Saia Q1 Earnings Call Highlights

Key Points

• Saia posted a Q1 revenue record of $806 million (up 2.4%) with diluted EPS of $1.86 flat year-over-year and an operating ratio of 91.7; management expects roughly 400–450 basis points of sequential operating-ratio improvement in Q2 as shipments strengthened in March and April.
• The company faced margin pressure from a rapid ~30% diesel spike in March that created about a $3.5 million headwind due to fuel-surcharge lag, alongside rising insurance and claims costs that lifted cost per shipment.
• Operationally Saia reported improvements—cargo claims ratio at 0.5% for the sixth consecutive quarter, better safety and productivity metrics, ongoing ramping of newer terminals within its 214-terminal network, and a plan to be free cash flow positive this year.

Saia NASDAQ: SAIA executives pointed to improving demand trends late in the first quarter, continued progress on service and safety metrics, and an expectation for meaningful sequential margin improvement in the second quarter, while also highlighting cost pressure tied to insurance-related claims and a sharp rise in diesel prices in March.

First-quarter results and operating backdrop

President and CEO Fritz Holzgrefe said the company entered 2026 focused on “serving our customers, enhancing operational efficiency, and integrating our newer terminals into our national network,” but noted that winter weather again affected results, particularly in “our core and profitable Texas and Mid-South regions.” Holzgrefe said seasonality improved in March, especially in the back half of the month, as customers increased usage of Saia’s national network.

The company reported first-quarter revenue of $806 million, which Holzgrefe called a first-quarter record and a 2.4% increase from the prior year. He said shipment volumes accelerated late in March, helping offset weather impacts in January and February, and resulting in a 1% shipment increase for the quarter.

Executive Vice President and CFO Matthew Batteh reported revenue of $806.2 million and said the increase was driven in part by higher fuel surcharge revenue and a 1% increase in shipments per workday. Diluted earnings per share were $1.86, which Batteh said was flat year over year. The operating ratio increased to 91.7% from 91.1% a year earlier.

Service, safety, and productivity metrics

Holzgrefe emphasized operational execution and customer service metrics during the quarter. He said Saia’s cargo claims ratio was 0.5%, marking the sixth consecutive quarter below 0.6%, which he described as a record streak for that milestone.

He also highlighted safety performance, including what he called a “significant increase in miles between preventable accidents” and a “significant improvement in hours between lost time injuries.” Holzgrefe said miles between preventable accidents were a first-quarter record, while hours between lost time injuries reached the highest first-quarter level since 2020.

On productivity, Holzgrefe said “touches” improved more than 2.5% versus the first quarter of 2025 and about 1% sequentially from the fourth quarter, reaching the strongest performance since the third quarter of 2024. Batteh later tied improvements in per-shipment labor and purchase transportation costs to optimization, technology and cost management efforts, noting the network has added more than 20 terminals over that period.

Pricing, mix, and the diesel surge

Management described continued efforts on pricing and mix management, alongside shifting freight patterns. Holzgrefe said revenue per shipment excluding fuel increased throughout the quarter, supported partly by contractual renewals that averaged 6.7% in the first quarter. Batteh added that renewals were “the highest number that we’ve seen in quite a while,” including a March renewal number “north of seven.”

Despite that, Batteh said revenue per shipment excluding fuel surcharge decreased 1.2% year over year to $297.11, which he attributed “largely as a weight per shipment and shorter length of haul compared to the prior year.” He added that revenue per shipment excluding fuel increased throughout the quarter. Revenue per shipment including fuel increased 0.7% year over year.

Fuel surcharge revenue increased 12.3% and represented 16.5% of total revenue versus 15.1% a year earlier. Batteh said tonnage fell 2.1%, driven by a 3.1% decline in average weight per shipment, and average length of haul decreased 1.7% to 890 miles.

Both Holzgrefe and Batteh highlighted a sharp spike in diesel costs late in the quarter. Holzgrefe said the company was “negatively impacted in March by the 30% increase in diesel cost in a matter of a few days,” citing the lag in the fuel surcharge program, which is tied to weekly national averages. Batteh said the rapid rise in March created an approximately $3.5 million margin headwind because fuel costs were incurred immediately while the surcharge table updated the following week.

Costs: insurance inflation, purchase transportation shifts, and headcount reductions

On expenses, Batteh said salaries, wages and benefits rose $4 million, or 1%, driven primarily by a $7.9 million increase in health insurance costs and a $1.4 million increase in workers’ compensation costs, which he said were “primarily the result of escalating costs of claims.” Those increases were partially offset by a $5.1 million decline in salaries and wages combined, as headcount ended the quarter 6.3% lower than the first quarter of 2025 and 0.7% lower than the fourth quarter of 2025. Excluding linehaul drivers, headcount decreased 7.9% year over year, reflecting a focus on operational efficiency and network cost management.

Purchase transportation expense increased 7.5% year over year and was 8% of total revenue versus 7.6% a year earlier. Batteh said the increase in purchase transportation usage was “driven entirely by rail,” as Saia leveraged “the most cost-effective mode” while meeting customer service expectations.

Depreciation expense was $62.2 million, up 5.3% year over year, which Batteh attributed to investments in revenue equipment, real estate and technology. Claims and insurance expense increased 6.3%, driven by higher insurance premium costs and inflation in claims, though Batteh said preventable accidents declined versus the prior year due to safety and training efforts.

Cost per shipment increased 2% year over year, “largely due to increases in self-insurance related costs,” with health insurance accounting for more than half of the increase, according to Batteh. He said salaries, wages and purchase transportation combined were down 1.2% on a per-shipment basis due to cost controls and network optimization.

Outlook: Q2 margin expectations, network ramp, and free cash flow

In response to analyst questions about margin progression, Batteh provided monthly volume trends and early second-quarter indicators:

• January: shipments per day down 2.1%; tonnage per day down 7%
• February: shipments per day up 0.3%; tonnage per day down 2.7%
• March: shipments per day up 4.3%; tonnage per day up 2.8%
• April to date: shipments up about 5.5%; tonnage up about 6.5%

Batteh said sequential operating ratio improvement from the first to second quarter is typically 250 to 300 basis points, but this year the company believes it can achieve “about 400-450 basis points of improvement,” assuming normal seasonality in May and June. Holzgrefe added that customers’ sentiment has become “more positive” and that they “see a better second half,” while noting management wants to see that translate into results and that macro uncertainty remains.

On network expansion and ramping terminals, Holzgrefe said Saia has opened 70 facilities since 2017, and more recently described the company as having a 214-terminal network. In the question-and-answer session, Batteh said a group of newer facilities improved their operating ratio by “over two points” year over year, though they remain “in the upper 90s” and still weigh on the consolidated result. Both executives said they were encouraged that the first quarter showed shipment growth in both legacy and ramping markets, with ramping facilities still growing faster, as expected.

Holzgrefe also addressed technology investment, describing continued work on optimization tools used in linehaul planning and city operations, which he characterized as “models or early-stage AI models” that have been in development for years, plus potential uses of AI in customer-facing tools like track-and-trace. He said the company is not ready to discuss “step function changes,” but will continue to invest in optimization.

On cash flow, Batteh said Saia has “long talked about our plan this year was to be free cash flow positive,” adding that much of the buildout is now complete, though there are still terminal opportunities. He said if the freight market continues to tighten, plans around free cash flow “could escalate further,” while acknowledging near-term uncertainty.

Saia ended the quarter with $39 million of cash, $12 million drawn on its revolving credit facility, and $113 million in total debt outstanding, according to Batteh.

About Saia NASDAQ: SAIA

Saia, Inc is a publicly traded transportation company specializing in less-than-truckload (LTL) freight services across North America. Headquartered in Johns Creek, Georgia, the company focuses on the efficient movement of time-sensitive freight for a diverse customer base that spans retail, manufacturing, automotive, and healthcare industries. By leveraging a network of terminals and service centers, Saia provides tailored solutions designed to optimize supply chain performance.

The company's core offerings include regional, interregional, and national LTL shipping, supported by volumetric LTL and port intermodal services.

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