What ArcBest (ARCB) Said on Its Q3 Earnings Call

Key Points

• ArcBest delivered a stronger third quarter: Revenue rose 15% to $1.2 billion, non-GAAP operating income increased to $85 million from $50 million, and adjusted EPS climbed to $2.62 from $1.46.
• Both business segments improved: Asset-Based daily tonnage grew 10%, with ABF’s adjusted operating ratio improving 210 basis points to 90.4%. Asset-Light operating income increased by $13 million year over year to $14 million, supported by pricing discipline and productivity gains.
• Management expects continued progress, citing technology, productivity and restructuring savings, including about $10 million per quarter at full run rate. ArcBest repurchased $26 million of shares in Q3 and another $14 million in October.

ArcBest NASDAQ: ARCB reported higher third-quarter revenue, earnings and operating margins as stronger Asset-Based tonnage, pricing discipline, Asset-Light improvements and savings from organizational changes supported results.

Third-quarter revenue totaled $1.2 billion, up 15% from a year earlier, while non-GAAP operating income increased to $85 million from $50 million. Adjusted earnings per share rose to $2.62 from $1.46 in the prior-year quarter, Chief Financial Officer Matt Beasley said on the company’s earnings call.

President and CEO Seth Runser said the company benefited from cost reductions associated with organizational changes implemented in July as well as a freight market that was tighter than a year ago. He said ArcBest remains focused on profitable growth, efficiency and technology-driven innovation.

Asset-Based Results Improve on Higher Tonnage

ArcBest’s Asset-Based segment generated third-quarter revenue of $799 million, an increase of 10% on a per-day basis. Non-GAAP operating income in the segment improved by $22 million year over year, while ABF’s adjusted operating ratio improved 210 basis points to 90.4%.

Daily tonnage rose 10% from the previous year, driven by a 13% increase in weight per shipment. Shipments per day declined 3%. Billed revenue per shipment increased 14%, reflecting a heavier freight mix and a 1% gain in revenue per hundredweight, which was attributable to higher fuel-surcharge revenue.

Runser said the company’s expanding dynamic quote pool has enabled ArcBest to be more selective about freight entering its network. The strategy is designed to align demand with network capacity, maintain service levels and improve profitability. Contract renewals averaged a 5.1% increase during the quarter, he said.

Asset-Based operating expenses increased due to contractual union wage and benefit increases, higher fuel prices and greater purchase transportation expense, Beasley said.

In October, Asset-Based daily tonnage increased about 15% year over year, with weight per shipment up 14% and shipments per day up 1%. October billed revenue per shipment increased 18%, including a 4% increase in billed revenue per hundredweight. Excluding fuel surcharges, revenue per hundredweight declined in the low single digits, primarily due to the heavier freight profile.

The company expects year-over-year growth in weight per shipment to moderate during the fourth quarter as it begins to compare against prior-year periods that benefited from its freight-selection initiatives. Beasley said this reflects a more difficult comparison rather than a change in the company’s approach.

ArcBest expects ABF’s fourth-quarter 2026 non-GAAP operating ratio to rise sequentially by about 50 to 150 basis points. Historically, excluding years with significant market disruptions, the operating ratio has increased by roughly 180 basis points on average from the third to fourth quarter, according to the company.

Asset-Light Segment Posts Profit Growth

Asset-Light revenue was $446 million in the third quarter, up 25% on a per-day basis. Segment non-GAAP operating income reached $14 million, an increase of $13 million from a year earlier.

Shipments per day increased 1%, led by managed logistics growth, while revenue per shipment rose 24% as rates increased amid tighter capacity conditions and higher fuel costs. Employee productivity, measured by shipments per person per day, improved 8%, and selling, general and administrative expense per shipment fell 2%.

Runser said managed logistics had another record quarter. He attributed the segment’s profitability improvement to disciplined pricing, carrier procurement, lower cost to serve and productivity tools.

October Asset-Light daily revenue rose approximately 27% year over year, supported by an 18% increase in revenue per shipment and an 8% increase in shipments per day. The company expects fourth-quarter Asset-Light non-GAAP operating income of about $7 million to $10 million, reflecting normal seasonal trends, current pricing conditions and continued productivity progress.

Beasley said the segment had produced approximately $24 million of operating income through the first nine months of the year and could finish the year in the low-$30 million range, based on the fourth-quarter outlook.

Technology, Insurance and Capital Allocation

ArcBest continued to introduce technology initiatives intended to improve productivity and customer service. During the quarter, the company began rolling out its in-house Asset-Light Transportation Operations Management System, known as ATOM, beginning with its expedite offering. Runser said the system is intended to reduce manual tasks, connect processes and help employees match freight with available capacity more quickly.

ArcBest View, the company’s shipment execution and visibility platform launched in May, surpassed 3,600 monthly users. The company added functions for shipment visibility, freight classification and cargo protection, along with tools designed to provide customers more information during the shipment lifecycle.

Runser also said ArcBest has more than 30 artificial intelligence agents performing tasks across the company. He cited city route optimization as a technology initiative that has generated more than $15 million in benefits. In addition, 60% of the company’s truckload shipments are now digitally augmented, he said.

The company renewed its insurance program while maintaining overall coverage limits and reducing its base premium. ArcBest added a structured component to one excess coverage layer in exchange for modestly higher retained risk and greater premium certainty over three years. Beasley said the affected layer had been impacted by only two claims in the company’s history, and that the premium savings amounted to low-single-digit millions.

ArcBest repurchased $26 million of shares in the third quarter and another $14 million in October. Looking ahead, Beasley said the company expects 2027 to bring another year of improvement, supported by Asset-Light growth, Asset-Based pricing efforts, technology and productivity gains, and the full run rate of restructuring savings. The company previously disclosed restructuring savings of about $10 million per quarter beginning in the first quarter.

About ArcBest (NASDAQ:ARCB)

ArcBest Corporation NASDAQ: ARCB is a multibillion-dollar logistics company headquartered in Fort Smith, Arkansas. The company provides freight transportation and supply chain solutions through a combination of asset-based and asset-light operations, serving businesses across North America and supporting select international shipping needs.

Its asset-based business is led by ABF Freight, a less-than-truckload carrier that transports palletized and industrial freight. ArcBest also offers expedited transportation, truckload and brokerage services, intermodal transportation, managed transportation, warehouse and distribution support, and supply chain consulting.

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