ArcBest Q4 Earnings Call Highlights

ArcBest (NASDAQ:ARCB) executives said the company delivered “solid” fourth-quarter and full-year performance despite what management described as a prolonged freight recession and continued market volatility. On the company’s fourth-quarter 2025 earnings call, President and CEO Seth Runser highlighted progress against ArcBest’s strategy built around growth, efficiency, and innovation, while Chief Financial Officer Matt Beasley detailed weaker year-over-year profitability alongside improving trends in the company’s Asset-Light operations.

Fourth-quarter results and segment performance

Beasley reported consolidated fourth-quarter revenue of $973 million, down 3% year-over-year. Non-GAAP operating income from continuing operations was $14 million compared with $41 million a year earlier, and non-GAAP earnings per share were $0.36 versus $1.33 in the prior-year period.

In the Asset-Based segment, fourth-quarter revenue was $649 million and was described as flat on a per-day basis. The segment’s operating ratio was 96.2%, up 420 basis points year-over-year, and up 370 basis points sequentially on a non-GAAP basis, which Beasley attributed in part to three fewer revenue days. Daily shipments increased 2% year-over-year, with a slight increase in weight per shipment that drove nearly 3% growth in tons per day.

Beasley said revenue per hundredweight declined about 3% year-over-year, including and excluding fuel surcharges, primarily due to reduced shipment activity in the manufacturing vertical. He also cited higher costs tied to additional labor to support shipment growth, annual increases in contracted union labor rates, and higher equipment depreciation.

In Asset-Light, fourth-quarter revenue was $354 million, a daily decline of 5% year-over-year. Shipments per day increased slightly as Managed Solutions growth offset a strategic reduction in less profitable truckload volumes. Revenue per shipment fell 6%, which management attributed to the soft freight market and a higher mix of managed business, which typically has smaller shipment sizes and lower revenue per shipment.

Cost actions and productivity gains helped the segment return to break-even non-GAAP operating results in the quarter, an improvement of $6 million year-over-year. Beasley said SG&A cost per shipment declined 15% and shipments per person per day increased 19%. For the full year, the company said Asset-Light generated more than $1 million in non-GAAP operating profit, a turnaround from a $17 million loss in 2024, alongside record employee productivity and a historic low in SG&A cost per shipment.

Volume trends, pricing discipline, and mix dynamics

Runser said Asset-Based LTL shipments averaged about 20,000 per day in the quarter, noting that seasonal softness and an “unusually weak October across the industry” weighed on volumes. He said ArcBest’s refined go-to-market approach contributed to the year-over-year shipment improvement and supported expansion of the company’s core LTL business.

On pricing, Runser said deferred price increases averaged 5% in the fourth quarter, up from 4.5% in the third quarter, which he attributed to a disciplined, data-driven pricing process that evaluates accounts and lanes to ensure compensation for service levels.

In Q&A, executives repeatedly pointed to mix shifts as a key factor in yield and revenue metrics. Management said ArcBest’s business is heavily tied to manufacturing, industrial production, and housing-related verticals, which have been pressured during the freight downturn. They described ongoing “trade-out” as softer legacy volumes are replaced with new business, while emphasizing pricing discipline on each account.

Discussing January trends, Beasley said daily shipments were up 3% year-over-year, weight per shipment rose 5%, and daily tonnage increased 8%, with both the current and prior-year periods affected by winter weather. Management said January 2025 had a lower mix of truckload-rated shipments, which influenced year-over-year comparisons. Runser added that dynamic shipments were trending heavier and that the company was not targeting a larger share of dynamic business than in the fourth quarter.

Executives said the company does not disclose the specific mix between core and transactional/dynamic shipments, describing the network as “primarily core,” with dynamic freight used to help smooth operations and maintain network consistency. Runser also referenced comments made at Investor Day that price per shipment has increased 50% since launching dynamic pricing, and he said the company expects both core and dynamic pricing to benefit in a stronger market environment.

Efficiency initiatives and expanded use of AI

Management highlighted several operational and technology initiatives intended to offset inflation and position the company to scale without proportional cost increases. Runser said ArcBest’s continuous improvement training program has been implemented across about 60% of the network, delivering $24 million in annual cost savings. He also said phases 2 and 3 of City Route Optimization, which use AI to reduce manual tasks and improve route planning, delivered $2 million in savings last year and $15 million in total savings in 2025.

Runser outlined a range of AI-related efforts across the business, including process improvements in truckload that he said delivered a $2.5 million operating income benefit last year. Other examples cited included:

• Truckload carrier portal adoption reaching 32%, with more than half of truckload shipments digitally augmented
• More than 30 AI agents supporting document processing, automated quoting, and shipment booking
• AVA, an AI-powered virtual agent, used to route inquiries and resolve common issues
• Quote augmentation that automated 120,000 email quotes in 2025
• An AI phone agent that, in 2025, was used by more than 23,000 carriers to cover over 7,000 shipments; automated phone options reduced carrier abandonment rates by half

Runser said 15% to 20% of office employees now consistently use AI tools in daily work and that AI-driven automation has eliminated “millions of unnecessary emails.” He characterized many initiatives as still early stage, including pilots, with broader rollout expected as the company moves into 2026.

Outlook, capital allocation, and leadership updates

For the Asset-Based segment, Beasley said ArcBest historically sees its non-GAAP operating ratio increase about 260 basis points from the fourth quarter to the first quarter. The company currently expects a sequential increase of roughly 100 to 200 basis points, which management said would be better than typical seasonality but still reflective of industry conditions. Beasley also said the company expects first-quarter tonnage growth to moderate versus January’s 8% increase, likely to the 4% to 5% range.

For Asset-Light, Beasley said ArcBest expects a first-quarter operating loss of up to $1 million due to typical seasonality under current market conditions, while reiterating a focus on yield discipline and cost management.

On capital spending, Beasley said ArcBest closed 2025 with $198 million in net capital expenditures, including $25 million in property sales. For 2026, the company expects net capital expenditures of $150 million to $170 million and said spending should be below 5% of revenue, reflecting fewer real estate purchases and remodels and lower spending on revenue equipment. Management also discussed optimizing replacement timing given higher equipment costs, citing a younger fleet and proactive maintenance as support for reliability.

The company said it returned more than $86 million to shareholders in 2025 through share repurchases and dividends, and Beasley said ArcBest ended the year with about $400 million in available liquidity and a net debt to EBITDA ratio “well below the S&P 500 average.”

Runser announced leadership and governance updates, including welcoming Mac Pinkerton as chief operating officer of the Asset-Light business and adding independent directors Anne Bordelon and Bobby George, while thanking outgoing directors Cathy McElligott and Fredrik Eliasson. Pinkerton told investors he was increasingly confident the company could meet its Investor Day targets and said he expects the Asset-Light business to become “more meaningful” in future discussions.

Executives also discussed winter weather disruptions, with Runser calling the recent storm one of the worst Januaries for service center closures and noting the FMCSA issued a 40-state hours-of-service waiver. Management said the impact was included in guidance and that investments in network tools and capacity have improved the company’s ability to manage disruptions.

About ArcBest (NASDAQ:ARCB)

ArcBest Corporation (NASDAQ: ARCB) is a transportation and logistics company that offers comprehensive freight and supply chain solutions across North America. Founded in 1923 as Arkansas Best Freight System, the company has evolved into a diversified service provider with both asset-based and asset-light operations. Its core businesses include less-than-truckload (LTL) shipping through ABF Freight, expedited full-truckload services via Panther Premium Logistics, and a range of logistics and supply chain management services under its ArcBest Integrated Logistics division.

The company’s asset-based operations also encompass FleetNet America, a provider of emergency roadside assistance and maintenance services for heavy-duty vehicles.