ARCBEST CORP /DE/ (ARCB) FY 2025 MD&A

ITEM 7.MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

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ArcBest Corporation™ (together with its subsidiaries, the “Company,” “ArcBest®,” “we,” “us,” and “our”) is a multibillion‑dollar integrated logistics company that leverages technology and a full suite of solutions across multiple modes of transportation to meet our customers’ supply chain needs. Our operations are conducted through two reportable operating segments:

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For more information, see additional segment descriptions in Part I, Item 1 (Business) and in Note M to our consolidated financial statements included in Part II, Item 8 of this Annual Report on Form 10-K.

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On February 28, 2023, the Company sold FleetNet America, Inc. (“FleetNet”), a wholly owned subsidiary of the Company, for an aggregate adjusted cash purchase price of $100.9 million, including post-closing adjustments. Following the sale, FleetNet® was reported as discontinued operations. As such, historical results of FleetNet have been excluded from both continuing operations and segment results for all periods presented. Unless otherwise indicated, all amounts in this Annual Report on Form 10-K refer to continuing operations, including comparisons to the prior year.

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ORGANIZATION OF INFORMATION

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Management’s Discussion and Analysis of Financial Condition and Results of Operations (“MD&A”) is provided to assist readers in understanding our financial performance during the periods presented and significant trends which may impact our future performance, including the principal factors affecting our results of operations, liquidity and capital resources, and critical accounting policies. MD&A includes additional information about significant accounting policies, practices, and the transactions that underlie our financial results. This discussion should be read in conjunction with our consolidated financial statements and the related notes thereto included in Part II, Item 8 of this Annual Report on Form 10-K. MD&A includes forward-looking statements that are subject to risks and uncertainties. Actual results may differ materially from the statements made in this section due to a number of factors that are discussed in Part I (Forward-Looking Statements) and Part I, Item 1A (Risk Factors) of this Annual Report on Form 10-K. MD&A is comprised of the following:

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RESULTS OF OPERATIONS

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This Results of Operations section of MD&A generally discusses 2025 and 2024 items and year-to-year comparisons between 2025 and 2024. Discussions of 2023 items and year-to-year comparisons between 2024 and 2023 that are not included in this Annual Report on Form 10‑K can be found in the Results of Operations section of MD&A in Part II, Item 7 of our Annual Report on Form 10-K for the fiscal year ended December 31, 2024.

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Consolidated Results

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Our consolidated revenues, which totaled $4.0 billion for 2025, decreased 4.0% compared to 2024. The revenue decline is primarily attributable to lower market rates and shipment levels for our Asset-Light shipping and logistics services in a soft market environment, which resulted in a decrease in Asset-Light revenues of 9.4%. Lower revenue per shipment, partially offset by higher shipment levels in our Asset-Based segment, resulted in a 0.6% decrease in Asset-Based revenues and contributed to the year-over-year decrease in consolidated revenues for 2025. The elimination of intersegment revenues reported within the “Other and eliminations” line of consolidated revenues increased 6.7% for 2025, compared to 2024, reflecting year-over-year changes in intersegment business levels among our operating segments.

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Our Asset-Based billed revenue per hundredweight, including fuel surcharges, decreased 1.3% for 2025, compared to 2024. The decrease was driven by a shift in freight profile, including fewer shipments from existing customers in the manufacturing sector and the decrease in the fuel surcharge revenue associated with lower fuel prices. Tonnage per day increased 1.2% for 2025, compared to the prior year, supported by higher daily shipment volumes, despite a softer market environment driven in part by continued weakness in the manufacturing sector.

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The decrease in revenues of our Asset-Light segment for 2025, compared to 2024, was impacted by a 7.4% decline in revenue per shipment associated with soft market conditions and changes in business mix, including a higher mix of managed transportation business, as well as a 1.8% decrease in shipments per day. Our Asset-Light segment generated approximately 34% and 36% of total revenues before other revenues and intercompany eliminations for 2025 and 2024, respectively.

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Consolidated operating income decreased $154.1 million year-over-year to an operating income of $90.3 million in 2025, reflecting the revenue decline, increases in Asset-Based segment salaries, wages and benefits; and the reduction in the contingent earnout consideration accrual during 2024, offset by lower purchased transportation costs and lower employee costs in the Asset-Light segment. Segment operating expenses are further described in the Asset-Based Segment Results and Asset-Light Segment Results sections of Results of Operations. In addition to the results of our operating segments, the year-over-year comparison of consolidated operating income was also impacted by items described in the following paragraphs.

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Innovative technology costs impacted consolidated segment results during 2025 and 2024, including costs associated with our Vaux suite – Vaux Freight Movement System™, Vaux Smart Autonomy™, and Vaux Vision™. Certain costs related to Vaux and other initiatives to optimize performance through technological innovation are reported in the “Other and eliminations” line of consolidated operating income. These combined costs decreased consolidated results by $29.1 million (pre-tax), or $22.2 million (after-tax) and $0.97 per diluted share, for 2025, compared to $34.1 million (pre-tax), or $26.1 million (after-tax) and $1.10 per diluted share, for 2024.

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The liability for contingent earnout consideration recorded for the MoLo® acquisition was remeasured at each quarterly reporting date, and any change in fair value as a result of the recurring assessments was recognized in operating income. Consolidated operating results increased by $2.7 million (pre-tax), or $2.0 million (after-tax) and $0.09 per diluted share for 2025 and by $90.3 million (pre-tax), or $67.9 million (after-tax) and $2.85 per diluted share for 2024, in each case due to quarterly remeasurements, which resulted in a lower liability of the contingent earnout consideration. During 2025, the liability was reduced to zero as the earnout calculation did not meet the threshold for an earnout payment based on adjusted earnings before interest, taxes, depreciation and amortization, for 2025. Remeasurement calculations related to the prior year contingent earnout consideration are further discussed in Note C to our consolidated financial statements included in Part II, Item 8 of this Annual Report on Form 10-K.

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The Company recognized noncash asset impairment charges during fourth quarter 2025 related to the indefinite-lived Panther trade name within the Asset-Light segment and the write-off of certain obsolete assets utilized in our Vaux suite, which reduced operating results by $12.0 million (pre-tax), or $9.1 million (after-tax) and $0.40 per diluted share for the year ended December 31, 2025. Asset impairment charges were recognized during fourth quarter 2024 for certain revenue equipment and software as part of a strategic decision to adjust capacity within Asset-Light’s operations, which reduced operating results by $1.7 million (pre-tax), or $1.3 million (after-tax) and $0.05 per diluted share, for the year ended December 31, 2024. Remeasurement of the intangible and long-lived assets, operating right-of-use assets, and leasehold improvements is further discussed within Note C to our consolidated financial statements included in Part II, Item 8 of this Annual Report on Form 10-K.

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Consolidated operating results benefited from the sale of certain properties, including two former service center locations, during the third quarter of 2025, which resulted in a net gain of $15.7 million (pre-tax), or $11.8 million (after-tax) and $0.51 per diluted share, for the year ended December 31, 2025.

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During 2024, consolidated net income and earnings per share were impacted by a one-time, noncash impairment charge of $28.7 million (pre-tax), or $21.6 million (after-tax) and $0.91 per diluted share, to write off our equity investment in Phantom Auto, a provider of human‑centered remote operation software, which ceased operations during the first quarter of 2024. The charge was recognized in “Other, net” within “Other income (costs).” The write-off of our equity investment is further described within Note C to our consolidated financial statements included in Part II, Item 8 of this Annual Report on Form 10-K.

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In addition to the above items, the year-over-year changes in consolidated net income and earnings per share were impacted by changes in the cash surrender value of variable life insurance policies, tax effects from the vesting of share-based compensation awards, and other changes in the effective tax rate as described within the Income Taxes section of MD&A and in Note E to our consolidated financial statements included in Part II, Item 8 of this Annual Report on Form 10-K. A portion of our variable life insurance policies have investments, through separate accounts, in equity and fixed income securities and, therefore, are subject to market volatility. Changes in the cash surrender value of life insurance policies, which are reported below the operating income line in the consolidated statements of operations, increased consolidated net income by $3.3 million and $0.15 per diluted share in 2025, and $3.3 million and $0.14 per diluted share in 2024. The vesting of restricted stock units resulted in a tax expense of $1.0 million and $0.04 per diluted share for 2025, compared to a tax benefit of $11.3 million and $0.47 per diluted share in 2024.

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Consolidated Adjusted Earnings Before Interest, Taxes, Depreciation, and Amortization (“Adjusted EBITDA”)

We report our financial results in accordance with U.S. generally accepted accounting principles (“GAAP”). However, management believes that certain non-GAAP performance measures and ratios, such as Adjusted EBITDA, utilized for internal analysis, provide analysts, investors, and others the same information that we use internally for purposes of assessing our core operating performance. Accordingly, using these measures improves comparability between current and prior results and provides important information to our analysis of performance trends because it removes the impact of items from operating results that, in management’s opinion, do not reflect our core operating performance. Management uses Adjusted EBITDA as a key performance measure and for business planning. The measure is particularly meaningful for analysis of our operating performance, because it excludes amortization of acquired intangibles and software of the Asset-Light segment, changes in the fair value of contingent earnout consideration and our equity investment, asset impairment charges, and certain legal settlement expenses of the Asset-Light segment, which are significant expenses or gains resulting from strategic decisions or other factors rather than core daily operations. Our calculation of Adjusted EBITDA may not be comparable to similarly titled measures of other companies as other companies may calculate Adjusted EBITDA differently. Non-GAAP financial measures should be viewed in addition to, and not as an alternative for, our reported results. Adjusted EBITDA should not be construed as a better measurement than operating income, net income, or earnings per share, as determined under GAAP. The following table presents a reconciliation of Adjusted EBITDA to our net income, which is the most directly comparable GAAP measure for the periods presented.

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Asset-Based Operations

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Asset-Based Segment Overview

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The Asset-Based segment consists of ABF Freight, one of North America’s largest less-than-truckload (“LTL”) carriers and a wholly owned subsidiary of the Company, and certain other subsidiaries. Our customers trust the LTL solutions ABF Freight has provided for over a century and rely on our unwavering commitment to quality, safety, and customer service to solve their transportation challenges, including through market disruptions and rapidly changing economic conditions. We are strategically investing in our Asset-Based operations to utilize technology to drive efficiency and productivity. We are also committed to our deepening customer relationships to navigate challenges now and in the future.

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Our Asset-Based operations are affected by general economic conditions, as well as a number of other competitive factors that are more fully described in Item 1 (Business) and in Item 1A (Risk Factors) of Part I of this Annual Report on Form 10-K. See Note M to our consolidated financial statements included in Part II, Item 8 of this Annual Report on Form 10-K

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for a description of the Asset-Based segment and additional segment information, including revenues, operating expenses, and operating income for the years ended December 31, 2025, 2024, and 2023.

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In addition to the overall customer demand for Asset-Based transportation services, including the impact of economic factors, key indicators, as outlined below, are used by management to evaluate segment operating performance and measure the effectiveness of strategic initiatives in the results of our Asset-Based segment. We quantify certain key indicators using key operating statistics, which are important measures in analyzing segment operating results from period to period. These statistics are defined within the key indicators below and referred to throughout the discussion of the results of our Asset-Based segment:

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Other companies within our industry may present different key performance indicators or operating statistics, or they may calculate their measures differently; therefore, our key performance indicators or operating statistics may not be

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comparable to similarly titled measures of other companies. Key performance indicators or operating statistics should be viewed in addition to, and not as an alternative for, our reported results. Our key performance indicators or operating statistics should not be construed as better measurements of our results than operating income, operating cash flow, net income, or earnings per share, as determined under GAAP.

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Tonnage

The level of freight tonnage managed by the Asset-Based segment is directly affected by industrial production and manufacturing; distribution; residential and commercial construction; consumer spending, primarily in the North American economy; and capacity in the trucking industry. Operating results are affected by economic cycles and conditions, customers’ business cycles, and changes in customers’ business practices. The Asset-Based segment actively competes for freight business based primarily on price, service, and capacity availability.

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Pricing

The industry pricing environment, another key factor affecting our Asset-Based results, influences the ability to obtain appropriate margins and implement price adjustments across our customer base. LTL freight is rated under a classification framework established by the National Motor Freight Traffic Association, Inc. (“NMFTA”). In July 2025, NMFTA updates accelerated the transition from the previous commodity-based model toward a density-based model that places greater emphasis on measured density, handling characteristics, stowability, and liability instead of fixed commodity classes. Changes in the freight class and packaging, along with changes in other freight profile factors, such as average shipment size; average length of haul; freight density; and customer and geographic mix, can affect the average billed revenue per hundredweight measure. Light, bulky freight generally results in higher classes and generates higher revenue per hundredweight while dense freight is usually assigned lower classes. As classification increasingly relies on density, pricing has become more sensitive to accurate dimensional data and other freight attributes.

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Approximately 17% of our Asset-Based business is subject to base LTL tariffs, which are affected by general rate increases, subject to individually negotiated discounts. Rates on the remaining Asset-Based business, including business priced in the spot market, are subject to individual pricing arrangements negotiated at various times throughout the year. Most of the business that is subject to negotiated pricing arrangements is associated with larger customer accounts with annual pricing arrangements. The remaining business is priced on an individual shipment basis considering shipment characteristics, network capacity, and current market conditions. Since most pricing is established by account, the Asset‑Based segment focuses on individual account profitability rather than a single measure of billed revenue per hundredweight when considering customer account or market evaluations.

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We allow shippers without negotiated published rates access to LTL rates through an online portal and application programming interface (“API”) connectivity, matching shipping needs with ABF Freight’s capacity options through a dynamic pricing option. The market has been receptive to this dynamic pricing option for transactional LTL shipments, and this program has been beneficial in optimizing our business levels by improving capacity utilization in the Asset‑Based network. Our dynamic pricing option allows us to strategically fill excess capacity, including during the current soft market environment, enabling us to improve utilization of our internal resources and be better positioned for a market rebound of higher freight demand, as well as provide a more sustainable service offering by reducing “empty miles” (or the number of miles we move empty or near-empty equipment for repositioning purposes). Although we continually evaluate our business mix to ensure revenue optimization, any resulting increase in revenues could be offset partially or entirely by the related increase in expenses needed to service higher shipment volumes.

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We also utilize a space-based pricing approach for shipments subject to LTL tariffs to better reflect capacity usage and freight shipping trends in the industry, including the overall growth and ongoing profile shift to bulkier, yet often lighter, shipments across the supply chain, the acceleration in e-commerce, and the unique requirements of many shipping and logistics solutions, such as accommodating for smaller LTL shipments. An increasing percentage of freight is taking up more space in trailers without a corresponding increase in weight. Traditional LTL pricing is generally weight-based, while our linehaul costs are generally space-based (i.e., costs are impacted by the volume of space required for each shipment). Space-based pricing involves the use of freight dimensions (length, width, and height) to determine applicable cubic minimum charges (“CMC”) that supplement weight-based metrics when appropriate. We believe space-based pricing better aligns our pricing mechanisms with the metrics which affect our resources and, therefore, our costs to provide logistics services. The recent move by the NMFTA to density-driven class brackets reflects this shift in LTL pricing practices from traditional LTL pricing. We seek to provide logistics solutions to our customers’ businesses and the unique shipment characteristics of their various products and commodities, and we believe that we are particularly experienced in

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handling freight that is generally considered difficult to handle. CMC is an additional pricing mechanism to better capture the value we provide in transporting these shipments.

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Fuel

The transportation industry is dependent upon the availability of adequate fuel supplies. The Asset-Based segment assesses a fuel surcharge based on the index of national on-highway average diesel fuel prices published weekly by the U.S. Department of Energy. Fuel surcharges apply across our Asset-Based network; however, to better align fuel surcharges to fuel- and energy-related expenses and provide more stability to account profitability as fuel prices change, we may, from time to time revise our standard fuel surcharge program, which primarily affects noncontractual customers representing a portion of Asset-Based shipments. While fuel surcharge revenue generally more than offsets the increase in direct diesel fuel costs when applied, the total impact of energy prices on other nonfuel-related expenses is difficult to ascertain. Management cannot predict, with reasonable certainty, future fuel price fluctuations, the impact of energy prices on other cost elements, recoverability of fuel costs through fuel surcharges, and the effect of fuel surcharges on the overall rate structure or the total price that the segment will receive from its customers. While the fuel surcharge is one of several components in the overall rate structure, the actual rate paid by customers is governed by market forces and the overall value of services provided to the customer.

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During periods of changing diesel fuel prices, the fuel surcharge and associated direct diesel fuel costs also vary by different degrees. Depending upon the rates of these changes and the impact on costs in other fuel- and energy-related areas, operating margins could be impacted. Fuel prices have fluctuated significantly in recent years. Whether fuel prices fluctuate or remain constant, operating results may be adversely affected if competitive pressures limit our ability to recover fuel surcharges. Throughout 2025, the fuel surcharge mechanism generally continued to have market acceptance among customers; however, certain nonstandard pricing arrangements have limited the amount of fuel surcharge recovered. The negative impact on operating margins of capped fuel surcharge revenue during periods of increasing fuel costs is more evident when fuel prices remain above the maximum levels recovered through the fuel surcharge mechanism on certain accounts. In periods of declining fuel prices, as experienced in 2025, compared to 2024, fuel surcharge percentages also decrease, which negatively impacts the total billed revenue per hundredweight measure and, consequently, revenues, while total fuel costs also decreased. The segment’s operating results will continue to be impacted by further changes in fuel prices and the related fuel surcharges.

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Labor Costs

Our Asset-Based labor costs, including retirement and healthcare benefits for contractual employees that are provided by a number of multiemployer plans (see Note I to our consolidated financial statements included in Part II, Item 8 of this Annual Report on Form 10-K), are impacted by contractual obligations under the 2023 ABF National Master Freight Agreement (“2023 ABF NMFA”), the collective bargaining agreement and other related supplemental agreements with the International Brotherhood of Teamsters (the “IBT”), which will remain in effect through June 30, 2028. Total salaries, wages, and benefits, amounted to 52.2% for 2025 and 50.5% of revenues for 2024. Changes in salaries, wages, and benefits expense and shared services expenses, which include labor costs related to ABF Freight’s portion of company‑wide functions, as a percentage of revenues are discussed in the Asset-Based Segment Results section.

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ABF Freight operates in a highly competitive industry comprised primarily of nonunion motor carriers. Nonunion competitors have a lower fringe benefit cost structure and less stringent labor work rules, and certain carriers also have lower wage rates for their freight-handling and driving personnel. As of December 2025, approximately 81% of our Asset-Based segment’s employees were covered under the 2023 ABF NMFA. The terms of the 2023 ABF NMFA continue to provide some of the best wages and benefits in the industry to our contractual employees. The combined contractual wage and benefits top hourly rate is estimated to increase approximately 4.2% on a compounded annual basis over the term of the agreement, with potential profit-sharing bonuses representing additional costs under the 2023 ABF NMFA.

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Under the 2023 ABF NMFA, ABF Freight continues to pay some of the highest benefit contribution rates in the industry, and through this contract, ABF Freight has the ability to implement location-specific wage increases in areas where hiring is challenging. ABF Freight’s benefit contributions for its contractual employees include contributions to multiemployer plans. Contributions to multiemployer pension plans and health and welfare plans totaled $164.1 million and $219.9 million, respectively, in 2025, and $157.9 million and $218.5 million, respectively, in 2024. ABF Freight’s latest labor agreement with the IBT requires wage rates and health, welfare, and pension contribution rates for most plans to increase annually in accordance with the terms of the 2023 ABF NMFA. Contractual wage rates increased effective July 1, 2024 and July 1, 2025. Health, welfare, and pension benefit contribution rates increased effective primarily on

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August 1, 2024 and August 1, 2025. These rate adjustments resulted in a combined contractual wage and benefits top hourly rate increase of approximately 2.9% in 2025 and 2.7% in 2024.

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As compared to the 2018 National Master Freight Agreement with the IBT, the 2023 ABF NMFA provides for:

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Through the term of the 2023 ABF NMFA, ABF Freight’s multiemployer pension contribution obligations generally will be satisfied by making the specified contributions when due. Future contribution rates will be determined through the negotiation process for contract periods following the term of the current collective bargaining agreement. While contributions that will be required under future collective bargaining agreements for ABF Freight’s contractual employees cannot be predicted with certainty, legislation in recent years provided funding relief to many underfunded plans which may reduce the likelihood of future contribution rate increases (see Note I to our consolidated financial statements included in Part II, Item 8 of this Annual Report on Form 10-K). If ABF Freight were to completely withdraw from certain multiemployer pension plans, under current law, ABF Freight would have material liabilities for its share of the unfunded vested liabilities of each such plan. Further, ABF Freight could also trigger complete or partial withdrawal liability from certain multiemployer pension plans through, among other things, mergers and other fundamental corporate transactions and as a result of operational changes, site closures and job losses, which could result in material liabilities.

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Asset-Based Segment Results

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The following table sets forth a summary of operating expenses and operating income as a percentage of revenue for the Asset-Based segment:

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The following table provides a comparison of key operating statistics for the Asset-Based segment, as previously defined in the Asset-Based Segment Overview:

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Asset-Based Revenues

Asset-Based segment revenues totaled $2.7 billion for the year ended December 31, 2025 and $2.8 billion for the prior‑year period. The decrease in revenue compared to the prior year primarily reflects lower billed revenue per hundredweight and weight per shipment. An increase in daily tonnage due to higher shipment volumes partially offset these impacts. There was one less workday in 2025 versus 2024.

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The decrease in total billed revenue per hundredweight year-over-year was driven by the shift in freight profile and lower fuel surcharge revenue associated with lower fuel prices, compared to 2024, partially offset by lower weight per shipment, which generally increases revenue per hundredweight. The pricing environment continues to be rational. Excluding the impact of fuel surcharges, the percentage decrease in billed revenue per hundredweight was in the low-single digits for 2025, compared to 2024. Prices on accounts subject to deferred pricing agreements and annually negotiated contracts that were renewed during 2025 increased an average of 4.6%. The Asset-Based segment implemented nominal general rate increases on its LTL base rate tariffs of 5.9% effective on August 4, 2025, and September 9, 2024, although the rate changes vary by lane and shipment characteristics.

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The increase in tonnage per day for 2025, compared to 2024, was driven by a 3.0% increase in daily shipments, reflecting changes in the Asset-Based business mix, including the onboarding of new core LTL customers. Ongoing weakness in the manufacturing sector and evolving freight dynamics, including the shift of some heavier LTL shipments to the truckload market due to lower rates amid excess capacity, resulted in lower average weight per shipment levels year-over-year.

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Current economic conditions and the Asset-Based segment’s pricing approach, as previously discussed in the Pricing section of the Asset-Based Segment Overview within Results of Operations, will continue to impact the segment’s tonnage levels and the prices it receives for its services and, as such, there can be no assurance that our Asset-Based segment will maintain or achieve improvements in its current operating results. The industry pricing environment remains rational, which has benefited our efforts to secure needed price increases; however, the competitive environment could limit the Asset-Based segment from securing adequate increases in base LTL freight rates and could limit the amount of fuel surcharge revenue recovered in future periods.

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Asset-Based Operating Income

The Asset-Based segment generated operating income of $172.0 million in 2025, compared to $242.6 million in 2024, with an operating ratio of 93.7% in 2025, compared to 91.2% in 2024. The 2.5 percentage-point increase in the Asset-Based segment’s operating ratio, primarily reflects the increase in operating expenses and slightly lower revenue levels. The Asset-Based segment’s operating ratio was positively impacted by the gain on the sale of property and equipment of $15.8 million, including gains on two service center sales.

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Asset-Based Operating Expenses

Labor costs, which are reported in operating expenses as salaries, wages, and benefits increased $40.7 million for 2025, compared to 2024, primarily due to contract rate increases under the 2023 ABF NMFA, as previously discussed in the Asset-Based Segment Overview section, an increase in headcount to align with higher shipment levels and increased tonnage, and the effect of rising healthcare costs. Wage rates increased 2.4% on July 1, 2025 and 2.5% on July 1, 2024, and health, welfare and benefits rates increased 3.6% on August 1, 2025 and 2.9% on August 1, 2024, for a blended

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increase of 2.9% in 2025 and 2.7% in 2024. Lower accruals for incentives, improved productivity, as measured by shipments per DSY hour, and higher utilization of purchased transportation, as discussed later in this section, partially offset the increase in salaries, wages and benefits.

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The Asset-Based segment manages costs with shipment levels; however, a number of factors impact DSY productivity, including the effect of freight profile and mix changes, utilization of local delivery agents, and efficiency of personnel. Shipments per DSY hour improved 0.1% for 2025, compared to 2024, primarily due to continued investments in technology and ongoing training and development at certain key locations as the ABF Freight Continuous Improvement Team continues to reinforce operational best practices throughout the Asset-Based network. Pounds per mile increased 1.3% for 2025, compared to 2024, reflecting an improvement in linehaul efficiency and an increase in the utilization of purchased transportation, partially offset by lower weight per shipment.

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Depreciation and amortization as a percentage of revenue increased 0.8 percentage points in 2025, compared to 2024, primarily due to recent service center renovations and higher purchase prices for new revenue equipment, which has resulted in an increase in depreciation expense per unit.

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Rents and purchased transportation as a percentage of revenue increased 0.7 percentage points in 2025, compared to 2024, primarily due to increased rent expense for new service centers, higher utilization of rail, local delivery agents, and linehaul purchased transportation to support shipment growth, partially offset by lower rail fuel surcharge cost per mile. Rail miles increased approximately 3% in 2025, compared to 2024.

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Operating expenses were also impacted by the gain on the sale of property and equipment of $15.8 million, including gains on two service center sales during third quarter 2025, as previously discussed.

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Asset-Light Operations

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Asset-Light Segment Overview

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Our Asset-Light segment is a key component of our strategy to offer a single source of integrated logistics solutions, designed to satisfy customers’ complex supply chain needs and unique shipping requirements. We are focused on growing and making strategic investments in our Asset-Light segment that enhance our service offerings and strengthen our customer relationships. Throughout our operations, we are seeking opportunities to expand our revenues by deepening existing customer relationships, securing new customers, and adding capacity options for our customers.

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As supply chains become more complex, most shippers use a mix of modes to keep their supply chains moving, and our managed transportation solutions seamlessly connect these modes to build better supply chains. We continue to develop our managed transportation solutions as part of our strategic efforts to cross-sell our service offerings and meet the demand for these services that increase operational efficiencies, reduce costs, and give better insights into their supply chain. We expect to benefit from these and other strategic initiatives as we continue to deliver innovative solutions to customers.

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Our Asset-Light operations are affected by general economic conditions, as well as several other competitive factors that are more fully described in Part I, Item 1 (Business) and in Part I, Item 1A (Risk Factors) of this Annual Report on Form 10-K. See Note M to our consolidated financial statements included in Part II, Item 8 of this Annual Report on Form 10-K for descriptions of the Asset-Light segment and additional segment information, including revenues, operating expenses, and operating income (loss) for the years ended December 31, 2025, 2024, and 2023.

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Key indicators, as outlined below, are used by management to evaluate segment operating performance and measure the effectiveness of strategic initiatives in the results of our Asset-Light segment. We quantify certain key indicators using key operating statistics which are important measures in analyzing segment operating results from period to period. These statistics are defined within the key indicators below and referred to throughout the discussion of the results of our Asset‑Light segment:

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Other companies within our industry may present different key performance indicators or they may calculate their key performance indicators differently; therefore, our key performance indicators may not be comparable to similarly titled measures of other companies. Key performance indicators should be viewed in addition to, and not as an alternative for, our reported results. Our key performance indicators should not be construed as better measurements of our results than operating income (loss), net income, or earnings per share, as determined under GAAP.

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Asset-Light Segment Results

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The following table sets forth a summary of operating expenses and operating income (loss) as a percentage of revenue for the Asset-Light segment:

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A comparison of key operating statistics for the Asset-Light segment, as previously defined in the Asset-Light Segment Overview section, is presented in the following table:

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Asset-Light Revenues

Asset-Light segment revenues decreased 9.4% to $1.4 billion for 2025, compared to $1.6 billion in 2024. The revenue decline primarily reflects lower average revenue per shipment driven by a soft market environment and a higher mix of managed transportation business, which typically has smaller shipment sizes. Revenue was also impacted by a decrease in average daily shipment volume resulting from our strategic reduction in less profitable truckload shipments, despite shipment growth in our managed transportation solutions. Excess capacity in the truckload market continues to impact spot market rates.

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Asset-Light Operating Income (Loss)

The Asset-Light segment generated operating loss of $15.3 million in 2025 and operating income of $58.4 million in 2024. The year-over-year decline in operating results is primarily attributable to the $90.3 million reduction in the fair value of the contingent earnout consideration for 2024, along with lower revenues and operating expense changes discussed in the following paragraphs. Operating results were also impacted by asset impairment charges recognized during fourth quarter 2025 of $6.6 million and during fourth quarter 2024 of $1.7 million, which are further described below.

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Asset-Light Operating Expenses

Operating expenses decreased $71.8 million, or 4.8%, and increased as a percentage of revenue by 4.9 percentage points. Excluding the change in fair value of contingent earnout consideration and asset impairment charges, operating expenses

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were lower primarily due to reduced spending on outside services and employee-related cost reductions in relation to lower business levels and productivity improvements in shipments per person per day.

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Purchased transportation costs as a percentage of revenue decreased by 1.0 percentage point for 2025, compared to 2024, reflecting the $138.7 million reduction of purchased transportation costs in 2025. Changes in market capacity impact the cost of purchased transportation and may not correspond to the timing of revisions to customer pricing and changes in revenue per shipment. There can be no assurance that we will be able to secure prices from our customers that will allow us to maintain or improve our margins on the cost of sourcing carrier equipment capacity.

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Contingent earnout consideration, as previously described in the Consolidated Results section of Results of Operations, increased as a percentage of revenue by 5.6 percentage points for 2025, compared to 2024. The contingent earnout consideration is discussed further in Note C to our consolidated financial statements included in Part II, Item 8 of this Annual Report on Form 10-K.

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Salaries, wages, and benefits decreased as a percentage of revenue by 0.7 percentage points in 2025, compared to 2024, or $19.9 million year-over-year as the segment continued efforts to align resources with business levels and advance employee productivity. Shipments per employee per day improved 16.9% for 2025, compared to 2024, as a result of these efforts, combined with changes in business mix and technology advancements from the digital roadmap initiatives.

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Shared service costs as a percentage of revenue increased 0.8 percentage points for 2025, compared to 2024, primarily reflecting the impact of lower revenues during 2025.

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Asset impairment charges, as previously described, of $6.6 million recorded in the fourth quarter of 2025 and $1.7 million recorded in the fourth quarter of 2024 were 0.5 percentage points for 2025 and 0.1 percentage points of revenue for 2024. The impairment charges are discussed further in Note C to our consolidated financial statements included in Part II, Item 8 of this Annual Report on Form 10-K.

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Table of Contents

Asset-Light Adjusted Earnings Before Interest, Taxes, Depreciation, and Amortization (“Asset-Light Adjusted EBITDA”)

We report our financial results in accordance with GAAP. However, management believes that certain non-GAAP performance measures and ratios, such as Asset-Light Adjusted EBITDA, which is utilized for internal analysis, provide analysts, investors, and others the same information that we use internally for purposes of assessing our core operating performance and provides meaningful comparisons between current and prior period results, as well as important information regarding performance trends. The use of certain non-GAAP measures improves comparability in analyzing our performance because it removes the impact of items from operating results that, in management’s opinion, do not reflect our core operating performance. Management uses Asset-Light Adjusted EBITDA as a key performance measure and for business planning. This measure is particularly meaningful for analysis of our Asset-Light segment because it excludes amortization of acquired intangibles and software, changes in the fair value of contingent earnout consideration, asset impairment charges, and certain legal settlement expenses, which are significant expenses or gains resulting from strategic decisions or other factors rather than core daily operations. Management also believes Asset-Light Adjusted EBITDA to be relevant and useful information, as EBITDA is a standard measure commonly reported and widely used by analysts, investors, and others to measure financial performance of asset-light businesses and the ability to service debt obligations. Other companies may calculate adjusted EBITDA differently; therefore, our calculation of Asset-Light Adjusted EBITDA may not be comparable to similarly titled measures of other companies. Non-GAAP financial measures should be viewed in addition to, and not as an alternative for, our reported results. Asset-Light Adjusted EBITDA should not be construed as a better measurement than operating income (loss), net income, or earnings per share, as determined under GAAP.

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Asset-Light Adjusted EBITDA

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[table omitted - see filing]