Hub Group Reports Second Quarter 2025 Results

About this update from Hub Group, Inc.

Highlights: GAAP diluted earnings per share (EPS) of $0.42 for the second quarter Second quarter revenue of $905.6 m illion Non-GAAP adjusted EPS of $0.45 , which excludes adjustments for vendor settlements in the quarter Operating income of $34 million or 3.8 % of revenue, adjusted operating income (non-GAAP) of $36.9 million or 4.1% of revenue Returned $29 million to shareholders year-to-date through dividend payments of $15 million and stock repurchases of $14 million Strong balance sheet with net debt/EBITDA LTM (non-GAAP) of 0.3x as of June 30, 2025 Proposed Union Pacific and Norfolk Southern combination a catalyst for growth OAK BROOK, Ill. , July 31, 2025 (GLOBE NEWSWIRE) -- Hub Group, Inc. (Nasdaq: HUBG) announced second quarter 2025 net income of $25 million and diluted earnings per share of $0.42 . Adjusting for vendor settlement expenses of $2.6 million (pre-tax), second quarter 2025 adjusted net income (non-GAAP) of $27.0 million decreased 6.2% from the prior year net income of $29.0 million . Adjusted EPS (non-GAAP) of $0.45 per diluted share decreased $0.02 from $0.47 EPS reported in the second quarter of 2024. “The team continues to navigate this operating environment with a focus on serving customers, improving productivity, and leveraging growth investments. Intermodal margin performance and new customer wins for the Final Mile business reflect success with our approach. Hub Group has made progress with cost-saving initiatives and remains opportunistic with capital deployment as reflected in the announced agreement to acquire certain assets from Marten Intermodal. Although market conditions remain challenging, higher margin and free cash flow performance from cycle trough-to-trough highlight the benefits of our strategy and execution, and we remain optimistic on the long-term growth opportunity,” said Phil Yeager , Hub Group’s President, Chief Executive Officer and Vice Chairman. Second Quarter 2025 Results Consolidated revenue for the second quarter of 2025 was $906 million , an 8% decrease from $986 million reported in the second quarter of 2024. Intermodal volume growth of 2% was offset by lower revenue per unit in intermodal and brokerage, decreased fuel revenue, and sub-seasonal demand across segments. Purchased transportation and warehousing costs of $656 million were 10% lower than prior year. Salaries and benefits of $143 million were 1% higher than prior year driven by additional warehouse and driver team members and the EASO acquisition. Total legacy headcount, which excludes acquisition employees, drivers and warehouse employees, declined 3% from prior year. Depreciation and amortization of $32 million decreased 14% from prior year. Insurance and claims of $11 million decreased 16% due to lower claims costs in the quarter. General and administrative expenses increased from prior year due to the impact from vendor settlements in the quarter. GAAP operating income for the second quarter was $34 million or 3.8% of revenue and adjusted operating income (non-GAAP) was $37 million or 4.1% of revenue. Prior year operating income was $39.5 million or 4.0% of revenue. Adjusted EBITDA (non-GAAP) for the second quarter was $85 million . Net debt/EBITDA LTM (non-GAAP) was 0.3x for the second quarter, below the leverage target range of 0.75 to 1.25x. Intermodal and Transportation Solutions (“ITS”) Segment revenue was $528 million in the second quarter, down from $561 million in the prior year due to intermodal mix, price and fuel impacts, along with lower dedicated revenue. ITS operating income was $14.4 million , or 2.7% of revenue, up from $13.6 million in the prior year. Second quarter Logistics Segment revenue was $404 million , down from $459 million in the prior year due to lower volume and revenue per load in our brokerage business, exiting of unprofitable business in consolidation and fulfilment, and sub-seasonal demand in managed transportation and final mile businesses. GAAP Logistics operating income was $20 million , or 4.9% of revenue. Adjusted Logistics operating income (non-GAAP) was $23 million , or 5.6% of revenue, down from $26 million in the prior year, due to a lower brokerage margin. Capital expenditures for the second quarter of 2025 totaled $11 million and decreased sequentially due to lower tractor fleet investment. As of June 30, 2025 , we had cash and restricted cash of $164 million . Year-to-date the company returned $29 million to shareholders through dividend payments of $15 million and stock repurchases of $14 million . Proposed Union Pacific and Norfolk Southern Combination We are supportive of our rail partners Union Pacific and Norfolk Southern in their announced plan to form America’s first transcontinental railroad. Throughout Hub Group’s history, we have remained committed to serving customers and realizing the potential of intermodal transportation. The announced transaction would further accelerate our long-term growth opportunity. Specifically, a transcontinental network removes friction in gateways, reduces transit times, provides access to new markets, and increases competition with truck volume through new single-line service. We remain focused on executing our strategy and will stay in close communication with our rail partners. 2025 Outlook We expect 2025 diluted earnings per share will range from $1.80 to $2.05 . We estimate revenue of approximately $3.6 billion to $3.8 billion for the full year. We project an effective tax rate of approximately 24.5% and capital expenditures in the range of $40 million to $50 million for the full year. Non-GAAP Financial Measures In this press release, we present certain non-GAAP financial measures, including adjusted EPS, adjusted operating income, adjusted EBITDA, and net debt/EBITDA. As required by the rules of the Securities and Exchange Commission (“SEC”), we have provided herein a reconciliation of these non-GAAP financial measures to the most directly comparable measures under GAAP, along with an explanation why management believes these non-GAAP financial measures provide relevant and useful information. These non-GAAP financial measures should be viewed in addition to, and not as an alternative to or substitute for, measures determined in accordance with GAAP and are not necessarily comparable to non-GAAP measures that may be presented by other companies. Certain Forward-Looking Statements: Statements in this press release that are not historical facts are forward-looking statements, provided pursuant to the safe harbor established under the Private Securities Litigation Reform Act of 1995. These forward-looking statements are not guarantees of future performance and involve risks, uncertainties and other factors that might cause the actual performance of Hub Group to differ materially from those expressed or implied by this discussion and, therefore, should be viewed with caution. Further information on the risks that may affect Hub Group’s business is included in filings it makes with the SEC from time to time, including those discussed under the “Risk Factors” section in Hub Group’s most recently filed periodic reports on Form 10-K and Form 10-Q and subsequent filings. Hub Group assumes no obligation to update any such forward-looking statements. Conference Call Hub Group, Inc. will hold a conference call at 5:00 p.m. Eastern Time on July 31, 2025 , to discuss our Second quarter 2025 results. Hosting the conference call will be Phil Yeager , President, CEO and Vice Chairman and Kevin Beth , Executive Vice President, Chief Financial Officer and Treasurer. This call is being webcast and can be accessed through the Investors link on Hub Group’s web site at www.hubgroup.com. The webcast is listen-only. Those interested in participating in the question-and-answer session should follow the telephone dial-in instructions below. To participate in the conference call by telephone, please pre-register https://register-conf.media-server.com/register/BI812532441b224285a8849232f987af30 to receive the dial-in number and unique PIN. On the day of the call, dial in approximately ten minutes prior to the scheduled call time and enter the unique participant PIN received during registration. The call will be limited to 60 minutes, including questions and answers. An audio replay will be available through the Investors link on the Company's web site at www.hubgroup.com . This replay will be available for 30 days. About Hub Group Hub Group offers comprehensive transportation and logistics management solutions. Keeping our customers’ needs in focus, Hub Group designs, continually optimizes, and applies industry-leading technology to our customers’ supply chains for better service, greater efficiency, and total visibility. As an award-winning, publicly traded company (Nasdaq: HUBG) with approximately $4 billion in revenue, our nearly 6,000 employees and drivers across the globe are always in pursuit of “The Way Ahead” – a commitment to service, integrity and innovation. For more information, visit hubgroup.com . SOURCE: Hub Group, Inc. CONTACT: Garrett Holland , [email protected] HUB GROUP, INC. CONSOLIDATED STATEMENTS OF EARNINGS (in thousands, except per share amounts) (unaudited) Three Months Ended June 30 , 2025 2024 % of % of Amount Revenue Amount Revenue Operating revenue $ 905,648 100.0 % $ 986,495 100.0 % Operating expenses: Purchased transportation and warehousing 655,904 72.4 % 727,236 73.7 % Salaries and benefits 143,310 15.8 % 141,856 14.4 % Depreciation and amortization 32,387 3.6 % 37,772 3.8 % Insurance and claims 10,644 1.2 % 12,639 1.3 % General and administrative 28,925 3.2 % 27,877 2.8 % Loss (gain) on sale of assets, net 130 0.0 % (413 ) -0.0 % Total operating expenses 871,300 96.2 % 946,967 96.0 % Operating income 34,348 3.8 % 39,528 4.0 % Other income (expense): Interest expense, net (2,129 ) -0.2 % (1,881 ) -0.2 % Other, net 728 -0.0 % (66 ) -0.0 % Total other expense, net (1,401 ) -0.2 % (1,947 ) -0.2 % Income before provision for income taxes 32,947 3.6 % 37,581 3.8 % Provision for income taxes 7,916 0.9 % 8,566 0.9 % Net income 25,031 29,015 Less: Net loss attributable to non-controlling interests (216 ) - Net income attributable to Hub Group, Inc. $ 25,247 $ 29,015 Earnings per share Basic $ 0.42 $ 0.48 Diluted $ 0.42 $ 0.47 Basic weighted average number of shares outstanding 60,002 60,710 Diluted weighted average number of shares outstanding 60,210 61,108 HUB GROUP, INC. CONSOLIDATED STATEMENTS OF EARNINGS (in thousands, except per share amounts) (unaudited) Six Months Ended June 30 , 2025 2024 % of % of Amount Revenue Amount Revenue Operating revenue $ 1,820,864 100.0 % $ 1,985,988 100.0 % Operating expenses: Purchased transportation and warehousing 1,313,827 72.2 % 1,467,408 73.9 % Salaries and benefits 292,723 16.1 % 286,352 14.4 % Depreciation and amortization 64,966 3.5 % 76,103 3.8 % Insurance and claims 21,526 1.2 % 25,257 1.3 % General and administrative 56,070 3.1 % 55,111 2.8 % Loss (gain) on sale of assets, net 65 0.0 % (910 ) -0.1 % Total operating expenses 1,749,177 96.1 % 1,909,321 96.1 % Operating income 71,687 3.9 % 76,667 3.9 % Other income (expense): Interest expense, net (4,121 ) -0.2 % (4,387 ) -0.2 % Other, net 1,023 0.1 % (236 ) -0.0 % Total other expense, net (3,098 ) -0.1 % (4,623 ) -0.2 % Income before provision for income taxes 68,589 3.8 % 72,044 3.7 % Provision for income taxes 16,363 0.9 % 15,976 0.8 % Net income 52,226 56,068 Less: Net income attributable to non-controlling interests 131 - Net income attributable to Hub Group, Inc. $ 52,095 $ 56,068 Earnings per share Basic $ 0.87 $ 0.92 Diluted $ 0.86 $ 0.91 Basic weighted average number of shares outstanding 60,096 61,018 Diluted weighted average number of shares outstanding 60,314 61,387 HUB GROUP, INC. CONSOLIDATED BALANCE SHEETS (in thousands, except share data) June 30 , December 31 , 2025 2024 (unaudited) ASSETS CURRENT ASSETS: Cash and cash equivalents $ 137,048 $ 98,248 Restricted cash 26,553 28,700 Accounts receivable trade, net 541,554 581,516 Accounts receivable other 11,887 10,880 Prepaid taxes 11,060 15,115 Prepaid expenses and other current assets 17,337 33,870 TOTAL CURRENT ASSETS 745,439 768,329 Restricted investments 20,005 21,642 Property and equipment, net 725,200 739,896 Right-of-use assets - operating leases 219,925 233,651 Right-of-use assets - financing leases 731 1,062 Other intangibles, net 259,300 267,357 Goodwill 804,019 814,309 Other non-current assets 25,432 22,097 TOTAL ASSETS $ 2,800,051 $ 2,868,343 LIABILITIES AND STOCKHOLDERS' EQUITY CURRENT LIABILITIES: Accounts payable trade $ 235,295 $ 279,982 Accounts payable other 31,260 29,069 Accrued payroll 26,820 32,833 Accrued other 90,337 91,441 Lease liability - operating leases 44,006 45,492 Lease liability - financing leases 569 663 Current portion of long-term debt 97,641 100,001 TOTAL CURRENT LIABILITIES 525,928 579,481 Deferred consideration 28,356 30,639 Long-term debt 134,279 164,361 Other non-current liabilities 51,551 51,004 Lease liability - operating leases 186,033 197,664 Lease liability - financing leases 96 330 Deferred taxes 147,600 152,913 STOCKHOLDERS' EQUITY: Preferred stock, $.01 par value; 2,000,000 shares authorized; no shares issued or outstanding in 2025 and 2024. - - Common stock Class A: $.01 par value; 97,337,700 shares authorized; 72,303,228 shares issued in both 2025 and 2024; 60,641,237 shares outstanding in 2025 and 60,746,745 shares outstanding in 2024. 723 723 Class B: $.01 par value; 662,300 shares authorized; 574,903 shares issued and outstanding in both 2025 and 2024. 6 6 Additional paid-in capital 216,107 222,039 Retained earnings 2,059,244 2,022,265 Accumulated other comprehensive loss 2,672 (1,453 ) Treasury stock; at cost, 11,661,991 shares in 2025 and 11,556,483 shares in 2024 (603,793 ) (598,583 ) Total Hub Group, Inc. equity 1,674,959 1,644,997 Non-controlling interests 51,249 46,954 TOTAL STOCKHOLDERS' EQUITY 1,726,208 1,691,951 TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 2,800,051 $ 2,868,343 HUB GROUP, INC. CONSOLIDATED STATEMENTS OF CASH FLOWS (in thousands) (unaudited) Six Months Ended June 30 , 2025 2024 Cash flows from operating activities: Net income $ 52,226 $ 56,068 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization of intangibles and right-of-use assets 94,448 99,100 Deferred taxes (4,191 ) (9,249 ) Non-cash share-based compensation expense 9,345 9,433 Loss (gain) on sale of assets, net 65 (910 ) Changes in operating assets and liabilities, net of acquisitions: Restricted investments 640 (281 ) Accounts receivable, net 41,251 15,784 Prepaid taxes 4,191 4,537 Prepaid expenses and other current assets 16,910 19,697 Other non-current assets (4,445 ) (1,503 ) Accounts payable (43,705 ) (14,270 ) Accrued expenses (13,552 ) (6,542 ) Non-current liabilities (21,647 ) (21,399 ) Net cash provided by operating activities 131,536 150,465 Cash flows from investing activities: Proceeds from sale of equipment 4,056 5,750 Purchases of property and equipment (30,480 ) (31,255 ) Acquisitions, net of cash acquired - 3,701 Net cash used in investing activities (26,424 ) (21,804 ) Cash flows from financing activities: Repayments of long term debt (51,729 ) (53,233 ) Purchase of treasury stock (13,814 ) (32,938 ) Dividends paid (15,000 ) (15,230 ) Stock withheld for payments of withholding taxes (6,673 ) (8,664 ) Finance lease payments (328 ) (1,217 ) Proceeds from issuance of debt 19,103 15,618 Net cash used in financing activities (68,441 ) (95,664 ) Effect of exchange rate changes on cash and cash equivalents (18 ) (20 ) Net increase in cash and cash equivalents 36,653 32,977 Cash and cash equivalents beginning of period 126,948 187,270 Cash and cash equivalents end of period $ 163,601 $ 220,247 HUB GROUP, INC. FINANCIAL INFORMATION BY SEGMENT (NON-GAAP) (in thousands) (unaudited) Three Months Ended June 30 , NON-GAAP NON-GAAP Adjusted Operating Revenue 2025 Adjustments (1) 2025 2024 Intermodal and Transportation Services $ 528,184 $ - $ 528,184 $ 561,033 Logistics 404,310 - 404,310 459,088 Inter-segment eliminations (26,846 ) - (26,846 ) (33,626 ) Total operating revenue $ 905,648 $ - $ 905,648 $ 986,495 Three Months Ended June 30 , NON-GAAP NON-GAAP Adjusted Operating Income 2025 Adjustments (1) 2025 2024 Intermodal and Transportation Services $ 14,407 $ 14,407 $ 13,639 Logistics 19,941 2,575 22,516 25,889 Total operating income $ 34,348 $ 2,575 $ 36,923 $ 39,528 Three Months Ended June 30 , NON-GAAP NON-GAAP Adjusted Depreciation and Amortization 2025 Adjustments (1) 2025 2024 Intermodal and Transportation Services $ 22,043 $ - $ 22,043 $ 27,270 Logistics 10,344 - 10,344 10,502 Total depreciation and amortization $ 32,387 $ - $ 32,387 $ 37,772 (1) See Reconciliation of GAAP to Non-GAAP Financial Measures for further discussion. HUB GROUP, INC. FINANCIAL INFORMATION BY SEGMENT (NON-GAAP) (in thousands) (unaudited) Six Months Ended June 30 , Operating Revenue 2025 Non-GAAP Adjustments (1) Non-GAAP Adjusted 2025 2024 Intermodal and Transportation Services $ 1,058,206 - 1,058,206 $ 1,113,066 Logistics 815,311 - 815,311 939,312 Inter-segment eliminations (52,653 ) - (52,653 ) (66,390 ) Total operating revenue $ 1,820,864 - 1,820,864 $ 1,985,988 Six Months Ended June 30 , Non-GAAP Non-GAAP Adjusted Operating Income 2025 Adjustments (1) 2025 2024 Intermodal and Transportation Services $ 28,457 $ 28,457 $ 26,670 Logistics 43,230 2,575 45,805 49,997 Total operating income $ 71,687 $ 2,575 $ 74,262 $ 76,667 Six Months Ended June 30 , Depreciation and Amortization 2025 Non-GAAP Adjustments (1) Non-GAAP Adjusted 2025 2024 Intermodal and Transportation Services $ 44,068 - 44,068 $ 54,319 Logistics 20,898 - 20,898 21,784 Total depreciation and amortization $ 64,966 - 64,966 $ 76,103 (1) See Reconciliation of GAAP to Non-GAAP Financial Measures for further discussion. HUB GROUP, INC. RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES (in millions, except per share amounts) (unaudited) The following is a reconciliation of GAAP earnings to Non-GAAP Adjusted Earnings, excluding certain items, for income before provision for income taxes (Pre-Tax), net income (After-Tax) and diluted earnings per share (Per Share): Three Months Ended Six Months Ended June 30, 2025 June 30, 2025 Pre-Tax After-Tax Per Share Pre-Tax After-Tax Per Share GAAP Earnings $ 32.9 $ 25.0 $ 0.42 $ 68.6 $ 52.2 $ 0.86 Vendor settlements (i) 2.6 2.0 $ 0.03 2.6 2.0 $ 0.03 Non-GAAP Adjusted Earnings $ 35.5 $ 27.0 $ 0.45 $ 71.2 $ 54.2 $ 0.89 By providing this measure of Non-GAAP Adjusted Earnings, management intends to provide investors with a useful measure of Hub Group's performance that excludes certain non-ordinary expense items and allowing better evaluation of underlying business performance and period-to-period comparability. (i) Vendor settlements includes vendor disputes related to our network alignment consolidation activities. HUB GROUP, INC. RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES (in millions, except per share amounts) (unaudited) The following is a reconciliation of GAAP Operating Income to Non-GAAP Adjusted Operating Income, excluding certain items. Three Months Ended Six Months Ended June 30, 2025 June 30, 2025 ITS Logistics Consolidated ITS Logistics Consolidated GAAP Operating Income $ 14.4 $ 19.9 $ 34.3 $ 28.5 $ 43.2 $ 71.7 Vendor settlements (i) $ - $ 2.6 $ 2.6 $ - $ 2.6 $ 2.6 Non-GAAP Adjusted Operating Income $ 14.4 $ 22.5 $ 36.9 $ 28.5 $ 45.8 $ 74.3 By providing this measure of Non-GAAP Adjusted Operating Income, management intends to provide investors with a useful measure of Hub Group's performance that excludes certain non-ordinary expense items and allowing better evaluation of underlying business performance and period-to-period comparability. (i) Vendor settlements includes vendor disputes related to our network alignment consolidation activities. RECONCILIATION OF NET INCOME TO EBITDA (1) AND NET DEBT / EBITDA LEVERAGE (in thousands) (unaudited) 2024 2024 2025 2025 Q3 Q4 Q1 Q2 LTM (3) Net Income $ 23,603 $ 24,372 $ 27,194 $ 25,031 $ 100,200 Interest Expense, net 1,333 1,858 1,992 2,129 7,312 Depreciation and Amortization (2) 46,374 47,088 47,046 47,402 187,910 Provision for Income Taxes 7,140 5,387 8,447 7,916 28,890 EBITDA $ 78,450 $ 78,705 $ 84,679 $ 82,478 $ 324,312 Network Alignment (i) $ 8,381 $ 4,814 $ - $ - $ 13,195 Transaction Related (ii) 947 1,194 - - 2,141 Other (iii) 1,061 67 - - 1,128 Vendor Settlements (iv) - - - 2,575 2,575 Adjusted EBITDA $ 88,839 $ 84,780 $ 84,679 $ 85,053 $ 343,351 EBITDA LTM (3) $ 331,535 $ 332,686 $ 330,791 $ 324,312 Net Debt (4) $ 102,105 $ 167,106 $ 140,223 $ 95,537 Net Debt / EBITDA LTM 0.3 0.5 0.4 0.3 Adjusted EBITDA LTM (3) $ 347,016 $ 349,150 $ 347,255 $ 343,351 Net Debt / Adjusted EBITDA LTM 0.3 0.5 0.4 0.3 (1) By providing this Non-GAAP measure of EBITDA and Net Debt / EBITDA Leverage, management intends to provide investors with a meaningful, consistent comparison of the Company's profitability and leverage for the periods presented. (2) Includes depreciation of property and equipment, amortization of intangible assets and amortization of right-of-use assets. (3) Last twelve months (4) Total debt (including finance leases) less cash and cash equivalents (i) Network Alignment expenses include transfer costs, legal fees and other expenses related to consolidating from existing warehouses to improve operational efficiency of our cross dock services, Final Mile and Consolidation and Fulfillment lines of business. (ii) Transaction related expenses are comprised of due diligence costs, legal fees, insurance fees and other professional service fees incurred as part of the forming of a joint venture with EASO in 2024 and the acquisition of Forward Air Final Mile in 2023. (iii) Other includes non-ordinary expenses related to employee matters. (iv) Vendor settlements includes vendor disputes related to our network alignment consolidation activities. Source: Hub Group, Inc.

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