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    FWRD
    Earnings call· Jun 2026(Q2 FY26)

    FORWARD AIR Q2 FY26 earnings call FWRD

    Aug 5, 2026 Source

    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

    6
    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

    3
    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%

    Operational metrics

    13
    Consolidated EBITDA
    $93 millionvs $79 million Q2 FY25
    Q2 FY26

    Calculated pursuant to credit agreement.

    Consolidated EBITDA margin
    1 percentage pointimprovement YoY
    Q2 FY26

    Improvement in margin compared to Q2 FY25.

    LTM Consolidated EBITDA
    $319 million
    LTM Q2 FY26

    As of the end of the second quarter.

    Adjusted EBITDA
    $92 millionvs $74 million Q2 FY25
    Q2 FY26

    Improved by $18 million compared to Q2 FY25, indicating continued improvement in earnings quality.

    Operating income (excluding impairment)
    $43 millionmore than double $20 million Q2 FY25
    Q2 FY26

    Excluding the $244 million goodwill impairment charge, operating income more than doubled year-over-year.

    Cash used by operating activities
    $5 millionvs $13 million Q2 FY25
    Q2 FY26

    Improvement compared to the $13 million used in Q2 FY25.

    Cash provided by operating activities
    $41 millionvs $27 million H1 FY25
    H1 FY26

    Improvement compared to the $27 million in H1 FY25.

    Total liquidity
    $401 millionflat sequentially
    Q2 FY26

    Liquidity remained flat sequentially despite a $34 million annual interest payment on senior secured notes.

    Diesel price increase
    51%
    Last 4 months

    Diesel prices started increasing in March and remained elevated through April, May, and June.

    Contract rates coverage
    almost 100%
    Current

    All business, including with the major customer, is almost 100% under contract rates, which are updated depending on the term.

    Non-core assets revenue (prior estimate)
    little over $100 million
    Prior quarter

    Analyst's recollection of prior quarter's disclosure regarding revenue for non-core businesses within Omni, specifically Truckload.

    Total businesses targeted for divestiture revenue (prior estimate)
    around $394 million
    Prior disclosure

    Jamie Pierson's recollection of the total revenue for all three businesses targeted for divestiture, including Intermodal.

    Two non-core assets sold revenue (prior estimate)
    around $100 million to $150 million
    Prior disclosure

    Jamie Pierson's estimate for the revenue contribution of the two non-core assets that were sold, as part of the larger $394 million total.

    Industry KPIs

    1
    MetricValueDetails
    Revenue per piece yielddecreased

    Deals & partnerships

    2
    UndisclosedDisposition 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 customerMemorandum 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

    4
    Macroeconomic uncertaintiesOngoing

    Not quantified

    Mitigation: Disciplined cost management and exceptional customer service.

    Geopolitical tensionsOngoing

    Could weigh on industrial activity and delay demand recovery

    Mitigation: Disciplined cost management and exceptional customer service.

    Diesel price volatilityOngoing

    Could weigh on industrial activity and delay demand recovery

    Mitigation: Disciplined cost management and exceptional customer service.

    Goodwill impairment chargeQ2 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

    5

    Intermodal business sale completion

    Q4 FY26
    CurrentSales process progressing as planned
    TargetClosing 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.

    Q&A highlights

    7

    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 read5 chapters

    Detailed Narrative

    01

    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.

    02

    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.

    03

    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.

    04

    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 impact🌐s.

    05

    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.

    AI-generated summary of the company’s earnings call. Not investment advice.