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Forward Air (FWRD) Q2 FY26 earnings call: guidance and Q&A

Earnings call· Jun 2026 (Q2 FY26)· Aug 5, 2026

Source: earnings call transcript

Executive summary

Forward Air Q2 FY26 — Strong Performance Across Segments and Key Customer Retention

Forward Air delivered a strong second quarter, achieving record operating revenue and its best consolidated EBITDA in 2.5 years, driven by robust performance across all segments. The company successfully completed the divestiture of two non-core assets and made significant progress in retaining a major customer's business. Management expressed confidence in a gradual freight market recovery and the company's internal operating leverage.

Highlights

6

  • Operating revenue reached a company record of $673 million, up from $619 million in Q2 2025.

  • Consolidated EBITDA improved to $93 million, up from $79 million in Q2 2025, marking the best result in 2.5 years.

  • Expedited Freight segment reported its best operating revenue, income, EBITDA, and margin (13.6%) since early 2024.

  • Omni Logistics segment, excluding impairment, achieved its best reported EBITDA ($38 million) and margin (11.2%) in 2.5 years.

  • Intermodal segment's reported EBITDA of $10 million was its best in 5 quarters, with a 16.7% margin, best in 6 quarters.

  • Successfully retained at least 50% of a major customer's $250 million 2025 revenue, with potential for up to 75%.

Concerns

2

  • Incurred a non-cash goodwill impairment charge of $244 million related to the Omni Logistics segment.

  • Macroeconomic uncertainties remain, particularly from geopolitical tensions and diesel price volatility.

Guidance & targets

CategoryTargetConfidence
Intermodal business sale completion
By the end of the year
medium materiality
High
Major customer revenue retention
At least 50% of approximately $250 million
high materiality
High
Major customer revenue retention potential
Additional approximate 25%
high materiality
Medium
Major customer contract extension
No less than 2 years
high materiality
High
Major customer service transition timing
Majority taking place in December 2026 and throughout the balance of 2027
high materiality
High
Additional major customer retention decision timeline
Before the end of the year
high materiality
Medium

Segment performance

SegmentRevenueYoYQoQMargin
Expedited Freight
Achieved best operating revenue, operating income, reported EBITDA, and margin since the beginning of 2024. Margin improved from 11.6% in Q2 2025. Performance driven by strategic decisions to increase network density and fill open capacity.
EBITDA: $43 millionEBITDA growth YoY: >40%EBITDA margin improvement YoY: 200 bpsTonnage per day: increasedNumber of shipments per day: increasedWeight per shipment: increasedRevenue per shipment excluding fuel: increased
———13.6%
Omni Logistics
Excluding a $244 million goodwill impairment charge, the segment achieved its best reported EBITDA and margin in the past 2.5 years. This compares to $30 million EBITDA and 9% margin in Q2 2025. Saw increased demand for contract logistics, air, and ocean services.
Reported EBITDA (excluding impairment): $38 millionReported EBITDA (including impairment): -$206 million
———11.2%
Intermodal
Reported its best EBITDA in 5 quarters and best margin in 6 quarters, improving from $9 million EBITDA and 15.1% margin in Q2 2025. Attributable to a strong pipeline and strategic rate increases on underperforming accounts. No business was lost due to rate adjustments.
Reported EBITDA: $10 millionEBITDA improvement YoY: $1 millionMargin improvement YoY: 160 bps
———16.7%

Deals & partnerships

Undisclosed Disposition of two non-core businesses from the Omni Logistics segment. approximately $27 million

The first business was disposed of during Q2, and the second in July. These were part of a portfolio optimization strategy.

Undisclosed major customer Memorandum of Understanding (MOU) for retention and extension of services. at least 50% of approximately $250 million (FY25 revenue) no less than 2 years

The MOU secures retention of at least half of the customer's 2025 revenue, with potential for up to 75%. The contract for retained services is extended for at least two years. Services transitioning to other providers are expected to start later this year, with the majority in December 2026 and throughout 2027.

Risks & headwinds

Macroeconomic uncertainties Ongoing

Not quantified

Mitigation:Disciplined cost management and exceptional customer service.

Geopolitical tensions Ongoing

Could weigh on industrial activity and delay demand recovery

Mitigation:Disciplined cost management and exceptional customer service.

Diesel price volatility Ongoing

Could weigh on industrial activity and delay demand recovery

Mitigation:Disciplined cost management and exceptional customer service.

Goodwill impairment charge Q2 FY26

$244 million non-cash charge

Mitigation:Based on uncertainty around potential revenue decreases with a major customer, which was subsequently mitigated by the MOU.

What to watch in Q3 FY26

Intermodal business sale completion

Q4 FY26
Current Sales process progressing as planned
Target Closing by year-end

Why it matters

Completion of this divestiture is expected to delever the balance sheet, streamline the organization, and enhance shareholder value.

The sales process is progressing as planned and remains on schedule with an expected closing date by the end of the year.

Find out whether FWRD delivers this. Inve re-checks your case every morning.

Q&A highlights

Can you elaborate on the reported yield numbers, specifically core pricing and renewals, and the competitive environment, given the mix impact and network changes?

Management explained that the lower revenue per hundredweight was a strategic decision to accept higher-weight shipments at lower yields to fill network capacity, leading to increased weight per shipment, improved load factors, and higher profitability. They emphasized balancing various KPIs for network optimization.

“So we lowered yield on some higher weight break shipments, and you'll see that come through when you guys have time to go through the staff. I weight per shipment is through the roof. So just on the weight of it, yield on a revenue per hundredweight basis is going to be mathematically lower.”

asked by J. Bruce Chan · answered by Jamie Pierson

2 min read 5 chapters

Detailed narrative

Market Fundamentals and Freight Recovery

The company observes improving market fundamentals, with capacity tightening due to regulatory enforcement and carrier exits. Macro leading demand indicators are becoming more constructive, including seven consecutive months of manufacturing PMI expansion, lean inventory levels (sales to inventory ratio), and increasing Truckload spot rates and tender rejection rates. These trends suggest a continual gradual freight recovery, though geopolitical tensions and diesel price volatility remain uncertainties.

Portfolio Optimization and Divestitures

Forward Air completed the disposition of two non-core businesses within the Omni Logistics segment during Q2 and July, respectively, for a combined sales price of approximately $27 million. The remaining targeted divestiture is the Intermodal business, which is performing well with its highest margin in recent history. The sale process for Intermodal is on schedule for a closing by year-end, aiming to delever the balance sheet, streamline the organization, and enhance shareholder value.

Strategic Freight Characteristics and Network Density

The Expedited Freight segment's strong performance was partly driven by a strategic decision to lower yield on higher-weight shipments to fill open capacity on dedicated lanes. This resulted in increased weight per shipment, improved load factors, reduced empty miles, and higher profitability. Management emphasized balancing various KPIs, not just revenue per hundredweight, to optimize network density and overall profitability.

Intermodal Segment Turnaround

The Intermodal segment bounced back with its best EBITDA in five quarters and best margin in six quarters. This improvement is attributed to a strong pipeline, recently enacted strategic rate increases on underperforming accounts, and new large customer additions. Management confirmed that these rate adjustments did not lead to customer losses, as customers understood the need for adjustments due to sourcing pattern changes and tariff impacts.

Earnings Quality and Operating Leverage

Management highlighted the dramatically improved earnings quality and ability to translate operating improvements to cash and liquidity. Consolidated EBITDA on an LTM basis was $319 million. The company believes it is at a 'tipping point' of internal operating leverage, where each additional shipment should disproportionately translate to the bottom line, especially if diesel prices remain elevated, providing a tailwind.

Summary of the company's earnings call; see how call summaries are prepared. Not investment advice.