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Hub Group Reports Second Quarter 2025 Results

1. Second quarter 2025 EPS of $0.42, down from $0.47 last year. 2. Revenue decreased 8% year-over-year to $905.6 million in Q2 2025. 3. Net debt/EBITDA ratio is strong at 0.3x, below target range. 4. Union Pacific and Norfolk Southern merger could drive future growth. 5. Year-to-date, $29 million returned to shareholders via dividends and buybacks.

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Why Neutral?

HUBG's solid balance sheet and commitment to growth contrast with declining EPS and revenue. It reflects mixed signals for investors considering a hold or cautious approach.

How important is it?

The article impacts HUBG significantly due to ongoing growth strategies and proposed industry changes. The financial metrics signal caution amidst long-term growth opportunities.

Why Long Term?

The proposed railroad merger may catalyze growth in the long run. However, current decline in key financial metrics can weigh on short-term performance.

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July 31, 2025 16:05 ET  | Source: Hub Group, Inc. Highlights: GAAP diluted earnings per share (EPS) of $0.42 for the second quarterSecond quarter revenue of $905.6 millionNon-GAAP adjusted EPS of $0.45, which excludes adjustments for vendor settlements in the quarter Operating income of $34 million or 3.8% of revenue, adjusted operating income (non-GAAP) of $36.9 million or 4.1% of revenue Returned $29 million to shareholders year-to-date through dividend payments of $15 million and stock repurchases of $14 millionStrong balance sheet with net debt/EBITDA LTM (non-GAAP) of 0.3x as of June 30, 2025Proposed Union Pacific and Norfolk Southern combination a catalyst for growth OAK BROOK, Ill., July 31, 2025 (GLOBE NEWSWIRE) -- Hub Group, Inc. (Nasdaq: HUBG) announced second quarter 2025 net income of $25 million and diluted earnings per share of $0.42. Adjusting for vendor settlement expenses of $2.6 million (pre-tax), second quarter 2025 adjusted net income (non-GAAP) of $27.0 million decreased 6.2% from the prior year net income of $29.0 million. Adjusted EPS (non-GAAP) of $0.45 per diluted share decreased $0.02 from $0.47 EPS reported in the second quarter of 2024. “The team continues to navigate this operating environment with a focus on serving customers, improving productivity, and leveraging growth investments. Intermodal margin performance and new customer wins for the Final Mile business reflect success with our approach. Hub Group has made progress with cost-saving initiatives and remains opportunistic with capital deployment as reflected in the announced agreement to acquire certain assets from Marten Intermodal. Although market conditions remain challenging, higher margin and free cash flow performance from cycle trough-to-trough highlight the benefits of our strategy and execution, and we remain optimistic on the long-term growth opportunity,” said Phil Yeager, Hub Group’s President, Chief Executive Officer and Vice Chairman. Second Quarter 2025 Results Consolidated revenue for the second quarter of 2025 was $906 million, an 8% decrease from $986 million reported in the second quarter of 2024. Intermodal volume growth of 2% was offset by lower revenue per unit in intermodal and brokerage, decreased fuel revenue, and sub-seasonal demand across segments. Purchased transportation and warehousing costs of $656 million were 10% lower than prior year. Salaries and benefits of $143 million were 1% higher than prior year driven by additional warehouse and driver team members and the EASO acquisition. Total legacy headcount, which excludes acquisition employees, drivers and warehouse employees, declined 3% from prior year. Depreciation and amortization of $32 million decreased 14% from prior year. Insurance and claims of $11 million decreased 16% due to lower claims costs in the quarter. General and administrative expenses increased from prior year due to the impact from vendor settlements in the quarter. GAAP operating income for the second quarter was $34 million or 3.8% of revenue and adjusted operating income (non-GAAP) was $37 million or 4.1% of revenue. Prior year operating income was $39.5 million or 4.0% of revenue. Adjusted EBITDA (non-GAAP) for the second quarter was $85 million. Net debt/EBITDA LTM (non-GAAP) was 0.3x for the second quarter, below the leverage target range of 0.75 to 1.25x. Intermodal and Transportation Solutions (“ITS”) Segment revenue was $528 million in the second quarter, down from $561 million in the prior year due to intermodal mix, price and fuel impacts, along with lower dedicated revenue. ITS operating income was $14.4 million, or 2.7% of revenue, up from $13.6 million in the prior year. Second quarter Logistics Segment revenue was $404 million, down from $459 million in the prior year due to lower volume and revenue per load in our brokerage business, exiting of unprofitable business in consolidation and fulfilment, and sub-seasonal demand in managed transportation and final mile businesses. GAAP Logistics operating income was $20 million, or 4.9% of revenue. Adjusted Logistics operating income (non-GAAP) was $23 million, or 5.6% of revenue, down from $26 million in the prior year, due to a lower brokerage margin. Capital expenditures for the second quarter of 2025 totaled $11 million and decreased sequentially due to lower tractor fleet investment. As of June 30, 2025, we had cash and restricted cash of $164 million. Year-to-date the company returned $29 million to shareholders through dividend payments of $15 million and stock repurchases of $14 million. Proposed Union Pacific and Norfolk Southern Combination We are supportive of our rail partners Union Pacific and Norfolk Southern in their announced plan to form America’s first transcontinental railroad. Throughout Hub Group’s history, we have remained committed to serving customers and realizing the potential of intermodal transportation. The announced transaction would further accelerate our long-term growth opportunity. Specifically, a transcontinental network removes friction in gateways, reduces transit times, provides access to new markets, and increases competition with truck volume through new single-line service. We remain focused on executing our strategy and will stay in close communication with our rail partners. 2025 Outlook We expect 2025 diluted earnings per share will range from $1.80 to $2.05. We estimate revenue of approximately $3.6 billion to $3.8 billion for the full year. We project an effective tax rate of approximately 24.5% and capital expenditures in the range of $40 million to $50 million for the full year. Non-GAAP Financial Measures In this press release, we present certain non-GAAP financial measures, including adjusted EPS, adjusted operating income, adjusted EBITDA, and net debt/EBITDA. As required by the rules of the Securities and Exchange Commission (“SEC”), we have provided herein a reconciliation of these non-GAAP financial measures to the most directly comparable measures under GAAP, along with an explanation why management believes these non-GAAP financial measures provide relevant and useful information. These non-GAAP financial measures should be viewed in addition to, and not as an alternative to or substitute for, measures determined in accordance with GAAP and are not necessarily comparable to non-GAAP measures that may be presented by other companies. Certain Forward-Looking Statements: Statements in this press release that are not historical facts are forward-looking statements, provided pursuant to the safe harbor established under the Private Securities Litigation Reform Act of 1995. These forward-looking statements are not guarantees of future performance and involve risks, uncertainties and other factors that might cause the actual performance of Hub Group to differ materially from those expressed or implied by this discussion and, therefore, should be viewed with caution. Further information on the risks that may affect Hub Group’s business is included in filings it makes with the SEC from time to time, including those discussed under the “Risk Factors” section in Hub Group’s most recently filed periodic reports on Form 10-K and Form 10-Q and subsequent filings. Hub Group assumes no obligation to update any such forward-looking statements. Conference Call Hub Group, Inc. will hold a conference call at 5:00 p.m. Eastern Time on July 31, 2025, to discuss our Second quarter 2025 results. Hosting the conference call will be Phil Yeager, President, CEO and Vice Chairman and Kevin Beth, Executive Vice President, Chief Financial Officer and Treasurer. This call is being webcast and can be accessed through the Investors link on Hub Group’s web site at www.hubgroup.com. The webcast is listen-only. Those interested in participating in the question-and-answer session should follow the telephone dial-in instructions below. To participate in the conference call by telephone, please pre-register https://register-conf.media-server.com/register/BI812532441b224285a8849232f987af30  to receive the dial-in number and unique PIN. On the day of the call, dial in approximately ten minutes prior to the scheduled call time and enter the unique participant PIN received during registration. The call will be limited to 60 minutes, including questions and answers. An audio replay will be available through the Investors link on the Company's web site at www.hubgroup.com. This replay will be available for 30 days. About Hub Group Hub Group offers comprehensive transportation and logistics management solutions. Keeping our customers’ needs in focus, Hub Group designs, continually optimizes, and applies industry-leading technology to our customers’ supply chains for better service, greater efficiency, and total visibility. As an award-winning, publicly traded company (Nasdaq: HUBG) with approximately $4 billion in revenue, our nearly 6,000 employees and drivers across the globe are always in pursuit of “The Way Ahead” – a commitment to service, integrity and innovation. For more information, visit hubgroup.com. SOURCE: Hub Group, Inc.CONTACT: Garrett Holland, GHolland@hubgroup.com  HUB GROUP, INC.CONSOLIDATED STATEMENTS OF EARNINGS(in thousands, except per share amounts)(unaudited)           Three Months Ended June 30,    2025   2024     % of  % of   AmountRevenue AmountRevenueOperating revenue $905,648 100.0% $986,495 100.0%        Operating expenses:       Purchased transportation and warehousing  655,904 72.4%  727,236 73.7% Salaries and benefits  143,310 15.8%  141,856 14.4% Depreciation and amortization  32,387 3.6%  37,772 3.8% Insurance and claims  10,644 1.2%  12,639 1.3% General and administrative  28,925 3.2%  27,877 2.8% Loss (gain) on sale of assets, net  130 0.0%  (413)-0.0%Total operating expenses  871,300 96.2%  946,967 96.0%        Operating income  34,348 3.8%  39,528 4.0%        Other income (expense):       Interest expense, net  (2,129)-0.2%  (1,881)-0.2% Other, net  728 -0.0%  (66)-0.0%Total other expense, net  (1,401)-0.2%  (1,947)-0.2%        Income before provision for income taxes  32,947 3.6%  37,581 3.8%        Provision for income taxes  7,916 0.9%  8,566 0.9%        Net income  25,031    29,015          Less: Net loss attributable to non-controlling interests  (216)   -          Net income attributable to Hub Group, Inc. $25,247   $29,015          Earnings per share       Basic $0.42   $0.48   Diluted $0.42   $0.47          Basic weighted average number of shares outstanding  60,002    60,710  Diluted weighted average number of shares outstanding  60,210    61,108           HUB GROUP, INC.CONSOLIDATED STATEMENTS OF EARNINGS(in thousands, except per share amounts)(unaudited)           Six Months Ended June 30,    2025   2024     % of  % of   AmountRevenue AmountRevenueOperating revenue $1,820,864 100.0% $1,985,988 100.0%        Operating expenses:       Purchased transportation and warehousing  1,313,827 72.2%  1,467,408 73.9% Salaries and benefits  292,723 16.1%  286,352 14.4% Depreciation and amortization  64,966 3.5%  76,103 3.8% Insurance and claims  21,526 1.2%  25,257 1.3% General and administrative  56,070 3.1%  55,111 2.8% Loss (gain) on sale of assets, net  65 0.0%  (910)-0.1%Total operating expenses  1,749,177 96.1%  1,909,321 96.1%        Operating income  71,687 3.9%  76,667 3.9%        Other income (expense):       Interest expense, net  (4,121)-0.2%  (4,387)-0.2% Other, net  1,023 0.1%  (236)-0.0%Total other expense, net  (3,098)-0.1%  (4,623)-0.2%        Income before provision for income taxes  68,589 3.8%  72,044 3.7%        Provision for income taxes  16,363 0.9%  15,976 0.8%        Net income  52,226    56,068          Less: Net income attributable to non-controlling interests  131    -          Net income attributable to Hub Group, Inc. $52,095   $56,068          Earnings per share       Basic $0.87   $0.92   Diluted $0.86   $0.91          Basic weighted average number of shares outstanding  60,096    61,018  Diluted weighted average number of shares outstanding  60,314    61,387           HUB GROUP, INC.CONSOLIDATED BALANCE SHEETS(in thousands, except share data)       June 30, December 31,       2025   2024       (unaudited)  ASSETS      CURRENT ASSETS:      Cash and cash equivalents $137,048  $98,248   Restricted cash  26,553   28,700   Accounts receivable trade, net  541,554   581,516   Accounts receivable other  11,887   10,880   Prepaid taxes  11,060   15,115   Prepaid expenses and other current assets 17,337   33,870     TOTAL CURRENT ASSETS  745,439   768,329           Restricted investments  20,005   21,642  Property and equipment, net  725,200   739,896  Right-of-use assets - operating leases  219,925   233,651  Right-of-use assets - financing leases  731   1,062  Other intangibles, net  259,300   267,357  Goodwill  804,019   814,309  Other non-current assets  25,432   22,097     TOTAL ASSETS $2,800,051  $2,868,343                   LIABILITIES AND STOCKHOLDERS' EQUITY    CURRENT LIABILITIES:      Accounts payable trade $235,295  $279,982   Accounts payable other  31,260   29,069   Accrued payroll  26,820   32,833   Accrued other  90,337   91,441   Lease liability - operating leases  44,006   45,492   Lease liability - financing leases  569   663   Current portion of long-term debt  97,641   100,001     TOTAL CURRENT LIABILITIES 525,928   579,481           Deferred consideration  28,356   30,639  Long-term debt  134,279   164,361  Other non-current liabilities  51,551   51,004  Lease liability - operating leases  186,033   197,664  Lease liability - financing leases  96   330  Deferred taxes  147,600   152,913           STOCKHOLDERS' EQUITY:      Preferred stock, $.01 par value; 2,000,000 shares authorized;      no shares issued or outstanding in 2025 and 2024. -   -   Common stock       Class A: $.01 par value; 97,337,700 shares authorized; 72,303,228       shares issued in both 2025 and 2024; 60,641,237 shares outstanding in 2025       and 60,746,745 shares outstanding in 2024. 723   723    Class B: $.01 par value; 662,300 shares authorized; 574,903 shares issued and       outstanding in both 2025 and 2024. 6   6   Additional paid-in capital  216,107   222,039   Retained earnings  2,059,244   2,022,265   Accumulated other comprehensive loss 2,672   (1,453)  Treasury stock; at cost, 11,661,991 shares in 2025 and 11,556,483 shares in 2024 (603,793)  (598,583)   Total Hub Group, Inc. equity  1,674,959   1,644,997   Non-controlling interests  51,249   46,954    TOTAL STOCKHOLDERS' EQUITY 1,726,208   1,691,951     TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY$2,800,051  $2,868,343           HUB GROUP, INC.CONSOLIDATED STATEMENTS OF CASH FLOWS(in thousands)(unaudited)               Six Months Ended June 30,       2025   2024                   Cash flows from operating activities:     Net income $52,226  $56,068  Adjustments to reconcile net income      to net cash provided by operating activities:      Depreciation and amortization of intangibles and right-of-use assets 94,448   99,100    Deferred taxes  (4,191)  (9,249)   Non-cash share-based compensation expense 9,345   9,433    Loss (gain) on sale of assets, net  65   (910) Changes in operating assets and liabilities, net of acquisitions:      Restricted investments  640   (281)   Accounts receivable, net  41,251   15,784    Prepaid taxes  4,191   4,537    Prepaid expenses and other current assets 16,910   19,697    Other non-current assets  (4,445)  (1,503)   Accounts payable  (43,705)  (14,270)   Accrued expenses  (13,552)  (6,542)   Non-current liabilities  (21,647)  (21,399)    Net cash provided by operating activities 131,536   150,465          Cash flows from investing activities:     Proceeds from sale of equipment  4,056   5,750  Purchases of property and equipment  (30,480)  (31,255) Acquisitions, net of cash acquired  -   3,701     Net cash used in investing activities (26,424)  (21,804)         Cash flows from financing activities:     Repayments of long term debt  (51,729)  (53,233) Purchase of treasury stock  (13,814)  (32,938) Dividends paid  (15,000)  (15,230) Stock withheld for payments of withholding taxes (6,673)  (8,664) Finance lease payments  (328)  (1,217) Proceeds from issuance of debt  19,103   15,618     Net cash used in financing activities (68,441)  (95,664)                   Effect of exchange rate changes on cash and cash equivalents (18)  (20)         Net increase in cash and cash equivalents 36,653   32,977 Cash and cash equivalents beginning of period 126,948   187,270 Cash and cash equivalents end of period $163,601  $220,247           HUB GROUP, INC.FINANCIAL INFORMATION BY SEGMENT (NON-GAAP)(in thousands)(unaudited)       Three Months Ended June 30,   NON-GAAP   NON-GAAPAdjusted  Operating Revenue 2025 Adjustments (1) 2025   2024 Intermodal and Transportation Services$528,184 $-$528,184  $561,033 Logistics 404,310  - 404,310   459,088 Inter-segment eliminations (26,846) - (26,846)  (33,626)Total operating revenue$905,648 $-$905,648  $986,495        Three Months Ended June 30,   NON-GAAP   NON-GAAPAdjusted  Operating Income 2025 Adjustments (1) 2025   2024 Intermodal and Transportation Services$14,407  $14,407  $13,639 Logistics 19,941  2,575 22,516   25,889 Total operating income$34,348 $2,575$36,923  $39,528        Three Months Ended June 30,   NON-GAAP   NON-GAAPAdjusted  Depreciation and Amortization 2025 Adjustments (1) 2025   2024 Intermodal and Transportation Services$22,043 $-$22,043  $27,270 Logistics 10,344  - 10,344   10,502 Total depreciation and amortization$32,387 $-$32,387  $37,772       (1) See Reconciliation of GAAP to Non-GAAP Financial Measures for further discussion.  HUB GROUP, INC.FINANCIAL INFORMATION BY SEGMENT (NON-GAAP)(in thousands)(unaudited)       Six Months Ended June 30,Operating Revenue 2025  Non-GAAPAdjustments (1) Non-GAAPAdjusted2025  2024 Intermodal and Transportation Services$1,058,206  - 1,058,206  $1,113,066 Logistics 815,311  - 815,311   939,312 Inter-segment eliminations (52,653) - (52,653)  (66,390)Total operating revenue$1,820,864  - 1,820,864  $1,985,988        Six Months Ended June 30,   Non-GAAP    Non-GAAPAdjusted  Operating Income 2025 Adjustments (1) 2025   2024 Intermodal and Transportation Services$28,457  $28,457  $26,670 Logistics 43,230  2,575 45,805   49,997 Total operating income$71,687 $2,575$74,262  $76,667        Six Months Ended June 30,Depreciation and Amortization 2025  Non-GAAPAdjustments (1) Non-GAAPAdjusted2025  2024 Intermodal and Transportation Services$44,068  - 44,068  $54,319 Logistics 20,898  - 20,898   21,784 Total depreciation and amortization$64,966  - 64,966  $76,103             (1) See Reconciliation of GAAP to Non-GAAP Financial Measures for further discussion.  HUB GROUP, INC.RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES(in millions, except per share amounts)(unaudited)             The following is a reconciliation of GAAP earnings to Non-GAAP Adjusted Earnings, excluding certain items, for income before provision for income taxes (Pre-Tax), net income (After-Tax) and diluted earnings per share (Per Share):       Three Months Ended Six Months Ended  June 30, 2025 June 30, 2025  Pre-Tax After-Tax Per Share Pre-Tax After-Tax Per ShareGAAP Earnings $32.9  $25.0  $0.42  $68.6  $52.2  $0.86 Vendor settlements (i)  2.6   2.0  $0.03   2.6   2.0  $0.03 Non-GAAP Adjusted Earnings $35.5  $27.0  $0.45  $71.2  $54.2  $0.89              By providing this measure of Non-GAAP Adjusted Earnings, management intends to provide investors with a useful measure of Hub Group's performance that excludes certain non-ordinary expense items and allowing better evaluation of underlying business performance and period-to-period comparability. (i) Vendor settlements includes vendor disputes related to our network alignment consolidation activities.              HUB GROUP, INC.RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES(in millions, except per share amounts)(unaudited)             The following is a reconciliation of GAAP Operating Income to Non-GAAP Adjusted Operating Income, excluding certain items.               Three Months Ended Six Months Ended  June 30, 2025 June 30, 2025  ITS Logistics Consolidated ITS Logistics ConsolidatedGAAP Operating Income $14.4  $19.9  $34.3  $28.5  $43.2  $71.7 Vendor settlements (i) $-  $2.6  $2.6  $-  $2.6  $2.6 Non-GAAP Adjusted Operating Income$14.4  $22.5  $36.9  $28.5  $45.8  $74.3              By providing this measure of Non-GAAP Adjusted Operating Income, management intends to provide investors with a useful measure of Hub Group's performance that excludes certain non-ordinary expense items and allowing better evaluation of underlying business performance and period-to-period comparability. (i) Vendor settlements includes vendor disputes related to our network alignment consolidation activities.              RECONCILIATION OF NET INCOME TO EBITDA (1) AND NET DEBT / EBITDA LEVERAGE(in thousands)(unaudited)                      2024   2024   2025   2025    Q3 Q4 Q1 Q2 LTM (3)Net Income$23,603  $24,372  $27,194  $25,031  $100,200 Interest Expense, net 1,333   1,858   1,992   2,129   7,312 Depreciation and Amortization (2) 46,374   47,088   47,046   47,402   187,910 Provision for Income Taxes 7,140   5,387   8,447   7,916   28,890 EBITDA$78,450  $78,705  $84,679  $82,478  $324,312           Network Alignment (i)$8,381  $4,814  $-  $-  $13,195 Transaction Related (ii) 947   1,194   -   -   2,141 Other (iii) 1,061   67   -   -   1,128 Vendor Settlements (iv) -   -   -   2,575   2,575 Adjusted EBITDA$88,839  $84,780  $84,679  $85,053  $343,351           EBITDA LTM (3)$331,535  $332,686  $330,791  $324,312   Net Debt (4)$102,105  $167,106  $140,223  $95,537   Net Debt / EBITDA LTM 0.3   0.5   0.4   0.3             Adjusted EBITDA LTM (3)$347,016  $349,150  $347,255  $343,351   Net Debt / Adjusted EBITDA LTM 0.3   0.5   0.4   0.3                       (1)   By providing this Non-GAAP measure of EBITDA and Net Debt / EBITDA Leverage, management intends to provide investors with a meaningful, consistent comparison of the Company's profitability and leverage for the periods presented.          (2)   Includes depreciation of property and equipment, amortization of intangible assets and amortization of right-of-use assets.          (3)   Last twelve months          (4)   Total debt (including finance leases) less cash and cash equivalents          (i) Network Alignment expenses include transfer costs, legal fees and other expenses related to consolidating from existing warehouses to improve operational efficiency of our cross dock services, Final Mile and Consolidation and Fulfillment lines of business.          (ii) Transaction related expenses are comprised of due diligence costs, legal fees, insurance fees and other professional service fees incurred as part of the forming of a joint venture with EASO in 2024 and the acquisition of Forward Air Final Mile in 2023.          (iii) Other includes non-ordinary expenses related to employee matters.          (iv) Vendor settlements includes vendor disputes related to our network alignment consolidation activities.

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