What Proficient Auto Logistics (PAL) Said on Its Q3 Earnings Call

Key Points

• Acquisition lifted Q3 revenue 30.3% to $149 million, but adjusted EBITDA fell to $7.9 million from $11.9 million. Excluding Hansen & Adkins, legacy revenue declined 15.7% as volume and capacity weakened.
• Fuel under-recovery raised the operating ratio by an estimated 2 to 2.5 percentage points, while driver shortages constrained capacity. Proficient is pursuing customer surcharge changes and higher contract rates; recent renewals brought weighted-average increases of just over 10%.
• Management raised potential Hansen & Adkins synergies to $20 million–$30 million and expects Q4 revenue of $180 million–$195 million. It also plans to prioritize debt reduction, targeting net leverage below 3x by Q3 2027.

Proficient Auto Logistics NASDAQ: PAL reported higher third-quarter revenue following its acquisition of Hansen & Adkins, but profitability declined as fuel costs outpaced customer surcharges and driver shortages constrained capacity.

Revenue rose 30.3% from a year earlier to $149 million in the third quarter of 2026, including approximately $51 million from Hansen & Adkins and its MCL McGill Canadian business, Chief Financial Officer Brad Wright said. The acquired businesses contributed for roughly half the quarter following the Aug. 13 transaction close.

Adjusted EBITDA fell to $7.9 million from $11.9 million a year earlier, reflecting what Wright described as a significant impact from fuel under-recovery and timing delays. Chairman and CEO Rick O'Dell said the results did not meet the company’s expectations.

“The third quarter reflected a combination of stable underlying demand and continued cost and capacity pressures,” O'Dell said. He added that tighter industry capacity was also creating opportunities to improve pricing.

Acquisition Boosts Revenue as Legacy Volume Falls

Proficient delivered 839,036 vehicles during the quarter, up 38.6% year over year, including 320,011 units from Hansen & Adkins. On a comparable basis, revenue from Proficient’s existing business declined 15.7%, while volume fell 14.3%. Wright attributed the revenue decline to reduced capacity and sluggish traffic at certain plants and ports.

Consolidated revenue per vehicle, excluding fuel, was $155. Wright cautioned that the addition of Hansen & Adkins lowered the combined figure because its average haul of approximately 130 miles is shorter than the roughly 150-mile average for the rest of Proficient’s portfolio. He expects a further mix effect in the fourth quarter as Hansen & Adkins contributes for a full period, but said that should not be interpreted as declining prices on comparable freight.

For the fourth quarter, the company forecast revenue of $180 million to $195 million. Wright said Proficient expects its operating ratio to improve sequentially by 50 to 100 basis points and its adjusted EBITDA margin to improve modestly, while fuel and driver-related pressures persist.

Fuel Costs Drive Pricing Push

President and Chief Operating Officer Amy Rice estimated that inadequate fuel recovery increased the third-quarter operating ratio by 2 to 2.5 percentage points. Proficient operates under nearly 20 manufacturer-established fuel surcharge programs with differing recovery structures, she said, leaving some previously profitable contracts unprofitable after fuel prices rose.

O'Dell said six customers had recently adjusted their programs to improve cost coverage or reduce recovery delays, although some changes were temporary and had not fully offset the margin impact.

The company is also seeking higher contract rates. O'Dell said weighted average price increases were just over 10% on approximately $25 million of contract business renewed since Sept. 1. Rice said Proficient expects at least mid-single-digit increases on standard contract renewals, while seeking stronger, often double-digit increases on poorly performing business.

Approximately one-third of the portfolio is rebid each year, Rice said. The company is working with customers to improve economics at the bottom 20% of its contract locations by profitability and plans to redeploy capacity where it cannot reach acceptable terms. She estimated that 7% to 12% of volume was benefiting from above-contract rates, including spot opportunities and temporary incentives.

Higher Synergy Target and Margin Goals

Proficient has identified $20 million to $30 million in potential synergies from the Hansen & Adkins combination, up from its initial estimate of $6 million to $10 million. O'Dell said the company expects to achieve the high end of the original range by year-end, primarily through headcount realignment and procurement savings.

Rice said Proficient expects to enter 2027 at a $10 million synergy run rate and capture another $5 million to $10 million over the course of the year, with only a partial-year benefit from the latter amount. Management sees further opportunities in 2028 and 2029 as integration initiatives mature.

Operationally, O'Dell said as many as 900 vehicles a day were moving on sister hauls between the companies, compared with roughly that number per week in early September. He said the practice was reducing empty miles and generating incremental revenue at a run rate exceeding $500,000 a month as the fourth quarter began.

O'Dell set operating ratio targets of 95 to 97 for 2027 and 92 to 94 for 2028. Rice said full normalization of fuel prices could allow the company to beat the 2027 range, but management was not relying on lower fuel costs to improve performance. Wright said the company’s 2027 leverage plan implied EBITDA in the $60 million to $70 million range.

Debt Reduction Takes Priority

Proficient ended the quarter with approximately $213 million in gross debt and roughly $12 million in cash, putting net debt just above $200 million, Wright said. Net leverage was approximately four times trailing pro forma EBITDA.

The company expects to use excess cash flow and scheduled equipment-loan payments to reduce debt. Its 2027 plan calls for net leverage below three times by the end of the third quarter and gross leverage below three times by year-end.

Proficient expects approximately $20 million in capital expenditures in 2027, assuming a limited increase in the vehicle sales rate. It is selling older, underused equipment and does not intend to add capacity without appropriate customer commitments and expected returns, Wright said.

About Proficient Auto Logistics (NASDAQ:PAL)

Proficient Auto Logistics, Inc. NASDAQ: PAL is a vehicle logistics company that provides transportation and related services for automobiles. The company primarily moves vehicles between manufacturers, dealerships, auctions, rental and fleet operators, and other locations within the United States. Its operations are centered on the management and deployment of car-hauling equipment, drivers, and logistics capabilities used to transport finished vehicles. Proficient Auto Logistics serves automotive industry participants that require reliable, scheduled movement of vehicles throughout regional and national distribution networks.

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