Financial Data and Key Metrics Changes - In Q4 2025, total revenue decreased approximately 1% year-over-year, primarily due to decreased ocean revenue, while truck transportation revenue remained nearly flat [9][10] - Heavy haul revenue set a new record of $569 million in FY 2025, a 14% increase from FY 2024 [6] - Gross profit was $85.6 million in Q4 2025, down from $109.4 million in Q4 2024, with a gross profit margin of 7.3% compared to 9% in the prior year [31][33] Business Line Data and Key Metrics Changes - Heavy haul service revenue increased by 23% year-over-year in Q4 2025, with loadings up approximately 7% and revenue per load up 16% [12][27] - Non-truck transportation service revenue decreased by 28% year-over-year, or $30 million, in Q4 2025 [27] - Truck revenue per load increased approximately 1% year-over-year, driven by a 7.5% increase in revenue per load on unsided platform equipment [24] Market Data and Key Metrics Changes - The freight environment in Q4 2025 was characterized by soft demand, with the ISM Index below 50 throughout the quarter [12] - Revenue hauled on behalf of other truck transportation companies was 15% below Q4 2024, indicating accessible capacity in the marketplace [30] - The number of loads hauled via truck in January 2026 was approximately 1% below January 2025, while revenue per load was approximately 4% above January 2025 [39] Company Strategy and Development Direction - The company focuses on five key priorities: accelerating the model, executing growth strategy, managing risk, leveraging financial strength, and enhancing support [5] - Landstar is investing approximately 50% of its IT CapEx budget for 2026 in AI enablement and solutions [8] - The company aims to enhance its technology strategy through AI, improving decision-making and operational efficiency [20] Management's Comments on Operating Environment and Future Outlook - Management noted that the freight recession has lasted longer than expected, but they remain optimistic about leveraging their strategic growth initiatives when the environment improves [5][9] - The company will provide revenue commentary for Q1 2026 instead of formal guidance due to the uncertain operating environment [39] - Management expressed confidence in the ability to recover from weather-related disruptions impacting loads in early 2026 [45][47] Other Important Information - The company returned approximately $261 million to shareholders over the last two years through share repurchases and cash dividends [8] - The accident frequency rate was reported at 0.59 DOT reportable accidents per million miles in 2025, below the national average [22] - The effective income tax rate decreased to 18.3% in Q4 2025 from 21.4% in Q4 2024 due to favorable resolutions of state tax matters [37] Q&A Session Summary Question: Impact of recent storms on BCO utilization - Management acknowledged challenges due to storms affecting dispatch loads but expressed optimism about recovery as weather clears [45][46] Question: AI initiatives compared to competitors - Management highlighted that their AI strategy focuses on enabling agents and BCOs rather than cost reduction, differentiating from competitors like C.H. Robinson [51][52] Question: BCO count and retention in Q1 2026 - Management indicated that while seasonality typically leads to a decline in BCO count, they are optimistic about retention and recruitment efforts [62][63] Question: Variable contribution margin with increased BCO count - Management confirmed that an increase in BCO count and improved rates could positively impact variable contribution margin [71]

Core Insights - The Dow Jones Transportation Average has experienced a nine-day winning streak, indicating strong momentum in the transportation sector, which is crucial for the overall stock market performance [1][2] - A rise in transportation stocks is seen as a positive signal for economic growth, as it suggests that companies are not only producing goods but also delivering them, aligning economic reality with market optimism [3] Transportation Sector Performance - Companies such as Expeditors International, Southwest Airlines, and Delta Air Lines saw their stock prices increase by over 10% last month, while Nvidia Corp. experienced a decline of 13% during the same period [4] - The transportation rally is expected to have broader implications for the equal-weighted S&P index, indicating a potential shift in investor sentiment towards economically sensitive stocks [4] Market Dynamics - The current rally in transportation stocks coincides with expectations of a Federal Reserve interest rate cut, which could further boost investor confidence [3] - New regulations regarding Commercial Driver's Licenses and English proficiency tests may lead to a tighter supply of truck drivers, potentially increasing freight rates in the long run [4]

Financial Performance - Operating revenues increased to $1421 million in 2Q25 from $1317 million in 2Q24[77] - Revenues excluding fuel surcharge were $1282 million in 2Q25, compared to $1168 million in 2Q24[77] - Adjusted income from operations improved by 9% year-over-year[82] - Adjusted EBITDA increased from $153 million in 2Q24 to $166 million in 2Q25[77] Segment Results - Truckload revenues excluding fuel surcharge increased 15% year-over-year due to the Cowan acquisition and higher revenue per truck per week[87] - Dedicated average trucks grew 27% year-over-year, primarily driven by the Cowan acquisition[87] - Intermodal revenues excluding fuel surcharge increased 5% year-over-year due to a 5% volume growth[91] - Logistics revenues excluding fuel surcharge increased 7% year-over-year due to the Cowan Systems acquisition and Power Only growth[94] Capital Allocation and Strategy - The company announced a $150 million, 3-year share repurchase program in February 2023, with approximately $46.1 million remaining as of June 30, 2025[61] - Dividends have increased 90% since the IPO in April 2017[61]