Saia Q3 Earnings Call Highlights

Key Points

• Record Q3 performance: Revenue rose 17% year over year to $982.5 million, while adjusted operating income increased 17.5% and diluted EPS climbed 21.4% to $3.41. Tonnage per workday increased 8.9%.
• Network expansion improved service: Saia now operates 219 facilities, with more than 60% of U.S. ZIP codes within 50 miles of a terminal. Transit improvements, fewer freight touches and a record-low 0.3% cargo claims ratio supported stronger customer service metrics.
• Capital spending is moderating: Saia authorized up to $250 million in share repurchases and expects 2027 capital expenditures of roughly 13% to 14.5% of revenue. Management expects fourth-quarter operating-ratio deterioration of about 200 basis points sequentially, better than the company’s historical 250- to 300-basis-point increase.

Saia NASDAQ: SAIA reported record third-quarter revenue and tonnage for 2026, as the less-than-truckload carrier cited continued network expansion, pricing initiatives and service improvements. The company also authorized up to $250 million in share repurchases as capital expenditures begin to moderate following a period of substantial network investment.

Third-quarter revenue rose 17% year over year to $982.5 million. Tonnage per workday increased 8.9%, while shipments per workday rose 0.8%. Revenue per shipment, excluding fuel surcharge, increased 5.8% from a year earlier and 2.7% sequentially from the second quarter.

Operating income reached $122.3 million, up 17.5% from adjusted operating income in the prior-year period. Saia’s operating ratio was 87.6%, unchanged from the adjusted third-quarter 2025 result. Diluted earnings per share were $3.41, up 21.4% from adjusted diluted EPS of $2.81 a year earlier.

Network investments and service metrics

President and CEO Fritz Holzgrefe said the company’s investments in terminals, equipment, technology and personnel are strengthening its national LTL offering. Since the start of 2022, Saia has added 45 terminals and relocated or expanded more than 25 other locations. Those efforts increased operational door count by approximately 32% and tractor and trailer capacity by more than 35%, according to the company.

More than 60% of U.S. ZIP codes are now within 50 miles of a Saia terminal, compared with about 35% in 2017. The company operates 219 facilities, executives said during the call.

Saia introduced its REV initiative in June, focused on improving transit times, capabilities and shipment visibility. The initial phase improved transit times across more than 2,000 lanes, Holzgrefe said, adding that lanes benefiting from faster transit times have posted outsized volume growth.

The company reported handling, or freight touches, improved 1.3% from the second quarter and more than 2% from the prior-year quarter. Its cargo claims ratio reached a company-record 0.3%, an improvement of more than 40% year over year. Saia also said its internal Net Promoter Score increased 15% from the third quarter of 2025.

“Our expanded footprint, combined with technology investments and network optimization, has improved efficiency, reduced freight handling, and enhanced service levels across the network,” Holzgrefe said.

Pricing, mix and terminal ramp-up

Saia reported a 10.8% contractual renewal rate during the quarter. Executives attributed pricing progress to service performance, broader market coverage and the company’s ability to address more customer needs through its national network.

Average length of haul declined 1% to 885 miles. Weight per shipment increased 8.1% year over year and 1.2% sequentially, reflecting mix optimization efforts. Because higher shipment weight typically reduces yield, yield excluding fuel surcharge declined 2.2% from the prior year. However, yield excluding fuel surcharge increased 1.5% sequentially despite the higher shipment weight.

Holzgrefe said the company is focused on identifying customers that value service reliability rather than targeting a single ideal freight profile. He said a mix of heavier shipments and time-sensitive one- and two-day freight can support the company’s strategy when customers are willing to pay for reliable, damage-free delivery.

Recently opened terminals continued to improve, according to Chief Financial Officer Matt Batteh. Terminals opened in 2023 and 2024 improved their operating ratio by 40 basis points year over year, while operating income from those facilities rose 22%. The newer locations are operating in the low 90s on an operating-ratio basis and remain below the company average, Batteh said, but are building density and generating higher revenue-per-shipment growth than legacy terminals.

Holzgrefe said Saia’s Los Angeles region remained a headwind, with revenue in that higher-revenue-per-shipment market down by low single digits year over year.

Costs, cash flow and capital allocation

Total operating expenses increased 16.9% from adjusted third-quarter 2025 operating expenses. Salaries, wages and benefits rose $46.7 million, or 11.6%, driven primarily by wage increases and higher performance-related compensation. Total headcount increased 0.4% year over year, though headcount excluding line-haul drivers declined 0.6%.

Fuel expense rose 55.2% as the national average diesel price increased 48.1% from a year earlier. Claims and insurance expense declined 10%, reflecting fewer preventable accidents and favorable claims experience.

Truck and rail purchased transportation represented 15.7% of total line-haul miles, up from 12% a year ago. Rail accounted for nearly 39% of purchased transportation miles, and Batteh said rail remains cost-advantaged on a per-mile basis. Underlying purchased transportation rates per mile, excluding fuel surcharge, increased about 4% year over year.

Saia generated more than $240 million in free cash flow year to date and ended the quarter with $203 million in cash and $100 million of total debt. The newly authorized $250 million repurchase program gives the company flexibility to return capital when management considers repurchases attractive, subject to market conditions and investment priorities.

Batteh said the company expects capital expenditures in 2027 to be roughly 13% to 14.5% of revenue, with longer-term capital spending expected to range from 12% to 15% of revenue. He said the largest real-estate investment years are behind the company, although strategic investments will continue.

Fourth-quarter outlook

For October, Saia said shipments were up about 2% year over year and tonnage was up about 10%, which Batteh characterized as in line with seasonal expectations. The company expects normal seasonal shipment trends through November and December and assumes fuel remains around October’s average level.

Historically, Saia’s operating ratio has worsened by roughly 250 to 300 basis points sequentially from the third to fourth quarter. Based on current trends, management said it expects the fourth-quarter sequential increase to be about 200 basis points, which would represent year-over-year operating-ratio improvement of more than 200 basis points.

The company also announced the appointment of Todd Fowler as an independent director. Holzgrefe said Fowler brings experience in transportation, logistics, supply-chain technology and capital markets.

About Saia (NASDAQ:SAIA)

Saia, Inc is a transportation and logistics company headquartered in Johns Creek, Georgia. Through its primary subsidiary, Saia LTL Freight, the company provides less-than-truckload transportation, moving palletized and other freight shipments that do not require a full trailer. Its services include standard and time-definite delivery, expedited transportation, guaranteed services, and shipment tracking.

Saia also provides non-asset-based logistics services through Saia Logistics Services, which helps customers arrange freight transportation using third-party carriers.

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