website - A live webcast of the quarterly earnings conference call is available at www.investor.landstar.com[10](index=10&type=chunk) - Contact for investor inquiries: Jim Todd, Chief Financial Officer, 904-398-9400[11] Unaudited Financial Statements Consolidated Statements of Income Presents unaudited consolidated statements of income for the thirteen and twenty-six weeks ended June 28, 2025, detailing key financial metrics Consolidated Statements of Income (Thirteen Weeks Ended) ($ in thousands, except EPS and Dividends per share) | Metric | June 28, 2025 | June 29, 2024 | | :--- | :--- | :--- | | Revenue | $1,211,383 | $1,225,005 | | Investment income | $3,729 | $3,654 | | Total costs and expenses | $1,158,832 | $1,160,600 | | Operating income | $56,280 | $68,059 | | Income before income taxes | $55,582 | $69,734 | | Net income | $41,893 | $52,624 | | Basic and diluted earnings per share | $1.20 | $1.48 | | Dividends per common share | $0.40 | $0.33 | Consolidated Statements of Income (Twenty-Six Weeks Ended) ($ in thousands, except EPS and Dividends per share) | Metric | June 28, 2025 | June 29, 2024 | | :--- | :--- | :--- | | Revenue | $2,363,885 | $2,396,048 | | Investment income | $7,327 | $7,066 | | Total costs and expenses | $2,275,513 | $2,275,094 | | Operating income | $95,699 | $128,020 | | Income before income taxes | $95,160 | $131,306 | | Net income | $71,699 | $99,720 | | Basic and diluted earnings per share | $2.05 | $2.79 | | Dividends per common share | $0.76 | $0.66 | Consolidated Balance Sheets Provides unaudited consolidated balance sheets as of June 28, 2025, and December 28, 2024, outlining assets, liabilities, and equity Consolidated Balance Sheets (June 28, 2025 vs December 28, 2024) ($ in thousands) | Item | June 28, 2025 | December 28, 2024 | | :--- | :--- | :--- | | ASSETS | | | | Cash and cash equivalents | $359,237 | $515,018 | | Short-term investments | $66,935 | $51,619 | | Total current assets | $1,237,346 | $1,319,867 | | Total assets | $1,699,644 | $1,813,311 | | LIABILITIES AND SHAREHOLDERS' EQUITY | | | | Total current liabilities | $619,139 | $673,154 | | Long-term debt, excluding current maturities | $54,677 | $69,191 | | Total shareholders' equity | $921,826 | $972,439 | | Total liabilities and shareholders' equity | $1,699,644 | $1,813,311 | Reconciliation of Gross Profit to Variable Contribution Details the reconciliation of gross profit to variable contribution for the thirteen and twenty-six weeks ended June 28, 2025, clarifying revenue cost components Reconciliation of Gross Profit to Variable Contribution (Thirteen Weeks Ended) ($ in thousands, except percentages) | Metric | June 28, 2025 | June 29, 2024 | | :--- | :--- | :--- | | Revenue | $1,211,383 | $1,225,005 | | Variable costs of revenue | $1,040,933 | $1,049,874 | | Other costs of revenue | $61,189 | $55,135 | | Total costs of revenue | $1,102,122 | $1,105,009 | | Gross profit | $109,261 | $119,996 | | Gross profit margin | 9.0% | 9.8% | | Variable contribution | $170,450 | $175,131 | | Variable contribution margin | 14.1% | 14.3% | Reconciliation of Gross Profit to Variable Contribution (Twenty-Six Weeks Ended) ($ in thousands, except percentages) | Metric | June 28, 2025 | June 29, 2024 | | :--- | :--- | :--- | | Revenue | $2,363,885 | $2,396,048 | | Variable costs of revenue | $2,032,125 | $2,052,677 | | Other costs of revenue | $124,194 | $109,473 | | Total costs of revenue | $2,156,319 | $2,162,150 | | Gross profit | $207,566 | $233,898 | | Gross profit margin | 8.8% | 9.8% | | Variable contribution | $331,760 | $343,371 | | Variable contribution margin | 14.0% | 14.3% | Supplemental Operational Data Tables Presents detailed supplemental operational data, including revenue by transportation type, loads, revenue per load, and truck capacity providers Revenue Generated Through (Thirteen Weeks Ended) ($ in thousands) | Transportation Type | June 28, 2025 | June 29, 2024 | | :--- | :--- | :--- | | Van equipment | $591,276 | $618,940 | | Unsided/platform equipment | $400,862 | $380,950 | | Less-than-truckload | $25,313 | $28,090 | | Other truck transportation | $100,687 | $77,709 | | Total truck transportation | $1,118,138 | $1,105,689 | | Rail intermodal | $22,028 | $22,307 | | Ocean and air cargo carriers | $50,789 | $71,306 | | Other | $20,428 | $25,703 | | Total Revenue | $1,211,383 | $1,225,005 | Number of Loads (Thirteen Weeks Ended) (Number of Loads) | Transportation Type | June 28, 2025 | June 29, 2024 | | :--- | :--- | :--- | | Van equipment | 284,091 | 300,959 | | Unsided/platform equipment | 128,996 | 126,460 | | Less-than-truckload | 41,250 | 42,617 | | Other truck transportation | 46,173 | 37,914 | | Total truck transportation | 500,510 | 507,950 | | Rail intermodal | 7,820 | 7,230 | | Ocean and air cargo carriers | 7,440 | 8,520 | | Total Loads | 515,770 | 523,700 | | Loads hauled via BCO Independent Contractors | 203,930 | 213,560 | Revenue per Load (Thirteen Weeks Ended) ($) | Transportation Type | June 28, 2025 | June 29, 2024 | | :--- | :--- | :--- | | Van equipment | $2,081 | $2,057 | | Unsided/platform equipment | $3,108 | $3,012 | | Less-than-truckload | $614 | $659 | | Other truck transportation | $2,181 | $2,050 | | Total truck transportation | $2,234 | $2,177 | | Rail intermodal | $2,817 | $3,085 | | Ocean and air cargo carriers | $6,826 | $8,369 | | Revenue per load on loads hauled via BCO Independent Contractors | $2,263 | $2,180 | Truck Capacity Providers (June 28, 2025 vs June 29, 2024) (Counts) | Capacity Type | June 28, 2025 | June 29, 2024 | | :--- | :--- | :--- | | BCO Independent Contractors | 7,844 | 8,385 | | Approved and active Truck Brokerage Carriers | 41,842 | 45,382 | | Other approved Truck Brokerage Carriers | 27,672 | 25,450 | | Total available truck capacity providers | 77,358 | 79,217 | | Trucks provided by BCO Independent Contractors | 8,611 | 9,180 |