Knight-Swift Transportation Holdings Inc.

04/29/2026 | Press release | Distributed by Public on 04/29/2026 11:02

Quarterly Report for Quarter Ending March 31, 2026 (Form 10-Q)

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
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,
•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,
Glossary of Terms
KNIGHT-SWIFT TRANSPORTATION HOLDINGS INC.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS - CONTINUED
•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," "address," "mission," "maintain," "ongoing," "predicts," "budgets," "remains," "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 2025 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 2025 Annual Report.
Glossary of Terms
KNIGHT-SWIFT TRANSPORTATION HOLDINGS INC.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS - CONTINUED
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, continue organic growth, and continue 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 one of the country's largest truckload fleets, 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 other operating segments, included within our All Other Segments.
Key Financial Highlights - Year-to-Date March 31, 2026
Consolidated operating income decreased 57.1% to $28.6 million during the quarter ended March 31, 2026, as compared to the same period last year. Net (loss) income attributable to Knight-Swift decreased 104.3% to a $1.3 million loss.
•Truckload - 96.9% operating ratio during the quarter ended March 31, 2026. The Adjusted Operating Ratio1 was 96.3%, with a 0.3% year-over-year decrease in revenue, excluding fuel surcharge and intersegment transactions.
•LTL - 101.0% operating ratio during the quarter ended March 31, 2026. The Adjusted Operating Ratio1 deteriorated 540 basis points year-over-year to 99.6%, primarily due to $18.0 million of expense for adverse claims development in our LTL segment, primarily related to an adverse arbitration ruling on a 2022 claim.
•Logistics - 97.2% operating ratio during the quarter ended March 31, 2026. The Adjusted Operating Ratio1 was 96.2% with a gross margin of 16.6%. Revenue decreased 9.9% year-over-year driven by an 18.9% decline in load count, partially offset by a 10.4% increase in revenue per load.
•Intermodal - 101.5% operating ratio during the quarter ended March 31, 2026, as year-over-year load count and revenue per load increased 1.2% and 1.6%, respectively.
•All Other Segments - Operating loss was $7.1 million during the quarter ended March 31, 2026 compared to operating income of $6.0 million during the comparable period of 2025, largely as a result of inclusion of $5.2 million of costs for the accounts receivable securitization program during the first quarter of 2026 that were previously reported in interest expense under the prior arrangement during the first quarter of 2025 and due to startup costs on new contract awards for which revenue is expected to ramp in the coming months.
•Liquidity and Capital - During the quarter ended March 31, 2026, we generated $142.5 million in operating cash flows and Free Cash Flow1 of $56.9 million. We paid down $33.3 million in finance lease liabilities, $41.4 million in operating lease liabilities, and had $32.0 million of net borrowings on our 2025 Revolver during the year-to-date period ended March 31, 2026. As of March 31, 2026, we had a balance of $222.8 million in unrestricted cash and cash equivalents, $2.1 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.
Glossary of Terms
KNIGHT-SWIFT TRANSPORTATION HOLDINGS INC.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS - CONTINUED
Key Financial Data and Operating Metrics
Quarter Ended March 31,
2026 2025
GAAP financial data: (Dollars in thousands, except per share data)
Total revenue $ 1,850,223 $ 1,824,362
Revenue, excluding truckload and LTL fuel surcharge $ 1,638,032 $ 1,632,963
Net (loss) income attributable to Knight-Swift $ (1,317) $ 30,639
(Loss) earnings per diluted share $ (0.01) $ 0.19
Operating ratio 98.5 % 96.3 %
Non-GAAP financial data:
Adjusted Net Income Attributable to Knight-Swift 1
$ 14,262 $ 45,372
Adjusted EPS 1
$ 0.09 $ 0.28
Adjusted Operating Ratio 1
97.0 % 94.7 %
Revenue equipment statistics by segment:
Truckload
Average tractors 2
21,027 21,909
Average trailers 3
82,288 85,928
LTL
Average tractors 4
4,239 4,023
Average trailers 5
11,281 10,976
Intermodal
Average tractors 595 622
Average containers 12,511 12,546
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 2.9 years and 2.8 years as of March 31, 2026 and 2025, respectively.
3Our average trailers includes 8,950 and 9,336 trailers related to leasing activities recorded within our All Other Segments for the quarters ended March 31, 2026 and 2025, respectively. Our trailer fleet within the Truckload segment had a weighted average age of 10.9 years and 8.8 years as of March 31, 2026 and 2025, respectively. Starting with the fourth quarter of 2025, the Company is excluding chassis trailers from its average trailer calculation. Prior period information has been recast for comparability.
4Our LTL tractor fleet had a weighted average age of 4.1 years and 4.0 years as of March 31, 2026 and 2025, respectively. Our LTL tractor fleet includes 646 and 668 tractors from ACT's dedicated and other businesses for the quarters ended March 31, 2026 and 2025, respectively.
5Our LTL trailer fleet had a weighted average age of 7.9 years and 7.8 years as of March 31, 2026 and 2025, respectively. Our LTL trailer fleet includes 1,309 and 1,015 trailers from ACT's dedicated and other businesses for the quarters ended March 31, 2026 and 2025, respectively.
Glossary of Terms
KNIGHT-SWIFT TRANSPORTATION HOLDINGS INC.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS - CONTINUED
Market Trends and Company Outlook
Market Trends
Freight markets during the first quarter reflected continued adjustment following a prolonged period of excess capacity, alongside emerging impacts from regulatory enforcement and episodic weather disruption. In the one-way truckload market, regulatory actions by the Federal Motor Carrier Safety Administration ("FMCSA") and US Department of Transportation ("DOT") related to driver qualifications, Commercial Driver's License ("CDL") issuance, and hours-of-service compliance are beginning to affect capacity, particularly among certain lower-cost operators, contributing to tighter conditions in portions of the market.
Market volatility increased early in the quarter following severe winter weather in January, which disrupted networks and temporarily constrained available capacity. While weather-related impacts moderated as the quarter progressed, broader market indicators pointed to a gradual tightening environment, including higher load tender activity, increased tender rejections, and firmer spot pricing. Demand trends remained uneven across geographies and customer segments, resulting in continued variability in freight flows.
Against this backdrop, truckload pricing activity increased during the quarter as bid cycles accelerated. Unlike prior periods characterized by elevated excess capacity, bid activity increasingly reflected shippers' focus on securing reliable service amid tightening availability. Turnback and off-cycle bid activity also became more common as networks adjusted. In response, we remained focused on disciplined pricing, selective freight alignment, and maintaining network efficiency while navigating these evolving market conditions.
In the LTL market, conditions were comparatively stable. Shipment activity was impacted early in the quarter by winter weather before returning closer to typical seasonal patterns. As the quarter progressed, changes in shipment characteristics, including higher weights and longer lengths of haul, reflected shifts in freight mix within the market. We continued to focus on operational execution and network optimization as these trends developed.
Logistics market conditions remained competitive, with third-party carrier availability and pricing influenced by tighter capacity and heightened compliance standards across the industry. These dynamics contributed to ongoing volatility in volumes and margins, particularly in contract freight, while spot market conditions improved later in the quarter. Intermodal markets also showed sequential improvement as weather disruptions eased, although pricing competition remained elevated.
Overall, freight markets during the first quarter continued to transition as capacity, regulatory developments, and weather-related disruptions influenced conditions across transportation modes. While certain indicators exiting the quarter suggested improving balance between supply and demand, market conditions remain subject to uncertainty related to economic activity, fuel costs, regulatory outcomes, and seasonal demand patterns.
Company Outlook
Our Company outlook for the second quarter of 2026 includes the following:
Truckload
•Truckload Segment revenue, excluding fuel surcharge, up low single digit percent year-over-year with operating margins improving 100 - 200 basis points year-over-year for second quarter.
LTL
•LTL Segment revenue, excluding fuel surcharge, up low single digit percent year-over-year in second quarter, driven by mix and yield improvement, with shipment count relatively stable year-over-year,
•Adjusted Operating Ratio in low 90's for second quarter.
Logistics
•Logistics Segment revenue up low-to-mid single-digit percent year-over-year in second quarter,
•Adjusted Operating Ratio stable sequentially.
Glossary of Terms
KNIGHT-SWIFT TRANSPORTATION HOLDINGS INC.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS - CONTINUED
Intermodal
•Intermodal Segment load count up high single to low double-digit percent sequentially in second quarter,
•Adjusted Operating Ratio improving 150 - 250 basis points sequentially in second quarter.
All Other
•All Other Segments operating income, before including the $11.5 million quarterly intangible asset amortization, approximately $14 million to $18 million in second quarter, which includes approximately $5 million of AR securitization cost that was reported as interest expense in 2025.
Additional
•Gain on sale to be in the range of $12 million to $17 million in second quarter,
•Net interest expense fairly flat sequentially in second quarter,
•"Other income, net" below the line expected to be roughly $4 million to $5 million in second quarter,
•Net cash capital expenditures for full-year 2026 expected range of $600 million - $650 million,
•Expected effective tax rate on adjusted income before taxes of approximately 25.5% to 26.5% for second quarter and for full year 2026.
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 2026 than in 2025 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 2026. Additionally, we anticipate that our equipment suppliers may need to raise prices in response to 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 2026. 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 like we have recently experienced. 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.
Glossary of Terms
KNIGHT-SWIFT TRANSPORTATION HOLDINGS INC.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS - CONTINUED
Results of Operations - Summary
Operating Results: First Quarter 2026 compared to First Quarter 2025
The $32.0 million decrease in net (loss) income attributable to Knight-Swift to a $1.3 million net loss during the first quarter of 2026 from net income of $30.6 million during the same period last year includes the following:
•Contributor - $16.3 million decrease in operating income within our LTL segment primarily due to $18.0 million of expense for claims development, primarily related to an adverse arbitration ruling on a 2022 claim.
•Contributor - $7.5 million decrease in operating income within our Truckload segment primarily due to $4.1 million of expense in our Truckload segment for an adverse decision on VAT reimbursement in Mexico for prior tax years.
•Contributor - $13.1 million decrease in operating income within the All Other Segments, partially due to the inclusion of $5.2 million of costs for the accounts receivable securitization program that were previously reported in interest expense under the prior arrangement and due to startup costs on new contract awards for which revenue is expected to ramp in the coming months.
•Contributor - $1.5 million decrease in operating income within our Logistics segment due to a 9.9% decrease in revenue year-over-year, driven by a 18.9% decline in load count, partially offset by a 10.4% increase in revenue per load.
•Contributor - $12.2 million decrease in other (expense) income, net, primarily due to net loss within our portfolio of investments.
•Offset - $0.4 million decrease in operating loss within our Intermodal segment, driven by 1.2% increase in load count and a 1.6% increase in revenue per load.
•Offset - $9.5 million decrease in consolidated interest expense primarily driven by the exclusion of $5.2 million of costs for the accounts receivable securitization program that were previously reported in interest expense under the prior arrangement and lower average interest rates.
•Offset - $10.4 million decrease in consolidated income tax expense primarily due to a decrease in pre-tax income. Our effective tax rate for the first quarter of 2026 was 7.0%, compared to 25.4% for the first quarter of 2025.
Glossary of Terms
KNIGHT-SWIFT TRANSPORTATION HOLDINGS INC.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS - CONTINUED
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)
Quarter Ended March 31,
2026 2025
Revenue: (In thousands)
Truckload $ 1,202,166 $ 1,192,550
LTL 368,364 352,401
Logistics 127,608 141,621
Intermodal 93,589 91,103
Subtotal $ 1,791,727 $ 1,777,675
All Other Segments 81,202 71,565
Intersegment eliminations (22,706) (24,878)
Total revenue $ 1,850,223 $ 1,824,362
Quarter Ended March 31,
2026 2025
Operating income (loss): (In thousands)
Truckload $ 37,058 $ 44,600
LTL (3,565) 12,694
Logistics 3,623 5,143
Intermodal (1,424) (1,812)
Subtotal $ 35,692 $ 60,625
All Other Segments (7,108) 6,038
Operating income $ 28,584 $ 66,663
Glossary of Terms
KNIGHT-SWIFT TRANSPORTATION HOLDINGS INC.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS - CONTINUED
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 15,100 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 6,700. Our LTL segment operates approximately 4,200 tractors and approximately 11,300 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 approximately 82,000 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. 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.
Glossary of Terms
KNIGHT-SWIFT TRANSPORTATION HOLDINGS INC.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS - CONTINUED
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.
Operating Statistic Relevant Segment(s) Description
Average Revenue per Tractor Truckload Measures productivity and represents revenue (excluding fuel surcharge and intersegment transactions) divided by average tractor count
Total Miles per Tractor Truckload Total miles (including loaded and empty miles) divided by average tractor count
Average Length of Haul Truckload, LTL For our Truckload segment this is calculated as average miles traveled with loaded trailer cargo per order.
For our LTL segment this is calculated as average miles traveled from the origin service center to the destination service center.
Non-paid Empty Miles Percentage Truckload Percentage of miles without trailer cargo
Shipments per Day LTL Average number of shipments completed each business day
Weight per Shipment LTL Total weight (in pounds) divided by total shipments
Revenue per shipment LTL Total revenue divided by total shipments
Revenue xFSC per shipment LTL Total revenue, excluding fuel surcharge, divided by total shipments
Revenue per hundredweight LTL
Measures yield and is calculated as total revenue divided by total weight (in pounds) times 100
Revenue xFSC per hundredweight LTL Total revenue, excluding fuel surcharge, divided by total weight (in pounds) times 100
Average Tractors Truckload, LTL, Intermodal Average tractors in operation during the period including company tractors and tractors provided by independent contractors
Average Trailers Truckload, LTL Average trailers in operation during the period
Average Revenue per Load Logistics, Intermodal Total revenue (excluding intersegment transactions) divided by load count
Gross Margin Percentage Logistics Logistics gross margin (revenue, excluding intersegment transactions, less purchased transportation expense, excluding intersegment transactions) as a percentage of logistics revenue, excluding intersegment transactions
Average Containers Intermodal Average containers in operation during the period
GAAP Operating Ratio Truckload,
LTL, Logistics, Intermodal 		Measures operating efficiency and is widely used in our industry as an assessment of management's effectiveness in controlling all categories of operating expenses. Calculated as operating expenses as a percentage of total revenue, or the inverse of operating margin.
Non-GAAP Adjusted Operating Ratio Truckload,
LTL, Logistics, Intermodal 		Measures operating efficiency and is widely used in our industry as an assessment of management's effectiveness in controlling all categories of operating expenses. Consolidated and segment Adjusted Operating Ratios are reconciled to their corresponding GAAP operating ratios under "Non-GAAP Financial Measures," below.
Glossary of Terms
KNIGHT-SWIFT TRANSPORTATION HOLDINGS INC.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS - CONTINUED
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.
Quarter Ended March 31, Increase
(Decrease)
2026 2025
(Dollars in thousands, except per tractor data)
Total revenue $ 1,202,166 $ 1,192,550 0.8 %
Revenue, excluding fuel surcharge and intersegment transactions $ 1,045,107 $ 1,048,083 (0.3 %)
GAAP: Operating income $ 37,058 $ 44,600 (16.9 %)
Non-GAAP: Adjusted Operating Income 1
$ 38,859 $ 46,485 (16.4 %)
Average revenue per tractor 2
$ 49,703 $ 47,838 3.9 %
GAAP: Operating ratio 2
96.9 % 96.3 % 60 bps
Non-GAAP: Adjusted Operating Ratio 1 2
96.3 % 95.6 % 70 bps
Non-paid empty miles percentage 2
13.2 % 14.1 % (90 bps)
Average length of haul (miles) 2
375 372 0.8 %
Total miles per tractor 2
20,296 20,049 1.2 %
Average tractors 2 3
21,027 21,909 (4.0 %)
Average trailers 2 4
82,288 85,928 (4.2 %)
1 Refer to "Non-GAAP Financial Measures" below.
2 Defined under "Operating Statistics," above.
3 Includes 19,017 and 19,840 average company-owned tractors for the first quarter of 2026 and 2025, respectively.
4 Our average trailers includes 8,950 and 9,336 trailers related to leasing activities recorded within our All Other Segments for the quarters ended March 31, 2026 and 2025, respectively. Starting with the fourth quarter of 2025, the Company is excluding chassis trailers from its average trailer calculation. Prior period information has been recast for comparability.
Glossary of Terms
KNIGHT-SWIFT TRANSPORTATION HOLDINGS INC.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS - CONTINUED
Comparison Between the Quarters Ended March 31, 2026 and 2025 - The Truckload segment experienced a rapidly evolving market in the first quarter as freight market tightness became more evident. After unusually disruptive winter weather early in the quarter, most of this segment's operating fundamentals improved progressively through the quarter, including total miles, utilization, tender rejection rates, and revenue per mile, excluding fuel surcharge. The spike in fuel prices during March did reduce the earnings contribution of the stronger miles. Truckload segment revenue, excluding fuel surcharge and intersegment transactions, was essentially flat year-over-year, as a 1.4% improvement in revenue per loaded mile, excluding fuel surcharge and intersegment transactions, largely offset a 1.8% decrease in loaded miles. Miles per tractor improved 1.2% year-over-year as a result of an increase in load tenders and our efforts to drive productivity. Adjusted Operating Income declined $7.6 million year-over-year, largely as a result of the $4.1 million charge for an adverse decision in VAT reimbursement, as well as the volume and cost headwinds from the severe winter weather and fuel escalation in the quarter. Strengthening rates and improvement in empty miles helped to largely offset these headwinds, allowing our Truckload segment to produce an Adjusted Operating Ratio that only deteriorated 70 basis points year-over-year. U.S. Xpress made further progress on operating efficiency and trailed the legacy brands in Adjusted Operating Ratio by approximately 300 basis points for the quarter.
The ongoing progress at U.S. Xpress is encouraging, and we expect this business will continue closing the gap in margin performance with our legacy brands as the market improves. We are focused on closely monitoring market pricing and demand development, intentionally deploying capacity, intensely managing costs, increasing our seated truck percentage, and enhancing utilization in order to maximize the opportunities provided by an improving market.
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.
Glossary of Terms
KNIGHT-SWIFT TRANSPORTATION HOLDINGS INC.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS - CONTINUED
Quarter Ended March 31, Increase
(Decrease)
2026 2025
(Dollars in thousands, except per tractor data)
Total revenue $ 368,364 $ 352,401 4.5 %
Revenue, excluding fuel surcharge $ 313,136 $ 305,258 2.6 %
GAAP: Operating (loss) income $ (3,565) $ 12,694 (128.1 %)
Non-GAAP: Adjusted Operating Income 1
$ 1,221 $ 17,721 (93.1 %)
GAAP: Operating ratio 2
101.0 % 96.4 % 460 bps
Non-GAAP: Adjusted Operating Ratio 1 2
99.6 % 94.2 % 540 bps
LTL shipments per day 2
23,112 23,349 (1.0 %)
LTL weight per shipment 2
1,033 982 5.2 %
LTL average length of haul (miles) 2
693 639 8.5 %
LTL revenue per shipment 2
$ 223.81 $ 209.96 6.6 %
LTL revenue xFSC per shipment 2
$ 189.52 $ 181.52 4.4 %
LTL revenue per hundredweight 2
$ 21.67 $ 21.38 1.4 %
LTL revenue xFSC per hundredweight 2
$ 18.35 $ 18.48 (0.7 %)
LTL average tractors 2 3
4,239 4,023 5.4 %
LTL average trailers 2 4
11,281 10,976 2.8 %
1Refer to "Non-GAAP Financial Measures" below.
2Defined under "Operating Statistics," above.
3Our LTL tractor fleet includes 646 and 668 tractors from ACT's dedicated and other businesses for the first quarter of 2026 and 2025, respectively.
4Our LTL trailer fleet includes 1,309 and 1,015 trailers from ACT's dedicated and other businesses for the first quarter of 2026 and 2025, respectively.
Comparison Between the Quarters Ended March 31, 2026 and 2025 - Our LTL segment experienced shipment volumes that generally followed muted seasonal patterns before improving late in the quarter while weight per shipment improved sequentially throughout the quarter to the highest average levels since our entry into this business in 2021. Length of haul also continues to grow as supported by our expanded network footprint. The improvement in freight mix helped to largely offset the negative impacts to volumes and costs from severe winter weather disruption in the quarter. Revenue, excluding fuel surcharge, grew 2.6% year-over-year as a 5.2% increase in weight per shipment and an 8.5% increase in length of haul offset a 1.0% decrease in shipments per day. Revenue per hundredweight, excluding fuel surcharge, fell 0.7%, driven by the increase in weight per shipment while renewal rates continue their recent trend of mid single-digit percentage increases. Revenue per shipment, excluding fuel surcharge, increased by 4.4% year-over-year. The Adjusted Operating Ratio was 99.6%, and Adjusted Operating Income decreased $16.5 million, primarily driven by the $18.0 million adverse claim development cited above, which negatively impacted the Adjusted Operating Ratio by 570 basis points. We are encouraged by the turnaround in shipment weights that had been slowly falling for the past few years and anticipate that the return of seasonal demand patterns will continue into the second quarter.
As previously noted, we expect our pace of facility expansion will be slower in 2026 than in the prior two years and believe ongoing bid events with new and existing customers will provide further opportunities to grow shipment volume, improve our freight mix, and drive operational 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.
Glossary of Terms
KNIGHT-SWIFT TRANSPORTATION HOLDINGS INC.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS - CONTINUED
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 primarily 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.
Quarter Ended March 31, Increase
(Decrease)
2026 2025
(Dollars in thousands, except per load data)
Revenue $ 127,608 $ 141,621 (9.9 %)
GAAP: Operating income $ 3,623 $ 5,143 (29.6 %)
Non-GAAP: Adjusted Operating Income 1 2
$ 4,787 $ 6,307 (24.1 %)
Revenue per load - Brokerage only 2
$ 2,160 $ 1,956 10.4 %
Gross margin percentage - Brokerage only 2
16.6 % 18.1 % (150 bps)
GAAP: Operating ratio 2
97.2 % 96.4 % 80 bps
Non-GAAP: Adjusted Operating Ratio 1 2
96.2 % 95.5 % 70 bps
1 Refer to "Non-GAAP Financial Measures" below.
2 Defined under "Operating Statistics," above.
Comparison Between the Quarters Ended March 31, 2026 and 2025 - The Logistics segment Adjusted Operating Ratio was 96.2%, a 70 basis point degradation year-over-year as a reduction in industry capacity drove up purchased transportation costs and compressed gross margins during the quarter. Gross margin percent declined 150 basis points year-over-year but improved 110 basis points sequentially over the fourth quarter to 16.6% as strengthening spot opportunities helped offset pressure on contractually priced business. Revenue decreased 9.9% year-over-year, driven by an 18.9% decline in load count, partially offset by a 10.4% increase in revenue per load. We further enhanced our already rigorous screening practices to mitigate risk of cargo theft and non-compliant carriers, which aggravated the upward pressure on capacity costs and served as a headwind to load volumes in the first quarter. As contractual pricing is reset through bid season, we expect to improve load volumes at appropriate gross margins. 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.
Glossary of Terms
KNIGHT-SWIFT TRANSPORTATION HOLDINGS INC.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS - CONTINUED
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 primarily 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.
Quarter Ended March 31, Increase
(Decrease)
2026 2025
(Dollars in thousands, except per load data)
Revenue $ 93,589 $ 91,103 2.7 %
GAAP: Operating loss $ (1,424) $ (1,812) 21.4 %
Average revenue per load 1
$ 2,628 $ 2,587 1.6 %
GAAP: Operating ratio 1
101.5 % 102.0 % (50 bps)
Load count 35,616 35,211 1.2 %
Average tractors 1 2
595 622 (4.3 %)
Average containers 1
12,511 12,546 (0.3 %)
1 Defined under "Operating Statistics," above.
2 Includes 553 and 576 company-owned tractors for the first quarter of 2026 and 2025, respectively.
Comparison Between the Quarters Ended March 31, 2026 and 2025 - The Intermodal segment grew revenue 2.7% and improved its operating ratio 50 basis points year-over-year as a 1.6% increase in revenue per load and a 1.2% increase in load count offset headwinds from winter weather in the quarter. Load count and revenue per load improved progressively throughout the quarter. 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.
Glossary of Terms
KNIGHT-SWIFT TRANSPORTATION HOLDINGS INC.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS - CONTINUED
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, warranty services, and insurance for independent contractors. Our All Other Segments also include certain corporate expenses (such as legal settlements and accruals, certain impairments, and $11.5 million in quarterly amortization of intangibles related to the 2017 Merger and various acquisitions).
Quarter Ended March 31, Increase
(Decrease)
2026 2025
(Dollars in thousands)
Total revenue $ 81,202 $ 71,565 13.5 %
Operating (loss) income $ (7,108) $ 6,038 (217.7 %)
Comparison Between the Quarters Ended March 31, 2026 and 2025 - Revenue within our All Other Segments for the first quarter increased 13.5% primarily driven by growth in our warehousing business. Operating results declined year-over-year to an operating loss partially due to the inclusion of $5.2 million of costs for the accounts receivable securitization program, startup costs on new contract awards in our warehousing business for which revenue is expected to ramp in the coming months, and the delay of warehousing project opportunities into the second and third quarters for which costs had already begun to be incurred.
Glossary of Terms
KNIGHT-SWIFT TRANSPORTATION HOLDINGS INC.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS - CONTINUED
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.
Quarter Ended March 31, Increase
(Decrease)
2026 2025
(Dollars in thousands)
Salaries, wages, and benefits $ 728,698 $ 721,659 1.0 %
% of total revenue 39.4 % 39.6 % (20 bps)
% of revenue, excluding truckload and LTL fuel surcharge 44.5 % 44.2 % 30 bps
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 March 31, 2026 and 2025 - The $7.0 million increase in consolidated salaries, wages, and benefits for the first quarter of 2026, as compared to the first quarter of 2025, is primarily due to a $11.2 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 $3.8 million decrease in Truckload driving associate mileage pay primarily due to a 3.3% decrease in total miles driven by company driving associates in our Truckload segment.
Quarter Ended March 31, Increase
(Decrease)
2026 2025
(Dollars in thousands)
Fuel $ 231,338 $ 207,246 11.6 %
% of total revenue 12.5 % 11.4 % 110 bps
% of revenue, excluding truckload and LTL fuel surcharge 14.1 % 12.7 % 140 bps
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.
Glossary of Terms
KNIGHT-SWIFT TRANSPORTATION HOLDINGS INC.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS - CONTINUED
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 March 31, 2026 and 2025 - The $24.1 million increase in consolidated fuel expense for the first quarter of 2026 is primarily driven by an increase in the average weekly DOE fuel prices for the first quarter of 2026, as compared to the first quarter of 2025. Average weekly DOE fuel prices were $4.12 per gallon for the first quarter of 2026 and $3.63 per gallon for the first quarter of 2025. This was partially offset by a 3.3% decrease in Truckload total miles driven by company driving associates.
Quarter Ended March 31, Increase
(Decrease)
2026 2025
(Dollars in thousands)
Operations and maintenance $ 128,473 $ 132,372 (2.9 %)
% of total revenue 6.9 % 7.3 % (40 bps)
% of revenue, excluding truckload and LTL fuel surcharge 7.8 % 8.1 % (30 bps)
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 2026, which could increase future driving associate development and recruiting costs and negatively affect our operations and maintenance expense. We expect to continue refreshing our tractor fleet in the coming quarters, subject to availability of new revenue equipment, to maintain the average age of our equipment.
Operations and maintenance expense decreased $3.9 million for the first quarter of 2026, as compared to the first quarter of 2025, primarily due to the decrease in company miles discussed above.
Quarter Ended March 31, Increase
(Decrease)
2026 2025
(Dollars in thousands)
Insurance and claims $ 109,157 $ 92,225 18.4 %
% of total revenue 5.9 % 5.1 % 80 bps
% of revenue, excluding truckload and LTL fuel surcharge 6.7 % 5.6 % 110 bps
Glossary of Terms
KNIGHT-SWIFT TRANSPORTATION HOLDINGS INC.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS - CONTINUED
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 transportation companies based upon significant verdicts and settlements against transportation companies. 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 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.
Comparison Between Quarters Ended March 31, 2026 and 2025 - Consolidated insurance and claims expense increased by $16.9 million for the first quarter of 2026, as compared to the same period last year. This increase was primarily due to $18.0 million of expense for claims development in our LTL segment, primarily related to an adverse arbitration ruling on a 2022 claim.
Quarter Ended March 31, Increase
(Decrease)
2026 2025
(Dollars in thousands)
Operating taxes and licenses $ 37,394 $ 34,366 8.8 %
% of total revenue 2.0 % 1.9 % 10 bps
% of revenue, excluding truckload and LTL fuel surcharge 2.3 % 2.1 % 20 bps
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 $3.0 million for the first quarter of 2026 as compared to the first quarter of 2025, primarily due to $4.1 million of expense in our Truckload segment for an adverse decision on VAT reimbursement in Mexico for prior tax years.
Quarter Ended March 31, Increase
(Decrease)
2026 2025
(Dollars in thousands)
Communications $ 6,442 $ 7,383 (12.7 %)
% of total revenue 0.3 % 0.4 % (10 bps)
% of revenue, excluding truckload and LTL fuel surcharge 0.4 % 0.5 % (10 bps)
Communications expense is comprised of costs associated with our tractor and trailer tracking systems, information technology systems, and phone systems.
Communications expense decreased $0.9 million for the first quarter of 2026 primarily due to the decrease in total miles discussed above.
Quarter Ended March 31, Increase
(Decrease)
2026 2025
(Dollars in thousands)
Depreciation and amortization of property and equipment $ 176,809 $ 177,479 (0.4 %)
% of total revenue 9.6 % 9.7 % (10 bps)
% of revenue, excluding truckload and LTL fuel surcharge 10.8 % 10.9 % (10 bps)
Glossary of Terms
KNIGHT-SWIFT TRANSPORTATION HOLDINGS INC.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS - CONTINUED
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 March 31, 2026 and 2025 - Consolidated depreciation and amortization of property and equipment remained relatively flat for the first quarter of 2026 as compared to the first quarter of 2025.
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 2026. Additionally, we anticipate that our equipment suppliers may need to raise prices in response to tariffs.
Quarter Ended March 31, Increase
(Decrease)
2026 2025
(Dollars in thousands)
Amortization of intangibles $ 18,902 $ 19,246 (1.8 %)
% of total revenue 1.0 % 1.1 % (10 bps)
% of revenue, excluding truckload and LTL fuel surcharge 1.2 % 1.2 % - bps
Amortization of intangibles relates to intangible assets identified with the 2017 Merger, ACT Acquisition, U.S. Xpress Acquisition, and various other acquisitions.
Quarter Ended March 31, Increase
(Decrease)
2026 2025
(Dollars in thousands)
Rental expense $ 45,052 $ 42,866 5.1 %
% of total revenue 2.4 % 2.3 % 10 bps
% of revenue, excluding truckload and LTL fuel surcharge 2.8 % 2.6 % 20 bps
Rental expense consists primarily of payments for our terminals and other real estate leases, as well as for revenue equipment assumed in the U.S. Xpress Acquisition.
Comparison Between Quarters Ended March 31, 2026 and 2025 - Consolidated rental expense increased $2.2 million for the first quarter of 2026, primarily due to higher rental renewal rates on several of our leased properties.
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 for the remainder of 2026.
Glossary of Terms
KNIGHT-SWIFT TRANSPORTATION HOLDINGS INC.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS - CONTINUED
Quarter Ended March 31, Increase
(Decrease)
2026 2025
(Dollars in thousands)
Purchased transportation $ 278,628 $ 277,294 0.5 %
% of total revenue 15.1 % 15.2 % (10 bps)
% of revenue, excluding truckload and LTL fuel surcharge 17.0 % 17.0 % - bps
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 March 31, 2026 and 2025 - As a percentage of revenue, excluding truckload and LTL fuel surcharge, consolidated purchase transportation expense remained flat year-over-year.
Quarter Ended March 31, Increase
(Decrease)
2026 2025
(Dollars in thousands)
Impairments $ 882 $ 28 3,050.0 %
First quarter 2026 reflects non-cash impairments related to certain intangible assets (within the All Other Segments) and assets held for sale (within the Truckload segment). First quarter 2025 reflects non-cash impairments related to certain real property leases (within the Truckload segment).
Quarter Ended March 31, Increase
(Decrease)
2026 2025
(Dollars in thousands)
Miscellaneous operating expenses $ 59,864 $ 45,535 31.5 %
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 March 31, 2026 and 2025 - The $14.3 million increase in net consolidated miscellaneous operating expenses is primarily due to the inclusion of $5.2 million of costs for the accounts receivable securitization program that were previously reported in interest expense under the prior arrangement and an $8.5 million decrease in gain on sales of operating property and equipment.
Consolidated Other Expenses (Income)
Quarter Ended March 31, Increase
(Decrease)
2026 2025
(Dollars in thousands)
Interest expense $ 30,729 $ 40,203 (23.6 %)
Other expense (income), net 1,181 (11,038) (110.7 %)
Income tax (benefit) expense (107) 10,303 (101.0 %)
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 5 in Part I, Item 1 of this Quarterly Report.
Glossary of Terms
KNIGHT-SWIFT TRANSPORTATION HOLDINGS INC.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS - CONTINUED
Comparison Between the Quarters Ended March 31, 2026 and 2025 - The $9.5 million decrease in interest expense is primarily driven by the exclusion of $5.2 million of costs for the accounts receivable securitization program that were previously reported in interest expense under the prior arrangement and lower average interest rates during the first quarter of 2026 when compared to the first quarter of 2025.
Other expense (income), net - Other expense (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 March 31, 2026 and 2025 - The $12.2 million decrease in other expense (income), net is primarily driven by a net loss recorded within our portfolio of investments during the first quarter of 2026.
Income tax (benefit) expense - In addition to the discussion below, Note 3 in Part I, Item 1 of this Quarterly Report provides further analysis related to income taxes.
Comparison Between the Quarters Ended March 31, 2026 and 2025 - The $10.4 million decrease in consolidated income tax expense was primarily due to a decrease in pretax income. Our effective tax rate for the first quarter of 2026 was 7.0%, compared to 25.4% for the first quarter of 2025.
Glossary of Terms
KNIGHT-SWIFT TRANSPORTATION HOLDINGS INC.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS - CONTINUED
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 (loss) 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.
Glossary of Terms
KNIGHT-SWIFT TRANSPORTATION HOLDINGS INC.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS - CONTINUED
Non-GAAP Reconciliation: Consolidated Adjusted Net Income Attributable to Knight-Swift and Adjusted EPS
Quarter Ended March 31,
2026 2025
(In thousands)
GAAP: Net (loss) income attributable to Knight-Swift $ (1,317) $ 30,639
Adjusted for:
Income tax (benefit) expense attributable to Knight-Swift (107) 10,303
(Loss) income before income taxes attributable to Knight-Swift (1,424) 40,942
Amortization of intangibles 1
19,042 19,628
Impairments 2
882 28
Legal accruals 3
600 261
Severance expense 4
518 -
Restructuring expense 5
200 -
Adjusted income before income taxes 19,818 60,859
Provision for income tax expense at effective rate 6
(5,556) (15,487)
Non-GAAP: Adjusted Net Income Attributable to Knight-Swift $ 14,262 $ 45,372
Note: Since the numbers reflected in the table below are calculated on a per share basis, they may not foot due to rounding.
Quarter Ended March 31,
2026 2025
GAAP: (Loss) earnings per diluted share $ (0.01) $ 0.19
Adjusted for:
Income tax (benefit) expense attributable to Knight-Swift - 0.06
(Loss) income before income taxes attributable to Knight-Swift (0.01) 0.25
Amortization of intangibles 1
0.12 0.12
Impairments 2
0.01 -
Legal accruals 3
- -
Severance expense 4
- -
Restructuring expense 5
- -
Adjusted income before income taxes 0.12 0.37
Provision for income tax expense at effective rate 6
(0.03) (0.09)
Non-GAAP: Adjusted EPS $ 0.09 $ 0.28
Glossary of Terms
KNIGHT-SWIFT TRANSPORTATION HOLDINGS INC.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS - CONTINUED
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.
2 "Impairments" reflects the non-cash impairment:
•First quarter 2026 reflects non-cash impairments related to certain intangible assets (within the All Other Segments) and assets held for sale (within the Truckload segment).
•First quarter 2025 reflects non-cash impairments related to certain real property leases (within the Truckload segment).
3 "Legal accruals" are included in "Miscellaneous operating expenses" in the condensed consolidated statements of comprehensive income and reflect the following:
•First quarter 2026 legal expense reflects the net increased estimated exposure for accrued legal matters based on recent settlement agreements.
•First quarter 2025 legal expense reflects the increased estimated exposure for accrued legal matters based on recent settlement agreements.
4 "Severance expense" is included within "Salaries, wages, and benefits" in the condensed statements of comprehensive income.
5 "Restructuring expense" reflects costs incurred with the wind-down of Abilene Motor Express and is included within "Operations and maintenance" and "Miscellaneous operating expenses" in the condensed statements of comprehensive income.
6 For the first quarter of 2026, an adjusted effective tax rate of 28.0% was applied in our Adjusted EPS calculation to exclude certain discrete items. For the first quarter of 2025, an adjusted effective tax rate of 25.4% was applied in our Adjusted EPS calculation to exclude certain discrete items.
Glossary of Terms
KNIGHT-SWIFT TRANSPORTATION HOLDINGS INC.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS - CONTINUED
Non-GAAP Reconciliation: Consolidated Adjusted Operating Income, Adjusted Operating Expenses, and Adjusted Operating Ratio
Quarter Ended March 31,
2026 2025
GAAP Presentation (Dollars in thousands)
Total revenue $ 1,850,223 $ 1,824,362
Total operating expenses (1,821,639) (1,757,699)
Operating income $ 28,584 $ 66,663
Operating ratio 98.5 % 96.3 %
Non-GAAP Presentation
Total revenue $ 1,850,223 $ 1,824,362
Truckload and LTL fuel surcharge (212,191) (191,399)
Revenue, excluding truckload and LTL fuel surcharge 1,638,032 1,632,963
Total operating expenses 1,821,639 1,757,699
Adjusted for:
Truckload and LTL fuel surcharge (212,191) (191,399)
Amortization of intangibles 1
(19,042) (19,628)
Impairments 2
(882) (28)
Legal accruals 3
(600) (261)
Severance expense 4
(518) -
Restructuring expense 5
(200) -
Adjusted Operating Expenses 1,588,206 1,546,383
Adjusted Operating Income $ 49,826 $ 86,580
Adjusted Operating Ratio 97.0 % 94.7 %
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.
Glossary of Terms
KNIGHT-SWIFT TRANSPORTATION HOLDINGS INC.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS - CONTINUED
Non-GAAP Reconciliation: Reportable Segment Adjusted Operating Income, Adjusted Operating Expenses, and Adjusted Operating Ratio
Truckload Segment
Quarter Ended March 31,
2026 2025
GAAP Presentation (Dollars in thousands)
Total revenue $ 1,202,166 $ 1,192,550
Total operating expenses (1,165,108) (1,147,950)
Operating income $ 37,058 $ 44,600
Operating ratio 96.9 % 96.3 %
Non-GAAP Presentation
Total revenue $ 1,202,166 $ 1,192,550
Fuel surcharge (156,963) (144,256)
Intersegment transactions (96) (211)
Revenue, excluding fuel surcharge and intersegment transactions 1,045,107 1,048,083
Total operating expenses 1,165,108 1,147,950
Adjusted for:
Fuel surcharge (156,963) (144,256)
Intersegment transactions (96) (211)
Amortization of intangibles 1
(1,551) (1,775)
Impairments 2
(50) (28)
Legal accruals 3
- (82)
Restructuring expense 4
(200) -
Adjusted Operating Expenses 1,006,248 1,001,598
Adjusted Operating Income $ 38,859 $ 46,485
Adjusted Operating Ratio 96.3 % 95.6 %
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.
Glossary of Terms
KNIGHT-SWIFT TRANSPORTATION HOLDINGS INC.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS - CONTINUED
LTL Segment
Quarter Ended March 31,
2026 2025
GAAP Presentation (Dollars in thousands)
Total revenue $ 368,364 $ 352,401
Total operating expenses (371,929) (339,707)
Operating (loss) income $ (3,565) $ 12,694
Operating ratio 101.0 % 96.4 %
Non-GAAP Presentation
Total revenue $ 368,364 $ 352,401
Fuel surcharge (55,228) (47,143)
Revenue, excluding fuel surcharge 313,136 305,258
Total operating expenses 371,929 339,707
Adjusted for:
Fuel surcharge (55,228) (47,143)
Amortization of intangibles 1
(4,786) (5,027)
Adjusted Operating Expenses 311,915 287,537
Adjusted Operating Income $ 1,221 $ 17,721
Adjusted Operating Ratio 99.6 % 94.2 %
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.
Logistics Segment
Quarter Ended March 31,
2026 2025
GAAP Presentation (Dollars in thousands)
Revenue $ 127,608 $ 141,621
Total operating expenses (123,985) (136,478)
Operating income $ 3,623 $ 5,143
Operating ratio 97.2 % 96.4 %
Non-GAAP Presentation
Revenue $ 127,608 $ 141,621
Total operating expenses 123,985 136,478
Adjusted for:
Amortization of intangibles 1
(1,164) (1,164)
Adjusted Operating Expenses 122,821 135,314
Adjusted Operating Income $ 4,787 $ 6,307
Adjusted Operating Ratio 96.2 % 95.5 %
1"Amortization of intangibles" reflects the non-cash amortization expense relating to intangible assets identified in the U.S. Xpress and UTXL acquisitions.
Glossary of Terms
KNIGHT-SWIFT TRANSPORTATION HOLDINGS INC.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS - CONTINUED
Intermodal Segment
Quarter Ended March 31,
2026 2025
GAAP Presentation (Dollars in thousands)
Revenue $ 93,589 $ 91,103
Total operating expenses (95,013) (92,915)
Operating loss $ (1,424) $ (1,812)
Operating ratio 101.5 % 102.0 %
Non-GAAP Reconciliation: Free Cash Flow
Quarter Ended March 31, 2026
GAAP: Cash flows from operations $ 142,540
Adjusted for:
Proceeds from sale of property and equipment, including assets held for sale 44,434
Purchases of property and equipment (130,037)
Non-GAAP: Free Cash Flow $ 56,937
Liquidity and Capital Resources
Sources of Liquidity
Our primary sources of liquidity are funds provided by operations and the following:
Source March 31, 2026
(In thousands)
Cash and cash equivalents, excluding restricted cash $ 222,774
Availability under 2025 Revolver, due July 8, 2030 1
827,305
Availability under 2025 RPA, due October 2, 2028 2
1,000
Total unrestricted liquidity $ 1,051,079
Cash and cash equivalents - restricted 3
76,804
Total liquidity, including restricted cash $ 1,127,883
1 As of March 31, 2026, we had $658.0 million in borrowings under our $1.5 billion 2025 Revolver. We additionally had $14.7 million in outstanding letters of credit (discussed below) issued under the 2025 Revolver, leaving $827.3 million available under the 2025 Revolver.
2 Based on eligible receivables at March 31, 2026, our facility capacity under the 2025 RPA was $456.2 million, while outstanding capital was $455.2 million, leaving $1.0 million available under the 2025 RPA. Refer to Note 4 in Part I, Item 1 of this Quarterly Report for more information regarding the 2025 RPA.
3 Restricted cash is primarily held by our captive insurance companies for claims payments. "Cash and cash equivalents - restricted" consists of $70.4 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 $6.4 million is included in "Other long-term assets" and is held in escrow accounts to meet statutory requirements.
Glossary of Terms
KNIGHT-SWIFT TRANSPORTATION HOLDINGS INC.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS - CONTINUED
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 - Subject to 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 (when justified by customer demand), 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 2026 will be in the range of $600 million - $650 million, which is an update from the original projection of $625 million - $675 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 2025 RPA, 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 March 31, 2026, we had debt and finance lease obligations of $2.3 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 revolving line of credit. As of March 31, 2026, we also had outstanding letters of credit of $188.9 million pursuant to a bilateral agreement which do not impact the availability of the 2025 Revolver. 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 March 31, 2026, 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 9 in Part I, Item 1 of this Quarterly Report.
________
1Refer to "Non-GAAP Financial Measures."
Glossary of Terms
KNIGHT-SWIFT TRANSPORTATION HOLDINGS INC.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS - CONTINUED
Working Capital
We had a working capital deficit of $404.3 million as of March 31, 2026 and a working capital deficit of $143.7 million as of December 31, 2025. The deficit as of March 31, 2026 is primarily due to the classification of the 2025 Term Loan A-2, maturing on January 8, 2027, as a current liability. We intend to refinance the 2025 Term Loan A-2 prior to its maturity.
Material Debt Agreements
As of March 31, 2026, we had $2.3 billion in material debt obligations at the following carrying values:
•$698.2 million: 2025 Term Loan A-1, due July 2030, net of $1.8 million in deferred loan costs
•$299.5 million: 2025 Term Loan A-2, due January 2027, net of $0.5 million in deferred loan costs
•$572.9 million: Finance lease obligations
•$658.0 million: 2025 Revolver, due July 2030
•$88.3 million: Revenue equipment installment notes
•$8.6 million: Other
As of December 31, 2025, we had $2.4 billion in material debt obligations at the following carrying values:
•$698.1 million: 2025 Term Loan A-1, due July 2030, net of $1.9 million in deferred loan costs
•$299.4 million: 2025 Term Loan A-2, due January 2027, net of $0.6 million in deferred loan costs
•$606.2 million: Finance lease obligations
•$626.0 million: 2025 Revolver, due July 2030
•$106.6 million: Revenue equipment installment notes
•$13.9 million: Other
Cash Flow Analysis
Quarter Ended March 31, Change
2026 2025
(In thousands)
Net cash provided by operating activities $ 142,540 $ 109,429 $ 33,111
Net cash used in investing activities (83,578) (54,219) (29,359)
Net cash used in financing activities (68,124) (76,303) 8,179
Net Cash Provided by Operating Activities
Comparison Between Quarter Ended March 31, 2026 and 2025 - The $33.1 million increase in net cash provided by operating activities was primarily driven by the timing of changes of $32.7 million within "Accrued liabilities and claims accrual" for the quarter ended March 31, 2026 in comparison to the prior year quarter.
Note: Factors affecting operating income are discussed in "Results of Operations - Consolidated Operating and Other Expenses."
Net Cash Used in Investing Activities
Comparison Between Quarter Ended March 31, 2026 and 2025 - The $29.4 million increase in net cash used in investing activities was primarily due to a $46.2 million increase in net cash capital expenditures and was partially offset by a $10.4 million decrease in cash used on the acquisitions of leased properties.
Glossary of Terms
KNIGHT-SWIFT TRANSPORTATION HOLDINGS INC.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS - CONTINUED
Net Cash Used in Financing Activities
Comparison Between Quarter Ended March 31, 2026 and 2025 - Net cash used in financing activities decreased by $8.2 million, primarily due to a decrease in net payments on our finance leases and long-term debt of $14.6 million partially offset by a $3.4 million increase in dividends paid.
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.
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