Summary of Schneider National 2026 Conference Call Company Overview - **Company**: Schneider National (NYSE: SNDR) - **Industry**: Trucking and Logistics Key Points Market Dynamics - The trucking market is experiencing a shift towards a more balanced supply-demand equilibrium, with spot pricing remaining attractive, particularly in the Midwest and Northeast regions [7][10] - Government enforcement actions are impacting capacity, particularly in the for-hire market, with estimates suggesting a potential removal of 5%-10% of capacity [17][19] - The demand environment has been stable, with resilient consumer behavior and balanced inventory levels among customers [13][15] Financial Performance and Outlook - The company anticipates adjusted EPS for 2026 to be in the range of $0.70-$1.00, with the lower end being conservative based on current market conditions [60][63] - There is a focus on earnings growth rather than just truck growth, with productivity improvements expected to drive earnings without significantly increasing headcount [31][54] - The company aims to recover from inflationary impacts and has set a cost savings target of $40 million for 2026 [56] Business Segments - **Dedicated Business**: Focused on long-term contracts to provide stable earnings, with a strategy to improve underperforming accounts [31][32] - **Intermodal Business**: Experienced seven consecutive quarters of growth, with a focus on differentiation and partnerships, particularly in the context of the Mexico market [46][49] - **Network Business**: Currently facing challenges but is expected to improve as market conditions stabilize [68] Cost Management - The company is implementing structural cost-cutting initiatives, including a 7% reduction in non-driver headcount for 2025, with ongoing efforts to manage third-party costs [54][56] - Inflationary pressures are being mitigated, but some costs are expected to persist, particularly in healthcare and logistics [55][59] Technology and Innovation - Schneider is investing in technology, including AI, to improve operational efficiency and reduce costs [87][89] - The company believes that technological advancements will enhance its competitive position in the market [88] Strategic Partnerships and Growth Opportunities - Schneider is focused on leveraging its partnerships with rail companies to enhance its intermodal offerings and improve service reliability [45][46] - The company is open to acquisitions to further strengthen its dedicated business segment [72] Challenges and Risks - The trucking industry is facing a tight labor market, which may push up driver wages, impacting margins [40][42] - The company acknowledges the cyclical nature of the trucking industry and is focused on strategies to compound earnings through cycles [76][78] Conclusion - Schneider National is positioned to navigate the current market dynamics with a focus on productivity, cost management, and strategic growth initiatives. The company is optimistic about its ability to recover margins and achieve long-term targets as market conditions improve [65][68]

Financial Data and Key Metrics Changes - Overall company revenue decreased approximately 1% year over year in Q3 2025, with total revenue increasing approximately 1% year over year when excluding the revenue contribution from Landstar Metro and a previously disclosed agent fraud matter [5][6] - GAAP EPS were $0.56, while adjusted EPS was $1.22, excluding the impact of three non-cash, non-recurring impairment charges totaling approximately $30.1 million [9][30] - Gross profit was $111.1 million compared to $112.7 million in Q3 2024, with a gross profit margin of 9.2% in Q3 2025 versus 9.3% in Q3 2024 [23][24] Business Line Data and Key Metrics Changes - Heavy haul service revenue increased approximately 17% year over year, generating about $147 million in Q3 2025, driven by a 9% increase in revenue per load and an 8% increase in volume [7][18] - Non-truck transportation service revenue decreased by 1% or $1 million compared to Q3 2024, but increased by approximately $13 million or 16% compared to the same period [19] - Transportation logistics segment revenue decreased by 0.6% year over year due to slight decreases in both loadings and revenue per load [20] Market Data and Key Metrics Changes - The freight environment in Q3 2025 was characterized by soft demand, with truck capacity readily available and market conditions favoring shippers [10] - Revenue hauled on behalf of other truck transportation companies was 17% below Q3 2024, indicating readily accessible capacity in the marketplace [23] - The number of loads hauled via truck in October 2025 was approximately 3% below October 2024, with revenue per load approximately equal to 2024 [32] Company Strategy and Development Direction - The company is focused on accelerating its business model and executing strategic growth initiatives, including investments in technology solutions and fleet refreshment [8][11] - A strategic review led to the decision to actively market Landstar Metro for sale, with a potential sale expected in late 2025 or early 2026 [6][28] - The company is committed to continuous improvement in service levels and support for customers, agents, BCOs, and carriers [8] Management's Comments on Operating Environment and Future Outlook - Management noted that the challenging truckload freight environment is influenced by volatile federal trade policy and inflation concerns, generating supply chain uncertainty [5] - The company will provide revenue commentary for Q4 2025 rather than formal guidance due to the fluid freight transportation backdrop and uncertain macroeconomic environment [32] - Management expressed optimism about the potential for a tighter supply-side environment due to regulatory changes affecting non-domiciled CDL holders [66] Other Important Information - The company declared a $0.40 dividend payable on December 9 to shareholders of record as of November 18 [11] - The effective income tax rate increased to 25.8% in Q3 2025 from 22.2% in Q3 2024, primarily due to the impact of non-cash impairment items [30] Q&A Session Summary Question: Insights on the broader truckload market and capacity exits - Management noted a sequential increase in BCO count for the first time since early 2022, indicating positive morale despite ongoing challenges in the market [38] Question: Visibility on returning to BCO count growth - Management expressed cautious optimism about returning to BCO count growth, dependent on rate improvements [40] Question: Alignment of revenue trends with truckload spot rates - Management clarified that while spot rates may be increasing, their data does not reflect similar trends, indicating a potential lag in their pricing [48] Question: Impact of government shutdown on volume trends - Management acknowledged a temporary decline in government-related volumes but anticipated a quick ramp-up once the government reopens [71] Question: AI usage in brokerage and differentiation from peers - Management highlighted ongoing investments in AI to assist agents and improve BCO retention, aiming for increased service levels and efficiency [72]