Knight-Swift Transportation Holdings Inc.

Good afternoon. My name is Ina, and I'll be your conference operator today. At this time, I would like to welcome everyone to the Night Swift Transportation Third Quarter 2025 Earnings Call. All lines have been placed on mute to prevent any background noise. If at any time during this call you require immediate assistance, please press star zero for the operator. Speakers for today's call will be Adam Miller, Chief Executive Officer, Andrew Hess, Chief Financial Officer, and Mr. Brad Stewart, Treasurer and Senior VP of Investor Relations. Mr. Stewart, the meeting is now yours.

Thank you, Ina. Good afternoon, everyone, and thank you for joining our third quarter 2025 earnings call. Today, we plan to discuss topics related to the results of the quarter, current market conditions, and our earnings guidance. We have slides to accompany this call, which are posted on our investor website. Our call is scheduled to last one hour. Following our commentary, we will answer questions related to these topics. In order to get to as many participants as possible, we limit the questions to one per participant. If you have a second question, please feel free to get back in the queue. We will answer as many questions as time allows. If we are not able to get to your question due to time restrictions, you may call 602-606-6349. To begin, I will first refer you to the disclosures on slide two of the presentation and note the following. This conference call and presentation may contain forward-looking statements made by the company that involve risks, assumptions, and uncertainties that are difficult to predict. Investors are directed to the information contained in item 1A, Risk Factors, or part one of the company's annual report on Form 10-K, followed with the United States SEC, for a discussion of the risks that may affect the company's future operating results. Actual results may differ. Before we get into the slides, I will hand the call over to Adam for some opening remarks.

Thanks, Brad, and good afternoon, everyone. The third quarter saw freight markets still grappling with uncertainty, with many shippers hesitant to take much risk and freight demand trends that continue to deviate from normal seasonal patterns. However, the third quarter brought more proactive customer discussions around peak season projects than we have seen since 2021. Some of these involve customers who did not express any such needs last year. Some peak projects are already underway, while our base level of normal demand through the first two weeks of October have remained stable and have not yet begun a seasonal build. Last year, some peak projects developed almost overnight during the fourth quarter, and we still do not have visibility to forecast if that will happen again this year. With still some uncertainty around how volumes will build during the quarter, we are taking a more cautious approach to our expectations for the fourth quarter. Despite some of the uncertainties in the present environment, we see a number of factors that make the opportunities of the next cycle more compelling for our businesses. First, on the demand front, Despite all the noise from tariffs and the shift in freight ordering patterns, demand has remained relatively stable throughout our different truckload brands. We believe the value we deliver through our scale, flexibility, and service has allowed us to maintain most of our volume in a challenging market. Early in the new bid season, we are seeing less churn of incumbent lanes and growth in awarded volume with low single digit rate improvements. This contrasts against last bid season where a similar pricing approach produced more churn in incumbent lanes and lower volume awards as some shippers were still pursuing discount offerings, especially through brokers. In recent weeks, more customers have been upfront about reducing the numbers of carriers they want to work with and are focused on increasing volumes with quality asset-based carriers. And as far as capacity, We expect ongoing attrition on a number of fronts that include the recent and developing regulatory focus on enforcement of standards related to English language proficiency and the qualifications and controls around the issuance, renewal, and revocation of non-domiciled CDLs, which we believe may have an outsized impact on the lowest price capacity in the one-way over-the-road market. Second, ongoing carrier downsizing and failures, especially among medium-sized carriers who invest in safety and compliance, but do not have the skill to overcome cost inflation and the unsustainably soft price environment our industry has faced over the last three years. Third, we see large carriers continuing to pull back from over-the-road service in favor of dedicated opportunities given difficult business conditions in the one-way market. And fourth, we see private fleet growth plateauing and likely reversing course as capital assets increasingly come up for replacement and at higher prices. And while the spread between the cost of internalizing the service versus outsourcing it to the market is historically high, we believe the majority of the capacity attrition from these factors will be concentrated in the one-way market, which is where we do roughly 70% of our truckload business. There are signs that the recent regulatory focus is starting to have an impact on capacity availability, but it may take some time before that tightness is consistently felt across the market, absent an increase in demand. If enforcement efforts are sustained and effective, there could be a meaningful shift in the supply-demand dynamic in 2026. Such developments would bring a more favorable setup for carriers and one particularly beneficial to our truckload business, given our unique ability to deliver responsiveness at scale and with industry-leading trailer pool resources that provide valuable flexibility to our customers. Also, the improvements we have made on our cost structure during the down cycle provide great opportunities for margin growth in a stronger market. Beyond our truckload segment, our logistics business is well positioned through its complementary relationship with our asset business to augment revenue capture and to leverage our tech-enabled power-only services to enhance the return on our trailer assets. Further, our intermodal business targets additional progress on cost, network management, and equipment utilization and looks forward to leveraging the new chapter in our rail partnerships in an improving market. Now shifting gears to our LTL business, we're excited to share that we are adopting the AAA Cooper brand across our entire LTL business. The consolidated branding recognizes that we are already one business operating seamlessly on one system and one network, delivering a cohesive solution to our customers we are continuing to grow our LTL network, customer base and volumes, and we are committed to doing this while providing strong service levels. As we build our network, we are capturing growth opportunities with new LTL customers, as well as from some of our longstanding truckload customers. This growth has come during the time when the industry volumes remain under pressure. Although we have felt some cost pressure during our network expansion, we remain focused on improving margins and have multiple initiatives underway to accelerate improvements in cost efficiencies and operational execution as we adapt to the growing network and customer base in a fluid market. So with that, I will turn it over to Andrew for our overview on slide three.