LSTR

Landstar's third quarter was marked by robust revenue growth, but the market reacted negatively due to earnings missing consensus profit expectations. Management attributed the revenue outperformance to increased demand for heavy haul services, improved truckload volumes, and positive pricing trends, especially in specialized freight. However, CEO Frank Lonegro acknowledged a challenging insurance and claims environment, highlighting that "the quarter was not without challenges that required our focus and attention," as significant unfavorable adjustments to prior year claims weighed on profitability. Is now the time to buy LSTR? Find out in our full research report (it's free). - Revenue $1.51 billion vs S&P analysts' estimates of $1.50 billion (25.3% year-on-year growth, 0.7% beat) - Adjusted EPS $1.42 vs S&P analysts' expectations of $1.66 (14.7% miss) - Operating margin 4.3%, up from 2.2% in the same quarter last year - Market capitalization $4.68 billion While we enjoy listening to the management's commentary, our favorite part of earnings calls is the analyst questions. Those are unscripted and can often highlight topics that management teams would rather avoid or topics where the answer is complicated. Here is what has caught our attention. - Scott Group (Wolfe Research) pressed CEO Frank Lonegro on insurance costs post-Montgomery; Lonegro acknowledged renewed insurance coverage and more risk for smaller brokers, while CFO Matt Miller confirmed a favorable renewal but noted ongoing uncertainty. - Jonathan Chappell (Evercore ISI) asked about freight demand in data center and infrastructure markets; Lonegro and VP Jim Applegate cited broad-based heavy haul strength and a strong pipeline of new customers, especially in data center-related segments. - Paul Stoddard (Goldman Sachs) inquired about persistent declines in brokerage volumes; VP Jim Todd attributed this to increased BCO activity and customer preferences, with higher BCO utilization reducing reliance on third-party carriers. - Tom Wadewitz (UBS) questioned changes to carrier selection and safety standards; Lonegro and Miller explained investments in technology and stricter vetting, reducing approved carriers by 35% to mitigate fraud and safety risks. - Stephanie Moore (Jefferies) asked about M&A strategy in light of industry changes; Lonegro said Landstar remains selective, favoring agent additions over traditional acquisitions but open to opportunities that fit its platform model. In the coming quarters, our analyst team will be monitoring (1) trends in insurance and claims costs as legal and regulatory dynamics evolve, (2) the pace of adoption and impact from new AI-powered agent tools, and (3) further shifts in truckload demand and pricing, particularly in specialized freight. Execution on agent network expansion and continued BCO growth will also be key indicators of Landstar's progress. Landstar currently trades at $139.64, down from $168.78 just before the earnings. At this price, is it a buy or sell? See for yourself in our full research report (it's free for active Edge members). ONE MORE THING: Top 5 Growth Stocks. The biggest stock winners almost always had one thing in common before they ran. Revenue growing like crazy. Meta. CrowdStrike. Broadcom. Our AI flagged all three. They returned 315%, 314%, and 455%, respectively. Find out which 5 stocks it's flagging this month — FREE. Get Our Top 5 Growth Stocks for Free HERE. Stocks that have made our list include now familiar names such as Nvidia (+1,460% between June 2020 and June 2025) as well as under-the-radar businesses like the once-micro-cap company Kadant (+214% between June 2020 and June 2025). Find your next big winner with StockStory today.

Landstar System (LSTR) is back in focus after its latest quarterly report and dividend update, as investors weigh strong freight demand, higher insurance costs, and a new US$0.44 per share payout. That mix of strong revenue growth and heavier insurance charges has been met with a sharp reset in expectations, with Landstar System's share price falling about 18% over the past week and around 16% over the past month, even though the 1 year total shareholder return is still about 14%. Recent momentum has clearly cooled after a stronger run earlier in the year. Scan how Landstar System's selloff compares with other transport and logistics stocks on the move by reviewing the hand picked 32 resilient stocks with low risk scores that have held up better in recent pullbacks. After a drop of roughly 18% in a week, Landstar System now trades at a very different entry point than it did earlier this year. Is that a window to step in now or a reason to wait for an even lower price before reassessing valuation? On the most followed view of Landstar System, a fair value of about $149.76 sits above the latest $138.80 close, which frames the recent pullback very differently from the price action alone. Management is allocating more than half of the IT capital budget to AI tools across pricing, dispatch, tracking and analytics. Adoption depends on hundreds of independent agents and BCOs, and if usage is uneven or slower than planned, the company could see higher selling, general and administrative expense and depreciation without a matching gain in shipment throughput or variable contribution margin. See why 0 investors see Landstar System as 7% undervalued. Result: Fair Value of $149.76 (UNDERVALUED) Still, heavier insurance exposure and tighter safety and fraud rules could pressure Landstar System's costs and limit the value investors assign to future earnings. Find out about the key risks to this Landstar System narrative. Sentiment in this piece may feel mixed, so move quickly from headline reaction to your own judgment by weighing both the risks and the potential upside. To see what those potential upsides look like in more detail, review the 3 key rewards. If Landstar System has sharpened your focus, do not stop here. Broaden your watchlist with a few focused stock ideas that match your risk and return preferences. - Target potential mispricing by scanning a curated set of high quality opportunities through the 26 high quality undervalued stocks. - Strengthen the income side of your portfolio by reviewing the 6 dividend fortresses that combine higher yields with disciplined payout profiles. - Prioritise resilience by running through the list of solid balance sheet and fundamentals (24 results) and filter for businesses backed by sturdier financial foundations. This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned. Companies discussed in this article include LSTR. Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email [email protected]

Landstar System, Inc. LSTR reported mixed third-quarter 2026 results, wherein earnings surpassed the Zacks Consensus Estimate and revenues exceeded expectations. Strong truck pricing and higher freight volumes supported the top line, although elevated insurance and claims expenses pressured profitability. Quarterly earnings of $1.89 per share beat the Zacks Consensus Estimate of $1.62 by 16.7%. Reported GAAP earnings were $1.42 per share, surged 153.6% from 56 cents a year earlier. Revenues of $1.51 billion surpassed the consensus mark of $1.49 billion by 1.6% and increased 25.4% year over year. Truck revenue per load climbed 25.2%. Landstar System, Inc. price-consensus-eps-surprise-chart | Landstar System, Inc. Quote Truck transportation revenues increased 29.1% year over year to $1.41 billion and represented 93% of total revenues. The number of truckloads rose 3.1% year over year to 500,650, while revenue per truckload increased to $2,811 from $2,245. Van-equipment revenues grew 30.3% year over year to $759.95 million, supported by a 6.1% increase in loads and a 22.8% rise in revenue per load. Unsided and platform revenues jumped 34.3% to $518.58 million as loadings increased 4.2% and revenue per load rose 29%. Consumer durables remained the largest market served, accounting for 29.2% of transportation logistics revenues. Revenues from that market increased 34% year over year, while energy revenues surged 79%. Machinery revenues increased 26%, building products revenues advanced 27% and automotive revenues rose 12%. Rail intermodal revenues increased 17.5% year over year to $27.81 million. Rail loads rose 6.3% to 8,490, while revenue per load increased 10.6% to $3,275, reflecting improvements in both pricing and volume. Ocean and air-cargo revenues declined 23.4% year over year to $55.33 million. Loadings decreased 10.8%, while revenue per load fell 14.2%. Other truck transportation revenues increased 8% to $103.71 million. Less-than-truckload revenues increased 1.9% to $24.93 million. A 23.2% decline in loadings was offset by a 32.7% improvement in revenue per load. Gross profit increased 13.9% year over year to $126.55 million, while gross margin contracted 80 basis points to 8.4%. Variable contribution, which excludes purchased transportation and agent commissions, rose 24.6% to $212.07 million. The related margin declined 10 basis points to 14%. Selling, general and administrative expenses increased 9.4% to $62.38 million, primarily reflecting higher incentive compensation and stock-based compensation. Operating income surged 149% to $65.54 million, partly reflecting the absence of $30.1 million in impairment charges recorded a year earlier. The company added a net 165 trucks provided by business capacity owners (BCOs) during the reported quarter, its greatest quarterly improvement since the third quarter of 2021. BCO trucks totaled 8,709 at quarter-end, up from 8,544 at the preceding quarter-end. BCO-hauled loads increased 6.9% year over year to 212,660, while revenues generated through BCO capacity rose 29.2% to $590.99 million. Improved utilization and stronger pricing supported performance. The trailing 12-month BCO truck turnover rate declined to 26.6% from 31.4% at the end of 2025. Meanwhile, approved truck brokerage carriers increased to 67,915 from 64,607 sequentially. Landstar ended the third quarter with cash and cash equivalents of $297.32 million compared with $396.69 million at the end of 2025, while long-term debt, excluding current maturities, stood at $56.90 million. Cash flow from operations totaled $98.7 million during the first 39 weeks of 2026, while capital expenditures were $11.6 million. Free cash flow amounted to $87.1 million, down from $144.5 million in the corresponding 2025 period. During the first 39 weeks, Landstar returned approximately $175 million to shareholders through dividends and share repurchases. The company also declared a quarterly dividend of 44 cents per share, payable Dec. 8, 2026, to shareholders of record as of Nov. 17. Management highlighted continued strength in freight pricing entering the fourth quarter. During October 2026, truckload volumes were approximately 7% higher year over year, while truck revenues per load increased approximately 29%. Currently, LSTR carries a Zacks Rank #3 (Hold). You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here. Alaska Air Group, Inc. ALK reported third-quarter 2026 adjusted earnings of 36 cents per share, excluding certain tax impacts, beating the Zacks Consensus Estimate of 35 cents by 2.9%. The company had reported adjusted earnings of $1.05 per share a year earlier. Higher fuel expenses weighed on profitability despite strong revenue momentum. Operating revenues increased 14.4% year over year to $4.30 billion but missed the consensus mark of $4.31 billion marginally by 0.1%. Wabtec Corporation WAB reported mixed third-quarter 2026 results, wherein earnings surpassed the Zacks Consensus Estimate, but revenues missed the same. Quarterly earnings (excluding 41 cents from non-recurring items) of $2.83 per share beat the Zacks Consensus Estimate of $2.72 by 4.04% and increased 22% year over year. Revenues climbed 8.1% year over year to $3.12 billion but missed the consensus mark of $3.18 billion by 2%. The 12-month backlog increased 8.8% to $8.99 billion. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Landstar System, Inc. (LSTR) : Free Stock Analysis Report Alaska Air Group, Inc. (ALK) : Free Stock Analysis Report Wabtec (WAB) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research

- Interested in Landstar System, Inc.? Here are five stocks we like better. - Revenue and pricing strengthened: Landstar's second-quarter 2026 revenue rose 18% year over year, driven by a 17% increase in truck revenue per load and nearly 2% higher volume. Heavy-haul revenue also increased 18%, supported by demand from data centers, aerospace, defense, power and energy markets. - Profitability faced cost pressures: Gross profit increased to $132.3 million, but variable contribution margin narrowed as brokerage carrier costs rose. Insurance and claims expense climbed to $39.4 million, including $10.5 million in unfavorable prior-year claim adjustments. - Freight conditions improved into Q3: Capacity tightened in favor of transportation providers, while Landstar added trucks and reduced BCO turnover. July truckload volume was approximately 5% above the prior year and revenue per load was about 26% higher, although the company withheld formal third-quarter guidance. - Is Landstar the Next Big Winner in Transportation Stocks? Landstar System (NASDAQ:LSTR) reported an 18% year-over-year increase in second-quarter 2026 revenue as truck pricing strengthened and demand modestly exceeded typical seasonal patterns, though higher insurance and claims costs weighed on operating results. President and CEO Frank Lonegro said the freight transportation environment shifted significantly during the quarter, with capacity tightening after market conditions had favored shippers since late 2022. Truck revenue per load rose 17% from a year earlier, while the number of truckloads hauled increased nearly 2%. → Comfort Systems Earnings: AI Slowdown or More Growth Ahead? - Forget Tariffs, Landstar and West Fraser Can Still Rally "Market conditions which have favored the shipper since late 2022 have begun shifting rather rapidly in favor of the transportation provider," Lonegro said. Jim Todd, Landstar's vice president and CFO, said truck revenue per load increased 14.4% sequentially from the first quarter, representing the company's largest quarter-over-quarter increase in more than 15 years. Revenue per load increased 19.9% for unsided platform equipment and 15.8% for van equipment compared with the prior-year quarter. → A 70% Rally Isn't Chord Energy's Only Selling Point - Landstar Systems Stock Can Bottom Down Here Revenue per mile for loads hauled by business capacity owners, or BCOs, increased 10% year over year for unsided platform equipment and 11% for van equipment. Todd said both equipment categories outperformed typical pre-pandemic seasonal trends in each month of the quarter. Heavy-haul services remained a notable area of growth. Landstar generated approximately $164 million in heavy-haul revenue during the quarter, up 18% from the second quarter of 2025. Heavy-haul volume rose 9%, while revenue per heavy-haul load increased 8%. → Not All Tech Is Getting Crushed: 5 Names Holding Up Through the AI Sell-Off Lonegro said the company continues to see strong demand tied to the broader data-center ecosystem, including energy, cooling, machinery and building-products freight. Todd added that 22 customers increased their heavy-haul volumes with Landstar by at least 50 loads during the quarter, with activity also supported by aerospace, defense, power and energy markets. Transportation logistics segment revenue increased 18% on a 16% rise in revenue per load and a 2% volume gain. Consumer durables revenue, the company's largest commodity category, rose 24%, driven by a 23% increase in revenue per load and a 2% volume increase. Electrical loadings rose 31%, building-products loadings increased 8%, machinery loadings rose 2%, and automotive equipment and parts loadings declined 1%. Gross profit totaled $132.3 million, compared with $109.3 million in the year-earlier period, while gross profit margin improved to 9.2% of revenue from 9.0%. Variable contribution increased to $199.4 million from $170.5 million, although variable contribution margin declined to 13.9% from 14.1%. Todd attributed the variable contribution margin decline primarily to lower brokerage profitability as rates paid to truck brokerage carriers increased 136 basis points from a year earlier. Brokerage net revenue margin compressed 129 basis points sequentially as capacity tightened. Insurance and claims costs increased to $39.4 million from $30.4 million a year earlier. The second-quarter figure included $10.5 million of net unfavorable adjustments to prior-year claim estimates, compared with $2.3 million in the prior-year period. Lonegro said the unfavorable development was almost entirely associated with five specific claims, including three truck-brokerage claims. The company said current-year trucking claim severity increased, though it was partially offset by lower frequency of current-year trucking and cargo claims. Insurance and claims costs represented 7% of BCO revenue, compared with 6.6% a year earlier. Selling, general and administrative expense rose to $68.2 million from $55.7 million. Excluding a prior-year $4.8 million reclassification related to a supply-chain fraud charge, SG&A increased about $7.7 million, reflecting higher incentive compensation, stock-based compensation and information technology project costs. Landstar entered the quarter with $348 million in cash and short-term investments. Cash flow from operations totaled $28 million during the first half, while cash capital expenditures were $9 million. Todd said free cash flow was negative in the second quarter because of the sharp sequential increase in revenue and related working-capital needs, marking only the third negative free-cash-flow quarter in the past decade. The company returned approximately $120 million to shareholders in the first half through about $95 million in dividends and $24 million in share repurchases. Its board declared a quarterly dividend of $0.44 per share, payable Sept. 9 to shareholders of record Aug. 18. The dividend represents a 10% increase from the regular dividend declared following each of the prior five quarters. Landstar's BCO truck count increased by a net 68 trucks during the second quarter, its strongest quarterly improvement since the first quarter of 2022. The truck count was down less than 1% from the end of the 2025 second quarter but increased about 80 basis points sequentially. The company also added a net 49 trucks during the first four weeks of the third quarter, according to Matt Miller, vice president and chief safety and operations officer. BCO turnover declined to 28.3% at the end of the quarter from 31.4% at year-end 2025. Miller said gross truck additions rose 4.2% sequentially and gross truck cancellations declined 13.6%. Landstar reported an accident frequency rate of 0.62 DOT-reportable accidents per million miles in the first half, down from 0.67 in the first half of 2025. The company has reduced its approved third-party carrier base from more than 100,000 in the second quarter of 2022 to just over 64,000 at the end of the latest quarter, a 35% reduction, as it tightened carrier-vetting practices amid cargo fraud and safety concerns. Management also discussed the legal environment for freight brokers following the Montgomery decision. Lonegro said smaller and midsized brokers may face increased litigation and compliance burdens, potentially making Landstar's platform more attractive to prospective agents. The company signed an approximately $18 million Midwest freight broker as a new agent during the quarter, one of its largest new agent additions in 15 years. Given a fluid freight, geopolitical and claims backdrop, Landstar said it would provide third-quarter operational commentary rather than formal financial guidance. In July, truckload volume was approximately 5% above July 2025 levels on a dispatch basis, while revenue per load was approximately 26% above the prior-year month on a processed basis. Todd said July demand was about 60 basis points better than normal seasonal trends on a loads-per-workday basis, while pricing was about 150 basis points above typical seasonal performance. Lonegro said the company expects to build on the momentum generated during the first half as freight-market conditions improve. Landstar System, Inc (NASDAQ: LSTR) is an asset-light transportation and logistics company headquartered in Jacksonville, Florida. Through a network of independent owner-operators, agents and third-party capacity providers, the company arranges the movement of freight for commercial and industrial customers. Landstar's services include truckload transportation, specialized and heavy-haul freight, expedited and time-critical shipping, less-than-truckload transportation, intermodal services and logistics management. This instant news alert was generated by narrative science technology and financial data from MarketBeat in order to provide readers with the fastest reporting and unbiased coverage. Please send any questions or comments about this story to [email protected]. The article "Landstar System Q3 Earnings Call Highlights" was originally published by MarketBeat. View MarketBeat's top stocks for October 2026.

This article first appeared on GuruFocus. - Total Revenue: Up 25% year-over-year in Q3 2026. - Truck Revenue: $1.407 billion, up 29% year-over-year. - Truck Revenue per Load: Up 25% year-over-year; up 7.5% sequentially (second-largest Q2-to-Q3 sequential increase in 15 years). - Truck Loads Hauled: Up 3% year-over-year. - Heavy Haul Revenue: Approximately $185 million, up 25% year-over-year; loadings up 11%; revenue per load up 13%. - Non-Truck Transportation Revenue: Down 13% (or $13 million) year-over-year, driven by an 18% decrease in ocean revenue per load and a 9% decrease in ocean volume. - Transportation & Logistics Segment Revenue: Up 26% year-over-year on a 22% increase in revenue per load and 3% volume growth. - Consumer Durables Revenue: Up 34% year-over-year on a 28% increase in revenue per load and 5% volume growth. - Top Five Commodities Revenue: Aggregate revenue up approximately 28% year-over-year (about 70% of transportation revenue). - Gross Profit: $126.5 million vs. $111.1 million in Q3 2025. - Gross Profit Margin: 8.4% of revenue vs. 9.2% in Q3 2025. - Variable Contribution: $212.1 million vs. $170.2 million in Q3 2025. - Variable Contribution Margin: 14.0% of revenue vs. 14.1% in Q3 2025 (10 bps decrease). - Insurance and Claims Costs: $55.3 million vs. $33 million in Q3 2025, including $21.9 million of net unfavorable prior-year adjustments (~$13 million adverse actuarial adjustments; ~$8 million from two claim settlements). - Other Operating Costs: $21.2 million vs. $15.6 million in Q3 2025. - SG&A Costs: $62.4 million vs. $57 million in Q3 2025; incentive compensation provision $6.9 million vs. $1 million. - Depreciation & Amortization: $9.9 million vs. $11.5 million in Q3 2025. - Effective Tax Rate: 26.3% vs. 25.8% in Q3 2025. - Cash and Short-Term Investments: $351 million at quarter end. - Cash Flow from Operations: Approximately $99 million for the 2026 39-week period. - Capital Expenditures: Approximately $12 million cash capex for the 2026 39-week period. - Shareholder Returns: ~$175 million returned in first 39 weeks of 2026 (~$110 million dividends; ~$65 million share repurchases); regular dividend of $0.44 per share declared. - VCO Truck Count: Net increase of 165 trucks in Q3 (strongest quarterly improvement since Q3 2021); up 91 trucks (1%) year-over-year; up ~2% sequentially. - BCO Truck Turnover Rate: Trailing 12-month rate down to 26.6% from 31.4% at fiscal year-end 2025. - Safety Metric: DOT accident frequency rate of 0.57 per million miles in first 39 weeks of 2026 vs. 0.60 in comparable 2025 period. - Warning! GuruFocus has detected 2 Warning Signs with LSTR. - Is LSTR fairly valued? Test your thesis with our free DCF calculator. Release Date: October 27, 2026 For the complete transcript of the earnings call, please refer to the full earnings call transcript. - Overall revenue up 25% year-over-year, with truck revenue up 29% and truck revenue per load up 25%. - Net VCO truck count increased by 165 in Q3, the strongest quarterly improvement since Q3 2021, and trailing 12-month turnover improved to 26.6% from 31.4%. - Heavy haul revenue grew 25% year-over-year to approximately $185 million, with loadings up 11% and revenue per load up 13%. - Safety performance improved with a DOT accident frequency rate of 0.57 per million miles, down from 0.60 in the prior year period. - Strong balance sheet with $351 million in cash and short-term investments, and approximately $175 million returned to shareholders through dividends and buybacks in the first 39 weeks of 2026. - Insurance and claims costs surged to $55.3 million from $33 million, including $22 million of net unfavorable prior year claim adjustments. - Gross profit margin declined to 8.4% from 9.2% due to higher insurance and claims costs and increased purchased transportation costs. - Variable contribution margin decreased 10 basis points to 14.0% as truck brokerage carrier rates rose 161 basis points. - Non-truck transportation revenue fell 13% year-over-year, driven by an 18% decrease in ocean revenue per load and a 9% decline in ocean volume. - The company did not provide formal Q4 guidance due to a highly fluid freight environment and volatile litigation claim environment, creating uncertainty for investors. Q: Jonathan Chappell (Evercore) asked how much of the $0.47 insurance hit was truly one-time versus repeatable, and what run rate to model going forward. A: CFO James Todd explained that the $8 million tied to two claim settlements ($5 million truck brokerage, $3 million BCO accident) is non-recurring, while the ~$13 million adverse actuarial adjustment reflects higher loss burn rates that will be booked prospectively. He noted a trailing four-quarter average of ~$46 million and a six-quarter average of ~$41-42 million, saying $35 million a quarter "feels too light" and $55 million "feels too heavy." Q: Chris Wetherbee (Wells Fargo) asked whether the Montgomery decision and insurance dynamics are a net positive or negative for Landstar's earnings opportunity. A: CEO Frank Lonegro called the opportunity "uniquely positive" given the agent model, citing the signing of ShowMe Global (~$20 million brokerage) and traction with other candidates seeking a "safe haven." He expects the full impact to take a year or two as insurance renewal cycles play out, after which smaller players facing multiples of their insurance costs will "get religion" and gravitate to scale players. Q: Scott Group (Wolfe Research) asked whether the re-acceleration to +29% revenue per load in October reflects fuel or underlying rates, and how to think about Q4 versus normal seasonality. A: CFO James Todd noted Q3's 7.5% sequential increase was about 5x normal, with August rates exceeding July for only the third time in 16 years. October is trending toward ~180 basis points of September-to-October lift versus a typical 40 basis points, and BCO revenue per load (ex-fuel) rose 10.9% sequentially, suggesting opportunity to outperform the benchmark. Q: Jason Seidl (TD Cowen) asked about the opportunity to grow BCO count as shippers favor well-established companies. A: CEO Frank Lonegro credited improved recruiting and orientation, reduced time to qualify, and leveraging existing BCO and agent communities. Matt Miller added that gross truck adds rose 11% sequentially, cancels fell 6.1%, turnover improved for an 11th consecutive quarter to 26.6% (below the long-term average), and BCO 1099 income is challenging the 2022 record. Q: Scott Group (Wolfe Research) asked whether higher rates are bringing capacity back to the market, given approved brokerage carriers rising from ~35,000 toward 40,000. A: CEO Frank Lonegro attributed the increase not to new entrants but to existing carriers adapting to higher vetting rigor. Matt Miller noted approved carriers were cut from ~100,000 in Q2 2022 to 64,000 in Q2 2026, with Q3 up ~3,300 (5%) as carriers embraced identity-related and other standards; Landstar does not accept newly minted MCs. Q: Tom Wadewitz (UBS) asked which customer segments look strongest and where softness may emerge. A: CFO James Todd said heavy haul is poised for a third consecutive record year, with 20 customers each growing volumes by at least 50 loads, led by data centers, aerospace/defense, electrical and heavy machinery. Management sees strength across most verticals and a real peak season emerging, with softness in automotive, some government business, and interest-rate-sensitive residential housing. Q: Paul Stoddart (Goldman Sachs) asked whether the cycle is being driven by supply or demand and how long an upcycle could last. A: CEO Frank Lonegro said supply-side factors (regulatory enforcement, Montgomery insurance overtones) have dominated most of the year, but low-to-mid single-digit volume growth is shifting the narrative toward demand. CFO James Todd noted pre-pandemic upcycles typically ran 24-30 months, implying "a good way to run" if the cycle began in late 2025. Q: Brandon Oglenski (Barclays) asked how Landstar's insurance renewal compares with competitors facing steep increases. A: CEO Frank Lonegro said Landstar was "both lucky and good," locking down most of its insurance tower before the Montgomery opinion, aided by strong loss history, safety metrics, trailer investments and a strong balance sheet. He warned competitors without those facts will face significant increases and may reconsider their business or seek an umbrella like Landstar's. Q: Brian Ossenbeck (JPMorgan) asked what Landstar is doing to mitigate insurance costs and whether industry or DC advocacy could provide relief. A: CEO Frank Lonegro cited federal and state advocacy aligned with TIA, plus a focus on reducing incident frequency (DOT accident rate of 0.57 per million miles). He said Landstar will settle cases where appropriate and fight others to shape favorable law, and is exploring AI to improve safety, security and service. Q: Stephanie Moore (Jefferies) asked about deploying the strong balance sheet toward M&A amid asset-light consolidation. A: CEO Frank Lonegro ruled out buying a large brokerage to compete against its agents, but expressed interest in "little M&A"putting capital to work to bring agent candidates into the network who value insurance protections and access to the BCO and ~40,000-carrier base. He sees real opportunity to grow the million-dollar agent count in a post-Montgomery world. Q: Bruce Chan (Stifel) asked for a ballpark on how material Montgomery could be to OTR market capacity, similar to the ~15% impact cited for regulatory initiatives. A: CEO Frank Lonegro said the answer is "more than zero" but difficult to quantify, expecting a one-to-two-year rollout as insurance renewals hit. He anticipates more broker lawsuits and defense costs, with renewal increases potentially ranging from 30% to 300%, and expects more participants to want to become Landstar agents or BCOs. Q: Bascome Majors (Stephens) asked whether the slight sequential decline in total agent count was a blip or a pattern. A: CFO James Todd said he was not aware of a short-term blip, emphasizing focus on the million-dollar agent count ($457 million agents in 2025) with 97%-plus retention For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Image source: The Motley Fool. Tuesday, Oct. 27, 2026 - President and Chief Executive Officer - Frank Lonegro - Chief Financial Officer - Jim Todd - Vice President and Chief Safety and Operations Officer - Matt Miller - Chief Strategy and Transformation Officer - Jim Applegate - Vice President and Chief Commercial Officer - Bill Clement Operator: President and CEO, Jim Applegate, Vice President and Chief Corporate Sales Strategy and Specialized Freight Officer, Jim Todd, Vice President and CFO, Matt Miller, Vice President and Chief Safety and Operations Officer. Now I would like to turn the call over to Mr. Jim Todd. Sir, you may begin. Jim Todd: Thanks, Arlene. Good afternoon, and welcome to Landstar's 2026 Second Quarter Earnings Conference Call. Before we begin, let me read the following statement. The following is a safe harbor statement on the Private Securities Litigation Reform Act of 1995. Statements made during this conference call that are not based on historical facts are forward-looking statements. During this conference call, we may make statements that contain forward-looking information that relate to Landstar's business, objectives, plans, strategies and expectations. Such information is by nature subject to uncertainties and risks, including but not limited to the operational, financial, and legal risks detailed in Landstar's Form 10-K for the 2025 fiscal year, described in the section Risk Factors and our other SEC filings from time to time. These risks and uncertainties could cause actual results or events to differ materially from historical results or those anticipated. Investors should not place undue reliance on such forward-looking information, and Landstar undertakes no obligation to publicly update or revise any forward-looking information. I'll now pass it to Landstar's CEO, Frank Lonegro, for his opening remarks. Frank Lonegro: Thanks, JT, and good afternoon, everyone. I'd like to thank our BCOs and agents and all of the Landstar employees who support them every day. It was great to spend time with our million-mile safe drivers and Roadstar honorees at our annual BCO All-Star event earlier this month in Orlando and to celebrate their incredible safety accomplishments. It was my honor to preside over Landstar's 53rd truck giveaway, awarding million-mile safe driver and Roadstar honoree, German Burgueno, from Haskell, Texas, with a new 2027 Peterbilt 579. The capability, resiliency, and level of commitment exhibited day in and day out by our network of independent business owners is unique in the freight transportation industry. Their dedication to safety, security, and service is one of the pillars of success at Landstar. They are exceptional business leaders and key to driving the continued success of Landstar's business model. I was very pleased with our revenue and variable contribution performance during the 2026 second quarter, but the quarter was not without challenges that required our focus and attention. We had a challenging insurance and claims quarter with approximately $10.5 million of net unfavorable adjustment to prior year claims estimates. The prior year development experienced during the quarter was almost entirely attributable to five specific claims, three of which were truck brokerage claims. We believe greater federal clarity around carrier vetting and selection standards would help support a more predictable operations, insurance, and claims environment for truck brokers, carriers, and shippers. Transitioning to overall performance, revenue was up 18% year-over-year. As noted in our earnings release, our second quarter revenue per truckload and the number of loads hauled via truck both outperformed pre-pandemic typical seasonality, and the net BCO truck count performance was the strongest quarterly improvement since the first quarter of 2022. In one continued major bright spot, I am extremely pleased with the performance of Landstar's heavy haul service offering. We generated approximately $164 million of heavy haul revenue during the 2026 second quarter, an 18% increase over the 2025 second quarter. This achievement was driven by a 9% increase in heavy haul volume and an 8% increase in heavy haul revenue per load. Notwithstanding the geopolitical uncertainty experienced thus far in 2026, our focus continues to be on accelerating our business model and executing on our strategic growth initiatives. We are continuing to invest in the foundational work that puts Landstar in a great position to leverage improving freight market conditions. We also remain focused on our commitment to continuous improvement in the level of service and support we provide to our customers, agents, BCOs and carriers each and every day. On the new agent front, we were thrilled to welcome an $18 million freight broker from the Midwest to our agent network earlier this month. This represents one of the largest new agent signings in the past 15 years. Inbound interest and conversations with potential new agents has accelerated since the Montgomery decision was released in mid-May. We believe the value proposition of becoming a Landstar independent agent has never been stronger. Turning to slide five. The freight environment in the 2026 second quarter was characterized by solid demand from a seasonal perspective, with the number of loads hauled via truck slightly outpacing normal seasonal patterns. The first time this has been achieved in the second quarter since 2021. This volume performance in the second quarter supports the ISM Index readings from earlier this year, with the ISM Index above 50 for all six months of 2026. Truck capacity tightened significantly during the quarter, as evidenced by the very strong sequential truck revenue per load performance, coupled with a 129 basis point compression in our brokerage net revenue margin sequentially. Market conditions which have favored the shipper since late 2022 have begun shifting rather rapidly in favor of the transportation provider. Considering that backdrop, Landstar's revenue performance was strong in the 2026 second quarter, with truck revenue per load 17% above the 2025 second quarter and the number of loads hauled via truck up nearly 2% over the same period. Our balance sheet continues to be very strong, and our capital allocation priorities are unchanged. We will continue to patiently and opportunistically execute on our existing buyback authority to benefit our long-term stockholders. As noted in the slide deck, during the 2026 first half, the company returned approximately $120 million to shareholders through dividends and share repurchases. Yesterday afternoon, our board declared a regular quarterly dividend of $0.44 per share, payable on September 9th to stockholders of record as of the close of business on August 18th. This quarterly dividend includes a 10% increase over the amount of the company's regular dividend declared following each of the prior five quarters. We continue to invest through the cycle in leading technology and AI solutions for the benefit of our network of independent business owners and have allocated a significant amount of capital this year towards refreshing our fleet of trailing equipment, with a particular focus on investing in new van equipment. Turning to slide seven and looking at our network, the scale, systems, and support inherent in the Landstar model helped to drive the operating results generated during the 2026 second quarter. JT will get into the details on revenue, loadings, and rate per load in a few moments. Safety is critical to our continued success. Our safety performance is a direct result of the professionalism of the thousands of Landstar BCOs operating safely every day and the agents and employees who support the critical importance of safety, security, and service at Landstar. I am proud to report an accident frequency rate of 0.62 DOT reportable accidents per million miles during the 2026 first half, well below the last available national average DOT reportable frequency rate released by the FMCSA for 2021 and lower than the 0.67 DOT accident frequency we reported during the 2025 first half. The company's long-run average is an impressive operating metric that speaks to the strength, skill, talent, and dedication of our BCOs and provides a point of differentiation our agents are able to highlight in discussions with freight customers. We remain committed to driving a best-in-class safety culture. I would also like to take a moment to recognize Landstar's 457 million-dollar agents based on our 2025 fiscal year results, a number we would expect to increase in 2026. Importantly, retention within the million-dollar agent network continues to be extremely high. Turning to slide eight, on a year-over-year basis, BCO truck count decreased by less than 1% compared to the end of the 2025 second quarter, but increased approximately 80 basis points sequentially. As noted above, our net 68 truck additions during the second quarter was the strongest quarterly improvement since the first quarter of 2022. Continuing that sequential trend, our BCO truck count has also increased during the first four weeks of the 2026 third fiscal quarter. We were also very pleased to see our trailing 12-month BCO truck turnover rate drop from 31.4% as of the fiscal year end 2025 to 28.3% at the end of the 2026 second quarter. This is a positive trend that we hope will continue into the third quarter. I'll now pass the call back to JT to walk you through the 2026 second quarter financials in more detail. Jim Todd: Thanks, Frank. Turning to slide 10, as Frank mentioned earlier, overall truck revenue per load increased 17% in the 2026 second quarter compared to the 2025 second quarter, primarily attributable to a 19.9% increase in revenue per load on loads hauled by unsided platform equipment and a 15.8% increase in revenue per load on loads hauled by van equipment. On a sequential basis, truck revenue per load increased 14.4% in the 2026 second quarter versus the 2026 first quarter. That represents the largest sequential increase in truck revenue per load over the past 15 years, edging out the 13.5% sequential increase experienced during the 2020 third quarter. In comparison to overall truck revenue per load, we consider revenue per mile on loads hauled by BCO trucks a pure reflection of market pricing, as it excludes fuel surcharges billed to customers that are paid 100% to the BCO. In the 2026 second quarter, revenue per mile on unsided platform equipment hauled by BCOs was 10% above the 2025 second quarter, and revenue per mile on van equipment hauled by BCOs was 11% above the 2025 second quarter. Delving deeper into seasonal trends, revenue per mile on loads hauled by BCOs on unsided platform equipment increased 5% from March to April, increased 2% from April to May, and increased 6% from May to June. Importantly, this sequential month-to-month performance as we move through the second quarter when compared against typical pre-pandemic trends suggests positive momentum in this aspect of our business. In fact, revenue per mile on loads hauled by BCOs on unsided platform equipment outperformed typical pre-pandemic trends in each month during the second quarter. Turning to van freight, revenue per mile on van equipment hauled by BCOs increased 3% from March to April, increased 3% from April to May, and increased 7% from May to June. Similar to the unsided platform revenue per mile, revenue per mile on loads hauled by BCOs on van equipment outperformed typical pre-pandemic trends in each month during the second quarter. It should be noted the month-to-month seasonal trends on unsided platform equipment are generally more volatile compared to that of van equipment. This relative volatility is often due to the mix between heavy specialized loads and standard flatbed volume. As Frank alluded to, we've been particularly pleased with the sustained strong performance of our heavy haul service offering. Heavy haul revenue was up 18% year-over-year in the second quarter. Heavy haul loadings were up 9% year-over-year, and revenue per heavy haul load increased 8% year-over-year. Nontruck transportation service revenue in the 2026 second quarter was 6%, or $5 million above the 2025 second quarter. The increase in nontruck transportation revenue was mostly due to a 50% increase in air revenue per load and a 16% increase in intermodal pricing. Turning to slide 11, we've provided revenue share by commodity and year-over-year change in revenue by commodity. Transportation logistics segment revenue was up 18% year-over-year on a 16% increase in revenue per load and a 2% increase in volume compared to the 2025 second quarter. Within our largest commodity category, consumer durables revenue increased 24% year-over-year on a 23% increase in revenue per load and a 2% increase in volume. Aggregate revenue across our top five commodity categories, which collectively make up about 69% of our transportation revenue, increased approximately 20% compared to the 2025 second quarter. While slide 11 displays revenue share by commodity, we thought it would also be helpful to include some color on volume performance within our top commodity categories. From the 2025 second quarter to the 2026 second quarter, total loadings of machinery increased 2%, automotive equipment and parts decreased 1%, building products increased 8%, and electrical loadings increased 31%. Even with the ups and downs in various customer categories, our business remains highly diversified with over 20,000 customers, none of which contributed over 8% of our revenue in the 2026 first half. Turning to Slide 12, in the 2026 second quarter, gross profit was $132.3 million compared to gross profit of $109.3 million in the 2025 second quarter. Gross profit margin was 9.2% of revenue in the 2026 second quarter as compared to gross profit margin of 9% in the corresponding period of 2025. In the 2026 second quarter, variable contribution was $199.4 million, compared to $170.5 million in the 2025 second quarter. Variable contribution margin was 13.9% of revenue in the 2026 second quarter compared to 14.1% in the same period last year. The decrease in variable contribution margin compared to the 2025 period was primarily due to decreased variable contribution margin on revenue generated by truck brokerage carriers, as the rate paid to truck brokerage carriers was 136 basis points higher than the rate paid in the 2025 second quarter, partially offset by an increase in the percentage of revenue generated from BCO independent contractors. Turning to Slide 13, operating income decreased as a percentage of gross profit due to higher selling general administrative costs in the 2026 second quarter. Operating income increased by approximately 20 basis points as a percentage of variable contribution. Other operating costs were $17.9 million in the 2026 second quarter, compared to $19.6 million in 2025. This decrease was primarily due to the reclassification of the $4.8 million supply chain fraud charge established during the 2025 first quarter from customer bad debt to contractor bad debt during the 2025 second quarter. Excluding the $4.8 million P&L reclassification, other operating costs increased approximately $3.2 million. This increase was primarily due to increased trailing equipment maintenance cost, increased trailing equipment rental cost, and decreased gains on disposal of used trailing equipment. Insurance and claims costs were $39.4 million in the 2026 second quarter, compared to $30.4 million in 2025. Total insurance and claims costs were 7% of BCO revenue in the 2026 second quarter as compared to 6.6% in the 2025 second quarter. The increase in insurance and claims costs as compared to 2025 was primarily attributable to increased net unfavorable development of prior year claim estimates, increased BCO miles traveled during the 2026 period, increased severity of current year trucking claims, partially offset by decreased frequency of both current year trucking claims and current year cargo claims. During the 2026 and 2025 second quarters, insurance and claims costs included $10.5 million and $2.3 million of net unfavorable adjustment to prior year claim estimates, respectively. Selling general and administrative costs were $68.2 million in the 2026 second quarter, compared to $55.7 million in the 2025 second quarter. Excluding the impact of the previously mentioned $4.8 million reclassification, selling general administrative costs increased approximately $7.7 million as compared to the 2025 second quarter. The increase in selling general administrative costs was primarily attributable to an increased provision for incentive compensation, increased stock-based compensation expense, and increased information technology project costs, partially offset by decreased employee benefit costs. The provision for incentive compensation was $6.4 million during the 2026 second quarter as compared to $1 million during the 2025 second quarter. Depreciation and amortization was $10.4 million in the 2026 second quarter compared to $12.1 million in 2025. This decrease was primarily due to decreased depreciation on software applications and decreased depreciation on our fleet of trailing equipment. The effective income tax rate was 25.2% in the 2026 second quarter compared to an effective income tax rate of 24.6% in the 2025 second quarter. The increase in the effective income tax rate from the 2025 second quarter to the 2026 second quarter is primarily due to the impact of nondeductible executive compensation on the 2026 income tax provision. Turning to Slide 14, looking at our balance sheet, we entered the quarter with cash and short-term investments of $348 million. Cash flow from operations for the 2026 first half was $28 million, and cash capital expenditures were $9 million. It should be noted that free cash flow was negative during the 2026 second quarter, given the sharp sequential revenue growth experienced. The 2026 second quarter negative free cash flow represents only the third negative free cash flow quarter in the past decade. The other two comparable quarters were the 2020 third quarter, when the freight economy recovered strongly from the early impacts of the COVID-19 pandemic, and the 2017 fourth quarter, when the ELD mandate took effect. Despite the significant net working capital draw experience during the 2026 first half, the company continues to return significant amounts of capital back to stockholders with approximately $95 million of dividends paid and approximately $24 million of share repurchases during the 2026 first half. The strength of our balance sheet is a testament to the cash-generating capabilities of the Landstar model. Back to you, Frank. Frank Lonegro: Thanks, JT. Before we jump into the current market update, I would like to briefly touch on our press release from last Thursday. We are extremely excited to welcome transportation industry veteran Bill Clement as our new Vice President and Chief Commercial Officer, effective August 1st. Bill brings more than 30 years of transportation and logistics leadership experience with him to Landstar. We are eager to introduce Bill to our agent network over the coming weeks through a series of previously scheduled agent meetings throughout the country. Bill will be charged with supporting the success of our agent network, advancing customer relationships, and enhancing the effectiveness of the entire commercial organization. In addition, he will focus on accelerating growth across our strategic initiatives. Importantly, Bill has a proven track record of success in the transportation space. He will be a tremendous addition to our organization and help enhance our safety, security, and service value proposition to drive sustainable, profitable growth throughout our network. In addition, we are excited for Jim Applegate to step into his new role as Chief Strategy and Transformation Officer. This newly created position will leverage Jim's deep transportation and logistics experience and unique skill set as we strengthen our ability to deliver innovative solutions and create value for our agents, customers, capacity providers, and shareholders. Turning to slide 16, given the highly fluid freight transportation backdrop and an evolving geopolitical and macroeconomic environment, coupled with a highly volatile litigation and claims environment, the company will be providing third quarter financial and operational commentary rather than formal guidance. Looking at historical seasonality from Q2 to Q3, pre-pandemic patterns would normally be expected to yield a sequential increase of approximately 1.5% in truck revenue per load, but an approximately 1.5% decrease in the number of loads hauled via truck, resulting in a relatively flat top line sequentially. Please also note that historically, the company has normally experienced a de minimis variance in variable contribution margin from the second quarter to the third quarter. The number of loads hauled via truck in July 2026 was approximately 5% above July 2025 on a dispatch basis, and revenue per load was approximately 26% above July 2025 on a process basis. As a result, we view anticipated truck revenue per load in July as outperforming normal seasonality, while anticipated July truck volumes are trending slightly ahead of normal seasonality. The slight seasonal outperformance in truck volumes during July was almost entirely attributable to a strong first week of fiscal July, driven in part by the timing of the Fourth of July holiday. For context, the year-over-year truck volume increase during the last three weeks of fiscal July ranged from +1.5% to +3.5% on a dispatch basis. We are excited to build upon the positive momentum generated during the first half and are energized by the opportunity to support the best network of independent business owners in the transportation space, especially in an environment that, after nearly four years, appears to have turned in our favor. With that, Arlene, we would like to open the line for questions. Operator: Thank you very much, sir. At this time, we will begin the question-and-answer session. If you would like to ask a question, please press star one on your touch-tone phone. Once again, that is star one to ask a question. To cancel your request, please press star two. Our first question comes from the line of Scott Group of Wolfe Research. Your line is now open. Scott Group: Hey, thanks. Afternoon, guys. I guess let's start maybe how you're thinking about the business post last week's, the nuclear verdict and how you think about your insurance costs going forward. Do you worry big brokers are just going to be more at risk of these big litigations? Then maybe what are the positives that you could argue are coming out of this in Montgomery? Is this good for your ability to get BCOs or gain share from small brokers? I do not know. Help us think through the pluses and minuses here. Frank Lonegro: Yeah. No, that sounds good, Scott. Thanks. I anticipated that would come early on in the dialogue. Obviously, we watch what happens in litigation involving other brokers and other carriers just to get a pulse of what's happening in the environment. We have renewed our insurance tower for the next 12 months. That was effective June the 1st. So we are in good shape there. Feel like we are amply covered and I think did quite well. I will let Matt and JT talk a little bit more about that one. I think scale remains important. I think safety remains very important. The folks who are going to be successful in this environment in the post-Montgomery world are those that put safety, security, and service high on the list. As you have heard us say for the last couple of years, those are the things that we think we are good at. And were also the things that give us the opportunity when we do those well to have our agents sell that to customers. You heard us reference a new agent addition in the quarter, the Midwest broker that I mentioned of about $18 million. That dialogue started prior to Montgomery, but certainly under the possibility of an adverse verdict in Montgomery. So I think that what you are seeing is an environment where small to medium-sized brokers are concerned about an existential risk. I think we are seeing our pipeline of potential agent candidates continue to increase and be, I would say, in the individualized case, a little bit larger than what we have done historically. If we have generally played in the kind of sub $5 million space for new agent additions, we are beginning to see traction in numbers that are higher than that. Matt, maybe a little bit on the insurance piece. And obviously, your focus on safety, I think, will be important. JT, obviously, any commentary you want to provide. Matt Miller: Sure. Appreciate that. I think it really reinforces why we are doing what we have been doing with a focus on safety, security, and service. Over more than 20 years in brokerage, we have always looked for ways to enhance our carrier vetting with people, process, technology, and information. Over the past four years, we have gone from over 100,000 approved carriers in the second quarter of 2022 to just over 64,000 at the end of the second quarter, or a 35% reduction. As new technologies and information become available, we are going to continue to do just that, exactly what we have been doing. We are always looking for opportunities to drive safety, security, and service. On the insurance front, to Frank's point, we had a very favorable outcome on the auto liability tower. We were effectively flat. Again, that was a June 1 renewal. That was post Montgomery decision, which I think was May 14th. Then on the broker liability, we were +3%. So net-net, I think we had a favorable outcome there. Frank Lonegro: Yeah, I would just piggyback that, Scott. Certainly, the Montgomery, half the country pre the SCOTUS ruling did not recognize that F4A. So now we have got basically half the country that we used to be able to submit a very well-crafted motion for summary judgment and usually get out very high degree of probability. Those now we will have to fight those, right? So that will look like the Jim Todd: Half of the country that did not recognize F4A pre-Montgomery. I think there's certainly going to be some element of plaintiffs being more emboldened to pursue these cases in terms of the figure that came out late last Thursday. I'm not familiar enough with the case. As you know, most of these things on big nuclear verdicts, and we're certainly aware on the BCO side, on the trucking side of the business have got a big degree of experience with large losses both at the trial level and settlement. But I would expect this thing to play out two, three, five years through the appellate process, et cetera. Scott Group: Yeah, helpful. Then just a second question on the BCO count. So picked up a little bit. When we start hearing about rates up mid-teens now, mid-20s in Q3, we historically have seen pretty dramatic increases in the BCO count. Is that something we should expect to start seeing in the back half of the year? Or in this world of more supply-driven tightness, do you think it's any different in terms of how quickly the BCO count starts to really ramp? Frank Lonegro: Hey, Scott. Thanks. Yeah, we're actually excited about seeing the trend improve here in the last few months. When you look at where we started off, the first, gosh, Matt, two or three weeks of January were a challenge for us and looked a little bit more like prior years. But I think we ended up the first quarter down a very modest amount. In comparison to the past four or five years was radically better, even though it was a slightly negative number. Then what Matt and his team are doing on the recruiting front and shrinking the time to qualify. Obviously, the rate environment is helpful to push more leads our way. But I think it is both the cycle, but I also think it's some of the structural things that Matt and his team are working on. Matt? Matt Miller: Yep. Yeah, I would say we're encouraged by what we're seeing, 68 trucks higher in the first quarter of, I'm sorry, in the second quarter of 2026. Best net truck count result in the quarter since the first quarter of 2022. It was the best second quarter result since 2021 and brings us to a positive net truck adds for the year. The net truck count trends improved in each month in the second quarter. We saw continued growth in net truck count during the most recent four-week period of July, where we added a net 49 trucks. During the quarter, gross truck adds were up 4.2% sequentially, demonstrating growing interest on the add side. Then during the quarter, gross truck cancels were down 13.6% sequentially, demonstrating that those that are in the network are finding success. I would say that this is the tenth consecutive quarter of turnover improvement. The high water mark was 41% in the fourth quarter of 2023. We finished the quarter at 28.3%. That is beneath our long-term average. I would just say the variable pay model is incredibly compelling for those that are interested in finding a home in this environment. You do not have to look further than 2018. We added +900 trucks, 2020 +750, 2021 +870. Typically, the improvement in cancellations leads the improvement in adds, and we are beginning to see that improvement in adds. Scott Group: Thank you, guys. Appreciate it. Frank Lonegro: Thanks, Scott. Operator: Thank you. Our next question comes from the line of Jonathan Chappell from Evercore ISI. Your line is now open. Jonathan Chappell: Thank you. Good afternoon. Jim or Frank, I recognize the reluctance to give guidance, but if we look at slide 16 here and you provided some year-over-year context and historical trends that clearly we are not tracking to right now. Is there any way through the first four weeks of the quarter to take these year-over-year magnitudes and kind of help frame out how the Q3 is shaking out relative to those historical trends? A little bit more than slight or slight above typical. Any type of magnitude would be helpful. Jim Todd: Hey, John. I am happy to. I would just start on the demand side. And really since March, we have been kind of plus or minus trailing 15-year averages on demand. One month will be slightly better, one month will be slightly worse. You saw the outcome for the second quarter where I think we were about maybe a little under 100 basis points better than typical one quarter to two quarter trends. We are 60 basis points better on a loads per workday June into July. Again, that dovetails with Frank's slightly better. But again, you have got probably four or five months now of demand kind of reconnecting to normal. On pricing, I think on the April deck, we had significantly outperformed was the word we used on the slide, and that is because pricing was 640 basis points better than it typically is in April. We were nearly 400 basis points better in May, nearly 400 basis points better in June. We are holding about 150 basis points better than normal in July, John. Hopefully, that helps with the model. Jonathan Chappell: Super helpful. Thanks, Jim. Then just a super quick follow-up. Obviously, there is a big narrative around AI, data center, infrastructure, et cetera. Sometimes that is favorable, sometimes it is unfavorable. Your heavy hauls continue to do very strong. Is there any kind of end market exposure that you can point to there that either kind of proves or disproves this narrative that maybe the data center or infrastructure-related construction may be slowing from kind of peak spend? Frank Lonegro: Yeah. Hey, John, it is Frank, and then Jim Applegate will pick up after my lead here. We are continuing to see strength in the data center business. We look at it like an ecosystem rather than specific to the hyperscalers. Obviously, there is Energy-related items in there, and then you got all the cooling as well. So we are looking at it from the broader ecosystem perspective. When you look at the commodity breakdown in the deck and the commentary that JT provided, you are going to see building products has got a piece of it, energy has got a piece of it, machinery has got a piece of it. There is a lot of different areas that have data center exposure. We continue to see strong demand, especially from one of our largest customers, strong demand in that space, and a continuing need for additional capacity. We feel quite bullish about the things that are happening in the data center space and have not felt any pullback or suggested pullback in that space, certainly not in the last three or four months when we have all read the same articles that you are alluding to. Yep. Jim Applegate: Yeah. Hi, Jonathan. Just to piggyback on what Frank's comments were. From a customer perspective, we are seeing a lot of new customers pop into our top customer list this year, and a pipeline that is looking very strong and new customers that are starting to come through the woodwork here that we really, frankly, didn't anticipate that would be jumping into the game. So, with the existing customers that seem to have a continual appetite to invest and then it is spreading across other providers, and us getting exposure to these new customers, I see a strong pipeline not only here for the remainder of the year, but heading into 2027. Jim Todd: John, just real quick. While the heavy haul service offering has certainly been helped out from some AI data center type demand, we had 22 customers in that vertical grow their heavy haul volumes at Landstar by at least 50 loads in the quarter. Besides data center, you have got aerospace, you have got defense. You heard Frank talk about power and energy. So it really is broad-based. It is not just one or two customers driving the bus there. Jonathan Chappell: Great. Thanks, Jim, Jim and Frank. Frank Lonegro: Thanks for your time. Operator: Thank you. Our next question comes from the line of Jordan Alliger from Goldman Sachs. Your line is now open. Paul Stoddard: Hey, everybody. This is Paul Stoddard on for Jordan Alliger. Thanks for taking our question. I guess my question is, seeing that the brokerage volumes are still running negative year-over-year, is this largely because we're not seeing a firming up of the volume? Are we seeing agents direct more volumes towards the BCOs? Jim Todd: Hey, Paul. I'll give you my take, and this is JT. Remember, the agents are going out to market to grow transportation volumes, and they are certainly constrained by customer preferences. But for the most part, they're trying to just serve their customer and access capacity. Then we run a non-forced dispatch operation here at Landstar. So utilization, if you just take BCO utilization second quarter year-to-date and annualize it, we'd be at 101.9 BCO loadings. That is about 5 loads better than the previous all-time high. So I think the decline in brokerage, while there's certainly some probably customer preference there, given the elevated fraud in the supply chain that's been going on since 2022, 2023, I think the BCOs are just more active in coming out of the longest down cycle from a rate side. They're hauling more loads, and as such, there's less freight to lay off to third-party carriers. Speaker 7: Got it. Thanks. Then I guess as a follow-up to that question, is it potential that since volumes are not growing at a meaningful amount compared to revenue per load, are we going to see less compression on VC margin because we're seeing more of those loads come through BCO rather than brokerage? Jim Todd: It's a great question. So BCO mix, if you just look at BCO revenue as a percentage of total from first quarter to second quarter, it did dip sequentially. That's not abnormal in the second quarter, especially when you have a 7% or 8% sequential uptick in loadings. The other factor there was, Paul, and mainly that's brokerage and diesel, which is having a tailwind to revenue per load on brokerage, that it's not necessarily on BCO, but it is a tighter capacity environment. As a result, I think you heard Frank mention our net revenue margin on brokerage business compressed 129 basis points. Some of that is also fuel that you mark up on. Fuel surcharge is not as much as a line haul. Speaker 7: Got it. Thanks. Operator: Thank you. Our next question comes from the line of Brandon Oglenski from Barclays. Your line is now open. Brandon Oglenski: Hey, good afternoon, guys, and thanks for taking my question. I think, Jim, maybe you mentioned that your insurance costs you held pretty much flat or maybe up slightly even in a post-Montgomery world. Is this something that we should expect on a go-forward basis, or is it just like everyone needs to experience what the claims are actually going to be like post-Montgomery, and maybe we could see a big reset there in the future? Frank Lonegro: Hey, Brandon, it's Frank first, and then JT and Matt may fill in some gaps here. I think the important thing in any insurance renewal is how your company performs on the most important measures, not the least of which is going to be safety and certainly the claims history. Then you got the market phenomenon, which is obviously if you have some catastrophic issues that impact particular carriers who may be shared across the environment, that's going to impact the overall renewal market. Now, walking into the renewal in the April-May timeframe, we felt like we had a pretty good case for a strong renewal, even though the market had shown us some trends that were maybe working against the industry. But we're able to point to all of the BCO demographics. We're able to point to the balance sheet. We're able to point to the safety measures. We're able to point to the things that the underwriters look at and say, "Okay, this is a company that I want to underwrite." Matt? Matt Miller: Yeah, no, I would agree with you, Frank. I think a lot depends. There's a lot to happen over the coming months and years, and certainly we have a renewal in June 1 of next year. There's an opportunity for FMCSA to do some things on the regulatory front. Then there's a variety of things that could happen in sort of litigation that may come out contrary to what we saw more recently. I think there's a lot that can happen between now and then. It's really tough to see. Brandon Oglenski: Gentlemen, I appreciate that response. I guess, Frank, are you trying to lay the case here that maybe not all is created equal? Is this going to be a larger issue for smaller brokerages? Frank Lonegro: On the brokerage side, for sure. You have, let's say, you move 100 loads and you have one or two that go bad as a small broker, as JT pointed out in answer to one of the earlier questions, you're going to have litigation costs that you never had before, if you're in an F4A jurisdiction that was in effect previously, but not in effect now because of Montgomery. Now you're going to be paying legal fees. As a reformed lawyer, I know that those aren't cheap. Then you have the possibility of a more extended litigation environment and potentially a verdict or a settlement. As you know, margins in our industry are thin. There's only so many punches to the stomach you can take as a smaller player. I do think back to the point we talked about earlier on being attractive to small and medium sized brokers. We think we offer a very compelling value proposition under the Landstar umbrella. We are beginning to see some traction there. As I mentioned, the one Midwestern independent broker that signed on as a new Landstar agent in the $18 million annualized range, that is a big deal for us. We would love to attract folks like that who are out there every day and believe in the safety, security, and service proposition that we offer and we expect from the new agents that come on board. Brandon Oglenski: Appreciate it. Operator: Thank you. Our next question comes from the line of Tom Wadewitz from UBS. Your line is now open. Tom Wadewitz: Yeah. Good afternoon. I wanted to just to, I guess ask you have had a lot of questions on this, but I want to get a little more sense of how you look at things. So, I guess in terms of the carrier selection, how have you changed your criteria? You mentioned the move down to 64,000 carriers. Is that for broker carriers? Do you think that continues to go down? And how do you look at it to say, okay, what would we tighten up or what would we view differently just in terms of how we define a safe carrier that we would work with? So that is one, and then I just had one follow-up, too. Frank Lonegro: Yeah, for sure, Tom. Nice to hear your voice. I think on the carrier selection, we've always taken carrier selection very seriously. We've always looked to evolve that over time as new sources of information become available. And honestly, as different carriers have different track records of success in what they do out there moving every single day. Matt and his team do a really nice job of understanding exactly what those criteria are. When things become safety related, obviously we have to move folks to the unapproved category and not use them anymore. So those are things that Matt and his team are working on. Customers are beginning to ask for, at least at a high level, what our carrier vetting standards are. So we're beginning to have some really good conversations with direct customers. I do think a point that Matt made earlier, and I mentioned in my prepared remarks, is going to be really important, and that is having some sort of minimum federal selection standards, vetting standards is going to be really important. Otherwise, we're going to be subject to 50 different states, and if you counted every county that has a court, it's going to be hundreds, if not thousands of different interpretations of what reasonable care or ordinary care is in the selection of carriers. Matt? Matt Miller: Yeah, I think going from, as you highlighted, the 100,000 carriers down to 64,000 carriers, that all started with cargo fraud. The investment in technology and the available technology that became available to us out of the advent of fraud helped us begin to drive further vetting standards within our organization and driving down those overall approved carriers in the network. That sort of dovetails with the safety parameters that we have as well. Folks that are not necessarily operating above board from a theft standpoint are likely not necessarily operating above board from a safety standpoint. So we've been able to drive that down and to Frank's point earlier, as information technology or an opportunity presents itself, we're going to continue to press that safety, security, and service emphasis. Tom Wadewitz: Okay. Great. I guess just a second kind of related question. So Frank, you mentioned it'd be helpful to get something from FMCSA that defines maybe parameters. Can you give a little more of a sense of what you would want to see from them? Also just what would you want to see from the courts that would maybe provide some precedents that would give you a little more clear look to say, okay, $600 million verdict against C.H. Robinson or whatever broker just doesn't make sense because they did this and that, right? Just some kind of thoughts on what would be helpful to think about how the legal risk could become better looking forward. Frank Lonegro: Yeah, I think on the second point, Tom, I think the courts are going to every decision, every verdict that comes out is going to set some level of new law and flesh out what is reasonable care in those situations. That's just going to take a fairly long period of time to develop. I think as it develops, we'll see the balance set between, let's call it, the plaintiffs and the defendants. As JT mentioned earlier, right now there's a little bit of buoyancy in the plaintiff bar in looking at cases that are tending toward broker liability issues. I think on the FMCSA side, as we talk to folks who are inside the beltway, so to speak, looking at minimum insurance standards for carriers is going to be important. That hasn't been touched in, Matt, 40 or 45 years or something like that. Thinking about minimum insurance standards for brokers, in addition to carriers, looking at literally a kind of a 10-bullet checklist of, did you check FMCSA? Did you check the technology tools that were available? Did you check their various records and things like that? We've got to have something where we can go through our standards relative to a federal minimum and say, "Look, we exercised ordinary care. We were in compliance with the federal minimum standards." I think that will help reset the balance between plaintiffs and defendants as well. I think there's going to be some time for this all to shake out. Right now, the best thing we can do is run the safest possible network we can. Tom Wadewitz: Do you think that's coming soon from FMCSA, or is that just kind of indefinite? Frank Lonegro: The short answer is, I don't know. I will tell you this. They've moved faster than any other FMCSA or DOT organization in the last couple of years than any in history. If they have a mind to tackle this item, my sense is it would happen on a quicker timetable than we're used to. Tom Wadewitz: Yeah, great. Thank you. Thanks for the time. Frank Lonegro: Thanks, Tom. Operator: Thank you. Our next question comes from the line of Brian Ossenbeck from JPMorgan. Your line is now open. Brian Ossenbeck: Hey, good afternoon. Thanks for taking the questions. Maybe first, just real quick follow-up on the insurance side. I do not know if you have seen any changes in coverage, endorsements or deductibles or anything along those lines for yourselves, and would you expect that to be part of how risk gets repriced across the industry from a broker liability perspective? Frank Lonegro: I think over time, Brian, as people renew, they are all going to have to look at who is going to write first dollar coverage or at a certain deductible level. I mean, we have deductibles in our space. We have structured deals in our tower. I think it is all going to depend on the risk assessment that the insurance carriers and brokers do. We did not have to make any meaningful adjustments in our self-insured retention levels this go around, but obviously, that will be subject to a dialogue next year. Jim Todd: Yeah, I would just echo that, Brian. The broker liability policies we have, which we have an initial policy and an excess policy, we renewed those as existing, I believe, Matt. Frank Lonegro: Yep Jim Todd: at a very modest increase policy year over policy year. Brian Ossenbeck: Okay. I appreciate that. Maybe just Jim Applegate. Obviously, company has been investing in technology for quite a while. You have been involved with that, but any sort of quick thoughts stepping into the, I guess, new role for strategy and transformation? Maybe you can start with an update on just the AI initiatives in sort of the distributed level and also at the central level at corporate. Thanks. Jim Applegate: Hey. Thanks, Brian. Frank Lonegro: We're going to finish up answering that question. Go ahead. Jim Applegate: Right. Brian, you know my background, and I think we've had a lot of conversations around technology. I think right now is just a great time to really be looking at what technology can do for our agent network. As you know, we've made a lot of progress. I think I've spoke on a few different calls about the progress that we've been making around AI, both within the building and within our agent offices. We've delivered several applications that are improving agent workflow. We're getting faster information retrieval. We're improving exception handling, better data visibility, you name it. I mean, it's just really powerful what this new technology can do. I think as we get into the next phase here, we've got a real meaningful opportunity here to get the technology in the hands of the agents. We're planning on ramping that up. Starting off in mid Q3, we've got a plan in place to get out into our agent offices. We have some repeatable applications that we can actually deliver to the agents, and our hope and really expectation is that they're going to be able to use those tools, not only get more efficient, but to grow their business. It's kind of a twofold approach. One is kind of making sure that they can actually transition to technology, but then really getting that technology deployed the right way, that they can redeploy the resources and us teaching them best practices and really kind of upping their game and really kind of delivering better solutions in the future on behalf of our customers. As you guys know, I think we've got the best model in the industry. It's not just the technology, it's making sure that you've got the right people in place to really deploy that technology. This is an execution business. Technology is not going to replace what our agents bring to the table. It's about relationships. It's about trust. It's about safety, security, service, delivering that throughout the Landstar Network. And we're going to make sure that they can do that better than anybody else in the industry. Brian Ossenbeck: Okay, great. Thanks for the time. Frank Lonegro: Thanks, Brian. Operator: Thank you. Our next question comes from the line of Jason Seidl from TD Cowen. Your line is now open. Uday: Hi. Thanks. This is Uday for Jason Seidl. Maybe I can just start on BCO utilization. I was just wondering how that looked in the second quarter. I imagine there is some excitement there with pricing moving up. Is there room for utilization to accelerate in the third quarter, maybe also into the fourth quarter? I know BCOs usually take some time off in the holiday season, but it is also the first time the rate environment has been favorable in four years. Just any thoughts on utilization? Frank Lonegro: Yeah, Dave, thanks for the question. Good question. Obviously, we have been very happy with BCO utilization over the last, gosh, three or four quarters. The comps will get harder as we lap the third and the fourth quarter of last year. But if you just took a trend line against the 101, 102 that we came into the last trailing 12 in the second quarter, I think you will see that we will continue to show utilization improvements on a year-over-year basis just based on the math. I think what you are seeing is the pent-up demand to make money, given the fact that we have been in a three or four-year freight recession. Look, that is not lost on the BCOs. They had some leaner years in 2022, 2023, 2024 as it was a declining market, and into 2025, obviously. I think they are making hay while the sun shines, so to speak, and making sure that they are able to get the loads. I also give a lot of credit to the agents. The agents are out there selling really good freight, and that puts it on the board for the BCOs to haul. The fact that we have more BCOs and higher BCO utilization, and we got agents that are out there getting the premium freight, that is what makes this network special. To Jim Applegate's good point. Matt, any other commentary you want to put on that? Matt Miller: Yeah. I would just say that utilization was up 12% year-over-year and 8% sequentially. And tip of the hat to the new BCOs coming into the network. They want to get to work. And also to the existing BCOs, they were in it for a pretty prolonged downturn, and they are also ready to haul more and more loads, and we are seeing that. Uday: Yep. All right. That is good to hear. Maybe if I could just go back to the insurance topic, just a clarification. So, Frank, I think you mentioned the five claims reserve headwinds in the quarter. I think three related to truck brokerage. Were those brokerage reserves new reserves that you have now made in light of the Montgomery ruling, or were those adjustments related to cases in the normal course of business? I think like JT said on the half of the country where you still have to fight these. Frank Lonegro: Yeah, Uday, that is a great question. I believe all three were $0 reserves previously, and then at each quarter-end balance sheet date, we have got to reevaluate from a FAS five standpoint. And there is a nuisance value on some of these, too. When you get your quote on what it is going to cost to take the initial trial and then appeal costs. But I think all three of those were zero. I will confirm that when we are offline and get back with you. Uday: Yep. No, that is very helpful context. Thank you very much. Operator: Thank you. Our next question comes from the line of Bascome Majors from Stephens. Your line is now open. Bascome Majors: Yeah. Thanks for taking my question. If we look back historically, we can see the cost of the rise in claims environment in your P&L clearly with the cost as a percent of BCO revenue of the insurance and claims going from what, 3% or less a decade ago to more like 7% and 8% more recently. We have heard you talk about BCOs being more attracted to the Landstar Network. We heard you talk some about attracting some larger agents. Is this shift starting to make the Landstar model and system and platform more valuable to the entrepreneurs on both sides? Is that an emerging trend, or are we reading too far into this? Frank Lonegro: Yeah, I think on the claims over time, JT will fill in the blanks on that one. Obviously, it is a combination of a lot of things that JT can unpack for you. I do think on the emerging trend idea, I do think that scale is going to continue to matter. I think scale players that have a long track record of being safe and secure and delivering a great service product for the end customer, I think we are going to begin to see more and more customers prefer scale players. I think they are going to have more and more customers that prefer BCOs, just because of the track record of success that they have there. So yeah, I would say it is an emerging trend. I have got one data point, but certainly the pipeline of potential agent additions, if we are able to get some of those across the finish line, would add a couple more data points to that over the next handful of quarters. Then certainly Matt and all the great work that he is doing. He is, I think, seeing less cancels and beginning to see some green shoots on the addition side and on a net basis that gives us a good trend in the BCO count. We saw that in the second quarter. We mentioned that we have seen an increase in July. So yeah, I would like to think that we are the leader in this space and are going to be successful even in a post-Montgomery world. JT. Jim Todd: Hey, Bass. I would echo Frank's first thought there, the value proposition to become and join the Landstar Network, to be an independent freight agent or owner-operator BCO is very, very strong. But I take your point on insurance. In 2019, we had about 10,500 BCOs in the fleet, and we had an $80 million insurance year. Fast-forward six years, seven years, it is trending 2x that with 8,600 BCOs in the fleet. Oh, by the way, our accident frequency and our DOT accident frequency, which are those more severe accidents, we are a safer company. We were safe in 2019. We are even safer today. I do not think that is unique to Landstar. Claim cost severity has been going one way for some period of time. I think other industry peers would echo that. Certainly, the kind of new elements that Miller touched on earlier, 2022, 2023, the cargo claim environment has gotten really, really tough on the brokerage side. We have done a lot of good work there in terms of implementing a new team and best-in-class technology, both off the shelf and internally developed. Then clearly this more recent phenomenon, our largest brokerage loss, at least based on the judgment entered last year, was $22.8 million. If you recall on that one, the jury apportioned 15% of that $22.8 million to Landstar, and that is one that is currently under appeal. So on the owner-operator side of the business, clearly claim cost severity has been a pressure for the industry and the cargo and the brokerage stuff are more recent. At the end of the day, folks, it is a higher cost for everybody. Our view has been the industry participants are going to have to start to recapture some of that in the top line, and I think some of that you are seeing in the first half of 2026 playing catch up. Bascome Majors: Thank you both. Frank Lonegro: Thanks, guys. Operator: Thank you. Our next question comes from the line of Stephanie Moore from Jefferies. Your line is now open. Stephanie Moore: Great. Good afternoon. Thank you. Appreciate the color on just maybe the changing landscape in this post-Montgomery world, and I think your color around just the impact this could have on small and medium-sized brokers. Curious if this changes your view from an M&A standpoint. Historically, an area you didn't really play much in, but just given the events as of late, is this something that you might look into differently, either on the small or medium brokers front or also if anything was interesting on the agent front as well? Thanks. Frank Lonegro: Good question, Stephanie. It depends on how you define M&A, right? If I look at the Midwest broker that signed on as an agent, obviously there's financial incentives to do that. You could look at that as a kind of small M, small A type of M&A. We've looked at a variety of different things over time. It's got to really fit the model. It's a limited environment of things that would fit the model. We're certainly not averse to looking at it and have looked at a number of possibilities over the last few years. We certainly have the balance sheet to be able to support it. But I think the best down the middle play for us is, could we find 5 or 10 more $18 million agents out of the Midwest that want to come onto the Landstar model? We are pretty good at doing that. We want to make sure that we are deploying the shareholders' capital in the right way and in a risk-adjusted type of return environment. We think that is a really smart play for us. Stephanie Moore: Great. I appreciate the time. Thank you. Frank Lonegro: Thanks, Stephanie. Operator: Sir, your line is now open. Great. I think there is no response from Bruce Chan. Our next question comes from the line of Bruce Chan: Hello? Can you hear me? Frank Lonegro: Bruce, are you there? Bruce Chan: I'm here, yeah. Just appreciate the time, gents. Just a couple, hopefully, quick ones left from my side. The first one here, I know it's a smaller part of the business, but it looks like LTL load count was down pretty meaningfully this quarter, revenue per load up. Anything to maybe glean from the underlying market there, or was that just agents maybe choosing to spend their time on more lucrative business? Jim Applegate: I think with the LTL, it's really more agent-specific is why you're seeing a certain downturn there and customer-specific as well too. It's not necessarily a customer preference thing that we're seeing across the board. I wouldn't make a lot out of it. It is a smaller segment of our business, so sometimes it will have a bigger impact when you have a certain agent or a certain customer where you get a little transition. Bruce Chan: Okay. Super helpful. Got it. Just a quick point of clarification. You talked about the traction with the new agent pipeline, which is certainly good news and makes a lot of sense. Is there any liability exposure to Landstar that might maybe come from those agents' prior claims, or is that something that gets extinguished once they come under the umbrella? Frank Lonegro: No, they maintain a separate corporate status, so we would not inherit liabilities from them. Bruce Chan: Got it. Very clear. Thank you. Frank Lonegro: Good. Thank you. Operator: Thank you. Our next question comes from the line of Chris Wetherbee from Wells Fargo. Your line is now open. Chris Wetherbee: Hey, thanks, guys. Thanks for squeezing me in here. I guess maybe just one question from me, just to sort of wrap up as we think about the insurance piece of this. Maybe can you give us some context on what the backlog might look like from a case perspective? I know you've increased some reserves around severity, but as you think about particularly broker liability in the 2-plus months since Montgomery, has anything materially changed there as you sort of look at what you might be facing over the course of the next several quarters or a couple of years? Just get a sense of if there's more activity going on in the market would be helpful. Frank Lonegro: Yeah. In terms of new cases or something like that, Chris, I mean, we haven't seen any meaningful uptick or downtick for that matter. It's been pretty much steady as she goes. I mean, we did have a couple of cases, as JT mentioned, the three that we referenced, that were either ongoing and estimates went up or got settled. So that's normal business. I just think that there's a renewed strength in the plaintiffs bar to try to press forward in the immediate aftermath of Montgomery and certainly the Robinson verdict and Godspeed to them challenging that successfully. But I just think it's going to be a normal course of events where if we have an issue with a brokered carrier, we should expect that we're going to get pulled into it. To me, it's a question of, if we didn't do anything wrong, we shouldn't have to pay a dollar. But my guess is we're going to have to defend some of those, and we may end up having to settle some of those for nuisance value that if you go back five years, we wouldn't have had to do that. Chris Wetherbee: Okay, but it is not to say that you have necessarily seen something pick up yet, sort of just been the wake of so far so good, I guess, on the backlog. Frank Lonegro: Correct. Chris Wetherbee: Okay. Perfect. Thanks for the time. Appreciate it. Frank Lonegro: Thanks, Chris. Operator: Thank you. We will take the last question from Harrison Bauer of Susquehanna. Your line is now open. Harrison Bauer: Great. Thanks for taking my question, fitting me in here. A lot of the discussion or really historically, a lot of the inflationary part of insurance has been on the BCO side, but especially with some of the adverse claims on the brokerage side post Montgomery, is there any way to frame what either the total or per load claims insurance related legal fees might be on a BCO load versus broker load? In the long run, do you see the risk for broker load converging at all towards a BCO load? Thank you. Jim Todd: Great question, Harrison. As you can imagine, we've had very well-developed loss triangles on BCOs going back decades. As an example, I think we had 1,600 claims last year between our trucking program and our unladen program, and we can look at cost per crash in those two programs going back 20 years. On the brokerage side of the business, Harrison, they're really few and far between. At the Montgomery ruling, we went back and just looked at total loss, both the insured loss portion and the Landstar deductible portion. We used to have a $1 million deductible. That's a $2 million deductible as of a couple of years ago versus our $5 million self-insured retention on the owner-operator side. It's very low, like less than 20 basis points, less than 25 basis points of gross brokerage revenue if you go back 15 years, again, with the largest loss reflected in our financials at about $23 million. I think there's a couple $5 million losses, and below the two $5 million losses, they get smaller. As I mentioned earlier on the call, that's with half the country recognizing F4A. I certainly subscribe that the frequency of brokerage losses should at least 2X, XA, embolden plaintiff counsel factor. Does it get to owner-operator type levels? No, because if you look at the vast majority of accidents, they get settled in a primary layer, right? The FMCSA requires a $750,000 primary insurance program to be a carrier. Landstar requires $1 million to get in our network. Probably 98% of the crashes are going to get resolved within that $1 million primary policy. The brokerage stuff comes in over and above that. Again, that's even without F4A. I'm not an attorney, so I got to be careful here, but you still have to demonstrate a negligent selection or a broker exerting control over a third-party carrier. Frank Lonegro: Harrison, that last piece that JT just mentioned, he did pretty good as a non-lawyer. That is the most important thing. We had to have negligently selected that carrier. The fact that the carrier had an accident does not automatically make us liable. Harrison Bauer: Okay, great. Thank you guys for the time today. Frank Lonegro: Thanks, Harrison. In closing, the management team has been energized by our interactions with BCOs and agents thus far in 2026. We are encouraged by the current freight environment and what we believe is the strongest unsided platform service offering, including heavy haul in our industry. Regardless of the economic environment, the Landstar variable cost business model continues to generate free cash flow year after year. Landstar has always been a cyclical growth company, and we are well-positioned to capitalize on the improving conditions and positive momentum in the freight markets. Thank you for joining us this afternoon. We look forward to speaking with you again on our 2026 third quarter earnings call in late October. Thank you. Operator: Thank you for joining the conference call today. Have a good evening. Please disconnect your line at this time. Before you buy stock in Landstar System, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Landstar System wasn't one of them. The 10 stocks that made the cut could produce monster returns in the coming years. Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you'd have $344,608!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you'd have $1,327,222!* Now, it's worth noting Stock Advisor's total average return is 904% — a market-crushing outperformance compared to 211% for the S&P 500. Don't miss the latest top 10 list, available with Stock Advisor, and join an investing community built by individual investors for individual investors. See the 10 stocks » *Stock Advisor returns as of October 28, 2026. This article is a transcript of this conference call produced for The Motley Fool. While we strive for our Foolish Best, there may be errors, omissions, or inaccuracies in this transcript. As with all our articles, The Motley Fool does not assume any responsibility for your use of this content, and we strongly encourage you to do your own research, including listening to the call yourself and reading the company's SEC filings. Please see our Terms and Conditions for additional details, including our Obligatory Capitalized Disclaimers of Liability. The Motley Fool has positions in and recommends Landstar System. The Motley Fool has a disclosure policy. Landstar (LSTR) Q3 2026 Earnings Call Transcript was originally published by The Motley Fool

Landstar System (NASDAQ:LSTR), an asset-light freight and logistics company, tumbled 15.7% through 11:10 a.m. ET Wednesday morning after reporting mixed earnings last night. Analysts had forecast a $1.67 per share adjusted profit on $1.5 billion in sales. Landstar's $1.42 per share profit missed estimates, despite sales edging out estimates at $1.51 billion. Missed AI's "Act 1"? Act 2 Could Be 14x Bigger. Most investors think they missed the AI boat because they didn't buy Nvidia in 2005. But according to our analysts, we're only at the end of "Act 1"—the R&D phase. "Act 2" is the global rollout. Continue » Image source: Getty Images. These were not objectively bad results. In fact, Landstar grew its revenue 25% year over year in Q3, and its $1.42 per share profit -- while below analyst estimates -- soared 154% year over year despite "highly elevated insurance and claim costs" that cost the company $0.47 per share in lost profit. Trucking revenue grew 29% in the quarter, and van and unsided/platform equipment revenue grew 30%, leading CEO Frank Lonegro to comment that the "freight transportation backdrop ... continues to improve." How much will it improve in Q4? Management didn't say, declining to give guidance in its report. Analysts polled by Yahoo! Finance, however, are forecasting Landstar to earn $5.83 per share this year, a 45% improvement over 2025 earnings. But here's the thing: At its current valuation, Landstar stock costs nearly 44x trailing earnings. Even assuming a 45% earnings growth rate was sustainable in a mature industry like trucking (hint: it's not), that would suggest Landstar stock is, at best, fairly valued at its present price. Given that most analysts anticipate Landstar's earnings will grow closer to 15% annually over the next five years (according to S&P Global Market Intelligence data), Landstar stock is probably overvalued right now. I think investors are right to be selling it. Before you buy stock in Landstar System, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Landstar System wasn't one of them. The 10 stocks that made the cut could produce monster returns in the coming years. Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you'd have $337,166!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you'd have $1,339,143!* Now, it's worth noting Stock Advisor's total average return is 904% — a market-crushing outperformance compared to 213% for the S&P 500. Don't miss the latest top 10 list, available with Stock Advisor, and join an investing community built by individual investors for individual investors. See the 10 stocks » *Stock Advisor returns as of October 28, 2026. Rich Smith has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Landstar System. The Motley Fool has a disclosure policy. Why Landstar System Stock Crashed After Earnings was originally published by The Motley Fool

Landstar System (LSTR) came out with quarterly earnings of $1.89 per share, beating the Zacks Consensus Estimate of $1.62 per share. This compares to earnings of $1.22 per share a year ago. These figures are adjusted for non-recurring items. This quarterly report represents an earnings surprise of +16.67%. A quarter ago, it was expected that this freight shipper and warehouser would post earnings of $1.42 per share when it actually produced earnings of $1.44, delivering a surprise of +1.41%. Over the last four quarters, the company has surpassed consensus EPS estimates four times. Landstar, which belongs to the Zacks Transportation - Truck industry, posted revenues of $1.51 billion for the quarter ended September 2026, surpassing the Zacks Consensus Estimate by 1.58%. This compares to year-ago revenues of $1.21 billion. The company has topped consensus revenue estimates three times over the last four quarters. The sustainability of the stock's immediate price movement based on the recently-released numbers and future earnings expectations will mostly depend on management's commentary on the earnings call. Landstar shares have added about 14.9% since the beginning of the year versus the S&P 500's gain of 12.1%. While Landstar has outperformed the market so far this year, the question that comes to investors' minds is: what's next for the stock? There are no easy answers to this key question, but one reliable measure that can help investors address this is the company's earnings outlook. Not only does this include current consensus earnings expectations for the coming quarter(s), but also how these expectations have changed lately. Empirical research shows a strong correlation between near-term stock movements and trends in earnings estimate revisions. Investors can track such revisions by themselves or rely on a tried-and-tested rating tool like the Zacks Rank, which has an impressive track record of harnessing the power of earnings estimate revisions. Ahead of this earnings release, the estimate revisions trend for Landstar was mixed. While the magnitude and direction of estimate revisions could change following the company's just-released earnings report, the current status translates into a Zacks Rank #3 (Hold) for the stock. So, the shares are expected to perform in line with the market in the near future. You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here. It will be interesting to see how estimates for the coming quarters and the current fiscal year change in the days ahead. The current consensus EPS estimate is $1.67 on $1.49 billion in revenues for the coming quarter and $5.87 on $5.58 billion in revenues for the current fiscal year. Investors should be mindful of the fact that the outlook for the industry can have a material impact on the performance of the stock as well. In terms of the Zacks Industry Rank, Transportation - Truck is currently in the top 37% of the 250 plus Zacks industries. Our research shows that the top 50% of the Zacks-ranked industries outperform the bottom 50% by a factor of more than 2 to 1. One other stock from the same industry, Forward Air (FWRD), is yet to report results for the quarter ended September 2026. The results are expected to be released on November 9. This contractor for the air cargo industry is expected to post quarterly earnings of $0.20 per share in its upcoming report, which represents a year-over-year change of +138.5%. The consensus EPS estimate for the quarter has remained unchanged over the last 30 days. Forward Air's revenues are expected to be $679.2 million, up 7.5% from the year-ago quarter. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Landstar System, Inc. (LSTR) : Free Stock Analysis Report Forward Air Corporation (FWRD) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research

Landstar System (LSTR) reported $1.51 billion in revenue for the quarter ended September 2026, representing a year-over-year increase of 25.1%. EPS of $1.89 for the same period compares to $1.22 a year ago. The reported revenue compares to the Zacks Consensus Estimate of $1.49 billion, representing a surprise of +1.58%. The company delivered an EPS surprise of +16.67%, with the consensus EPS estimate being $1.62. While investors scrutinize revenue and earnings changes year-over-year and how they compare with Wall Street expectations to determine their next move, some key metrics always offer a more accurate picture of a company's financial health. Since these metrics play a crucial role in driving the top- and bottom-line numbers, comparing them with the year-ago numbers and what analysts estimated about them helps investors better project a stock's price performance. Here is how Landstar performed in the just reported quarter in terms of the metrics most widely monitored and projected by Wall Street analysts: - Revenue per load - Ocean and air cargo carriers: $7,939.00 versus $7,823.03 estimated by three analysts on average. - Revenue per load - Rail Intermodal: $3,275.00 compared to the $3,389.19 average estimate based on three analysts. - Number of loads - Total: 516,110 versus 515,739 estimated by three analysts on average. - Number of loads - Truck Transportation: 500,650 versus 499,586 estimated by three analysts on average. - Investment income: $2.26 million compared to the $2.98 million average estimate based on five analysts. The reported number represents a change of -31.3% year over year. - Revenue: $1.51 billion compared to the $1.49 billion average estimate based on five analysts. The reported number represents a change of +25.4% year over year. - Revenue- Other: $21.48 million versus $20.87 million estimated by four analysts on average. Compared to the year-ago quarter, this number represents a +9.7% change. - Revenue- Rail Intermodal: $27.81 million versus the three-analyst average estimate of $30.39 million. The reported number represents a year-over-year change of +17.5%. - Revenue- Truck Transportation: $1.41 billion versus the three-analyst average estimate of $1.36 billion. The reported number represents a year-over-year change of +29.1%. - Revenue- Ocean and air cargo carriers: $55.33 million compared to the $55.97 million average estimate based on three analysts. The reported number represents a change of -23.4% year over year. - Revenue- Truck Transportation- Other Truck transportation: $103.71 million versus $100.78 million estimated by two analysts on average. Compared to the year-ago quarter, this number represents a +8% change. - Revenue- Truck Transportation- Less-than-truckload: $24.93 million compared to the $30.06 million average estimate based on two analysts. The reported number represents a change of +1.9% year over year. View all Key Company Metrics for Landstar here>>> Shares of Landstar have returned -0.2% over the past month versus the Zacks S&P 500 composite's -0.8% change. The stock currently has a Zacks Rank #3 (Hold), indicating that it could perform in line with the broader market in the near term. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Landstar System, Inc. (LSTR) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research

JACKSONVILLE, Fla., Oct. 27, 2026 (GLOBE NEWSWIRE) -- Landstar System, Inc. (NASDAQ: LSTR) ("Landstar" or the "Company") today reported its financial results for the 2026 third quarter. The Company reported total revenue of $1.512 billion in the 2026 third quarter, an increase of 25% as compared to revenue of $1.205 billion in the 2025 third quarter, and basic and diluted earnings per share ("EPS") of $1.42 in the 2026 third quarter, an increase of 154% as compared to EPS of $0.56 in the 2025 third quarter. It should be noted that EPS in the 2025 third quarter was negatively impacted by non-cash impairment charges of $30.1 million, or $0.66 per share, related to the previously disclosed strategic review of operations conducted during the 2025 third quarter, and, as further described below, the 2026 third quarter EPS was negatively impacted by highly elevated insurance and claim costs. The Company also reported a 14% increase in gross profit and a 25% increase in variable contribution (defined as revenue less the cost of purchased transportation and commissions to agents) in the 2026 third quarter, as compared in each case to the 2025 third quarter. "The Landstar team of independent business owners and employees excelled in a freight transportation backdrop that continues to improve. Our network generated truck revenue of $1.407 billion, an increase of 29% compared to the 2025 third quarter, with revenue generated via van and unsided/platform equipment each increasing over 30% compared to the 2025 third quarter," said Landstar President and Chief Executive Officer Frank Lonegro. "In addition, I was highly encouraged to see our net 165 Business Capacity Owner (BCO) truck additions during the third quarter, the strongest quarterly improvement since the third quarter of 2021. We are continuing to deliver safety, security and service for our customers, and our BCOs achieved a 5% year-over-year improvement in DOT accident frequency. Even so, we are not immune to the challenges of the insurance and claims inflation prevalent in our industry." | 3Q 2026 | 3Q 2025 | Change ($) | Change (%) Revenue | $ | 1,511,787 | $ | 1,205,406 | $ | 306,381 | 25.4 | % Gross profit | $ | 126,547 | $ | 111,060 | $ | 15,487 | 13.9 | % Variable contribution | $ | 212,066 | $ | 170,241 | $ | 41,825 | 24.6 | % Operating income | $ | 65,540 | $ | 26,326 | $ | 39,214 | 149.0 | % Basic and diluted earnings per share ("EPS") | $ | 1.42 | $ | 0.56 | $ | 0.86 | 153.6 | % | (1) | Dollars above in thousands, except per share amounts. | (2) | Please refer to the Consolidated Statements of Income and the Reconciliation of Gross Profit to Variable Contribution included below. | (3) | Operating income and EPS during the 2025 third quarter were negatively impacted by $30.1 million and $0.66, respectively, as a result of non-cash impairment charges. | | Third quarter 2026 EPS reflected highly elevated insurance and claim costs of $55.3 million, an increase from $33.0 million of insurance and claim costs reported during the 2025 third quarter. The following items are reflected in insurance and claims for the 2026 third quarter: - Approximately $13.0 million, or $0.29 per share, of adverse actuarial adjustments to insurance and claim reserves. - $8.0 million, or $0.18 per share, of prior year development attributable to settlements of a 2024 brokered truck accident claim and a 2025 BCO accident. During the 2026 third quarter, truck revenue was $1,407 million, an increase of 29%, as compared to the 2025 third quarter truck revenue of $1,090 million. Truck revenue per load increased approximately 25% in the 2026 third quarter compared to the 2025 third quarter, and the number of loads hauled via truck increased approximately 3% compared to the 2025 third quarter. Truck transportation revenue hauled by independent business capacity owners ("BCOs") and truck brokerage carriers in the 2026 third quarter was 93% of revenue, compared to 90% of revenue in the 2025 third quarter. Truckload transportation revenue hauled via van equipment in the 2026 third quarter was $760 million, compared to $583 million in the 2025 third quarter. Truckload transportation revenue hauled via unsided/platform equipment in the 2026 third quarter was $519 million, compared to $386 million in the 2025 third quarter. Revenue from other truck transportation, which is largely related to power-only services, in the 2026 third quarter was $104 million, compared to $96 million in the 2025 third quarter. Revenue hauled by rail, air and ocean cargo carriers was $83 million, or 5% of revenue, in the 2026 third quarter, compared to $96 million, or 8% of revenue, in the 2025 third quarter. Gross profit in the 2026 third quarter was $127 million, as compared to $111 million in the 2025 third quarter. Variable contribution in the 2026 third quarter was $212 million, compared to $170 million in the 2025 third quarter. Reconciliations of gross profit to variable contribution and gross profit margin to variable contribution margin for the 2026 and 2025 third quarters and year-to-date periods are provided in the Company's accompanying financial disclosures. Landstar continues to return capital to stockholders through the Company's share purchase program and dividends. During the 2026 third quarter, Landstar purchased 232,645 shares of its common stock at an aggregate cost of $41.4 million, bringing the total number of common shares purchased during the year-to-date period ended September 26, 2026 to 383,568 shares at an aggregate cost of approximately $64.0 million. The Company is currently authorized to purchase up to an additional 882,550 shares of the Company's common stock under its longstanding share purchase program. Landstar also announced today that its Board of Directors declared a quarterly dividend of $0.44 per share payable on December 8, 2026, to stockholders of record as of the close of business on November 17, 2026. It is currently the intention of the Board to continue to pay dividends on a quarterly basis going forward. The Company's balance sheet continues to be very strong, with cash and short-term investments of approximately $351 million as of September 26, 2026. Trailing twelve-month return on average shareholders' equity was 19%. Return on invested capital, representing net income divided by the sum of average equity plus average debt, was 18%. Landstar will provide a live webcast of its quarterly earnings conference call this afternoon at 4:30 p.m. ET. To access the webcast, visit https://www.investor.landstar.com; click on "Webcasts," then click on "Landstar's Third Quarter 2026 Earnings Release Conference Call." A slide presentation to accompany the webcast presentation is also available on Landstar's investor relations website at https://investor.landstar.com/. About Landstar: Landstar System, Inc. is a technology-enabled, asset-light provider of freight transportation and logistics solutions focused on safety, security and service to a broad range of customers utilizing a network of agents, third-party capacity providers and employees. Landstar transportation services companies are certified to ISO 9001:2015 quality management system standards and RC14001:2015 environmental, health, safety and security management system standards. Landstar System, Inc. is headquartered in Jacksonville, Florida. Its common stock trades on The NASDAQ Stock Market® under the symbol LSTR. Non-GAAP Financial Measures: In this earnings release and accompanying financial disclosures, the Company provides the following information that may be deemed non-GAAP financial measures: variable contribution and variable contribution margin. The Company believes variable contribution and variable contribution margin are useful measures of the variable costs that we incur at a shipment-by-shipment level attributable to our transportation network of third-party capacity providers and independent agents in order to provide services to our customers. The Company also believes that it is appropriate to present each of the financial measures that may be deemed a non-GAAP financial measure, as referred to above, for the following reasons: (1) disclosure of these matters will allow investors to better understand the underlying trends in the Company's financial condition and results of operations; (2) this information will facilitate comparisons by investors of the Company's results as compared to the results of peer companies; and (3) management considers this financial information in its decision making. Forward Looking Statements Disclaimer: The following is a "safe harbor" statement under the Private Securities Litigation Reform Act of 1995. Statements contained in this press release that are not based on historical facts are "forward-looking statements." This press release contains forward-looking statements, such as statements which relate to Landstar's business objectives, plans, strategies and expectations. Terms such as "anticipates," "believes," "estimates," "intention," "expects," "plans," "predicts," "may," "should," "could," "would," "will," the negative thereof and similar expressions are intended to identify forward-looking statements. Such statements are by nature subject to uncertainties and risks, including but not limited to: decreased demand for transportation services; U.S. trade relationships and potential or imposed tariffs; an increase in the frequency or severity of accidents or other claims; unfavorable development of existing accident claims; substantial verdicts or settlements rendered in connection with accidents or other claims; dependence on third party insurance companies; dependence on independent commission sales agents; dependence on third party capacity providers; the impact of the Russian conflict with Ukraine on the operations of certain independent commission sales agents, including the Company's second largest such agent by revenue in the 2025 fiscal year; substantial industry competition; disruptions or failures in the Company's computer systems; cyber and other information security incidents; dependence on key vendors; potential changes in taxes; status of independent contractors; regulatory and legislative changes; regulations focused on diesel emissions and other air quality matters; regulations requiring the purchase and use of zero-emission vehicles; intellectual property; acquisitions and investments; increased exposure to broker liability claims; and other operational, financial or legal risks or uncertainties detailed in Landstar's Form 10-K for the 2025 fiscal year; described in Part I, Item 1A Risk Factors; Landstar's Form 10-Q for the 2026 second quarter, described in Item 1A Risk Factors; and in other SEC filings from time to time. These risks and uncertainties could cause actual results or events to differ materially from historical results or those anticipated. Investors should not place undue reliance on such forward-looking statements, and the Company undertakes no obligation to publicly update or revise any forward-looking statements. Landstar System, Inc. and Subsidiary Consolidated Statements of Income (Dollars in thousands, except per share amounts) (Unaudited) | | | | | | | | | | | | | | | | | | | | | Thirty-Nine Weeks Ended | | Thirteen Weeks Ended | | | September 26, | | September 27, | | September 26, | | September 27, | | | 2026 | | 2025 | | 2026 | | 2025 | | | | | | | | | Revenue | $ | 4,115,342 | | $ | 3,569,291 | | $ | 1,511,787 | | $ | 1,205,406 Investment income | | 7,943 | | | 10,620 | | | 2,264 | | | 3,293 | | | | | | | | | Costs and expenses: | | | | | | | | Purchased transportation | | 3,212,442 | | | 2,775,761 | | | 1,182,045 | | | 936,472 | Commissions to agents | | 319,254 | | | 291,529 | | | 117,676 | | | 98,693 | Other operating costs, net of gains on asset sales/dispositions | | 53,971 | | | 46,996 | | | 21,226 | | | 15,572 | Insurance and claims | | 130,193 | | | 103,309 | | | 55,270 | | | 33,008 | Selling, general and administrative | | 191,534 | | | 174,303 | | | 62,376 | | | 57,015 | Depreciation and amortization | | 30,887 | | | 35,884 | | | 9,918 | | | 11,509 | Impairment of intangible and other assets | | - | | | 30,104 | | | - | | | 30,104 | | | | | | | | | | | Total costs and expenses | | 3,938,281 | | | 3,457,886 | | | 1,448,511 | | | 1,182,373 | | | | | | | | | Operating income | | 185,004 | | | 122,025 | | | 65,540 | | | 26,326 Interest and debt expense | | 1,692 | | | 756 | | | 362 | | | 217 | | | | | | | | | Income before income taxes | | 183,312 | | | 121,269 | | | 65,178 | | | 26,109 Income taxes | | 46,878 | | | 30,206 | | | 17,135 | | | 6,745 | | | | | | | | | Net income | $ | 136,434 | | $ | 91,063 | | $ | 48,043 | | $ | 19,364 | | | | | | | | | Basic and diluted earnings per share | $ | 4.02 | | $ | 2.61 | | $ | 1.42 | | $ | 0.56 | | | | | | | | | Average basic and diluted shares outstanding | | 33,943,000 | | | 34,885,000 | | | 33,871,000 | | | 34,581,000 | | | | | | | | | Dividends per common share | $ | 1.24 | | $ | 1.16 | | $ | 0.44 | | $ | 0.40 | | | | | | | | | Landstar System, Inc. and Subsidiary Consolidated Balance Sheets (Dollars in thousands, except per share amounts) (Unaudited) | | | | | | | | | | September 26, | | December 27, | | | | | 2026 | | | | 2025 | ASSETS | | | | Current assets: | | | | Cash and cash equivalents | $ | 297,321 | | | $ | 396,694 | | Short-term investments | | 53,683 | | | | 55,531 | | Trade accounts receivable, less allowance | | | | | of $8,090 and $12,490 | | 892,404 | | | | 670,137 | | Other receivables, including advances to independent | | | | | contractors, less allowance of $15,314 and $18,759 | | 77,898 | | | | 52,784 | | Assets held for sale | | - | | | | 12,231 | | Other current assets | | 50,217 | | | | 28,949 | | | Total current assets | | 1,371,523 | | | | 1,216,326 | | | | | | | Operating property, less accumulated depreciation | | | | | | and amortization of $494,295 and $473,642 | | 268,570 | | | | 261,322 | Goodwill | | | 34,005 | | | | 34,005 | Other assets | | 133,617 | | | | 124,282 | Total assets | $ | 1,807,715 | | | $ | 1,635,935 | | | | | | | LIABILITIES AND SHAREHOLDERS' EQUITY | | | Current liabilities: | | | | Cash overdraft | $ | 68,713 | | | $ | 56,654 | | Accounts payable | | 482,041 | | | | 369,567 | | Current maturities of long-term debt | | 25,772 | | | | 28,342 | | Insurance claims | | 87,393 | | | | 87,343 | | Dividends payable | | - | | | | 68,117 | | Liabilities held for sale | | - | | | | 6,961 | | Other current liabilities | | 101,837 | | | | 78,856 | | | Total current liabilities | | 765,756 | | | | 695,840 | | | | | | | Long-term debt, excluding current maturities | | 56,899 | | | | 48,480 | Insurance claims | | 103,299 | | | | 62,706 | Deferred income taxes and other non-current liabilities | | 51,765 | | | | 33,244 | | | | | | | Shareholders' equity: | | | | Common stock, $0.01 par value, authorized 160,000,000 | | | | | shares, issued 68,636,098 and 68,590,708 | | 686 | | | | 686 | | Additional paid-in capital | | 269,696 | | | | 261,256 | | Retained earnings | | 2,947,019 | | | | 2,852,680 | | Cost of 34,927,155 and 34,531,982 shares of common | | | | | stock in treasury | | (2,378,302 | ) | | | (2,313,245 | ) | Accumulated other comprehensive loss | | (9,103 | ) | | | (5,712 | ) | | Total shareholders' equity | | 829,996 | | | | 795,665 | Total liabilities and shareholders' equity | $ | 1,807,715 | | | $ | 1,635,935 | | | | | | | Landstar System, Inc. and Subsidiary Supplemental Information (Unaudited) | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Thirty-Nine Weeks Ended | | | Thirteen Weeks Ended | | | | | September 26, | | September 27, | | | September 26, | | September 27, | | | | | | 2026 | | | | 2025 | | | | | 2026 | | | | 2025 | Revenue generated through (in thousands): | | | | | | | | | | | | | | | | | | | | | | Truck transportation | | | | | | | | | | | Truckload: | | | | | | | | | | | | Van equipment | | $ | 2,080,868 | | | $ | 1,769,440 | | | | $ | 759,949 | | | $ | 583,369 | | | | Unsided/platform equipment | | | 1,379,319 | | | | 1,127,276 | | | | | 518,582 | | | | 386,006 | | | Less-than-truckload | | | 73,845 | | | | 72,229 | | | | | 24,933 | | | | 24,480 | | | Other truck transportation (1) | | | 289,298 | | | | 288,807 | | | | | 103,707 | | | | 96,041 | | | | Total truck transportation | | | 3,823,330 | | | | 3,257,752 | | | | | 1,407,171 | | | | 1,089,896 | | Rail intermodal | | | 74,881 | | | | 63,183 | | | | | 27,806 | | | | 23,668 | | Ocean and air cargo carriers | | | 153,047 | | | | 188,696 | | | | | 55,334 | | | | 72,270 | | Other (2) | | | 64,084 | | | | 59,660 | | | | | 21,476 | | | | 19,572 | | | | | | $ | 4,115,342 | | | $ | 3,569,291 | | | | $ | 1,511,787 | | | $ | 1,205,406 | | | | | | | | | | | | | | Revenue on loads hauled via BCO Independent Contractors (3) | | | | | | | | | | | included in total truck transportation | | $ | 1,629,408 | | | $ | 1,345,852 | | | | $ | 590,987 | | | $ | 457,363 | | | | | | | | | | | | | Number of loads: | | | | | | | | | | | | | | | | | | | | | | Truck transportation | | | | | | | | | | | Truckload: | | | | | | | | | | | | Van equipment | | | 870,347 | | | | 850,047 | | | | | 294,875 | | | | 277,893 | | | | Unsided/platform equipment | | | 375,093 | | | | 369,495 | | | | | 128,398 | | | | 123,254 | | | Less-than-truckload | | | 95,729 | | | | 115,692 | | | | | 29,834 | | | | 38,862 | | | Other truck transportation (1) | | | 143,311 | | | | 135,606 | | | | | 47,543 | | | | 45,421 | | | | Total truck transportation | | | 1,484,480 | | | | 1,470,840 | | | | | 500,650 | | | | 485,430 | | Rail intermodal | | | 23,600 | | | | 21,960 | | | | | 8,490 | | | | 7,990 | | Ocean and air cargo carriers | | | 20,840 | | | | 24,370 | | | | | 6,970 | | | | 7,810 | | | | | | | 1,528,920 | | | | 1,517,170 | | | | | 516,110 | | | | 501,230 | | | | | | | | | | | | | | Loads hauled via BCO Independent Contractors (3) | | | | | | | | | | | included in total truck transportation | | | 644,870 | | | | 597,010 | | | | | 212,660 | | | | 199,010 | | | | | | | | | | | | | Revenue per load: | | | | | | | | | | | | | | | | | | | | | | Truck transportation | | | | | | | | | | | Truckload: | | | | | | | | | | | | Van equipment | | $ | 2,391 | | | $ | 2,082 | | | | $ | 2,577 | | | $ | 2,099 | | | | Unsided/platform equipment | | | 3,677 | | | | 3,051 | | | | | 4,039 | | | | 3,132 | | | Less-than-truckload | | | 771 | | | | 624 | | | | | 836 | | | | 630 | | | Other truck transportation (1) | | | 2,019 | | | | 2,130 | | | | | 2,181 | | | | 2,114 | | | | Total truck transportation | | | 2,576 | | | | 2,215 | | | | | 2,811 | | | | 2,245 | | Rail intermodal | | | 3,173 | | | | 2,877 | | | | | 3,275 | | | | 2,962 | | Ocean and air cargo carriers | | | 7,344 | | | | 7,743 | | | | | 7,939 | | | | 9,254 | | | | | | | | | | | | | | Revenue per load on loads hauled via BCO Independent Contractors (3) | | $ | 2,527 | | | $ | 2,254 | | | | $ | 2,779 | | | $ | 2,298 | | | | | | | | | | | | | Revenue by capacity type (as a % of total revenue): | | | | | | | | | | | | | | | | | | | | | | Truck capacity providers: | | | | | | | | | | | BCO Independent Contractors (3) | | | 40 | % | | | 38 | % | | | | 39 | % | | | 38 | % | | Truck Brokerage Carriers | | | 53 | % | | | 54 | % | | | | 54 | % | | | 52 | % | Rail intermodal | | | 2 | % | | | 2 | % | | | | 2 | % | | | 2 | % | Ocean and air cargo carriers | | | 4 | % | | | 5 | % | | | | 4 | % | | | 6 | % | Other | | | | 2 | % | | | 2 | % | | | | 1 | % | | | 2 | % | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | September 26, | | September 27, | | | | | | | | | | | 2026 | | | | 2025 | Truck Capacity Providers: | | | | | | | | | | | | | | | | | | | | | | BCO Independent Contractors (3) | | | | | | | | 7,843 | | | | 7,827 | | Truck Brokerage Carriers: | | | | | | | | | | Approved and active (4) | | | | | | | | 39,460 | | | | 40,004 | | Other approved | | | | | | | | 28,455 | | | | 27,461 | | | | | | | | | | | | 67,915 | | | | 67,465 | | Total available truck capacity providers | | | | | | | | 75,758 | | | | 75,292 | | | | | | | | | | | | | | Trucks provided by BCO Independent Contractors (3) | | | | | | | | 8,709 | | | | 8,618 | | | | | | | | | | | | | | | | | | | | | | | | | (1) | Includes power-only, expedited, straight truck, cargo van, and miscellaneous other truck transportation revenue generated by the transportation logistics segment. Power-only refers to shipments where the Company furnishes a power unit and an operator but not trailing equipment, which is typically provided by the shipper or consignee. | | | | | | | | | | | | (2) | Includes primarily reinsurance premium revenue generated by the insurance segment and intra-Mexico transportation services revenue generated by Landstar Metro. | | | | | | | | | | | | (3) | BCO Independent Contractors are independent contractors who provide truck capacity to the Company under exclusive lease arrangements. | | | | | | | | | | | | (4) | Active refers to Truck Brokerage Carriers who moved at least one load in the 180 days immediately preceding the fiscal quarter end. | | | | | | | | | | | | Landstar System, Inc. and Subsidiary Reconciliation of Gross Profit to Variable Contribution (Dollars in thousands) (Unaudited) | | | | | | | | | | | | | | | | | | | | | Thirty-Nine Weeks Ended | | Thirteen Weeks Ended | | | September 26, | | September 27, | | September 26, | | September 27, | | | | 2026 | | | | 2025 | | | | 2026 | | | | 2025 | | | | | | | | | | Revenue | $ | 4,115,342 | | | $ | 3,569,291 | | | $ | 1,511,787 | | | $ | 1,205,406 | | | | | | | | | | Costs of revenue: | | | | | | | | | Purchased transportation | | 3,212,442 | | | | 2,775,761 | | | | 1,182,045 | | | | 936,472 | | | Commissions to agents | | 319,254 | | | | 291,529 | | | | 117,676 | | | | 98,693 | | | | | | | | | | | Variable costs of revenue | | 3,531,696 | | | | 3,067,290 | | | | 1,299,721 | | | | 1,035,165 | | | | | | | | | | | | Trailing equipment depreciation | | 19,108 | | | | 20,829 | | | | 6,489 | | | | 6,985 | | | Information technology costs (1) | | 8,186 | | | | 10,928 | | | | 2,503 | | | | 3,319 | | | Insurance-related costs (2) | | 130,955 | | | | 104,622 | | | | 55,301 | | | | 33,305 | | | Other operating costs | | 53,971 | | | | 46,996 | | | | 21,226 | | | | 15,572 | | | | | | | | | | | Other costs of revenue | | 212,220 | | | | 183,375 | | | | 85,519 | | | | 59,181 | | | | | | | | | | | Total costs of revenue | | 3,743,916 | | | | 3,250,665 | | | | 1,385,240 | | | | 1,094,346 | | | | | | | | | | Gross profit | $ | 371,426 | | | $ | 318,626 | | | $ | 126,547 | | | $ | 111,060 | | | | | | | | | | Gross profit margin | | 9.0 | % | | | 8.9 | % | | | 8.4 | % | | | 9.2 | % | | | | | | | | | | Plus: other costs of revenue | | 212,220 | | | | 183,375 | | | | 85,519 | | | | 59,181 | | | | | | | | | | Variable contribution | $ | 583,646 | | | $ | 502,001 | | | $ | 212,066 | | | $ | 170,241 | | | | | | | | | | Variable contribution margin | | 14.2 | % | | | 14.1 | % | | | 14.0 | % | | | 14.1 | % | | | | | | | | | (1) | Includes costs of revenue incurred related to internally developed software including ASC 350-40 amortization, implementation costs, hosting costs and other support costs utilized to support the Company's independent commission sales agents, third-party capacity providers, and customers, included as a portion of depreciation and amortization and of selling, general and administrative in the Company's Consolidated Statements of Income. (2) | Primarily includes (i) insurance premiums paid for commercial auto liability, general liability, cargo and other lines of coverage related to the transportation of freight; (ii) the related costs of claims incurred under those programs; and (iii) brokerage commissions and other fees incurred relating the the administration of insurance programs available to BCO Independent Contractors that are reinsured by the Company, which are included in selling, general and administrative in the Company's Consolidated Statements of Income. CONTACT: Contact:Jim ToddChief Financial Officer904-398-9400