Werner Enterprises Q1 Earnings Call Highlights

Key Points

• Q1 results: Revenue rose to $809 million (+14% YoY) with adjusted operating margin of 1.5% and adjusted EPS of $0.02, while adverse winter weather and rising fuel cut EPS by roughly $0.05; operating cash flow was $89 million with total liquidity of $513 million and covenant-defined pro forma net leverage of about 2x.
• FirstFleet integration ahead of schedule: Werner retained most FirstFleet management and drivers, is seeing strong customer renewals (98% across ~2/3 of the portfolio reviewed), has realized >$1 million in savings in three months and expects to deliver $18 million of cost synergies by mid-next year to lift FirstFleet margins ~300 bps.
• Network reshaping and market outlook: Dedicated now represents 73% of TTS revenue (78% of trucks) and One‑Way fleet reductions improved productivity (miles per truck and revenue per mile up), while management cites supply‑driven tightening, accelerated capacity exits and early mid‑single‑digit bid‑season rate increases with more meaningful pricing gains expected in H2.

Werner Enterprises NASDAQ: WERN executives said the carrier is seeing early signs of improvement in trucking market fundamentals, citing accelerated capacity exits, firmer spot pricing and positive momentum in contract bids as the company works through a reshaped portfolio following its FirstFleet acquisition and a restructuring of its One-Way truckload network.

First-quarter results show revenue growth, weather and fuel weigh on EPS

Executive Vice President and CFO Chris Wikoff reported first-quarter revenue of $809 million, up 14% year-over-year. Adjusted operating income was $11.9 million, with an adjusted operating margin of 1.5%. Adjusted EPS was $0.02.

Wikoff said adverse winter weather early in the quarter and rapidly rising fuel prices in March reduced EPS by about $0.05 combined. On the call, he clarified the split as “call it $0.03-$0.04” from weather-related productivity losses and “$0.01-$0.02 from the fuel impact,” noting fuel impacts are largely timing-related given the weekly reset of fuel surcharges.

Gains on sale of property and equipment totaled $3.8 million, up from $2.8 million a year earlier.

FirstFleet integration progresses ahead of schedule

Chairman and CEO Derek Leathers emphasized the company’s January acquisition of FirstFleet as a key step in expanding Werner’s dedicated footprint and exposure to more resilient verticals such as grocery and food and beverage. Leathers said Werner is retaining the majority of FirstFleet’s management team and “all drivers,” while aligning around a shared safety and service culture.

Leathers said customer reception has been strong, pointing to a 98% renewal rate across roughly two-thirds of FirstFleet’s portfolio addressed to date. He added the integration is ahead of schedule and that the company had already realized more than $1 million in savings within three months, with actions implemented representing more than $5 million of the $6 million synergy target for the current year. Werner reaffirmed confidence in achieving $18 million of cost synergies by mid-next year, which Leathers said is expected to improve FirstFleet’s operating margin by about 300 basis points.

Wikoff said Truckload Transportation Services (TTS) revenue was $594 million, up 18%, with revenue net of fuel surcharges up 16% to $516 million. TTS adjusted operating income was $14.8 million, and adjusted operating margin net of fuel improved 250 basis points to 2.9%, driven by lower insurance and claims in the legacy business, accretive FirstFleet results, One-Way improvements and higher used-equipment gains.

Dedicated mix rises as One-Way restructuring drives early productivity gains

Werner’s fleet size and revenue mix shifted materially with the acquisition. Wikoff said TTS average trucks increased 14% to 8,454, while the fleet ended the quarter at 9,040 trucks, up 27% sequentially. Dedicated represented 73% of TTS trucking revenues in the quarter, up from 64% a year ago, and 78% of TTS trucks at quarter end.

In Dedicated, trucking revenue net of fuel increased 33% to $372 million. Dedicated revenue per truck per week rose 0.8% year-over-year, which management said reflected FirstFleet’s addition to the mix. Wikoff said Werner’s legacy Dedicated fleet delivered a 1.8% increase, while FirstFleet’s revenue per truck per week grew more than 4%. On a pro forma basis including FirstFleet in the prior-year baseline, Dedicated revenue per truck per week growth would have been “near 3%,” according to Wikoff.

In One-Way, Werner continued to lap its restructuring actions. Wikoff said One-Way trucking revenue net of fuel was $136 million, down 12%, with average trucks down 19% to 2,122 as the company intentionally reduced the fleet. Total miles fell 15%, but miles per truck increased 5.7% (about 6% as described elsewhere on the call), while revenue per total mile rose 3.6%. Empty miles decreased 40 basis points year-over-year and 60 basis points sequentially.

Leathers said the One-Way reconfiguration is already improving results, with flat sequential rates in the first quarter—something he said the company “have not seen in the last 10 years” for a quarter that typically declines after peak season. Addressing guidance that implies more modest revenue-per-mile improvement in the second quarter, Leathers attributed the difference to mix changes from the network redesign, including fewer short-haul congested loads, which “dilut[es]…the impact of the actual underlying rate increases.”

Logistics pressured by purchase transportation costs; intermodal and final mile grow

Logistics revenue was $196 million, flat year-over-year but down 6% sequentially as the company emphasized yield management amid rising purchase transportation costs, Wikoff said. Truckload logistics revenue decreased 4% on 9% lower shipments, partially offset by a 5% increase in revenue per load. However, higher purchased transportation costs reduced gross margin by 90 basis points, and logistics adjusted operating margin was -0.4%, down 70 basis points year-over-year.

Leathers said the truckload brokerage margin pressure was “mostly transitory” as contract rates reset, and he said results improved throughout the quarter. Wikoff said truckload logistics margins improved every month in the quarter as sell-side rates reset and spot exposure increased.

Other logistics modes showed growth. Wikoff said intermodal revenue rose 18% on a 22% increase in load volume, while final mile revenue increased 8% year-over-year.

Market outlook: supply-driven tightening, regulatory enforcement, and bid season momentum

Leathers described the rate recovery as “largely supply driven” as capacity exits accelerate due to regulatory enforcement and carrier bankruptcies, adding that higher fuel prices are a newer headwind for weaker carriers. He also noted long-haul truckload employment has fallen below pre-COVID levels. While acknowledging uncertainty tied to geopolitics and tariffs, Leathers said he expects pricing gains to continue, with more meaningful improvement in the third and fourth quarters.

During Q&A, Leathers said bid season is showing mid-single-digit rate increases in One-Way early on, with momentum building. He characterized Dedicated as more partnership-driven, where upside in a tightening cycle can come through incremental fleet additions with higher contribution margins, improved backhauls and selectivity on new wins, rather than purely higher per-mile pricing.

Leathers also discussed potential additional regulatory tightening from expanded drug testing standards. He said Werner hair follicle tests all incoming drivers and supports broader adoption, citing historical data from when the company transitioned: hair follicle testing was “10 times more likely to show a positive than urine analysis.”

On capital and liquidity, Wikoff said Werner ended the quarter with $62 million in cash and total liquidity of $513 million, including credit availability. Operating cash flow was $89 million, up more than 200% year-over-year. First-quarter CapEx was $2 million, while full-year 2026 net CapEx guidance was maintained at $185 million to $225 million. The company ended the quarter with $932 million in debt, reflecting the FirstFleet transaction, and reported covenant-defined pro forma net leverage of 2 times.

Werner reaffirmed full-year average truck fleet growth guidance of 23% to 28% and updated its full-year Dedicated revenue per truck per week outlook to flat to up 3% (from a prior range of -1% to +2%), citing contract renewals with low- to mid-single-digit increases.

About Werner Enterprises NASDAQ: WERN

Werner Enterprises, Inc, founded in 1956 by Clarence L. “Chris” Werner, is a leading transportation and logistics provider based in Omaha, Nebraska. The company began as a one‐truck operation and has since grown into one of North America's largest carriers, offering an array of services to support diverse supply chains.

Werner's core business activities include full truckload dry van services, dedicated contract carriage, intermodal transport and brokerage solutions. The company also provides value-added services such as warehousing, freight management and fleet maintenance through its network of terminals and service centers.

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