Knight-Swift Transportation Holdings Inc.: Form 10-Q for the period ended Sep 30, 2025

CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

This Quarterly Report contains certain statements that may be considered "forward-looking statements" within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended (the "Exchange Act") and Section 27A of the Securities Act of 1933, as amended. All statements, other than statements of historical or current fact, are statements that could be deemed forward-looking statements, including without limitation:

• any projections of or guidance regarding earnings, earnings per share, revenues, cash flows, dividends, capital expenditures, or other financial items,
• any statement of plans, strategies, and objectives of management for future operations,
• any statements concerning proposed acquisition plans, new services, or developments,
• any statements regarding future economic conditions or performance, and
• any statements of belief and any statements of assumptions underlying any of the foregoing.

In this Quarterly Report, forward-looking statements include, but are not limited to, statements we make concerning:

• our ability to gain market share and adapt to market conditions, the ability of our infrastructure to support future growth, future market position, and the ability, desire, and effects of expanding our service offerings (including expansion of our LTL network), whether we grow organically or through potential acquisitions,
• our ability to recruit and retain qualified driving associates,
• future safety performance,
• future performance of our segments or businesses,
• future capital expenditures, equipment prices (including used equipment) and availability, our equipment purchasing or leasing plans, and mix of our owned versus leased revenue equipment, and our equipment turnover,
• the impact of pending legal proceedings,
• future insurance claims, coverage, coverage limits, premiums, and self-insured retention limits, including the potential impact of adverse developments in our prior period claims, and charges related to the exit from our third-party carrier insurance business,
• the expected freight environment, including freight demand, capacity, seasonality, and volumes,
• economic conditions and growth, including future inflation, consumer spending, supply chain conditions, inventory levels or management, labor supply and relations, and trade policy,
• expected liquidity and methods for achieving sufficient liquidity, including our expected need or desire to incur indebtedness and our ability to comply with debt covenants,
• future fuel prices and availability and the expected impact of fuel efficiency initiatives,
• future expenses, including depreciation and amortization, purchased transportation, impairments, interest rates, cost structure, and our ability to control costs,
• future rates, operating profitability and margin, load count, asset utilization, and return on capital,
• future third-party service provider relationships and availability, including pricing terms,
• future contracted pay rates with independent contractors, ability to lease equipment to independent contractors, and compensation arrangements with driving associates,
• future capital allocation, capital structure, capital requirements, and growth strategies and opportunities,
• future share repurchases and dividends,
• future tax rates,
• expected tractor and trailer fleet age, fleet size, and demand for trailer fleet,
• future investment in and deployment of new or updated technology or services,
• future classification of our independent contractors, including the impact of new laws and regulations regarding classification,
• political conditions and regulations, including conflicts, trade regulation, quotas, duties, or tariffs, and any future changes to the foregoing,
• integration efforts related to prior acquisitions and any future effects of such acquisitions, and
• others.

Such statements may be identified by their use of terms or phrases such as "believe," "may," "could," "will," "would," "should," "expects," "estimates," "designed," "likely," "foresee," "goals," "seek," "target," "forecast," "projects," "anticipates," "plans," "intends," "hopes," "strategy," "potential," "objective," "pursue," "continue," "outlook," "confident," "feel," and similar terms and phrases. Forward-looking statements are based on currently available operating, financial, and competitive information. Forward-looking statements are inherently subject to risks and uncertainties, some of which cannot be predicted or quantified, which could cause future events and actual results to materially differ from those set forth in, contemplated by, or underlying the forward-looking statements. Factors that could cause or contribute to such differences include, but are not limited to, those discussed in Part I, Item 1A "Risk Factors" in our 2024 Annual Report, and various disclosures in our press releases, stockholder reports, and other filings with the SEC.

All such forward-looking statements speak only as of the date of this Quarterly Report. You are cautioned not to place undue reliance on such forward-looking statements. We expressly disclaim any obligation or undertaking to publicly release any updates or revisions to any forward-looking statements contained herein, to reflect any change in our expectations with regard thereto, or any change in the events, conditions, or circumstances on which any such statement is based.

Reference to Glossary of Terms

Certain acronyms and terms used throughout this Quarterly Report are specific to our company, commonly used in our industry, or are otherwise frequently used throughout our document. Definitions for these acronyms and terms are provided in the "Glossary of Terms," available in the front of this document.

Reference to Annual Report

The following discussion and analysis of our financial condition and results of operations should be read in conjunction with the condensed consolidated financial statements (unaudited) and footnotes included in this Quarterly Report, as well as the consolidated financial statements and footnotes included in our 2024 Annual Report.

Executive Summary

Company Overview

Knight-Swift Transportation Holdings Inc. is one of North America's largest and most diversified freight transportation companies, providing multiple full truckload, LTL, intermodal, and other complementary services. Our objective is to operate our business with industry-leading margins and continued organic growth and growth through acquisitions while providing safe, high-quality, cost-effective solutions for our customers. Knight-Swift uses a nationwide network of business units and terminals in the US and Mexico to serve customers throughout North America. In addition to operating the country's largest truckload fleet, Knight-Swift also contracts with third-party equipment providers to provide a broad range of transportation services to our customers while creating quality driving jobs for our driving associates and successful business opportunities for independent contractors. Our four reportable segments are Truckload, LTL, Logistics, and Intermodal. Additionally, we have various non-reportable segments.

Key Financial Highlights — Year-to-Date September 30, 2025

Consolidated operating income increased 14.6% to $189.6 million during the year-to-date period ended September 30, 2025, as compared to the same period last year. Net income attributable to Knight-Swift increased 51.1% to $72.7 million.

• Truckload — 96.5% operating ratio during the year-to-date period ended September 30, 2025. The Adjusted Operating Ratio1 was 95.4%, with a 3.0% year-over-year decrease in revenue, excluding fuel surcharge and intersegment transactions. Cost-reduction efforts led to a 0.4% reduction in our Adjusted Operating Expenses per mile for the year-to-date period ended September 30, 2025, compared to the year-to-date period ended September 30, 2024.
• LTL — 97.4% operating ratio during the year-to-date period ended September 30, 2025. The Adjusted Operating Ratio1 deteriorated 410 basis points year-over-year to 92.6%, due to start-up costs and early-stage operations at recently opened facilities as well as some lingering costs from the integration of the DHE Acquisition. We opened eleven new locations during the year-to-date period ended September 30, 2025, as we continue to invest in our network.
• Logistics — 95.7% operating ratio during the year-to-date period ended September 30, 2025. The Adjusted Operating Ratio1 was 94.9% with a gross margin of 18.2%. Revenue increased 2.1% year-over-year. Revenue per load increased 8.3% and was partially offset by a 6.0% decline in load count.
• Intermodal — 102.8% operating ratio during the year-to-date period ended September 30, 2025, as year-over-year load count decreased 6.9%, partially offset by a 0.3% increase in revenue per load.
• All Other Segments — Operating income increased to $24.4 million during the year-to-date period ended September 30, 2025 from a $10.3 million operating loss during the comparable period of 2024, largely as a result of our warehousing business and leasing businesses and reflects improvement from the prior year period, which had included a $19.5 million operating loss for the third-party insurance business we exited during the first quarter of 2024 partially offset by the $14.0 million loss contingency in 2025.
• Liquidity and Capital — During the year-to-date period ended September 30, 2025, we generated $543.4 million in operating cash flows and Free Cash Flow1 of $136.1 million. We paid down $112.4 million in finance lease liabilities, $118.8 million in operating lease liabilities, and had $471.0 million of net borrowings on our 2025 Revolver, 2021 Revolver, and 2023 RSA, $360.0 million of which was used to pay down outstanding term loan balances, during the year-to-date period ended September 30, 2025. On July 8, 2025, the Company entered into a $2.5 billion 2025 Debt Agreement, replacing the Company's previous $2.3 billion 2021 Debt Agreement and the Company’s previous $250 million 2023 Term Loan. As of September 30, 2025, we had a balance of $192.7 million in unrestricted cash and cash equivalents, $2.7 billion face value outstanding debt, net of unrestricted cash, and $7.1 billion of stockholders' equity. We do not foresee material liquidity constraints or any issues with our ongoing ability to meet our debt covenants. See discussion under "Liquidity and Capital Resources" for additional information.

1Refer to "Non-GAAP Financial Measures" below.

Key Financial Data and Operating Metrics

(Dollars in thousands, except per share data)

1Adjusted Net Income Attributable to Knight-Swift, Adjusted EPS, and Adjusted Operating Ratio are non-GAAP financial measures and should not be considered alternatives, or superior to, the most directly comparable GAAP financial measures. However, management believes that presentation of these non-GAAP financial measures provides useful information to investors regarding the Company's results of operations. Adjusted Net Income Attributable to Knight-Swift, Adjusted EPS, and Adjusted Operating Ratio are reconciled to the most directly comparable GAAP financial measures under "Non-GAAP Financial Measures," below.

2Our tractor fleet within the Truckload segment had a weighted average age of 2.7 years and 2.6 years as of September 30, 2025 and 2024, respectively.

3Our average trailers includes 9,965 and 8,510 trailers related to leasing activities recorded within our All Other Segments for the quarters ended September 30, 2025 and 2024, respectively. Our trailer fleet within the Truckload segment had a weighted average age of 9.5 years and 9.1 years as of September 30, 2025 and 2024, respectively. Our average trailers includes 9,862 and 8,718 trailers related to leasing activities recorded within our non-reportable segments for the year-to-date periods September 30, 2025 and 2024, respectively.

4Our LTL tractor fleet had a weighted average age of 3.9 years and 4.2 years as of September 30, 2025 and 2024, respectively. Our LTL tractor fleet includes 677 and 615 tractors from ACT's dedicated and other businesses for the quarters ended September 30, 2025 and 2024, respectively. Our LTL tractor fleet includes 668 and 613 tractors from ACT's dedicated and other businesses for the year-to-date periods September 30, 2025 and 2024, respectively.

5Our LTL trailer fleet had a weighted average age of 8.0 years and 8.5 years as of September 30, 2025 and 2024, respectively. Our LTL trailer fleet includes 1,236 and 843 trailers from ACT's dedicated and other businesses for the quarters ended September 30, 2025 and 2024, respectively. Our LTL trailer fleet includes 1,097 and 831 trailers from ACT's dedicated and other businesses for the year-to-date periods September 30, 2025 and 2024, respectively.

Market Trends and Company Outlook

Market Trends

Freight markets remain volatile, with shippers cautious and demand patterns diverging from historical norms. While overall demand in the truckload market has been steady through early October, we have seen more proactive customer engagement around peak season projects, including interest from clients who were previously inactive. The usual seasonal uptick has yet to materialize, but early bid season results show stable demand, less lane turnover, and modest rate improvements. Customers appear to be consolidating their carrier base, increasingly favoring reliable, asset-based providers.

On the capacity front, regulatory changes, particularly around driver qualifications and non-domiciled CDLs, are expected to reduce lower-cost market capacity. Carrier downsizing, failures among mid-sized operators, and large carriers shifting toward dedicated services are further tightening supply. Private fleet growth is also slowing as replacement costs rise, which may constrain capacity in the one-way market, where we are most active. Sustained regulatory enforcement could shift the supply-demand balance by 2026, creating a more favorable environment for our truckload segment and supporting margin growth.

Our Logistics business is central to our strategy as customers seek integrated, flexible solutions. By leveraging technology-enabled power-only services and our extensive trailer pools, we believe we are positioned to provide scalable capacity and responsive service. We expect continued investment in technology and process efficiency will further differentiate our offering and support margin improvement as shippers prioritize reliability and asset-backed solutions.

In Intermodal, we are optimizing cost structure and network management while strengthening rail partnerships. This segment is well-placed to serve customers seeking alternative transportation modes and longer-haul solutions, especially as supply chain strategies evolve. Enhanced equipment utilization and streamlined operations should drive service improvements and cost competitiveness, with new rail efficiencies expected to support volume growth.

Our LTL business is building momentum, supported by unified AAA Cooper branding across the network. We are expanding our LTL footprint and customer base, focusing on operational execution and cost efficiency. As facility expansion moderates, we are prioritizing optimization of existing locations and leveraging bid activity to drive shipment volume and efficiency. We believe industry trends favoring regional coverage and integrated solutions position our LTL segment for continued growth.

Despite near-term uncertainty, we believe we are well-positioned to capitalize on emerging opportunities and expect market conditions to improve over the medium term.

Company Outlook

Our Company outlook for the fourth quarter of 2025 includes the following:

Truckload

• Truckload Segment revenue fairly stable sequentially with operating margins improving 250 - 350 basis points sequentially,
• Revenue per loaded mile improves low single-digit percent sequentially on seasonal opportunities,
• Tractor count stable and utilization down modestly sequentially.

LTL

• LTL Segment revenue, excluding fuel surcharge, growth between 10% - 15% year-over-year in fourth quarter,
• Similar Adjusted Operating Ratio as prior year fourth quarter.

Logistics

• Logistics Segment revenue and Adjusted Operating Income increase mid-teens percent sequentially.

Intermodal

• Intermodal Segment load count improves mid single-digit percent sequentially,
• Adjusted Operating Ratio fairly stable sequentially.

All Other

• All Other Segments operating income, before including the $11.7 million quarterly intangible asset amortization, approximately break even in fourth quarter.

Additional

• Gain on sale to be in the range of $18 million to $23 million in fourth quarter,
• Net interest expense declines modestly sequentially in fourth quarter,
• Net cash capital expenditures for full-year 2025 expected range of $475 million - $525 million,
• Expected effective tax rate on adjusted income before taxes of approximately 23% to 24% for fourth quarter.

In addition to the above, we expect the Truckload segment will continue to pursue opportunities, and the Logistics segment will continue to provide value to our customers through our power-only and traditional brokerage service offerings. With our mid-2024 acquisition of DHE and the continued organic expansion of our AAA Cooper brand, we expect additional yield and revenue opportunities from our growing super-regional LTL transportation network. The pace of our LTL facility expansion will be lower in 2025 than in 2024 as we focus on ongoing bid activities that we believe will provide further opportunities to grow shipment volumes and improve efficiencies in our LTL segment. The Intermodal segment continues to build out its network that aligns with our new rail partners as we pursue a more diversified portfolio of customers. Our All Other Segments are further expanding to complement our other service offerings.

We anticipate that depreciation and amortization expense will increase, as a percentage of revenue, excluding truckload and LTL fuel surcharge, as we intend to purchase, rather than enter into operating leases, for a majority of our revenue equipment or terminal improvements during 2025. Additionally, we anticipate that our equipment suppliers may need to raise prices in response to recently announced tariffs. With significant tightening in the insurance markets, we may also experience changes in premiums, retention limits, and excess coverage limits in the remainder of 2025. While fuel expense is generally offset by fuel surcharge revenue, our fuel expense, net of truckload and LTL fuel surcharge revenue, may increase in the future, particularly during periods of sharply rising fuel prices. In periods of declining prices the opposite is true. Overall, we remain committed to long-term profitability as we continue to leverage opportunities across the Knight-Swift brands, and efficiently deploy our assets, while maintaining a relentless focus on cost control. This includes seeking acquisition opportunities to improve earnings, gain customers, and reach more professional drivers, as illustrated by the acquisition of U.S. Xpress and our intention to further expand the geographic footprint of our LTL network, as illustrated by the DHE Acquisition.

Results of Operations — Summary

Note: The reported results do not include the LTL operations of DHE prior to its acquisition by the Company on July 30, 2024 in accordance with the accounting treatment applicable to the transaction. Accordingly, comparisons between the Company's current and prior period results may not be meaningful.

Operating Results: Third Quarter 2025 compared to Third Quarter 2024

The $22.6 million decrease in net income attributable to Knight-Swift to $7.9 million during the third quarter of 2025 from $30.5 million during the same period last year includes the following:

• Contributor — $26.2 million decrease in operating income within our LTL segment primarily due to the $28.8 million trade name impairment as a result of our decision to combine our LTL brands under the AAA Cooper trade name.
• Contributor — $9.5 million decrease in operating income within our Truckload segment largely as a result of $12.0 million of higher insurance and claims costs at U.S. Xpress.
• Contributor — $0.9 million increase in operating loss within our Intermodal segment, driven by a $2.5 million impairment for certain software as well as a 11.5% decrease in load count, partially offset by a 3.5% increase in revenue per load.
• Offset — $5.4 million increase in operating income within the All Other Segments, driven by a 29.9% increase in revenue primarily driven by our warehousing and leasing businesses.
• Offset — $3.5 million decrease in consolidated interest expense primarily driven by lower average interest rates.
• Offset — $0.5 million increase in other income, net, primarily due to current quarter income within our portfolio of investments.
• Offset — $0.2 million increase in operating income within our Logistics segment due to a 3.6% increase in revenue per load.
• Offset — $6.7 million decrease in consolidated income tax expense, was primarily due to a decrease in pretax income which was partially offset by an increase in deferred tax expense following the merger of certain subsidiaries. Our effective tax rate for the third quarter of 2025 was 47.0%, compared to 32.0% for the third quarter of 2024.

Operating Results: Year-To-Date September 30, 2025 Compared to Year-To-Date September 30, 2024

The $24.6 million increase in net income attributable to Knight-Swift to $72.7 million during the year-to-date period ended September 30, 2025 from $48.1 million during the same period last year includes the following:

• Contributor — $33.9 million increase in operating income within our Truckload segment primarily due to a 0.4% year-over-year reduction in our Adjusted Operating Expenses per mile.
• Contributor — $3.6 million increase in operating income within our Logistics segment due to an 8.3% increase in revenue per load, partially offset by a 6.0% decrease in load count.
• Contributor — $0.5 million decrease in operating loss within our Intermodal segment.
• Contributor — $34.7 million increase in operating income within the All Other Segments, largely as a result of exiting the third-party insurance business at the end of the first quarter of 2024.
• Contributor — $10.8 million increase in other income, net, primarily due to income within our portfolio of investments.
• Contributor — $4.1 million decrease in consolidated interest expense primarily driven by lower interest rates.
• Offset — $48.6 million decrease in operating income within our LTL segment primarily due to the tradename impairment mentioned above, and start-up costs and early-stage operations at recently opened facilities.
• Offset — $9.4 million increase in consolidated income tax expense, was primarily due to the increase in pretax income, and an increase in deferred tax expense following the merger of certain subsidiaries. Our effective tax rate for the year-to-date period ended September 30, 2025 was 30.4%, compared to 32.2% for the year-to-date period ended September 30, 2024.

Results of Operations — Segment Review

The Company has four reportable segments: Truckload, LTL, Logistics, and Intermodal, as well as certain other operating segments included within our All Other Segments.

Consolidating Tables for Total Revenue and Operating Income (Loss)

(In thousands)

(In thousands)

35

Revenue

• Our truckload services include irregular route and dedicated, refrigerated, expedited, flatbed, and cross-border transportation of various products, goods, and materials for our diverse customer base with approximately 15,400 irregular route and 5,900 dedicated tractors.
• Our LTL business, which was initially established in 2021 through the ACT Acquisition and later the MME and DHE acquisitions, provides our customers with super-regional LTL transportation service through our growing network of approximately 180 facilities and a door count of approximately 6,600. Our LTL segment operates approximately 4,200 tractors and approximately 11,000 trailers, including equipment used for dedicated and other businesses. The LTL segment also provides national coverage to our customers by utilizing partner carriers for areas outside of our direct network.
• Our Logistics and Intermodal segments provide a multitude of shipping solutions, including additional sources of truckload capacity and alternative transportation modes, by utilizing our vast network of third-party capacity providers and rail providers, as well as certain logistics and freight management services. We offer power-only services through our Logistics segment leveraging our fleet of nearly 89,000 trailers.
• Our All Other Segments include support services provided to our customers and third-party carriers including equipment maintenance, equipment leasing, warehousing, trailer parts manufacturing, and warranty services, as well as insurance prior to the first quarter of 2024. Our All Other Segments also include certain corporate expenses (such as legal settlements and accruals, certain impairments, and amortization of intangibles related to the 2017 Merger and various acquisitions).
• In addition to the revenues earned from our customers for the trucking and non-trucking services discussed above, we also earn fuel surcharge revenue from our customers through our fuel surcharge programs, which serve to recover a majority of our fuel costs. This generally applies only to loaded miles for our Truckload and LTL segments and typically does not offset non-paid empty miles, idle time, and out-of-route miles driven. Fuel surcharge programs involve a computation based on the change in national or regional fuel prices. These programs may update as often as weekly, but typically require a specified minimum change in fuel cost to prompt a change in fuel surcharge revenue. Therefore, many of these programs have a time lag between when fuel costs change and when the change is reflected in fuel surcharge revenue for our Truckload and LTL segments.

Expenses

Our most significant expenses typically vary with miles traveled and include fuel, driving associate-related expenses (such as wages and benefits), and services purchased from third-party service providers (including other trucking companies, railroad and drayage providers, and independent contractors). Maintenance and tire expenses, as well as the cost of insurance and claims generally vary with the miles we travel, but also have a controllable component based on safety performance, fleet age, operating efficiency, and other factors. Our primary fixed costs are depreciation and lease expense for revenue equipment and terminals, non-driver employee compensation, amortization of intangible assets, and interest expenses.

Operating Statistics

We measure our consolidated and segment results through the operating statistics listed in the table below. Our chief operating decision makers monitor the GAAP results of our reportable segments, supplemented by certain non-GAAP information. Refer to "Non-GAAP Financial Measures" for more details. Additionally, we use a number of primary indicators to monitor our revenue and expense performance and efficiency.

37

Segment Review

Truckload Segment

We generate revenue in the Truckload segment primarily through irregular route, dedicated, refrigerated, expedited, flatbed, and cross-border service operations across our brands. Generally, we are paid a predetermined rate per mile or per load for our truckload services. Additional revenues are generated by charging for tractor and trailer detention, loading and unloading activities, dedicated services, and other specialized services, as well as through the collection of fuel surcharge revenue to mitigate the impact of increases in the cost of fuel. The main factors that affect the revenue generated by our Truckload segment are rate per mile from our customers, the percentage of miles for which we are compensated, and the number of loaded miles we generate with our equipment.

The most significant expenses in the Truckload segment are primarily variable and include fuel and fuel taxes, driving associate-related expenses (such as wages, benefits, training, and recruitment), and costs associated with independent contractors primarily included in "Purchased transportation" in the condensed consolidated statements of comprehensive income. Maintenance expense (which includes costs for replacement tires for our revenue equipment) and insurance and claims expenses have both fixed and variable components. These expenses generally vary with the miles we travel but also have a controllable component based on safety, fleet age, efficiency, and other factors. The main fixed costs in the Truckload segment are depreciation and rent expense from tractors, trailers, and terminals, as well as compensating our non-driver employees.

(Dollars in thousands, except per tractor data)

1 Refer to "Non-GAAP Financial Measures" below.

2 Defined under "Operating Statistics," above.

3 Includes 19,265 and 20,688 average company-owned tractors for the third quarter of 2025 and 2024, respectively. Includes 19,474 and 20,838 average company-owned tractors for the year-to-date periods September 30, 2025 and 2024, respectively.

4 Our average trailers includes 9,965 and 8,510 trailers related to leasing activities recorded within our All Other Segments for the quarters ended September 30, 2025 and 2024, respectively. Our average trailers includes 9,862 and 8,718 trailers related to leasing activities recorded within our All Other Segments for the year-to-date periods September 30, 2025 and 2024, respectively.

Comparison Between the Quarters Ended September 30, 2025 and 2024 — Truckload segment revenue, excluding fuel surcharge and intersegment transactions, declined 2.1% year-over-year, driven by a 2.3% decrease in loaded miles. Revenue per loaded mile, excluding fuel surcharge and intersegment transactions, was stable year-over-year and sequentially recovered part of the dip seen in the second quarter. Adjusted Operating Income declined $7.3 million year-over-year, largely as a result of $12.0 million of higher insurance and claims costs at U.S. Xpress ($0.05 negative impact to Adjusted EPS) primarily driven by settling two large U.S. Xpress accident claims from 2023, one of which occurred prior to our July 2023 acquisition and the other shortly thereafter. These accidents occurred prior to integration of U.S. Xpress' hiring, safety, and claims management practices which have since begun to produce meaningful improvements in safety metrics. The third quarter combined Adjusted Operating Ratio was 60 basis points higher year-over-year as the settlements noted above offset ongoing progress on our cost structure. Excluding U.S. Xpress, the legacy truckload brands operated at a 93.7% Adjusted Operating Ratio. Miles per tractor improved 4.2% year-over-year as a result of our efforts to drive productivity and reduce underutilized assets. We continue to make tangible progress improving our cost structure to position our business to generate meaningful returns as market conditions recover.

Comparison Between Year-to-Date September 30, 2025 and 2024 — Truckload segment revenue, excluding fuel surcharge and intersegment transactions declined 3.0% year-over-year, driven by a 3.5% decrease in loaded miles. Adjusted Operating Ratio improved 130 basis points during the year-to-date period ended September 30, 2025, to 95.4%, reflecting improvements of 90 basis points for U.S. Xpress and 140 basis points for our legacy trucking businesses. Miles per tractor improved 3.0% year-over-year as a result of our efforts to drive productivity and reduce underutilized assets. Our cost-reduction efforts led to a 0.4% year-over-year reduction in our Adjusted Operating Expenses per mile.

LTL Segment

Our LTL segment provides super-regional direct service and serves our customers' national transportation needs by utilizing key partner carriers for coverage areas outside of our network. We primarily generate revenue by transporting freight for our customers through our core LTL services.

Our revenues are impacted by shipment volume and tonnage levels that flow through our network. Additional revenues are generated through fuel surcharges and accessorial services provided during transit from shipment origin to destination. We focus on the following multiple revenue generation factors when reviewing revenue yield: revenue per hundredweight, revenue per shipment, weight per shipment, and length of haul. Fluctuations within each of these metrics are analyzed when determining the revenue quality of our customers' shipment density.

Our most significant expenses are related to direct costs associated with the transportation of our freight moves including direct salary, wage and benefit costs, fuel expense, and depreciation expense associated with revenue equipment costs. Other expenses associated with revenue generation that can fluctuate and impact operating results are insurance and claims expense, as well as maintenance costs of our revenue equipment. These expenses can be influenced by multiple factors including our safety performance, equipment age, and other factors. A key component to lowering our operating costs is labor efficiency within our network. We continue to focus on technological advances to improve the customer experience and reduce our operating costs.

We are also excited to share that we are adopting the strong and historically significant AAA Cooper brand across our entire LTL business. The consolidated branding recognizes that we are already one business, operating seamlessly on one system through one network to present a cohesive solution to our customers, while simplifying administration and communication. We are pleased with the growth of our LTL business and continue to focus on building out our network and improving margins.

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS — CONTINUED

(Dollars in thousands, except per tractor data)

1Refer to "Non-GAAP Financial Measures" below.

2Defined under "Operating Statistics," above.

3Our LTL tractor fleet includes 677 and 615 tractors from ACT's dedicated and other businesses for the third quarter of 2025 and 2024, respectively. Our LTL tractor fleet includes 668 and 613 tractors from ACT's dedicated and other businesses for the year-to-date periods September 30, 2025 and 2024, respectively.

4Our LTL trailer fleet includes 1,236 and 843 trailers from ACT's dedicated and other businesses for the third quarter of 2025 and 2024, respectively. Our LTL trailer fleet includes 1,097 and 831 trailers from ACT's dedicated and other businesses for the year-to-date periods September 30, 2025 and 2024, respectively.

Comparison Between the Quarters Ended September 30, 2025 and 2024 — Our LTL segment grew revenue, excluding fuel surcharge, 21.5% as shipments per day increased 14.2% year-over-year, as we lapped the acquisition of DHE on July 30, 2024. Revenue per hundredweight, excluding fuel surcharge, increased 6.1%, while revenue per shipment, excluding fuel surcharge, increased by 6.6%. Weight per shipment increased 0.4% for the first year-over-year increase in this metric since our 2021 entry into this business. The $1.7 million operating loss is due to the $28.8 million trade name impairment as a result of our decision to combine our LTL brands under the AAA Cooper trade name. Adjusted Operating Income increased 10.1%, marking the first year-over-year improvement in five quarters as volumes remained sequentially stable while operational and cost initiatives begin to gain traction. The Adjusted Operating Ratio was 90.6% for the third quarter, which was an improvement of 250 basis points from the second quarter, counter to the typical seasonal degradation.

During the third quarter, we opened one new service center and replaced two more with larger sites, bringing our growth in door count to 8.5% year-to-date and 10.2% year-over-year. We expect our pace of facility expansion will be slower in the near term than in 2024 and believe ongoing bid activities will provide further opportunities to grow shipment volume and improve efficiencies. Our near-term focus is to drive both revenue and margin expansion in the business through strong service, disciplined pricing, and cost efficiency. We continue to look for both organic and inorganic opportunities to geographically expand our footprint within the LTL market.

Comparison Between Year-to-Date September 30, 2025 and 2024 — Our LTL segment grew revenue, excluding fuel surcharge, 25.4% as shipments per day increased 19.8% during the year-to-date period ended September 30, 2025, which includes the acquisition of DHE on July 30, 2024. Revenue per hundredweight, excluding fuel surcharge, increased 8.3%, while revenue per shipment, excluding fuel surcharge, increased by 6.7%, with weight per shipment decreased 1.5%. This segment produced a 92.6% Adjusted Operating Ratio during the year-to-date period ended September 30, 2025, and Adjusted Operating Income decreased 19.0% when compared to the year-to-date period ended September 30, 2024, due to the decline in operating margin primarily attributable to early-stage operations at our recently opened facilities as well as continued costs related to the integration of DHE.

Logistics Segment

The Logistics segment is less asset-intensive than the Truckload and LTL segments and is dependent upon capable non-driver employees, modern and effective information technology, and third-party capacity providers. Logistics revenue is generated by its brokerage operations. We generate additional revenue by offering specialized logistics solutions (including, but not limited to, trailing equipment, origin management, surge volume, disaster relief, special projects, and other logistics needs). Logistics revenue is mainly affected by the rates we obtain from customers, the freight volumes we ship through third-party capacity providers, and our ability to secure third-party capacity providers to transport customer freight.

The most significant expense in the Logistics segment is purchased transportation that we pay to third-party capacity providers, which is primarily a variable cost and is included in "Purchased transportation" in the condensed consolidated statements of comprehensive income. Variability in this expense depends on truckload capacity, availability of third-party capacity providers, rates charged to customers, current freight demand, and customer shipping needs. Fixed Logistics operating expenses primarily include non-driver employee compensation and benefits recorded in "Salaries, wages, and benefits" and depreciation and amortization expense recorded in "Depreciation and amortization of property and equipment" in the condensed consolidated statements of comprehensive income.

(Dollars in thousands, except per load data)

1 Refer to "Non-GAAP Financial Measures" below.

2 Defined under "Operating Statistics," above.

Comparison Between the Quarters Ended September 30, 2025 and 2024 — The Logistics segment Adjusted Operating Ratio was 94.3%, and Adjusted Operating Income improved 1.9% while gross margin of 17.8% was flat year-over-year. Revenue decreased 2.2% year-over-year, driven by a 6.2% decline in load count, largely offset by a 3.6% increase in revenue per load. We remain disciplined on price and diligent in carrier qualification to provide value to customers while maintaining profitability. We continue to leverage our power-only capabilities to complement our asset business, build a broader and more diversified freight portfolio, and to enhance the returns on our capital assets.

Comparison Between Year-to-Date September 30, 2025 and 2024 — The Logistics segment Adjusted Operating Ratio was 94.9%, with a gross margin of 18.2% in the year-to-date period ended September 30, 2025. Revenue increased 2.1% year-over-year, driven by an 8.3% increase in revenue per load, partially offset by a 6.0% decline in load count.

Intermodal Segment

The Intermodal segment complements our regional operating model, allows us to better serve customers in longer haul lanes, and reduces our investment in fixed assets. Through the Intermodal segment, we generate revenue by moving freight over the rail in our containers and other trailing equipment, combined with revenue for drayage to transport loads between railheads and customer locations. The most significant expense in the Intermodal segment is the cost of purchased transportation that we pay to third-party capacity providers (including rail providers), which is primarily variable and included in "Purchased transportation" in the condensed consolidated statements of comprehensive income. While rail pricing is determined on an annual basis, purchased transportation varies as it relates to rail capacity, freight demand, and customer shipping needs. The main fixed costs in the Intermodal segment are depreciation of our company tractors related to drayage, containers, and chassis, as well as non-driver employee compensation and benefits.

(Dollars in thousands, except per load data)

1 Defined under "Operating Statistics," above.

2 Includes 527 and 566 company-owned tractors for the third quarter of 2025 and 2024, respectively.

Includes 552 and 558 company-owned tractors for the year-to-date periods ended September 30, 2025 and 2024, respectively.

Comparison Between the Quarters Ended September 30, 2025 and 2024 — The Intermodal segment produced an operating loss of $2.3 million, which includes a $2.5 million impairment charge for a software project. Excluding this charge, the Adjusted Operating Ratio improved 160 basis points year-over-year to 99.8%, driven by a 3.5% increase in revenue per load as well as cost reductions and improvements in network balance. Revenue declined 8.4% year-over-year as a result of an 11.5% decrease in load count, partially offset by the increase in revenue per load. On a sequential basis, the Adjusted Operating Ratio improved 430 basis points on an 11.9% increase in revenue driven by an 8.2% growth in load count and a 3.4% increase in revenue per load over the second quarter results as bid awards continue taking effect. We remain focused on delivering excellent service and driving appropriate returns through cost control, network balance, equipment utilization, and growing our load count with disciplined pricing.

Comparison Between Year-to-Date September 30, 2025 and 2024 — The Intermodal segment operated with a 102.8% operating ratio, while total revenue decreased 6.6% year-over-year to $269.3 million. The drop in revenue was driven by the 6.9% decrease in load count partially offset by a 0.3% increase in revenue per load. when compared to the same period last year.

All Other Segments

Our All Other Segments include support services provided to our customers and third-party carriers including equipment maintenance, equipment leasing, warehousing, trailer parts manufacturing, and warranty services, and insurance for independent contractors, as well as insurance for affiliated carriers through the first quarter of 2024. Our All Other Segments also include certain corporate expenses (such as legal settlements and accruals, certain impairments, and $11.7 million in quarterly amortization of intangibles related to the 2017 Merger and various acquisitions).

(Dollars in thousands)

Comparison Between the Quarters Ended September 30, 2025 and 2024 — Revenue within our All Other Segments for the third quarter increased 29.9% and operating income increased 86.4% year-over-year, primarily driven by our warehousing and leasing businesses. Additionally, the third quarter 2025 results include an increase in the loss contingency of $11.2 million representing estimated additional premiums related to our 2024 transfer to another insurance carrier of the outstanding auto liability claims from the third-party carrier insurance business we closed in March 2024.

Comparison Between Year-to-Date September 30, 2025 and 2024 — Revenue within our All Other Segments for the year-to-date period ended September 30, 2025 increased 5.9% and operating income increased $34.7 million year-over-year, primarily driven by our warehousing business and leasing businesses and reflects improvement from the prior year period, which had included a $19.5 million operating loss for the third-party insurance business.

Results of Operations — Consolidated Operating and Other Expenses

Consolidated Operating Expenses

The following tables present certain operating expenses from our condensed consolidated statements of comprehensive income, including each operating expense as a percentage of total revenue and as a percentage of revenue, excluding truckload and LTL fuel surcharge. Truckload and LTL fuel surcharge revenue can be volatile and is primarily dependent upon the cost of fuel, rather than operating expenses unrelated to fuel. Therefore, we believe that revenue, excluding truckload and LTL fuel surcharge is a better measure for analyzing many of our expenses and operating metrics.

Note: The reported results do not include the LTL operations of DHE prior to its acquisition by the Company on July 30, 2024 in accordance with the accounting treatment applicable to the transaction. Accordingly, comparisons between the Company's current and prior periods may not be meaningful.

(Dollars in thousands)

Salaries, wages, and benefits expense is primarily affected by the total number of miles driven by and rates we pay to our company driving associates, and employee benefits including healthcare, workers' compensation, and other benefits. To a lesser extent, non-driver employee headcount, compensation, and benefits affect this expense. Driving associate wages represent the largest component of salaries, wages, and benefits expense.

Several ongoing market factors have reduced the pool of available driving associates, contributing to a challenging driver sourcing market, which we believe will continue. Having a sufficient number of qualified driving associates is a significant headwind, although we continue to seek ways to attract and retain qualified driving associates, including heavily investing in our recruiting efforts, our driving academies, technology, our equipment, and our terminals that improve the experience of driving associates. We expect labor costs (related to both driving associates and non-driver employees) to remain inflationary, which we expect will result in additional pay increases in the future, thereby increasing our salaries, wages, and benefits expense.

Comparison Between the Quarters Ended September 30, 2025 and 2024 — The $28.9 million increase in consolidated salaries, wages, and benefits for the third quarter of 2025, as compared to the third quarter of 2024, is primarily due to a $31.6 million increase in LTL wages as a result of service center expansion and labor to support increased shipment count from expansion efforts. This was partially offset by a $2.9 million decrease in Truckload driving associate mileage pay primarily due to a 2.5% decrease in total miles driven by company driving associates in our Truckload segment.

Comparison Between Year-to-Date September 30, 2025 and 2024 — The $120.4 million increase in consolidated salaries, wages, and benefits for the year-to-date period ended September 30, 2025, as compared to the year-to-date period ended September 30, 2024, is primarily due to a $117.5 million increase in LTL wages as a result of service center expansion, the DHE Acquisition, and labor to support increased shipment count from expansion efforts. This was partially offset by a $16.6 million decrease in Truckload driving associate mileage pay primarily due to a 3.2% decrease in total miles driven by company driving associates in our Truckload segment.

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS — CONTINUED

(Dollars in thousands)

Fuel expense consists primarily of diesel fuel expense for our company-owned tractors. The primary factors affecting our fuel expense are the cost of diesel fuel, the fuel economy of our equipment, and the miles driven by company driving associates.

Our fuel surcharge programs help to offset increases in fuel prices, but generally apply only to loaded miles for our Truckload and LTL segments and typically do not offset non-paid empty miles, idle time, or out-of-route miles driven. Typical fuel surcharge programs involve a computation based on the change in national or regional fuel prices. These programs may update as often as weekly, but typically require a specified minimum change in fuel cost to prompt a change in fuel surcharge revenue for our Truckload and LTL segments. Therefore, many of these programs have a time lag between when fuel costs change and when the change is reflected in fuel surcharge revenue. Due to this time lag, our fuel expense, net of fuel surcharge, negatively impacts our operating income during periods of sharply rising fuel costs and positively impacts our operating income during periods of falling fuel costs. We continue to utilize our fuel efficiency initiatives such as trailer blades, idle-control, management of tractor speeds, fleet updates for more fuel-efficient engines, management of fuel procurement, and driving associate training programs that we believe contribute to controlling our fuel expense.

Comparison Between Quarters Ended September 30, 2025 and 2024 — The $8.3 million increase in consolidated fuel expense for the third quarter of 2025 is primarily driven by an increase in the average weekly DOE fuel prices for the third quarter of 2025, as compared to the third quarter of 2024. Average weekly DOE fuel prices were $3.76 per gallon for the third quarter of 2025 and $3.69 per gallon for the third quarter of 2024. This was partially offset by a 2.5% decrease in Truckload total miles driven by company driving associates.

Comparison Between Year-to-Date September 30, 2025 and 2024 — The $38.0 million decrease in consolidated fuel expense for the year-to-date period ended September 30, 2025 is primarily driven by the 3.2% decrease in Truckload total miles driven by company driving associates and the decrease in the average weekly DOE fuel prices for the year-to-date period ended September 30, 2025, as compared to the year-to-date period ended September 30, 2024. Average weekly DOE fuel prices were $3.65 per gallon for the year-to-date period ended September 30, 2025 and $3.83 per gallon for the year-to-date period ended September 30, 2024. This was partially offset by a 28.1% increase in LTL miles.

(Dollars in thousands)

Operations and maintenance expense consists of direct operating expenses, such as driving associate hiring and recruiting expenses, equipment maintenance, and tire expense. Operations and maintenance expenses are typically affected by the age of our company-owned fleet of tractors and trailers and the miles driven. We expect the driver market to remain competitive throughout 2025, which could increase future driving associate development and recruiting costs and negatively affect our operations and maintenance expense.

Operations and maintenance expense remained relatively flat for the third quarter of 2025 and the year-to-date period ended September 30, 2025, as compared to the same periods last year.

(Dollars in thousands)

Insurance and claims expense consists of premiums for liability, physical damage, and cargo, and will vary based upon the frequency and severity of claims, our level of self-insurance, and premium expense. In recent years, insurance carriers have raised premiums for many businesses, including transportation companies, and as a result, our insurance and claims expense could increase in the future, or we could raise our self-insured retention limits or reduce excess coverage limits when our policies are renewed or replaced. Insurance and claims expense also varies based on the number of miles driven by company driving associates and independent contractors, the frequency and severity of accidents, trends in development factors used in actuarial accruals, and developments in large, prior-year claims. In future periods, our higher self-insured retention limits and lower excess coverage limits, may cause increased volatility in our consolidated insurance and claims expense.

In the first quarter of 2024, we exited our third-party insurance business, which offered insurance products to third-party carriers, earning premium revenues, which were partially offset by increased insurance reserves, and which exposed us to claims and inability to collect premiums.

Comparison Between Quarters Ended September 30, 2025 and 2024 — Consolidated insurance and claims expense increased by $30.0 million for the third quarter of 2025, as compared to the same period last year. This increase was primarily due to an increase in the loss contingency of $11.2 million related to the 2024 exit from the third-party carrier insurance business; and $12.0 million of higher insurance and claims costs at U.S. Xpress primarily driven by settlement of two large 2023 U.S. Xpress auto liability claims, one of which occurred prior to our July 2023 acquisition and the other shortly thereafter.

Comparison Between Year-to-Date September 30, 2025 and 2024 — Consolidated insurance and claims expense decreased by $20.4 million for the year-to-date period ended September 30, 2025, as compared to the same period last year primarily due to the Company exiting the third-party insurance business at the end of the first quarter of 2024. Additionally, the decrease was due to a 3.7% decrease in total miles driven year-over-year, improvements within our current year experience as a result of lower frequency and severity of claims, and positive development within certain prior year losses, and was partially offset by the two charges mentioned above.

(Dollars in thousands)

46

Operating taxes and licenses include state franchise taxes, state and federal highway use taxes, property taxes, vehicle license and registration fees, and fuel and mileage taxes, among others. The expense is impacted by changes in the tax rates and registration fees associated with our tractor fleet and regional operating facilities.

Operating taxes and licenses expenses increased by $1.0 million for the third quarter of 2025 and $8.2 million for the year-to-date period ended September 30, 2025, as compared to the same periods last year, primarily as a result of expanding our LTL network.

(Dollars in thousands)

Communications expense is comprised of costs associated with our tractor and trailer tracking systems, information technology systems, and phone systems.

Communications expense as a percentage of total revenue and revenue, excluding truckload and LTL fuel surcharge remained relatively flat for the third quarter of 2025 and the year-to-date period ended September 30, 2025, as compared to the same periods last year.

(Dollars in thousands)

Depreciation relates primarily to our owned tractors, trailers, buildings, electronic logging devices, other communication units, and other similar assets. Changes to this fixed cost are generally attributed to increases or decreases to company-owned equipment, the relative percentage of owned versus leased equipment, and fluctuations in new equipment purchase prices. Depreciation can also be affected by the cost of used equipment that we sell or trade and the replacement of older used equipment. Management periodically reviews the condition, average age, and reasonableness of estimated useful lives and salvage values of our equipment and considers such factors in light of our experience with similar assets, used equipment market conditions, and prevailing industry practices.

Comparison Between Quarters Ended September 30, 2025 and 2024 — Consolidated depreciation and amortization of property and equipment increased $0.4 million for the third quarter of 2025, as compared to the same period last year. This increase is primarily due to increases in equipment counts for our LTL segment, partially offset by decreases in tractor and trailer counts within our Truckload segment.

Comparison Between Year-to-Date September 30, 2025 and 2024 — Consolidated depreciation and amortization of property and equipment decreased $6.3 million for the year-to-date period ended September 30, 2025, as compared to the same period last year. This decrease is primarily due to the decrease in tractor and trailer counts in our Truckload segment, partially offset by increases in equipment counts for our LTL segment.

We anticipate that depreciation and amortization expense will increase, as a percentage of revenue, excluding truckload and LTL fuel surcharge, as we intend to purchase, rather than enter into operating leases, for a majority of our revenue equipment, terminal improvements, or terminal expansions in the remainder of 2025. Additionally, we anticipate that our equipment suppliers may need to raise prices in response to recently announced tariffs.

(Dollars in thousands)

Amortization of intangibles relates to intangible assets identified with the 2017 Merger, ACT Acquisition, U.S. Xpress Acquisition, and various other acquisitions. See Note 3 in Part I, Item 1, of this Quarterly Report for more details regarding details of our acquisitions.

(Dollars in thousands)

Rental expense consists primarily of payments for revenue equipment assumed in the U.S. Xpress Acquisition, as well as our terminals and other real estate leases.

Comparison Between Quarters Ended September 30, 2025 and 2024 — Consolidated rental expense remained relatively flat for the third quarter and the year-to-date period ended September 30, of 2025, as compared to the same periods last year.

We anticipate that rental expense will decrease, as a percentage of revenue, excluding truckload and LTL fuel surcharge, as we intend to purchase, rather than enter into operating leases, a majority of our revenue equipment, terminal improvements, or terminal expansions in the remainder of 2025.

(Dollars in thousands)

Purchased transportation expense is comprised of payments to independent contractors in our trucking operations, as well as payments to third-party capacity providers related to logistics, freight management, and non-trucking services in our logistics and intermodal businesses. Purchased transportation is generally affected by capacity in the market as well as changes in fuel prices. As capacity tightens, our payments to third-party capacity providers and to independent contractors tend to increase. Additionally, as fuel prices increase, payments to third-party capacity providers and independent contractors increase.

Comparison Between the Quarters Ended September 30, 2025 and 2024 — The $10.9 million decrease in purchased transportation for the third quarter of 2025 is primarily due to decreases in intermodal and logistics loads, as well as loaded miles hauled by independent contractors.

Comparison Between the Year-to-Date September 30, 2025 and 2024 — The $31.9 million decrease in purchased transportation for the year-to-date period ended September 30, 2025 when compared to the same period last year is primarily due to decreases in intermodal and logistics loads, as well as loaded miles hauled by independent contractors.

(Dollars in thousands)

Third quarter 2025 impairments reflect the non-cash impairments in tradenames of $28.8 million associated with the decision to rebrand the MME and DHE brands of our LTL businesses under the AAA Cooper brand (within the LTL segment), as well as certain discontinued software projects of $2.5 million (within the Intermodal Segment), and certain real property leases of $3.6 million (within the Truckload Segment). Second quarter 2025 impairments reflect non-cash impairments related to certain real property owned and leased of $10.6 million (within the Truckload Segment). First quarter 2025 reflects non-cash impairments related to certain real property leases of $28,000 (within the Truckload segment). In 2024, we incurred impairment charges associated with building improvements, certain revenue equipment held for sale, leases, and other equipment (within the Truckload segment and All Other Segments).

(Dollars in thousands)

Miscellaneous operating expenses primarily consist of legal and professional services fees, general and administrative expenses, other costs, as well as net gain on sales of equipment.

Comparison Between the Quarters Ended September 30, 2025 and 2024 — The $8.5 million decrease in net consolidated miscellaneous operating expenses is primarily due to an $11.7 million increase in gain on sales of operating property and equipment.

Comparison Between the Year-to-Date September 30, 2025 and 2024 — The $20.5 million decrease in net consolidated miscellaneous operating expenses is primarily due to a $26.4 million increase in gain on sales of operating property and equipment.

Consolidated Other Expenses (Income)

(Dollars in thousands)

Interest expense — Interest expense is comprised of debt and finance lease interest expense as well as amortization of deferred loan costs. Additional details regarding our debt are discussed in Note 6 in Part I, Item 1 of this Quarterly Report.

Comparison Between the Quarters Ended September 30, 2025 and 2024 — The $3.5 million decrease in interest expense is primarily driven by lower interest rates during the third quarter of 2025 when compared to the third quarter of 2024.

Comparison Between the Year-to-Date September 30, 2025 and 2024 — The $4.1 million decrease in interest expense is primarily driven by lower interest rates during the year-to-date period ended September 30, 2025, when compared to the year-to-date period ended September 30, 2024.

Other income, net — Other income, net is primarily comprised of losses and (gains) from our various equity investments, as well as certain other non-operating income and expense items that may arise outside of the normal course of business.

Comparison Between the Quarters Ended September 30, 2025 and 2024 — The $0.5 million increase in other income, net is primarily driven by a net gain recorded within our portfolio of investments during the third quarter of 2025.

Comparison Between the Year-to-Date September 30, 2025 and 2024 — The $10.8 million increase in other income, net is primarily driven by a net gain recorded within our portfolio of investments during the year-to-date period ended September 30, 2025.

Income tax expense (benefit) — In addition to the discussion below, Note 4 in Part I, Item 1 of this Quarterly Report provides further analysis related to income taxes.

Comparison Between the Quarters Ended September 30, 2025 and 2024 — The $6.7 million decrease in consolidated income tax expense was primarily due to a decrease in pretax income which was partially offset by an increase in deferred tax expense following the merger of certain subsidiaries. Our effective tax rate for the third quarter of 2025 was 47.0%, compared to 32.0% for the third quarter of 2024.

Comparison Between Year-to-Date September 30, 2025 and 2024 — The $9.4 million increase in consolidated income tax expense was primarily due to the increase in pretax income, and an increase in deferred tax expense following the merger of certain subsidiaries. Our effective tax rate for the year-to-date period ended September 30, 2025 was 30.4%, compared to 32.2% for the year-to-date period ended September 30, 2024.

Non-GAAP Financial Measures

The terms "Adjusted Net Income Attributable to Knight-Swift," "Adjusted EPS," "Adjusted Operating Income," "Adjusted Operating Expenses," "Adjusted Operating Ratio," and "Free Cash Flow," as we define them, are not presented in accordance with GAAP. These financial measures supplement our GAAP results in evaluating certain aspects of our business. We believe that using these measures improves comparability in analyzing our performance because they remove the impact of items from our operating results that, in our opinion, do not reflect our core operating performance. Management and the Board focus on Adjusted Net Income Attributable to Knight-Swift, Adjusted EPS, Adjusted Operating Income, Adjusted Operating Expenses, and Adjusted Operating Ratio as key measures of our performance, all of which are reconciled to the most comparable GAAP financial measures and further discussed below. Management and the Board use Free Cash Flow as a key measure of our liquidity. Free Cash Flow does not represent residual cash flow available for discretionary expenditures. We believe our presentation of these non-GAAP financial measures is useful because it provides investors and securities analysts the same information that we use internally for purposes of assessing our core operating performance.

Adjusted Net Income Attributable to Knight-Swift, Adjusted EPS, Adjusted Operating Income, Adjusted Operating Expenses, Adjusted Operating Ratio, and Free Cash Flow are not substitutes for their comparable GAAP financial measures, such as net income, cash flows from operating activities, operating income, or other measures prescribed by GAAP. There are limitations to using non-GAAP financial measures. Although we believe that they improve comparability in analyzing our period to period performance, they could limit comparability to other companies in our industry if those companies define these measures differently. Because of these limitations, our non-GAAP financial measures should not be considered measures of income generated by our business or discretionary cash available to us to invest in the growth of our business. Management compensates for these limitations by primarily relying on GAAP results and using non-GAAP financial measures on a supplemental basis.

Pursuant to the requirements of Regulation G, the following tables reconcile GAAP consolidated net income attributable to Knight-Swift to non-GAAP consolidated Adjusted Net Income attributable to Knight-Swift, GAAP consolidated earnings per diluted share to non-GAAP consolidated Adjusted EPS, GAAP consolidated operating ratio to non-GAAP consolidated Adjusted Operating Ratio, GAAP reportable segment operating income to non-GAAP reportable segment Adjusted Operating Income, GAAP reportable segment operating expenses to non-GAAP segment Adjusted Operating Expenses, GAAP reportable segment operating ratio to non-GAAP reportable segment Adjusted Operating Ratio, and GAAP cash flow from operations to non-GAAP Free Cash Flow.

Non-GAAP Reconciliation: Consolidated Adjusted Net Income Attributable to Knight-Swift and Adjusted EPS

(In thousands)

Note: Since the numbers reflected in the table below are calculated on a per share basis, they may not foot due to rounding.

52

1 "Amortization of intangibles" reflects the non-cash amortization expense relating to intangible assets identified in the 2017 Merger, the ACT Acquisition, the U.S. Xpress Acquisition, and other acquisition, as well as the non-cash amortization expense related to the fair value of favorable leases assumed in the DHE acquisition included within "Rental expense" in the condensed consolidated statements of comprehensive income. Refer to Note 3 in Part I, Item 1 of this Quarterly Report for additional details regarding our acquisitions.

2 "Impairments" reflects the non-cash impairment:

• Third quarter 2025 impairments reflect the non-cash impairments of tradenames associated with the decision to rebrand the MME and DHE brands of our LTL businesses under the AAA Cooper brand (within the LTL segment), as well as certain discontinued software projects (within the Intermodal Segment), and certain real property leases (within the Truckload Segment). Second quarter 2025 impairments reflects non-cash impairments related to certain real property owned and leased (within the Truckload Segment). First quarter 2025 reflects non-cash impairments related to certain real property leases (within the Truckload segment).
• Third quarter and year-to-date 2024 reflects the non-cash impairments of building improvements, certain revenue equipment held for sale, leases, and other equipment (within the Truckload segment and All Other Segments).

3 "Legal accruals" are included in "Miscellaneous operating expenses" in the condensed consolidated statements of comprehensive income and reflect the following:

• First and third quarter 2025 legal expense reflects the increased estimated exposure for accrued legal matters based on recent settlement agreements.
• Year-to-date 2024 legal expense reflects the increased estimated exposures for accrued legal matters based on recent settlement agreements.

4 "Transaction fees" reflects certain legal and professional fees associated with the July 30, 2024 acquisition of DHE. The transaction fees are included within "Miscellaneous operating expenses" in the condensed statements of comprehensive income.

5 "Severance expense" is included within "Salaries, wages, and benefits" in the condensed statements of comprehensive income.

6 "Change in fair value of deferred earnout" reflects the expense for the change in fair value of a deferred earnout related to various acquisitions, which is recorded in "Miscellaneous operating expenses."

7 "Loss on investment" reflects the write-off of a minority investment in a transportation-adjacent technology venture which ceased operations in the third quarter of 2024.

8 "Write-off of deferred debt issuance costs" was incurred from replacing the 2021 Debt Agreement and 2023 Debt Agreement with the 2025 Debt Agreement.

9 For the third quarter of 2025, an adjusted effective tax rate of 29.6% was applied in our Adjusted EPS calculation. For the year-to-date period ended September 30, 2025, an adjusted effective tax rate of 27.8% was applied in our Adjusted EPS calculation. For the third quarter of 2024, an adjusted effective tax rate of 29.3% was applied in our Adjusted EPS calculation to exclude certain discrete items. For the year-to-date period ending September 30, 2024, an adjusted effective tax rate of 28.5% was applied in our adjusted EPS calculation to exclude certain discrete items.

Non-GAAP Reconciliation: Consolidated Adjusted Operating Income, Adjusted Operating Expenses, and Adjusted Operating Ratio

(Dollars in thousands)

1 See Non-GAAP Reconciliation: Consolidated Adjusted Net Income Attributable to Knight-Swift and Adjusted EPS footnote 1.

2 See Non-GAAP Reconciliation: Consolidated Adjusted Net Income Attributable to Knight-Swift and Adjusted EPS footnote 2.

3 See Non-GAAP Reconciliation: Consolidated Adjusted Net Income Attributable to Knight-Swift and Adjusted EPS footnote 3.

4 See Non-GAAP Reconciliation: Consolidated Adjusted Net Income Attributable to Knight-Swift and Adjusted EPS footnote 4.

5 See Non-GAAP Reconciliation: Consolidated Adjusted Net Income Attributable to Knight-Swift and Adjusted EPS footnote 5.

6 See Non-GAAP Reconciliation: Consolidated Adjusted Net Income Attributable to Knight-Swift and Adjusted EPS footnote 6.

Non-GAAP Reconciliation: Reportable Segment Adjusted Operating Income, Adjusted Operating Expenses, and Adjusted Operating Ratio

Truckload Segment

(Dollars in thousands)

1"Amortization of intangibles" reflects the non-cash amortization expense relating to intangible assets identified in historical Knight acquisitions and the U.S. Xpress Acquisition.

2See Non-GAAP Reconciliation: Consolidated Adjusted Net Income Attributable to Knight-Swift and Adjusted EPS footnote 2.

3See Non-GAAP Reconciliation: Consolidated Adjusted Net Income Attributable to Knight-Swift and Adjusted EPS footnote 3.

4See Non-GAAP Reconciliation: Consolidated Adjusted Net Income Attributable to Knight-Swift and Adjusted EPS footnote 5.

LTL Segment

(Dollars in thousands)

1"Amortization of intangibles" reflects the non-cash amortization expense relating to intangible assets identified with the ACT, MME, and DHE acquisitions, as well as the non-cash amortization expense related to the fair value of favorable leases assumed in the DHE Acquisition.

2See Non-GAAP Reconciliation: Consolidated Adjusted Net Income Attributable to Knight-Swift and Adjusted EPS footnote 2.

Logistics Segment

(Dollars in thousands)

1"Amortization of intangibles" reflects the non-cash amortization expense relating to intangible assets identified in the U.S. Xpress and UTXL acquisitions.

Intermodal Segment

(Dollars in thousands)

1See Non-GAAP Reconciliation: Consolidated Adjusted Net Income Attributable to Knight-Swift and Adjusted EPS footnote 2.

Non-GAAP Reconciliation: Free Cash Flow

57

Liquidity and Capital Resources

Sources of Liquidity

Our primary sources of liquidity are funds provided by operations and the following:

(In thousands)

1 As of September 30, 2025, we had $707.0 million borrowings under our $1.5 billion 2025 Revolver. We additionally had $18.3 million in outstanding letters of credit (discussed below) issued under the 2025 Revolver, leaving $774.7 million available under the 2025 Revolver.

2 Based on eligible receivables at September 30, 2025, our borrowing base for the 2023 RSA was $473.5 million, while outstanding borrowings were $455.2 million, along with $15.7 million in outstanding letters of credit, leaving $2.6 million available under the 2023 RSA. Refer to Note 5 in Part I, Item 1 of this Quarterly Report for more information regarding the 2023 RSA.

3 Restricted cash is primarily held by our captive insurance companies for claims payments. "Cash and cash equivalents – restricted" consists of $101.7 million included in "Cash and cash equivalents – restricted" on the condensed consolidated balance sheet held by Mohave and Red Rock for claims payments. The remaining $5.7 million is included in "Other long-term assets" and is held in escrow accounts to meet statutory requirements.

Uses of Liquidity

Our business requires substantial amounts of cash for operating activities, including salaries and wages paid to our employees, contract payments to independent contractors, insurance and claims payments, tax payments, and others. We also use large amounts of cash and credit for the following activities:

Capital Expenditures — When justified by customer demand, as well as our liquidity and our ability to generate acceptable returns, we make substantial cash capital expenditures to maintain a modern company tractor fleet, refresh and expand our trailer fleet, expand our network of LTL service centers, and, to a lesser extent, fund upgrades to our terminals and technology in our various service offerings. In connection with our business strategy, we regularly evaluate acquisition and strategic partnership opportunities. We expect net cash capital expenditures for full-year 2025 will be in the range of $475 million - $525 million, which is a reduction from our previous range of $525 million - $575 million. Our expected net cash capital expenditures primarily represent replacements of existing tractors and trailers and investments in our terminal network, driver amenities, and technology, and excludes acquisitions. We believe we have ample flexibility in our trade cycle and purchase agreements to alter our current plans if economic and other conditions warrant.

Over the long-term, we will continue to have significant capital requirements, which may require us to seek additional borrowing, lease financing, or equity capital. The availability of financing or equity capital will depend upon our financial condition and results of operations as well as prevailing market conditions. If such additional borrowing, lease financing, or equity capital is not available at the time we need it, then we may need to borrow more under the 2025 Revolver (if not then fully drawn), extend the maturity of then-outstanding debt, rely on alternative financing arrangements, engage in asset sales, limit our fleet size, or operate our revenue equipment for longer periods.

There can be no assurance that we will be able to obtain additional debt under our existing financial arrangements to satisfy our ongoing capital requirements. However, we believe the combination of our expected cash flows, financing available through operating and finance leases, available funds under our accounts receivable securitization, and availability under the 2025 Revolver will be sufficient to fund our expected capital expenditures for at least the next twelve months.

Principal and Interest Payments — As of September 30, 2025, we had debt, accounts receivable securitization, and finance lease obligations of $2.9 billion, which are discussed under "Material Debt Agreements," below. Certain cash flows from operations are committed to minimum payments of principal and interest on our debt and lease obligations. Additionally, when our financial position allows, we periodically make voluntary prepayments on our outstanding debt balances.

Letters of Credit — Our lenders may issue standby letters of credit on our behalf, certain of which reduce availability under our 2023 RSA and our revolving line of credit. As of September 30, 2025, we also had outstanding letters of credit of $195.3 million pursuant to a bilateral agreement which do not impact the availability of the 2025 Revolver and 2023 RSA. Standby letters of credit are typically issued for the benefit of regulatory authorities, insurance companies and state departments of insurance for the purpose of satisfying certain collateral requirements, primarily related to our automobile, workers' compensation, and general insurance liabilities.

Share Repurchases — From time to time, and depending on Free Cash Flow1 availability, debt levels, common stock prices, general economic and market conditions, as well as internal approval requirements, we may repurchase shares of our outstanding common stock. As of September 30, 2025, the Company had $200.0 million remaining under the 2022 Knight-Swift Share Repurchase Plan. Additional details regarding our share repurchase plans are discussed in Note 10 in Part I, Item 1 of this Quarterly Report.

1Refer to "Non-GAAP Financial Measures."

Working Capital

We had a working capital surplus of $363.1 million as of September 30, 2025 and a working capital deficit of $258.0 million as of December 31, 2024. The deficit as of December 31, 2024 is primarily due to classification of the 2023 RSA, maturing on October 1, 2025, as a current liability. On October 1, 2025, we entered into the 2025 RSA replacing the 2023 RSA and extending the maturity to October 2, 2028.

Material Debt Agreements

As of September 30, 2025, we had $2.9 billion in material debt obligations at the following carrying values:

• $698.1 million: 2025 Term Loan A-1, due July 8, 2030, net of $1.9 million in deferred loan costs
• $299.2 million: 2025 Term Loan A-2, due January 8, 2027, net of $0.8 million in deferred loan costs
• $455.2 million: 2023 RSA outstanding borrowings
• $593.8 million: Finance lease obligations
• $707.0 million: 2025 Revolver, due July 2030
• $132.3 million: Revenue equipment installment notes
• $14.2 million: Other

As of December 31, 2024, we had $2.9 billion in material debt obligations at the following carrying values:

• $349.1 million: 2021 Term Loan A-2, due September 2026, net of $0.9 million in deferred loan costs
• $779.4 million: 2021 Term Loan A-3, due September 2026, net of $0.6 million in deferred loan costs
• $249.5 million: 2023 Term Loan, due September 2026, net of $0.5 million in deferred loan costs
• $459.0 million: 2023 RSA outstanding borrowings, net of $0.2 million in deferred loan costs
• $597.4 million: Finance lease obligations
• $232.0 million: 2021 Revolver, due September 2026
• $192.3 million: Revenue equipment installment notes
• $23.3 million: Other, net of $10,000 in deferred loan costs

Cash Flow Analysis

(In thousands)

Net Cash Provided by Operating Activities

Comparison Between Year-to-Date September 30, 2025 and 2024 — The $18.7 million increase in net cash provided by operating activities is primarily related to a $24.2 million increase in operating income for year-to-date September 30, 2025, and was partially offset by changes to our net working capital.

Note: Factors affecting the increase in operating income are discussed in "Results of Operations — Consolidated Operating and Other Expenses."

Net Cash Used in Investing Activities

Comparison Between Year-to-Date September 30, 2025 and 2024 — The $194.5 million decrease in net cash used in investing activities was primarily due to a $185.5 million decrease in cash used on acquisitions.

Net Cash Used in Financing Activities

Comparison Between Year-to-Date September 30, 2025 and 2024 — Net cash used in financing activities increased by $134.6 million, primarily due to an increase in net payments on our finance leases and long-term debt of $496.4 million and $10.0 million increase in dividends paid. These increases were partially offset by increased net borrowings of $63.8 million on our 2023 RSA and a $315.0 million increase in net borrowings on our 2021 Revolver and 2025 Revolver.

Seasonality

Discussion regarding the impact of seasonality on our business is included in Note 1 in the notes to the condensed consolidated financial statements, included in Part I, Item 1 of this Quarterly Report, incorporated by reference herein.

Inflation

Most of our operating expenses are inflation-sensitive, with inflation generally leading to increased costs of operations. Price increases in manufactured revenue equipment has impacted the cost for us to acquire new equipment. Cost increases have also impacted the cost of parts for equipment repairs and maintenance. The qualified driver shortage experienced by the trucking industry overall has had the effect of increasing compensation paid to our driving associates. We have also experienced inflation in insurance and claims cost related to health insurance and claims as well as auto liability insurance and claims. Prolonged periods of inflation have recently and could continue to cause interest rates, fuel, wages, and other costs to increase as well. Any of these factors could adversely affect our results of operations unless freight rates correspondingly increase.

Recently Issued Accounting Pronouncements

See Note 2 in Part I, Item 1 of this Quarterly Report, which is incorporated herein by reference, for the impact of recently issued accounting pronouncements on the Company's condensed consolidated financial statements.

There have been no material changes from the market risks discussed in the section entitled "Quantitative and Qualitative Disclosures About Market Risk" set forth in Part II, Item 7A of our 2024 Annual Report.

Disclosure Controls and Procedures

We have established disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) to ensure that material information relating to us, including our consolidated subsidiaries, is made known to the officers who certify our financial reports and to other members of senior management and the Board. Our management, with the participation of our principal executive officer and principal financial officer, conducted an evaluation of the effectiveness of our disclosure controls and procedures. Based on this evaluation, as of the end of the period covered by this Quarterly Report on Form 10-Q our principal executive officer and principal financial officer have concluded that our disclosure controls and procedures are effective to ensure that the information required to be disclosed by us in the reports that we file or submit under the Exchange Act is (1) recorded, processed, summarized, and reported within the time periods specified in the SEC rules and forms, and (2) accumulated and communicated to management, including our principal executive officer and principal financial officer, as appropriate, to allow timely decisions regarding required disclosure.

Changes in Internal Control over Financial Reporting

There was no change in our internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) during the quarter ended September 30, 2025, that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting. We base our internal control over financial reporting on the criteria set forth in the 2013 COSO Internal Control: Integrated Framework.

We have confidence in our disclosure controls and procedures and internal control over financial reporting. Nevertheless, our management, including our principal executive officer and principal financial officer, does not expect that our disclosure controls and procedures and internal control over financial reporting will prevent all errors, misstatements, or fraud. A control system, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. Further, the design of a control system must reflect the fact that there are resource constraints, and the benefits of controls must be considered relative to their costs. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, have been detected.

While we attempt to identify, manage, and mitigate risks and uncertainties associated with our business, some level of risk and uncertainty will always be present. Our 2024 Annual Report in the section entitled "Item 1A. Risk Factors," describes some of the risks and uncertainties associated with our business.