Schneider National(SNDR) - 2025 Q2 - Quarterly Results

Executive Summary & Consolidated Financial Highlights Q2 2025 Announcement and CEO Commentary 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][2][3] - CEO Mark Rourke attributed growth to solid execution in Truckload and Intermodal segments, structural business improvements, strategic growth priorities, and acquisitions[3] - Truckload segment achieved double-digit earnings improvement, while Intermodal saw continued volume momentum and earnings improvement from network optimization[3] Consolidated Results Summary 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] Enterprise Results 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] - 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] Cash Flow and Capitalization 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] - 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] Segment Performance Analysis Truckload Segment 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] - Revenue per truck per week increased 1% to $3,964 due to improved rate per mile[10] Intermodal Segment 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] - Lower purchased transportation costs contributed to the earnings growth[13] Logistics Segment 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] - Lower brokerage volume was the main driver for the decrease in income from operations[15] Business Outlook Business Outlook 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] - Uncertainties include the timing and impact of trade, legislative, and regulatory policy, and ongoing industry cost inflation[16] Non-GAAP Financial Measures & Reconciliations Explanation of Non-GAAP Measures 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][45] - Revenues (excluding fuel surcharge) are useful as they isolate volume, price, and cost changes related to industry demand from fluctuating fuel prices[45] - Management primarily relies on GAAP results in addition to using non-GAAP measures, acknowledging their limitations as analytical tools[46] Reconciliation of Revenues (excluding fuel surcharge) 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 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 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 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 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 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 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. 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] - 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] - Service offerings include transportation of full-truckload freight, intermodal services with major North American rail carriers, and comprehensive logistics services[20] Conference Call and Contact Information 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] - Contact for investor relations is Christyne McGarvey, Vice President of Investor Relations and Corporate Finance[22] GAAP Financial Statements Consolidated Statements of Income 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 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 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 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 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 Truckload KPIs 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] Intermodal KPIs 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 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] Forward-Looking Statements Forward-Looking Statements 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] - 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] - The Company undertakes no obligation to publicly release any revision to its forward-looking statements[66]