Forward Air Q2 Earnings Call Highlights

Key Points

• Forward Air reported a strong second quarter: Operating revenue rose to a record $673 million from $619 million, while consolidated EBITDA increased to $93 million from $79 million. Expedited Freight led the improvement, with EBITDA up more than 40% year over year to $43 million and margins expanding to 13.6%.
• Omni Logistics showed underlying improvement despite a major impairment: A non-cash $244 million goodwill impairment produced a reported EBITDA loss, but adjusted EBITDA reached $38 million with an 11.2% margin. A customer memorandum of understanding could preserve at least 50%—and potentially up to 75%—of approximately $250 million in annual revenue.
• Management is focused on liquidity and restructuring: Forward Air ended the quarter with $401 million in liquidity, completed $27 million of legacy Omni asset sales and remains on track to sell Intermodal by year-end 2026. Executives see improving freight-market conditions but warned that geopolitical risks and diesel-price volatility could delay recovery.

Forward Air NASDAQ: FWRD reported record quarterly operating revenue and its strongest consolidated EBITDA performance in more than two years during the second quarter of 2026, as its Expedited Freight, Omni Logistics and Intermodal operations improved.

Operating revenue rose to $673 million from $619 million in the second quarter of 2025, while consolidated EBITDA, calculated under the company’s credit agreement, increased to $93 million from $79 million. Chief Executive Officer Shawn Stewart said the company delivered its best operating revenue in its history and its best consolidated EBITDA result in two and a half years.

“While we have more work to do,” Stewart said, “we are beginning to see the fruits of our labor and results at the level I know we are capable of producing.”

Segment performance improves

The Expedited Freight segment led the quarter, producing its best operating revenue, operating income, reported EBITDA and margin since the beginning of 2024, according to Stewart. Segment EBITDA increased more than 40% year over year to $43 million from $30 million, while the EBITDA margin expanded to 13.6% from 11.6%.

Chief Financial Officer Jamie Pierson said the segment benefited from gains in tonnage per day, shipments per day, weight per shipment and revenue per shipment excluding fuel. Revenue per hundredweight excluding fuel declined because shipment weights rose significantly, he said.

Management described the change in freight mix as intentional. Pierson said the company lowered pricing on certain higher-weight shipments to improve network density, while Stewart said Forward Air added lane pairs and sought to fill available capacity on dedicated lanes. The result was higher load factors, fewer empty miles and improved profitability, management said.

Stewart also said he believes some freight has shifted back to less-than-truckload networks as truckload pricing has increased. Customers that had previously consolidated shipments into full truckloads may be moving freight back into LTL channels as truckload rates per pound rise, he said.

At Omni Logistics, the company reported a goodwill impairment charge of $244 million that resulted in reported EBITDA loss of $206 million for the segment. Excluding the impairment, Omni generated $38 million in reported EBITDA and an 11.2% margin, compared with $30 million and a 9% margin a year earlier. Pierson said those adjusted results represented the segment’s best performance since the transaction in early 2024.

The impairment was non-cash and did not affect EBITDA, cash or liquidity, Pierson said. The charge was tied to uncertainty surrounding possible revenue reductions from a major customer at the time the required impairment analysis was performed, before the company signed a memorandum of understanding with that customer in July.

Intermodal reported EBITDA of $10 million, up from $9 million a year earlier and its best result in five quarters. Its 16.7% margin was the strongest in six quarters, rising 160 basis points from 15.1% in the prior-year period. Stewart said strategic rate and fuel-price increases implemented beginning in the first quarter helped address underperforming accounts, and that the company did not lose customers as a result of those actions.

Customer agreement could preserve up to 75% of revenue

Forward Air has been negotiating with one of its largest customers after the customer disclosed plans to transition part of the services supplied by Omni to other providers as part of its operational and supplier-diversification strategy. Stewart said the change was not related to Forward Air’s service levels during the companies’ 20-year relationship.

Under a recently signed memorandum of understanding, Forward Air expects to retain at least half of approximately $250 million in revenue associated with the customer during the fiscal year ended Dec. 31, 2025. The company said it could retain an additional roughly 25% of that business, potentially preserving up to 75% of the prior business level.

The memorandum also contemplates extending the retained-services contract for at least two years. Services expected to move to other providers are anticipated to begin transitioning later this year, with most of the transition occurring in December 2026 and through the remainder of 2027.

Stewart said the customer has continued to grow with Forward Air during 2026 and that a decision regarding additional retention could come before year-end. He added that the company expects it can remove or mitigate cost overhang associated with any services that ultimately transition away.

Asset sales and liquidity

Forward Air completed the sale of two smaller legacy Omni businesses during the second quarter and July for a combined sales price of about $27 million. Pierson said the businesses were generally break-even on a reported EBITDA basis. Management said the transactions simplify the service portfolio and monetize underperforming assets.

The company continues to pursue the sale of its Intermodal business, which Stewart said is performing well and generating its highest margin in recent history. The sales process remains on schedule for an expected closing by the end of 2026, according to management. Forward Air expects the divestitures to support debt reduction, streamline the organization and enhance shareholder value.

For the quarter, cash used in operating activities totaled $5 million, compared with $13 million used a year earlier. During the first half of 2026, operating activities provided $41 million in cash, up from $27 million in the comparable 2025 period.

Forward Air ended the quarter with $401 million in liquidity, consisting of $139 million in cash and $261 million of revolver availability. Pierson noted that liquidity remained roughly flat from the first quarter despite a $34 million semiannual interest payment on senior secured notes during the second quarter.

Freight-market outlook

Stewart said market fundamentals are improving as capacity tightens amid regulatory enforcement and carrier exits. He cited seven consecutive months of manufacturing PMI expansion, lean inventory levels, rising truckload spot rates and higher tender-rejection rates as indicators of a gradual freight recovery.

Management also cited higher diesel prices as a tailwind. Pierson said diesel had increased 51% over the previous four months and remained elevated in July relative to the second quarter. He said that, if current fuel conditions persist, additional shipments could disproportionately benefit the company’s earnings as operating leverage improves.

Stewart cautioned that geopolitical tensions and diesel-price volatility could still weigh on industrial activity and delay demand recovery. “Recoveries are rarely, if ever, linear in nature,” he said.

About Forward Air (NASDAQ:FWRD)

Forward Air Corporation is a leading North American provider of expedited ground transportation and related logistics services, specializing in time-sensitive shipments. The company offers a comprehensive suite of solutions including less-than-truckload (LTL) expedited freight, consolidation and distribution services, container drayage, and final-mile delivery. By integrating transportation management with warehousing, inventory control, and technology-driven tracking, Forward Air supports customers across a variety of industries such as manufacturing, retail, automotive and chemicals.

Founded in 1981 and headquartered in Greeneville, Tennessee, Forward Air has developed a broad network of service centers, terminals and rail ramps throughout the United States, Canada and Puerto Rico.

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