Knight-Swift Transportation Holdings Inc. (KNX) Q4 2025 Earnings Call

Investor webinar replay

Replay transcript excerpt

In order to get to as many participants as possible, we limit the questions to one per participant. If you have a second question, please feel free to get back in the queue and we will answer as many questions as time allows. If we are not able to get to your question due to time restrictions, you may call Adam, for some opening remarks. Thank you, Brad, and good afternoon, everyone. During the fourth quarter, the truckload market saw demand that was generally stable but lacking the typical broad-based seasonal lift in demand until late in the quarter. Seasonal project activity occurred in October but wound down quickly in early November. As a result, truckload volumes were lower than we expected. While we did see some improvement in overall demand and a tightening spot market in December, it was a reduction in available capacity that seemed to be the primary driver of the tightening market. The pressure on capacity also may be affecting the secondary equipment market as we experience slowing equipment sales trends and falling average prices during the quarter. Developments such as these are often a precursor to a more healthy market. Thus far in January, network balance is running better than typical seasonality as capacity continues to be under pressure. We are pleased that our people were able to deliver meaningful sequential operating margin improvement in our truckload segment, even while demand was short of our expectation for much of the quarter. For the full year, our progress on structurally cutting costs out of the business helped us overcome a $125 million decline in truckload revenue excluding fuel surcharge, but grew adjusted operating income $28 million in this segment. At the same time, the truckload business overcame inflation pressures to hold its 20...