Financial Data and Key Metrics Changes - Old Dominion's revenue for Q4 2025 was $1.31 billion, a 5.7% decrease from the prior year, reflecting a 10.7% decrease in LTL tons per day, partially offset by a 5.6% increase in LTL revenue per hundredweight [9][10] - The operating ratio increased to 76.7% for Q4 2025, up 80 basis points from the previous year [10][11] - Cash flow from operations totaled $310.2 million for Q4 and $1.4 billion for the year, with capital expenditures of $45.7 million for Q4 and $415 million for the year [12][13] Business Line Data and Key Metrics Changes - LTL revenue per hundredweight, excluding fuel surcharges, increased by 4.9% compared to Q4 2024 [9] - Direct operating costs as a percentage of revenue remained consistent at 53% despite a decline in network density [11] Market Data and Key Metrics Changes - The company reported a 99% on-time service rate and a cargo claims ratio of 0.1% in Q4, indicating strong service performance [5] - The average weight per shipment increased from 1,450 pounds in September to 1,520 pounds in December, suggesting a positive trend in shipment quality [18][19] Company Strategy and Development Direction - The company maintains a disciplined approach to yield management to offset cost inflation while investing in capacity, technology, and personnel [6] - Old Dominion aims to leverage its superior service and increased network capacity to capture market share as the economy improves [8] Management's Comments on Operating Environment and Future Outlook - Management expressed cautious optimism about demand recovery in 2026, noting positive signs in recent months and improvements in key metrics [17][19] - The company anticipates revenue for Q1 2026 to be between $1.25 billion and $1.3 billion, depending on performance relative to seasonality [23] Other Important Information - The board approved a quarterly cash dividend of $0.29 per share for Q1 2026, a 3.6% increase from the previous year [13] - The effective tax rate for Q4 2025 was 24.8%, with an expectation of 25.0% for Q1 2026 [13] Q&A Session All Questions and Answers Question: Can you provide thoughts on demand and possible better tone to volume as we move through the year? - Management noted positive signs in demand and an increase in weight per shipment, indicating potential recovery [17][19] Question: What are your thoughts on the first quarter sequentially from an operating ratio perspective? - Management expects an increase of about 150 basis points in the operating ratio for Q1, with revenue per day starting behind seasonality [23][24] Question: What is driving the increase in average shipment weight? - The increase is attributed to better performance from both contract customers and smaller customers, with indications of normalization in the truckload market [26][28] Question: How do you view competitive dynamics in the industry? - Management expressed confidence in their position, noting that capacity remains tight and they are prepared to capture market share as demand improves [92][94] Question: What are your expectations for employee pay and headcount as demand rebounds? - Management indicated that they prioritize employee compensation and expect to continue providing raises and benefits [52][53] Question: How do you see incremental margins as volumes grow? - Management expects to achieve higher incremental margins as they leverage their fixed costs and improve operating ratios [72][74]

Financial Data and Key Metrics Changes - Old Dominion's revenue for Q1 2025 was $1.37 billion, reflecting a 5.8% decrease from the prior year, driven by a 6.3% decrease in LTL tons per day, partially offset by a 2.2% increase in LTL revenue per hundredweight [20][22] - The operating ratio increased by 190 basis points to 75.4% due to revenue decline impacting operating expenses, contributing to a 130 basis point increase in overhead costs as a percentage of revenue [23][24] - Cash flow from operations totaled $336.5 million, with capital expenditures at $88.1 million, and $201.1 million utilized for share repurchase [28] Business Line Data and Key Metrics Changes - The company experienced a 5% decline in LTL shipments per day, but improved platform shipments per hour and P&D shipments per hour [10][20] - The monthly sequential changes in LTL tons per day showed a decrease of 3.8% in January, an increase of 1.9% in February, and an increase of 4.8% in March [21] Market Data and Key Metrics Changes - The company maintained a market share of approximately 12% to 13% during the downturn, indicating resilience in a challenging environment [45] - The company noted that retail accounts for about 25% to 30% of its business, with expectations for continued growth in this segment due to the shift towards e-commerce [62] Company Strategy and Development Direction - The company remains focused on executing its long-term strategic plan, emphasizing operational efficiency and cost control to protect its operating ratio [9][12] - Capital expenditures for 2025 are expected to total approximately $450 million, a reduction of $125 million from the initial plan, reflecting a cautious approach amid economic uncertainty [25][26] - The company believes that investing through the economic cycle is crucial for long-term market share gains [24] Management's Comments on Operating Environment and Future Outlook - Management expressed cautious optimism based on customer feedback and improving macroeconomic indicators, although uncertainty remains regarding the overall economic recovery [13][14] - The management team highlighted the importance of maintaining superior service and disciplined yield management to support long-term growth [11][18] Other Important Information - The effective tax rate for Q1 2025 was 24.8%, a decrease from 25.6% in Q1 2024, with expectations to remain the same for Q2 2025 [28] Q&A Session Summary Question: Can you provide insights on seasonality and the potential impact of ongoing economic conditions? - Management indicated that the typical sequential increase in margins from Q1 to Q2 is based on revenue growth, which is uncertain given current economic conditions [34][36] Question: What is the breakdown of April's revenue per day and any changes in pricing environment? - Management noted that April's revenue per day is impacted by the timing of holidays, with weight per shipment dropping slightly, but they remain committed to their long-term yield management strategy [40][44] Question: How does the company view the impact of retail customers and competition in the LTL market? - Management sees retail as a significant opportunity, especially with the growth of e-commerce, and believes they can leverage their superior service to capture market share [62][65] Question: What are the expectations for capital expenditures and their relation to macroeconomic conditions? - Management clarified that the reduction in capital expenditures is a strategic decision to navigate economic uncertainty while still preparing for future growth [25][52] Question: How does the company plan to maintain pricing power amid competitive pressures? - Management emphasized their consistent approach to yield management and the importance of demonstrating value to customers to justify price increases [80][104]