Hub Group, Inc. Class A Stock price
Compare with Peer Group
📊 Peer Group
📈 What is it?
The peer group consists of the companies with the most similar business model. They serve as a benchmark for putting a stock into context.
🧮 How is it selected?
Based on similarity of business model, meaning companies from the same industry with comparable products and a similar customer base. That's the only way to compare apples to apples.
🏛️ Why does it matter?
Whether a stock is cheap or expensive is best judged by comparison. A P/E of 18 or an EV/FCF of 20 can look cheap or expensive depending on the yardstick. The peer group gives you the most accurate one: companies with a similar business model that operate under the same conditions.
🎯 What does it mean for investors?
When a metric sits below the peer average, the stock is valued more cheaply relative to its competitors, and above the average more expensively. A discount to the peer group can be an opportunity, but it can also have a reason (for example lower growth). The comparison is a starting point, not a verdict.
Is Hub Group, Inc. Class A a Top Scorer Stock based on the Dividend, High-Growth-Investing or Leverman Strategy?
As a Free StocksGuide user, you can view scores for all 9,120 stocks worldwide.
StocksGuide Premium
StocksGuide Unlimited
Key metrics
📘 Market Capitalization
📈 What is it?
Market capitalization shows how much a company is currently worth on the stock market.
🧮 How is it calculated?
🏛️ Why is it important?
It helps classify companies by size (Large, Mid, Small Cap) and indicates their market presence and relative stability.
🧮 Calculation
🎯 What does this mean for investors?
- Large-cap companies tend to be more stable, often pay dividends, but may grow more slowly.
- Smaller firms may offer higher growth potential but come with more volatility.
- Market capitalization is a useful indicator of company size — but not a measure of whether a stock is undervalued or overvalued.
📘 Enterprise Value (EV)
📈 What is it?
Enterprise Value represents the total cost to acquire a company — including its debt and excluding its cash reserves.
🧮 How is it calculated?
(= Market Cap + Net Debt)
🏛️ Why is it important?
EV gives a more complete picture of a company's value than market cap alone and is used in key valuation ratios like EV/FCF or EV/Sales.
🧮 Calculation
🎯 What does this mean for investors?
- Enterprise Value shows the true cost of buying a company, including all financial obligations.
- It is more accurate than just looking at market cap, especially when comparing companies with different levels of debt or cash.
- Professional investors prefer EV-based multiples because they better reflect the company’s full financial footprint.
📘 Net Debt
📈 What is it?
Net Debt shows how much debt remains after subtracting a company’s available cash reserves.
🧮 How is it calculated?
🏛️ Why is it important?
It indicates how dependent a company is on borrowed money and how easily it can service its debt in the short term.
🧮 Calculation
🎯 What does this mean for investors?
- Low or negative net debt signals financial strength and flexibility.
- Companies with strong cash positions are better positioned in crises.
- High net debt increases financial risk — especially in environments with rising interest rates or economic downturns.
📘 Cash
📈 What is it?
Cash represents all liquid assets a company can access immediately — including cash, bank deposits, and short-term investments.
🧮 How is it calculated?
🏛️ Why is it important?
It reflects a company’s financial flexibility and resilience — enabling investments, buybacks, or buffer in downturns.
🧮 Calculation
🎯 What does this mean for investors?
- A strong cash position means greater room for maneuver and crisis resistance.
- Cash-rich companies can invest, pay down debt, or repurchase shares.
- But excess idle cash might indicate a lack of growth opportunities.
📘 Shares Outstanding
📈 What is it?
Shares outstanding represent the total number of a company’s shares currently held by investors — excluding treasury stock.
🧮 How is it calculated?
🏛️ Why is it important?
It’s the basis for key metrics like Earnings Per Share (EPS), Market Capitalization, or the Price/Earnings ratio (P/E).
🧮 Calculation
🎯 What does this mean for investors?
- Fewer shares in circulation typically increase earnings per share — making each share more valuable.
- Share buybacks reduce the number of shares and boost per-share metrics.
- Issuing new shares does the opposite — diluting shareholder value and lowering per-share figures.
📘 Price-to-Earnings Ratio (P/E)
📈 What is it?
The P/E ratio shows how many times a company's earnings per share are reflected in its current share price — in other words, how "expensive" the stock appears relative to its profits.
🧮 How is it calculated?
🏛️ Why is it important?
The P/E ratio is one of the most widely used valuation metrics. It helps investors assess whether a stock appears cheap or expensive compared to its earnings power.
🧮 Calculation
📊 P/E (TTM) = Based on earnings from the last 12 months (Trailing Twelve Months):🎯 What does this mean for investors?
- A low P/E may indicate undervaluation — or signal underlying issues.
- A high P/E may reflect strong growth expectations — or an overvalued stock.
📘 Price-to-Sales Ratio (P/S)
📈 What is it?
The P/S ratio shows how much investors are paying for $1 of the company’s revenue – regardless of profitability.
🧮 How is it calculated?
🏛️ Why is it important?
P/S is especially useful for evaluating growth companies or businesses not yet profitable. It reflects how the market values the company’s sales.
🧮 Calculation
Market Cap = $1.76b | Revenue (TTM) = $3.73b
Market Cap = $1.76b | Estimated Revenue = $3.75b
🎯 What does this mean for investors?
- A low P/S may indicate undervaluation — or low profitability.
- A high P/S can reflect strong growth expectations — or excessive optimism.
- Especially helpful when evaluating companies where profits are low, volatile, or negative.
📘 Enterprise Value to Sales (EV/Sales)
📈 What is it?
EV/Sales shows how much investors are paying for $1 of revenue — considering not just equity, but also debt and cash. It’s the capital structure–adjusted version of the P/S ratio.
🧮 How is it calculated?
🏛️ Why is it important?
It’s ideal for comparing companies with different levels of debt. It reflects a company's true cost relative to its revenue.
🧮 Calculation
Enterprise Value = $1.89b | Revenue (TTM) = $3.73b
Enterprise Value = $1.89b | Forward Revenue = $3.75b
🎯 What does this mean for investors?
- EV/Sales allows for capital structure–neutral company comparisons.
- A lower ratio may indicate undervaluation; a higher one may signal strong growth expectations or overvaluation.
- Especially helpful when evaluating high-growth companies with low or negative earnings.
📘 Enterprise Value to Free Cash Flow (EV/FCF) | ex SBC
📈 What is it?
EV/FCF compares a company’s enterprise value with its free cash flow. The metric therefore shows the multiple of current free cash flow at which a company is valued. EV/FCF ex SBC additionally accounts for stock-based compensation (SBC). While SBC does not represent a direct cash outflow, issuing shares as compensation can dilute existing shareholders. Therefore, SBC is deducted from free cash flow in this adjusted version.
🧮 How is it calculated?
EV/FCF ex SBC = Enterprise Value ÷ (Free Cash Flow (TTM) − SBC)
🏛️ Why is it important?
EV/FCF provides a valuation based on free cash flow and therefore complements earnings-based valuation metrics such as the P/E ratio. The ex SBC version additionally accounts for the economic impact of stock-based compensation and provides a more conservative view from a shareholder perspective.
🧮 Calculation
🎯 What does this mean for investors?
- A low EV/FCF means that enterprise value is low relative to current free cash flow. The reasons should always be considered in the context of the company and its industry.
- A high EV/FCF means that enterprise value is high relative to current free cash flow. This can, for example, reflect high growth expectations or temporarily weak cash generation.
- When SBC is positive and adjusted free cash flow remains positive, EV/FCF ex SBC is generally higher than the standard EV/FCF.
- The metric is particularly useful for companies with relatively stable and predictable cash flows.
- If free cash flow is negative or very low, EV/FCF has limited usefulness and should not be interpreted like a standard valuation multiple.
📘 Price-to-Book Ratio (P/B)
📈 What is it?
The P/B ratio compares a company’s market value to its book value — showing how much investors are paying for each dollar of net assets.
🧮 How is it calculated?
🏛️ Why is it important?
P/B is commonly used for asset-heavy industries like banks or industrials. It helps assess whether a stock is trading above or below its net asset value.
🧮 Calculation
🎯 What does this mean for investors?
- A P/B below 1 may signal undervaluation — or weak profitability.
- A P/B above 1 implies the market expects future value creation (e.g., brand, IP, growth).
- Best used for companies with tangible assets and strong balance sheets.
📘 Dividend per Share (DPS)
📈 What is it?
Dividend per Share shows how much cash a company pays out to shareholders for each share they own – usually on an annual or quarterly basis.
🧮 How is it calculated?
🏛️ Why is it important?
DPS is the absolute value of the payout per share – crucial for income-focused investors and dividend strategies.
🧮 Calculation
🎯 What does this mean for investors?
- A stable or growing DPS often signals a strong, shareholder-friendly business.
- DPS alone doesn’t tell you how attractive the payout is – the stock price also matters (→ see Dividend Yield).
- Long-term dividend growth is often a hallmark of high-quality companies – like the dividend aristocrats.
📘 Dividend Yield
📈 What is it?
Dividend yield shows how large a company’s dividend is in relation to its current share price.
🧮 How is it calculated?
🏛️ Why is it important?
It allows investors to compare dividend payouts across stocks, regardless of price or payout size.
🧮 Calculation
🎯 What does this mean for investors?
- A stable yield can reflect reliable distributions.
- Comparing 1Y and 5Y yield shows whether dividend growth keeps pace with stock price appreciation.
- A low yield isn’t always negative – it can signal strong past performance or growth focus.
📘 Dividend Growth
📈 What is it?
Dividend growth shows how much a company has increased its dividend per share over time.
🧮 How is it calculated?
5Y: Compound Annual Growth Rate (CAGR)
🏛️ Why is it important?
Consistently rising dividends are often a sign of financial strength and shareholder orientation – especially relevant for long-term investors.
🧮 Calculation
🎯 What does this mean for investors?
- Stable dividend growth is a sign of sustainable earning power.
- High dividend growth can significantly boost your total return:
- If a company pays $1 in dividends and increases it by 15% annually over 5 years, you’ll receive $2 per share in year 5 – twice as much as at the start!
📘 Payout Ratio
📈 What is it?
The payout ratio shows what percentage of a company’s earnings (per share) is distributed to shareholders as dividends.
🧮 How is it calculated?
🏛️ Why is it important?
It helps assess whether the dividend is sustainable – especially in relation to the company’s profitability.
🧮 Calculation
🎯 What does this mean for investors?
- A low payout ratio means the company retains more earnings for reinvestment – typical for growth companies.
- A moderate payout (e.g. 25–50%) indicates a healthy balance between returns and reinvestment.
- High payout ratios may seem attractive but can carry risk if earnings decline.
📘 Consecutive Dividend Increases
📈 What is it?
This metric shows how many consecutive years a company has raised its dividend per share – without any cuts or pauses.
🧮 How is it calculated?
(Special dividends are not considered.)
🏛️ Why is it important?
A long track record of increases reflects financial strength, consistency, and shareholder commitment.
🎯 What does this mean for investors?
- A long dividend increase streak builds confidence – especially in volatile markets.
- Such companies are seen as reliable and income-friendly investments.
- The longer the streak, the stronger the company’s dividend discipline.
📘 Revenue
📈 What is it?
Revenue shows how much a company earns in total from selling its products and services – the gross income before any costs are deducted.
🧮 How is it calculated?
🏛️ Why is it important?
Revenue is one of the key figures to assess a company’s size, market position, and growth potential.
🧮 Calculation
🎯 What does this mean for investors?
- Growing revenue indicates rising demand and can be an early signal of future earnings growth.
- Comparing actual and expected revenue reveals trends in the market environment and analyst sentiment.
- Note: Strong revenue alone isn’t enough – margins and profitability matter just as much.
📘 EBITDA
📈 What is it?
EBITDA stands for “Earnings Before Interest, Taxes, Depreciation, and Amortization.” It reflects a company’s operating profit before the effects of financing, taxes, and accounting depreciation.
🧮 How is it calculated?
🏛️ Why is it important?
EBITDA is widely used to evaluate a company’s operating performance – especially across capital-intensive sectors or international comparisons.
🧮 Calculation
🎯 What does this mean for investors?
- A high or growing EBITDA indicates strong operational profitability – independent of taxes, interest, or accounting methods.
- It’s especially useful for comparing companies across sectors or geographies.
- Important: EBITDA is not a net income figure – it excludes key costs like depreciation and interest.
📘 EBIT
📈 What is it?
EBIT stands for “Earnings Before Interest and Taxes.” It reflects a company’s operating profit after depreciation, but before interest and tax expenses.
🧮 How is it calculated?
🏛️ Why is it important?
EBIT is a core profitability metric that shows how well the company performs in its main business operations – independent of capital structure and tax environment.
🧮 Calculation
🎯 What does this mean for investors?
- A high EBIT indicates strong profitability from the company’s core business – before financial and tax effects.
- It allows better comparison between companies with different debt levels or tax structures.
- Compared to EBITDA, EBIT already accounts for depreciation and reflects capital intensity more clearly.
📘 Net Income
📈 What is it?
Net income is the company’s total profit – the amount left after all expenses, taxes, interest, and depreciation have been deducted.
🧮 How is it calculated?
🏛️ Why is it important?
Net income is the most comprehensive measure of a company’s profitability – showing how much actual profit remains after all business and financing costs.
🧮 Calculation
🎯 What does this mean for investors?
- Growing net income indicates that the company is managing all of its costs efficiently.
- It directly influences valuation metrics like P/E ratio and the company’s dividend capacity.
- Over time, net income trends reveal how resilient and profitable the business model really is.
📘 Free Cash Flow (FCF) | ex SBC
📈 What is it?
Free cash flow shows how much cash remains after a company has covered its operating and capital expenditures. FCF ex SBC additionally deducts stock-based compensation (SBC) to adjust the cash flow for the effect of non-cash SBC.
🧮 How is it calculated?
Free Cash Flow ex SBC = Operating Cash Flow − SBC − Capital Expenditures (CAPEX)
🏛️ Why is it important?
FCF reflects a company’s actual financial strength – independent of reported accounting earnings. It shows how much flexibility a company has for dividends, share buybacks, or debt reduction. FCF ex SBC also deducts stock-based compensation and shows how much cash generation remains after SBC.
🧮 Calculation
🎯 What does this mean for investors?
- High free cash flow indicates that a company has strong financial strength – independent of reported earnings.
- It is often a solid basis for sustainable dividends and share buybacks.
- Declining FCF can be a warning sign, even if reported earnings remain stable.
📘 Revenue Growth
📈 What is it?
Revenue growth shows how much a company’s sales have changed compared to the previous year – both on a trailing basis (TTM) and based on forward projections.
🧮 How is it calculated?
Forward = (Expected revenue ÷ Revenue in prior year − 1) × 100
Forward growth is based on analyst estimates for the current fiscal year.
🏛️ Why is it important?
Rising revenue signals growing demand, business expansion, and market share gains – especially important for growth-oriented companies.
🧮 Calculation
🎯 What does this mean for investors?
- Growth is the engine of long-term value creation – especially in tech and growth sectors.
- What matters is not just current growth, but its sustainability.
- Forward projections reflect whether analysts expect continued momentum – or a slowdown.
📘 EBITDA Growth
📈 What is it?
EBITDA growth shows how much a company’s operating profit (before interest, taxes, depreciation, and amortization) has increased or decreased compared to the previous year.
🧮 How is it calculated?
Forward = (Expected EBITDA ÷ EBITDA from prior year − 1) × 100
The forward estimate is based on analyst projections for the current fiscal year.
🏛️ Why is it important?
Growing EBITDA indicates improving operational profitability – regardless of financing or accounting effects.
🧮 Calculation
🎯 What does this mean for investors?
- Strong EBITDA growth signals operational efficiency and scalability – especially during growth phases.
- EBITDA growth can be an early indicator of margin and earnings expansion – but should be assessed alongside revenue and EBIT.
📘 EBIT Growth
📈 What is it?
EBIT growth shows how much a company’s operating profit (after depreciation, but before interest and taxes) has increased compared to the previous year.
🧮 How is it calculated?
Forward = (Expected EBIT ÷ EBIT from prior year − 1) × 100
The forward estimate is based on analyst projections for the current fiscal year.
🏛️ Why is it important?
EBIT growth is a direct indicator of a company’s business performance – taking into account capital intensity through depreciation.
🧮 Calculation
🎯 What does this mean for investors?
- Rising EBIT signals improving operating profitability – even after accounting for depreciation.
- It’s especially important for evaluating companies with significant capital expenditures.
- Combined with revenue and EBITDA growth, EBIT growth provides a well-rounded view of operational progress.
📘 Net Income Growth
📈 What is it?
Net income growth shows how much a company’s bottom-line profit has increased or decreased compared to the previous year – both on a trailing basis (TTM) and based on analyst projections.
🧮 How is it calculated?
Forward = (Expected net income ÷ Net income from prior year − 1) × 100
The forward estimate reflects analysts’ expectations for the current fiscal year.
🏛️ Why is it important?
Net income is the ultimate measure of profitability. Growing net income signals stronger efficiency, cost control, and sustainable earnings power.
🧮 Calculation
🎯 What does this mean for investors?
- Stronger net income boosts valuation, dividend potential, and investor confidence.
- If profits stall while revenue grows, it may signal margin pressure.
📘 Free Cash Flow Growth
📈 What is it?
Free cash flow (FCF) growth shows how a company’s available cash – after covering operating expenses and capital expenditures – has changed compared to the previous year.
🧮 How is it calculated?
🏛️ Why is it important?
Free cash flow reflects real financial strength. Growing FCF indicates more flexibility for dividends, share buybacks, and reinvestment.
🧮 Calculation
🎯 What does this mean for investors?
- Declining FCF may point to rising investments, increasing costs, or weaker operating performance.
- Especially for dividend investors, FCF growth is critical – since dividends are paid from actual available cash.
- A negative trend isn't always bad, but it deserves closer attention.
📘 Gross Margin
📈 What is it?
Gross margin shows how much of a company’s revenue remains after deducting the direct costs of goods sold (like materials and production). It represents the company’s “raw profit” before fixed costs, taxes, and interest.
🧮 How is it calculated?
Or simply: Gross Margin = Gross Profit ÷ Revenue × 100
🏛️ Why is it important?
Gross margin indicates how efficiently a company can produce or procure what it sells. It is a key measure of product-level profitability and pricing power.
🎯 What does this mean for investors?
- A high gross margin suggests strong pricing power and efficient production.
- Falling margins may signal rising input costs or competitive pressure.
- Compared to peers, gross margin offers insights into the quality of a business model.
📘 EBITDA Margin
📈 What is it?
The EBITDA margin shows how much of a company’s revenue remains as operating profit before interest, taxes, depreciation, and amortization.It reflects operating efficiency without being distorted by financing or accounting factors.
🧮 How is it calculated?
🏛️ Why is it important?
The EBITDA margin reveals how much operating income a company generates per dollar of revenue – independent of capital structure and tax effects.
🧮 Calculation
🎯 What does this mean for investors?
- A high EBITDA margin reflects strong core profitability – before accounting distortions.
- It allows for effective comparisons across companies and sectors.
- A stable or growing margin signals efficient cost control and business scalability.
📘 EBIT Margin
📈 What is it?
The EBIT margin shows what percentage of revenue remains as operating profit after depreciation but before interest and taxes.
🧮 How is it calculated?
🏛️ Why is it important?
The EBIT margin reflects a company’s core profitability while accounting for capital intensity (e.g. machinery, infrastructure). It’s especially useful for comparing businesses with different levels of depreciation.
🧮 Calculation
🎯 What does this mean for investors?
- A high EBIT margin shows that the company remains efficient even after factoring in depreciation.
- It’s especially relevant for capital-intensive industries.
- Stable or rising EBIT margins over time are a strong indicator of pricing power and business quality.
📘 Net Margin
📈 What is it?
Net margin shows how much of a company’s revenue remains as bottom-line profit after deducting all costs, interest, taxes, and depreciation.
🧮 How is it calculated?
🏛️ Why is it important?
Net margin reflects a company’s overall efficiency – across operations, financing, and taxation. It shows how much actual profit is generated from each dollar of revenue.
🧮 Calculation
🎯 What does this mean for investors?
- A high net margin means the company is not only strong operationally but also manages financing and taxes efficiently.
- Peer comparisons reveal business quality and competitiveness.
- Declining margins despite revenue growth can be a red flag for rising costs or inefficiencies.
📘 Free Cash Flow Margin | ex SBC
📈 What is it?
The Free Cash Flow Margin shows how much free cash flow a company generates relative to its revenue. In simplified terms, free cash flow is calculated as operating cash flow minus capital expenditures. The Free Cash Flow Margin ex SBC additionally accounts for stock-based compensation (SBC). While SBC does not represent a direct cash outflow, issuing shares as compensation can dilute existing shareholders. Therefore, SBC is deducted from free cash flow in this adjusted metric.
🧮 How is it calculated?
Free Cash Flow Margin ex SBC = (Free Cash Flow − SBC) ÷ Revenue × 100
🏛️ Why is it important?
The Free Cash Flow Margin shows how efficiently a company converts its revenue into free cash flow. Strong free cash flow can provide financial flexibility for dividends, share buybacks, debt repayment, or further investments. The ex SBC version additionally accounts for the economic impact of stock-based compensation and therefore provides a more conservative view of cash generation from a shareholder perspective.
🧮 Calculation
🎯 What does this mean for investors?
- A high Free Cash Flow Margin shows that a company converts a high proportion of its revenue into free cash flow.
- This can provide greater financial flexibility for dividends, share buybacks, debt repayment, or investments.
- The Free Cash Flow Margin ex SBC additionally accounts for potential shareholder dilution from stock-based compensation.
- The long-term trend is particularly important. Declining margins can, for example, result from higher investments, changes in working capital, or weaker operating performance.
📘 Equity Ratio
📈 What is it?
The equity ratio indicates what portion of a company’s total assets is financed by shareholders’ equity – in other words, how much it relies on its own capital.
🧮 How is it calculated?
🏛️ Why is it important?
A high equity ratio reflects financial strength and stability, especially during downturns. It’s a key indicator of a company’s solvency and long-term risk profile.
🧮 Calculation
🎯 What does this mean for investors?
- Companies with high equity ratios are generally more resilient and less dependent on external debt.
- Low equity ratios can signal higher risk or aggressive financial strategies.
- Important: Always assess the equity ratio in combination with the return on equity (ROE). This shows not just how stable the company is – but also how efficiently it uses shareholder capital.
📘 Return on Equity (ROE)
📈 What is it?
Return on equity (ROE) shows how efficiently a company uses its shareholders’ equity to generate profit. In other words: how much net income is earned per dollar of equity.
🧮 How is it calculated?
🏛️ Why is it important?
ROE is a core profitability metric. It helps investors understand whether a company delivers attractive returns on the capital provided by its shareholders.
🧮 Calculation
🎯 What does this mean for investors?
- A high ROE indicates that the company is using its capital efficiently and profitably.
- It’s especially meaningful for capital-intensive businesses or firms with high equity bases.
- Important: A very high ROE can also result from high debt levels – always interpret it alongside the equity ratio to assess financial health.
📘 Return on Capital Employed (ROCE)
📈 What is it?
ROCE measures how efficiently a company generates profits from its total capital – including both equity and interest-bearing debt.
🧮 How is it calculated?
It evaluates the return on all capital employed, regardless of how it’s financed.
🏛️ Why is it important?
ROCE is ideal for comparing companies with different financing structures. It shows how well management uses capital to create value for both shareholders and creditors.
🧮 Calculation
🎯 What does this mean for investors?
- A high ROCE means the company uses its capital efficiently – regardless of whether it's funded by debt or equity.
- The higher the ROCE compared to peers, the more value the company creates with its invested capital.
- Especially relevant for capital-intensive sectors like industrials, energy, or infrastructure.
📘 Return on Invested Capital (ROIC)
📈 What is it?
ROIC measures how efficiently a company generates returns from the capital invested in its core operations – regardless of whether the capital comes from equity or debt.
🧮 How is it calculated?
- NOPAT = Net Operating Profit After Taxes
- Invested Capital = Operating assets minus non-interest-bearing liabilities
🏛️ Why is it important?
ROIC is one of the most accurate indicators of capital efficiency. Unlike return on equity, it is not distorted by leverage and shows how much value is created for all capital providers.
🧮 Calculation
🎯 What does this mean for investors?
- A high ROIC shows how effectively a company uses the capital that is truly invested in its core operations.
- Unlike ROCE, ROIC focuses only on the capital that is actively used to run the business – and that requires a return (i.e. interest-bearing).
- Especially useful when comparing companies with large amounts of excess cash or non-interest-bearing liabilities – giving a more realistic picture of capital efficiency.
📘 Leverage Ratio (Debt-to-Equity)
📈 What is it?
The leverage ratio indicates how much a company relies on interest-bearing debt (such as loans and bonds) relative to its shareholders’ equity.
🧮 How is it calculated?
🏛️ Why is it important?
This ratio helps assess a company’s financial structure and risk profile. High leverage can enhance returns – but also increases exposure to interest rate changes and financial stress.
🧮 Calculation
🎯 What does this mean for investors?
- A low leverage ratio signals financial strength and independence.
- A higher ratio can improve returns in good times but increases risk during downturns or rising interest rate periods.
- 👉 Always interpret in the context of industry, capital intensity, and interest rate environment.
📘 SBC | in % Revenue
📈 What is it?
SBC (Stock-Based Compensation) refers to equity-based compensation granted by a company to its employees and executives. The percentage shows SBC relative to revenue.
🧮 How is it calculated?
SBC as % of Revenue = (SBC ÷ Revenue) × 100
🏛️ Why is it important?
Stock-based compensation is a real cost factor for shareholders. It can increase the number of shares outstanding and therefore dilute existing shareholders. The percentage of revenue shows how heavily a company relies on equity-based compensation and how significant this form of compensation is relative to the size of the business.
🧮 Calculation
🎯 What does this mean for investors?
- A lower figure is generally positive: Stock-based compensation is relatively small compared with the company's revenue.
- A high figure can indicate greater reliance on stock-based compensation and a higher potential risk of dilution. However, it is also important to consider whether the company offsets dilution through share buybacks.
- The trend over time should also be considered. A high but declining percentage presents a different picture from a persistently high or increasing percentage.
- A single-digit SBC-to-revenue ratio is not unusual among many growth-oriented and technology companies.
📘 SBC as % of FCF
📈 What is it?
SBC (Stock-Based Compensation) refers to equity-based compensation granted by a company to its employees and executives. The percentage shows SBC relative to free cash flow (FCF).
🧮 How is it calculated?
SBC as % of FCF = (SBC ÷ Free Cash Flow) × 100
🏛️ Why is it important?
Stock-based compensation is a real cost factor for shareholders. It can increase the number of shares outstanding and therefore dilute existing shareholders. The percentage of free cash flow shows how significant SBC is relative to the cash generated by the company. Since SBC is non-cash compensation, it is typically not deducted as a cash outflow when calculating FCF.
🧮 Calculation
🎯 What does this mean for investors?
- A lower value is generally favorable. Stock-based compensation is relatively small compared with the company's cash generation.
- A high value means that SBC represents a significant portion of the company's reported free cash flow, even though SBC itself is non-cash.
- The higher the value, the more significant SBC can be as an economic cost to shareholders, particularly when it results in share dilution.
📘 SBC Growth 1Y
📈 What is it?
SBC Growth 1Y shows how much a company's stock-based compensation has changed compared to the previous year.
🧮 How is it calculated?
🏛️ Why is it important?
SBC Growth shows whether stock-based compensation is becoming more or less significant for shareholders. If SBC increases significantly, it can lead to greater shareholder dilution over time. At the same time, SBC is a non-cash expense that reduces earnings on the income statement but is added back in the cash flow statement.
🧮 Calculation
🎯 What does this mean for investors?
- A high positive value is generally negative, as rising SBC can increase the burden on shareholders, particularly through potential dilution.
- What matters is whether the development of SBC is sustainable over the long term. Some level of SBC is common among many growth and technology companies.
📘 Share Count Growth 1Y
📈 What is it?
Share Count Growth 1Y shows how much the number of shares outstanding has increased or decreased over a one-year period.
🧮 How is it calculated?
🏛️ Why is it important?
The number of shares determines how many shares the company's earnings and assets are distributed across. If the share count decreases, existing shareholders' relative ownership increases. If it increases, existing shareholders are diluted. The metric therefore makes dilution and share buybacks directly visible.
🧮 Calculation
🎯 What does this mean for investors?
- A negative value is generally positive, as the number of shares outstanding is decreasing.
- A positive value indicates dilution of existing shareholders.
- A declining share count is not automatically positive: It also matters at what price the shares are repurchased and how the buybacks are financed.
📘 Shareholder Yield
📈 What is it?
Shareholder Yield measures how much capital a company returns to shareholders or uses to reduce debt relative to its market capitalization. It goes beyond dividend yield by also including share buybacks and debt reduction.
🧮 How is it calculated?
🏛️ Why is it important?
Dividend yield only tells part of the story. Companies can also return capital through share buybacks, while reducing debt can strengthen the balance sheet. Shareholder Yield combines all three components into one metric, giving investors a broader view of how a company uses its capital.
🧮 Calculation
🎯 What does this mean for investors?
- A higher Shareholder Yield generally indicates more capital being returned to shareholders or used to reduce debt.
- The mix matters: dividends, buybacks, and debt reduction can affect shareholders in different ways.
- Share buybacks are most beneficial when shares are repurchased at attractive valuations.
- Investors should also consider whether dividends, buybacks, and debt reduction are sustainable over time.
📘 Earnings per share (EPS)
📈 What is it?
Earnings per Share (EPS) shows how much profit is attributable to a single share – and is one of the most important metrics for evaluating a company's performance.
🧮 How is it calculated?
The diluted share count reflects potential new shares that could be issued through options, convertible bonds, or other rights.
🏛️ Why is it important?
EPS is the basis for many key valuation metrics like P/E ratio, PEG ratio, or payout ratio. It enables comparisons of profitability across companies, regardless of their size.
🧮 Calculation
🎯 What does this mean for investors?
- EPS captures per-share profitability and is especially useful for comparisons over time or with analyst estimates.
- Rising EPS may signal consistent growth or share buybacks.
- Important: Always use diluted EPS for more realistic valuations – especially in companies with stock-based compensation.
📘 Free cash flow per share (FCF per share)
📈 What is it?
Free Cash Flow per Share shows how much free cash flow a company generates per outstanding share – after investments, but before dividends or debt repayments.
🧮 How is it calculated?
Free cash flow is calculated as operating cash flow minus capital expenditures (CapEx).
🏛️ Why is it important?
FCF per Share reveals how much real cash is available per share – useful for dividends, buybacks, or reducing debt. Unlike net income, free cash flow is harder to manipulate and often seen as a more reliable metric.
🧮 Calculation
🎯 What does this mean for investors?
- High FCF per share signals strong financial flexibility.
- It shows how much capital the company can effectively reinvest or return to shareholders.
- Particularly relevant for dividend payers and capital-efficient businesses.
📘 Short interest
📈 What is it?
Short interest indicates how many shares of a company are currently sold short – that is, borrowed and sold by investors who expect the price to decline.
🧮 How is it calculated?
It reflects the percentage of a company’s shares that are being shorted relative to the total shares available.
🏛️ Why is it important?
Short interest serves as a sentiment indicator: A high value may signal skepticism or bearish expectations – but also increases the potential for a short squeeze if prices rise unexpectedly.
🧮 Calculation
🎯 What does this mean for investors?
- Low short interest usually indicates market confidence in the company.
- High short interest can be a warning sign – or an opportunity if sentiment shifts.
- Especially relevant in volatile markets or ahead of key earnings releases.
📘 Employees
📈 What is it?
The employee count shows how many people a company employs worldwide – offering insights into its size, structure, and business model.
🧮 How is it calculated?
🏛️ Why is it important?
It helps assess operational scale, labor intensity, and cost structure. Combined with revenue and profit, it enables key metrics like revenue per employee or productivity.
🧮 Calculation
🎯 What does this mean for investors?
- A high headcount can signal operational complexity – but also significant growth capacity.
- Revenue per employee is a key indicator of efficiency.
- Especially useful for comparing tech, industrial, or service-heavy companies.
📘 Revenue per employee
📈 What is it?
Revenue per employee indicates how much revenue a company generates on average per employee – a key measure of efficiency and productivity.
🧮 How is it calculated?
The employee count is typically taken from the most recent annual report.
🏛️ Why is it important?
This metric helps compare business models – especially between labor-intensive and technology-driven companies. A high value suggests automation, operational efficiency, or strong value creation per head.
🧮 Calculation
🎯 What does this mean for investors?
- A high revenue per employee indicates a scalable and margin-strong business model.
- A low figure may reflect labor-intensive operations or lower value-add.
- Especially helpful when comparing tech companies to industrial or service sectors.
Hub Group, Inc. Class A Stock Analysis
Analyst Opinions
19 Analysts have issued a Hub Group, Inc. Class A forecast:
Analyst Opinions
19 Analysts have issued a Hub Group, Inc. Class A forecast:
Hub Group, Inc. Class A Events
Past Events
|
FEB
5
Q4 2025 Earnings Call
8 months ago
|
|
OCT
30
Q3 2025 Earnings Call
11 months ago
|
StocksGuide Free
Hub Group, Inc. Class A — Q4 2025 Earnings Call
1. Management Discussion
Hello, and welcome to the Hub Group Preliminary Fourth Quarter and Full Year 2025 Results Conference Call. It is now my pleasure to turn the call over to the company. You may now begin.
Hello, and welcome to the Hub Group Preliminary Fourth Quarter and Full Year 2025 Results Conference Call. Joining on the call are Phil Yeager, Hub Group's President, Chief Executive Officer and Vice Chairman; and Kevin Beth, Chief Financial Officer and Treasurer.
Statements made on this call that are not historical facts are forward-looking statements. 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 those statements. Further information on these risks and uncertainties are included at the end of our press release and in our most recent Form 10-K and other periodic reports filed with the SEC, which are posted on our website.
The financial results that we will be discussing today are preliminary and may change, including as a result of adjustments that may arise in connection with the ongoing audit of our consolidated financial statements for the year ended December 31, 2025. There could be no assurance that the company's final results will not differ from the preliminary results and any changes could be material. Finally, the preliminary financial results should not be viewed as a substitute for full financial statements prepared in accordance with GAAP and are not necessarily indicative of results that may be achieved in future periods. I now turn the call over to CEO, Phil Yeager.
Good afternoon, and welcome to Hub Group's conference call to discuss our preliminary fourth quarter 2025 financial results. Joining me today is Kevin Beth, Hub Group's Chief Financial Officer; and Garrett Holland, our Senior Vice President of Investor Relations. Before we dive into our preliminary results, as you saw in the press release we issued this afternoon, in the course of our quarter and year-end closing process, we identified a calculation error that resulted in the understatement of purchase transportation costs and accounts payable. As a result, we are delayed in finalizing our financial results for the fourth quarter and full year 2025. We will restate results for earlier quarters in 2025 when we file our 10-K. Accuracy and transparency in reporting on our performance is of the utmost importance at Hub Group, and we have taken steps to strengthen and enhance our controls.
Kevin will discuss this in greater detail, but as noted in our press release, there is no expected impact on total cash and cash equivalents or operating cash flow for any periods, and we have provided estimated impact of purchase transportation and warehousing costs for the 9 months ended September 30, 2025, based on our team's initial review.
Now I'd like to turn to our preliminary financial results that we are able to review today, along with details on execution of our strategy and trends we are seeing in the market. The last year was a continuation of a challenging market cycle with stable demand and an oversupply of capacity. We performed well and focused on controlling what we can control, delivering record service levels across our platform and in particular, our Intermodal segment, while managing our costs, adding new business wins and investing in our business, including equipment, technology and acquisitions. We executed on our strategy while maintaining our strong balance sheet and cash flow profile. 2025 preliminary operating cash flow is approximately $194 million.
I will now discuss our segment performance beginning with ITS. Fourth quarter ITS revenue declined slightly year-over-year. We experienced a lighter peak season than last year in this segment while continuing to focus on cost management and operational discipline in both Intermodal and Dedicated. Intermodal performance remained strong, and we delivered another year of record service and market share gains. For the fourth quarter, volumes increased 1% year-over-year, while revenue per load was flat, but up 3% sequentially. Transcon volume was up 1%, Local East was down 4% and Local West was down 1%, while refrigerated volumes increased 150% and Mexico volumes increased 33%. Intermodal volume finished October, up 2% year-over-year, down 3% year-over-year in November and up 3% year-over-year in December. In January, intermodal volume decreased 4% year-over-year with significant impact from the winter storm against a challenging growth comparison from a year ago as shippers pulled forward orders ahead of tariffs.
We worked extremely well with our rail partners during peak, delivering a 90 basis point improvement in year-over-year on-time performance, positioning us well for Intermodal volume growth in 2026 bid season. Throughout the year, our excellent service performance and the consolidation with our rail partners drove enhanced engagement with our customers who are excited about the opportunity for improved transits and costs in a single rail network, which along with our consistent focus on cost reduction and efficiency gains, we believe will position us well in Intermodal in 2026 and beyond. Given the strong value proposition across our business lines driven by quality service and savings, especially for the Intermodal offering, we remain optimistic regarding the 2026 bid cycle.
Incumbency and strong service on awards in recent years is expected to provide a strong foundation to grow from, and new logos have engaged with us to establish service. We remain focused on supporting growth with customers, building on the momentum from business awarded last year, and further improving network balance to reduce backhaul costs.
With respect to demand, shippers are cautiously optimistic with potential benefits from stimulus measures countering lingering inflationary pressure.
In Dedicated, revenue declined in the fourth quarter due to lost sites from earlier in the year, but we were able to partially offset this impact through operational discipline and service improvements. We have significantly improved service levels, which is leading to a strong pipeline of growth opportunities with existing clients, and we are excited about the recent trends in the business.
Fourth quarter Logistics segment revenue reflects softer demand across business lines, partially offset by new business wins. In CFS, we have performed well through our warehouse consolidation leading to a 630 basis point improvement year-over-year in space utilization. We see additional opportunities for further efficiency improvements, and we expect to be better positioned for further growth.
In Final Mile, we are in the process of completing the onboarding of significant new business wins, which has helped to offset negative mix and lost sites. In order to successfully onboard the business, we have made investments in the relationships that are continuing into the first quarter to ensure a seamless transition and start-up.
Although the volume underperformed in the fourth quarter due to onboarding delays and minor scope changes, we are confident that the steps we are taking now will help drive volume growth well into the future. For the fourth quarter, brokerage volumes declined 10% year-over-year with revenue per load down 4% as LTL volumes slowed while truckload and refrigerated volume benefited from project freight and market tightness in the latter portion of the quarter. Market conditions have remained tighter due to weather as we enter 2026, and we are seeing opportunities to support customers with spot opportunities. Our fourth quarter productivity improved 41% year-over-year due to our investments in technology and our restructuring, and we expect this to position us well for the current market backdrop and as conditions evolve.
Finally, Managed Transportation performed well throughout 2025 and is expected to continue to perform well in 2026 as we brought on new business in the fourth quarter and have a strong pipeline of additional growth opportunities. Our strong value proposition of continuous improvement, savings and technology continues to resonate with our clients. Our fourth quarter productivity improved 12% compared to the prior year, which is enabling our ability to invest in the business and position for growth. We are pleased with our operational performance in 2025 in challenging market conditions. As we look ahead to 2026, we believe we are well positioned to support our customers in this evolving environment and excited about our opportunities for growth. We continue to see signs of tightening capacity due to regulatory enforcement, along with challenging market conditions and cost inflation forcing out undercapitalized carriers.
However, demand and inventory levels remain balanced and the consumer has stayed resilient. With the increased tax refund disbursements, we are hopeful that supply and demand will move to equilibrium, leading to opportunities for intermodal conversion and growth across all our services. It is too early to determine whether a sustained market inflection is imminent, but we believe we are well positioned regardless of market conditions due to our best-in-class service and team, efficient cost structure, financial flexibility and ongoing strategic investments.
With stabilizing market conditions and excellent service as well as rail consolidation expected in 2027, we have the ability to convert business from over-the-road to rail. We believe our logistics services are well positioned due to our focus on productivity, service and continuous improvement.
Last, we maintain a strong balance sheet and capital flexibility to invest in our business for the long term. We expect to remain disciplined with capital deployment, continuing a balanced approach, returning capital to shareholders through our dividend and share repurchases, while evaluating potential M&A opportunities that meet appropriate return thresholds. As of today, we have approximately $142 million remaining under our share repurchase program. To sum up, although there is some uncertainty near term in the industry, we see all these drivers creating an exciting backdrop for Hub Group in 2026 and beyond.
With that, I will hand the call over to Kevin to discuss our preliminary financial results.
Thank you, Phil. Before walking through our preliminary fourth quarter and full year 2025 financial results and our 2026 outlook, I want to touch on the accounting item outlined in our release that Phil mentioned at the start of the call. The company identified an error that resulted in an understatement of purchased transportation costs and accounts payable in the first 9 months of 2025. The total amount of the reduction to accounts payable and purchased transportation costs related to this issue that was recorded during these periods is $77 million. Based on our analysis to date, we estimate the correction of the error will increase purchased transportation and warehousing costs for the 9 months ended September 30, 2025, but cannot yet estimate what the resulting increase to purchase transportation and warehousing costs and accounts payable will be.
There is no expected impact on Hub's total cash and cash equivalents or operating cash flows for any periods. We are working to report our full and final financial results for 2025 as soon as possible. We plan to include the restated quarterly financial information for Q1, Q2 and Q3 2025 in our 2025 Form 10-K. The team is committed to transparency and resolution of the accounting matter.
Now turning to our preliminary results. For the full year, we expect consolidated operating revenue of $3.7 billion, a 7% decrease over prior year. Full year 2025 ITS segment operating revenue is expected to be approximately $2.2 billion, which includes low single-digit year-over-year decrease during the fourth quarter. Fourth quarter Intermodal volume growth of 1% and stable revenue per load, despite lower surcharge revenue was offset by lower dedicated revenue during the quarter. We realized peak surcharges of approximately $900,000 in Q4, representing a year-over-year difference of $4 million. Full year Logistics segment operating revenue is expected to be approximately $1.6 billion, inclusive of a high single-digit year-over-year decrease during the fourth quarter. Fourth quarter performance reflects lower brokerage revenue, select customer attrition at CFS and softer underlying Final Mile demand, partially offset by new customer onboardings.
Building on Phil's earlier remarks, peak season activity was largely in line with expectations, but muted overall relative to prior years. We saw select customers reaching out with project freight activity, and we saw pockets of tightness, particularly off the West Coast to start the quarter. However, many shippers pulled forward inventory over the course of the year and had less urgency to move product. Tightening capacity conditions later in the quarter reflected the combination of lower driver supply from policy actions and weather disruptions. Freight market dynamics clearly remain fluid and closer to balance than any time in recent years.
Now turning to our cash flow. Preliminary cash flow from operations for the full year was $194 million. Our full year CapEx was approximately $45 million, in line with our estimate of less than $50 million. Integrations related to the acquisitions of Martin Intermodal assets and West Coast Final Mile Provider, SITH LLC are complete and the businesses are performing well.
Importantly, our balance sheet and financial position remains strong. Debt at December 31, 2025, totaled approximately $229 million, which after giving effect to cash of approximately $113 million, resulted in net debt of approximately $116 million, a decrease of approximately $50 million compared to December 31, 2024. In 2025, we returned $44 million to shareholders through dividends and stock repurchases.
Turning to our preliminary 2026 guidance. Revenue is projected to be between $3.65 billion to $3.95 billion for the full year. For our ICS segment, we expect revenue will largely be driven by Intermodal volume growth through the year. We expect Dedicated performance will be slightly lower compared to 2025 due to lost customer sites, which will continue to offset new awards in the near term. For Logistics, excluding our brokerage business, we expect recovering revenue through the year due to new business wins and improving profitability led by Final Mile and Managed Transportation. For brokerage, we expect volume pressure continues in the near term and weighs on Logistics segment profitability.
For the year, we expect capital expenditures of $35 million to $45 million as we continue to focus on technology projects and opportunistic replacements for tractors, given favorable purchase terms and recent changes for bonus depreciation. We do not plan to purchase containers in 2026. As Phil noted, our capital allocation plan continues to guide us and starts with investing in the business to support long-term growth and improved efficiency across tractors, technology and container capacity. As you know, we consider M&A opportunistically to complement organic growth and the bar for M&A is high, given our disciplined due diligence process and return focus.
And finally, we remain focused on returning capital directly to shareholders through our quarterly dividend and share repurchases. Our current dividend also returns approximately $7.5 million to shareholders quarterly. And as Phil noted, we have approximately $142 million remaining under our current share repurchase authorization. We expect to continue to balance capital deployment priorities and opportunistically repurchase shares as market conditions and opportunities evolve. Our balance sheet is in great shape and has been fortified by the cash flow resiliency of our operating model through this industry downturn. We remain focused on ways to maximize shareholder value. We will share additional details on the 2026 outlook when we release our full fourth quarter and full year 2025 financial results.
And now I'll turn it back over to Phil for his closing remarks.
Thanks, Kevin. To sum up for today, freight market conditions remain challenging through 2025, but the Hub Group team adapted and remained focused on serving our customers and controlling expenses. To start 2026, we are seeing positive trends in the marketplace as reflected in improving ISM new orders and spot market activity. Our balance sheet and cash generation remains strong and should provide significant capital flexibility as we remain disciplined with capital deployment. Operating momentum and a strong focus on execution has carried us into 2026, and we will continue to lead with service as the freight market backdrop evolves. Phil and Joyce Yeager founded this company 55 years ago based on the principles of service, integrity and innovation. And the success of this business has been and continues to be based on living those values every day. We are excited about the growth prospects for Hub Group and extending that legacy of performance.
Ladies and gentlemen, this concludes today's call with Hub Group. Thank you for joining. You may now disconnect.
Hub Group, Inc. Class A — Q3 2025 Earnings Call
1. Management Discussion
"
"
"
2. Question Answer
" Wolfe Research
" Susquehanna Financial Group
"
" Stifel, Nicolaus & Company
" Evercore ISI Institutional Equities
" JPMorgan Chase & Co
" Stephens Inc.
" Robert W. Baird & Co.
" TD Cowen
" UBS Investment Bank
" Barclays Bank PLC
Hello, and welcome to the Hub Group Third Quarter 2025 Earnings Conference Call. Phil Yeager, Hub's President, Chief Executive Officer and Vice Chairman; and Kevin Beth, Chief Financial Officer and Treasurer, are joining the call. [Operator Instructions]
Statements made on this call and in other reference documents on our website that are not historical facts are forward-looking statements. 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 the filings with the SEC, which are on our website. In addition, on today's call, non-GAAP financial measures will be used. Reconciliations between GAAP and non-GAAP financial measures are included in our earnings release and quarterly earnings presentation. As a reminder, this conference is being recorded.
It is now my pleasure to turn the call over to your host, Phil Yeager. You may now begin.
Good afternoon, and thank you for joining Hub Group's third quarter earnings call. Joining me today is Kevin Beth, our Chief Financial Officer, and Garrett Holland, our Senior Vice President of Investor Relations. Before we begin our review of the current market and Hub Group's performance, I wanted to thank all of our team members across North America for their constant effort and focus on delivering for our customers and organizations in this evolving environment. I'd like to begin by discussing near-term market conditions and our current viewpoint on supply and demand dynamics. International shipping volume was pulled forward in the third quarter, but we did not see that inventory materially begin to impact domestic shipping until following the Labor Day holiday.
This has led to a delayed West Coast peak season from what we originally anticipated. Strong West Coast shipping demand in September continued through October, and our customers are indicating that will be maintained into November, which is much closer to typical seasonality. We believe that the recently established regulatory requirements in our industry will be a positive catalyst to balance the supply of capacity and with active enforcement and demand strength should lead to improving market conditions over time. These factors, along with our investments in our intermodal business and the prospects of a Transcontinental Rail merger are creating a more positive framework for 2026 bid season and beyond.
As we referenced in our call last quarter, we are excited about the opportunities that a potential merger between our primary rail partners presents to drive increased intermodal conversion in shorter-haul lanes while growing share gain opportunities due to reduced transit times and improved service performance. These improvements would enhance asset utilization and in aggregate, reduce overall costs, leading to significant opportunities for growth. In the current market, rail services remain strong, and we are excited about the new lanes we are offering our customers in conjunction with our rail partners. In particular, the launch of a new integrated service in Louisville has led to conversion of existing volumes running less efficiently over Chicago and new customer wins in a short time frame.
We believe we are well-positioned to drive growth in the months ahead as bid season kicks off and over time, as the merger process progresses. We have remained focused on our strategic priorities and executed well in the third quarter. We closed on the acquisition of Marten Transport's Intermodal division, adding scale to a fast-growing and higher-margin segment of our Intermodal business. We also closed on the acquisition of SITH LLC, adding additional full-service locations and scale in Final Mile. We completed these while returning capital to shareholders, executing on our cost reduction program and maintaining excellent service for our customers.
In ITS, we delivered strong results with revenue that was slightly up and operating margins that improved 20 basis points year-over-year due to strength in Intermodal, which was offset by declines in Dedicated. We performed well in Intermodal with slightly improving volumes following double-digit growth in the third quarter last year as we are providing an excellent value proposition with our rail partners. As mentioned, peak volumes were not recognized in the quarter until September and have continued into the fourth quarter despite a pull forward of inventory. Transcon volumes declined 1%, Local West declined 2%, Local East declined 12%, while we grew Mexico nearly 300% and our refrigerated business 55% in the quarter. Revenue per load increased 2% due to improved mix, peak season surcharges and more balanced pricing.
We have also reduced costs in our network through lower linehaul costs, improving our in-sourced trade percentage by nearly 700 basis points and decreasing our maintenance and repair costs through higher in-sourcing levels. These improvements were offset by headwinds and repositioning costs to support peak demand at the end of the quarter and higher insurance costs. Overall, we are pleased with the momentum in our Intermodal business and the investments we are making to deliver growth. In Dedicated, higher volumes and revenue per tractor per day with core customers was not able to offset lost sites, impacting both revenue and profitability. We reduced equipment, maintenance, insurance and third-party carrier costs while onboarding new business in the quarter, which helped to balance revenue headwinds.
We are actively reallocating assets in preparation for growth with new and existing customers and believe that our high-end service capabilities, geographic density and dynamic model position us well for growth in the current market and the shifts in capacity occur. In the logistics segment, revenue declined 13% year-over-year, but we were able to improve operating margins by 10 basis points as our cost containment initiatives and performance in Final Mile and managed transportation helped to offset headwinds in brokerage. Last quarter, we announced significant onboardings in our Final Mile business totaling $150 million in annual revenue. Those onboardings are taking place now, and we are ramping volumes consistent with our expectations. The timing of the start-ups was delayed, but we are excited with the growth we are having with our customers as well as the integration of our most recent acquisition. These onboardings are helping to offset softness in our legacy Final Mile customers and position us well for strong growth in 2026.
In CFS, we are executing on in-sourcing space in our remaining third-party locations with a focus on maximizing our space utilization, which improved by 1,400 basis points year-over-year while delivering improved site productivity. The integration will be completed by the end of the first quarter of 2026 and along with new onboardings we brought on in September and have scheduled in the fourth quarter, will help drive further improvements in our margins. In brokerage, we continue to face headwinds with soft demand and limited spot market activity. We executed on a restructuring of the business during the quarter, which reduced costs and enhanced productivity by 7% year-over-year, while focusing our team on higher profitability areas to serve our clients.
Volumes declined 13% and revenue per load was down 5% in the quarter. However, we believe the actions we are taking to right-size our business and focus on revenue quality will position us for success in the future. Managed Transportation has performed exceedingly well, and we have new onboardings we recently signed, which will help deliver further growth. Our productivity has improved over 50% year-over-year, enhancing our margins due to our investments in automation and technology. We are excited about the momentum we have in this business due to the savings and visibility enhancements we are delivering to our customers. We are focused on controlling what we can control in this dynamic environment. We are reducing costs while investing in our business to deliver results in the near and long-term through our scale and integrated product offering. We are excited about the performance that our team is delivering and believe we are well positioned as an organization to support our customers and deliver for our shareholders.
With that, I will hand it over to Kevin to discuss our financial performance.
Thank you, Phil. I will walk through our financial results before commenting on our outlook. Our reported revenue for the third quarter was $934 million. Revenue decreased by 5% compared to last year but increased 3% sequentially. ITS revenue was $561 million, which is slightly greater than prior year's revenue of $560 million as steady Intermodal volume and 2% growth in revenue per load was partially offset by lower Dedicated revenue in the quarter. Additionally, lower fuel revenue of approximately $8 million negatively impacted the top line. The logistics segment revenue was $402 million compared to $461 million in the prior year due to lower volume and revenue per load in our brokerage business, exiting of unprofitable business and select customer attrition in CSS and sub-seasonal demand in Managed Transportation and Final Mile businesses. Lower fuel revenue of $6 million in the quarter also contributed to the decrease.
Moving down the P&L. For the quarter, purchase transportation and warehousing costs were $684 million, a decrease of $56 million from prior year due to strong cost controls as well as lower rail and warehouse expenses. This resulted in a 180-basis point improvement on a percent of revenue basis when compared to Q3 of 2024. Salaries and benefit expenses of $143 million were stable compared to the prior year as the impact from the EASO transaction offset expense initiatives. Total legacy headcount, which excludes acquisition employees, drivers and warehouse employees declined 5% from the prior year as we continue to manage headcount across the organization. Depreciation and amortization decreased $1 million over Q3 2024 due to our updated useful life assumptions. Insurance and claims expense were largely unchanged from prior year as we continue to realize benefits from our safety focus and training programs.
Our general and administration expenses declined by $3 million or 9% year-over-year. Altogether, our adjusted operating income decreased 4% year-over-year, but our adjusted operating income margin was 4.4% for the quarter and increased 10 basis points over the prior year. The IPS quarterly adjusted operating margin was 2.9%, a 20-basis point improvement over prior year. The third quarter logistics adjusted operating margin increased 10 basis points year-over-year at 6.1% despite the challenging brokerage environment and demand headwinds. Adjusted EBITDA was $88 million in the third quarter. Overall, Hub earned adjusted EPS of $0.49 in the third quarter, down from adjusted EPS of $0.52 in Q3 2024.
Now turning to our cash flow. Cash flow from operations for the first 9 months of 2025 was $160 million. Third quarter capital expenditures totaled $9 million, with spending weighted towards technology and warehouse equipment investments. Our balance sheet and financial position remains strong. Through the third quarter, we returned $36 million to shareholders through dividends and stock repurchases. We also closed on the acquisitions of Marten Intermodal assets and West Coast Final Mile provider, SIS LLC during the quarter. Net debt was $136 million, which is 0.4x adjusted EBITDA, below our stated net debt-to-EBITDA range of 0.75x to 1.25x and includes the Marten transaction. Adjusted EBITDA less CapEx was $79 million in the third quarter. We are pleased with our adjusted cash EPS of $0.60. The spread between adjusted EPS and adjusted cash EPS was $0.11 for the quarter, and we ended the quarter with $147 million of cash and restricted cash.
Turning to our 2025 guidance. We expect full year EPS in the range of $1.80 to $1.90 and revenue of $3.6 billion to $3.7 billion for the full year. We project an effective tax rate for the year of approximately 24.5%. We also expect capital expenditures to be less than $50 million for the year. Recall, the upper end of our prior revenue and EPS guidance ranges reflected benefits from a healthy peak season and related surcharges, along with the onboarding of sizable Final Mile business awards. Outside of quarter end activity, peak season has been muted to date rather than a stronger return to seasonality. Execution for the Final Mile awards has also been solid but start dates for some markets have shifted into the fourth and first quarters. The team continues to realize targeted cost savings, but benefits have been offset to a degree by revenue pressure.
Given muted demand and continued low visibility, we tempered expectations for the fourth quarter and narrowed our outlook accordingly. This outlook implies sequentially lower adjusted EPS during the fourth quarter at the midpoint. Realizing the upper end of our revenue and EPS guidance range would reflect a strong finish to peak season. The path to the lower end of the current guidance range would reflect further weakness in freight market activity. For the ICS segment, the Intermodal business continues to cycle challenging volume growth comparisons from a year ago, but revenue per load trends should continue to slowly improve in the stabilizing pricing environment. Lost sites and customer activity in the competitive one-way market are expected to continue to weigh on Dedicated's performance.
For logistics, excluding our brokerage business, during the fourth quarter, we expect further progress onboarding new Final Mile awards, sustained stronger profitability in Managed Transportation and stable CSS results sequentially. For brokerage, we expect volume pressure continues in the near term and weighs on logistics segment profitability. Market optimism to start the third quarter around the stabilizing tariff backdrop and potentially stronger peak season gave way to sustained softer demand across end markets. Nevertheless, the team was able to deliver improving margin performance year-over-year and sequentially for both the ITS and logistics segments.
Hub Group is not assuming market conditions quickly change and remains focused on execution. We remain confident in achieving the targeted $50 million of cost savings on a run rate basis by the end of the year and work to continuously improve profitability across business lines. Margin improvement and solid free cash flow through this challenging freight recession underscores the resilience of our operating model. The acquisition of Marten Intermodal also reflects our disciplined approach to capital deployment. Focused growth, cost controls and capital deployment should continue to support performance until the freight market conditions improve. We continue to manage the business for long-term growth, higher returns on capital and resilient free cash flow generation.
With that, I'll turn it over to the operator to open the line to any questions.
I would also like to remind participants that this call is being recorded, and a replay will be available on the Hub Group website for 30 days. [Operator Instructions] Our first question is from Scott Group of Wolfe Research.
So I think your call last quarter was like right after the UP-Norfolk announcement. And so, 3 months later, I'm guessing you've had some time to talk with customers. We're seeing some share shifts; IMC is moving some stuff around from one rail to another. I'm curious what you're hearing from customers. Do you think as you approach 2026 bid season, is there an opportunity for you guys to take share ahead of the merger closing, just sort of getting on to this combined UP-Norfolk early? Just overall, what you're hearing from customers, how you think you're positioned?
Yes. Great. Thanks, Scott. This is Phil. Yes, I think you're exactly right. We do look at some of the shifts that are occurring as an opportunity. We already have a great service product that we're delivering with Norfolk in particular, as well as GP. But with that capacity shift, there's now capacity available for us to sell into. As we enter bid season first and second quarter, we're going to have in bid over 80% of our intermodal network, and we think we have a great value proposition to go out and compete and win. I've been out visiting with a lot of customers. There is an extremely high level of engagement around this merger process. I think our customers see it as an opportunity not only to engage on new service, but a more resilient service as well as the market is likely going to be tightening given hopefully a positive demand backdrop.
So, I think the announcement of partnerships and the new lanes from Louisville are a great positive for us as well and things that we can engage with our customers on. But I would tell you, the feedback is overwhelmingly positive. We're excited about it and think it positions us well for this upcoming bid season.
Can you give an update on sort of volume trends throughout Q3, what you're seeing so far in Q4?
Yes, sure. Yes. So, we did see a little bit of a later peak than we had originally anticipated just given that air pocket and then the surge of incoming international demand. We expected that to flow through to the domestic side a little bit sooner than it did. So, July was flat. August was down 5%. September was up 6% and then October month-to-date is up 3%. And I would tell you the last couple of weeks here in October have been really strong. We're excited to see that momentum in discussions with customers. We're anticipating some of that demand will likely continue through November, leading up to the Thanksgiving holiday. I think it gets a little unclear after that. Typical seasonality would tell you things start to slow down at that point. But given the diversification we've done in our business model as a whole, that's really when we start to see our Final Mile business and e-commerce businesses start to ramp up, which can offset some of those headwinds.
And Scott, this is Kevin. I just like to point out, there is a business day difference where August had 1 less business day and September had one more. So those sort of canceled each other out. But we are excited and wanted to point out, we have had 6 consecutive quarters now of intermodal growth.
And then just lastly before I pass it on. You guys talk a lot about the free cash flow the business is generating. We've got you doing over $150 million of free cash flow this year. You're well below your leverage target and you bought back like, I don't know, $30 million or so of stock this year. Like why aren't you doing more with the cash you're generating in the balance sheet?
Yes. So good question, Scott. This is Kevin again. It's our capital allocation plan that we invest in our core business, we look at acquisitions and then we look at our capital allocation and how we get back to our shareholders. We feel that we've done all of those this year. We've had -- our CapEx has been a little muted compared to some prior years as we don't need to add additional containers. But we're still seeing our same $20 million to $25 million of IT enhancements, and our tractor replacement cycle has continued on as well. We spent over $50 million in acquisitions this past quarter with the Marten acquisition and the SITH LLC. And then we're still returning to our shareholders with our dividends, which we had another $7.5 million during this quarter. So, between all of those and the exciting pipeline that we feel we have on an M&A side, we think that we are allocating our cash effectively and think that we're doing the right things for the long-term of the business.
Our next question comes from Bascome Majors of Susquehanna Financial Group.
Maybe to follow up on Scott's opening question here. If you're successful in using your rail alignment to really grow share next year, what's the time line of when that could really show up in volumes, gross profit, bottom line? Just trying to understand when the opportunity and conversations happen and when the financial benefit, if you're successful, will really show up for us.
Sure. Yes. This is Phil. I think if you look at our bid schedule, it's actually gotten pulled forward the last several years. And our anticipation is that this year will be similar, just given some of the unknowns, our customers are trying to make sure they lock in capacity early. We are having really good dialogue with many of our customers as they're kicking off their RFP events. We do think about, call it, 48% or so, which is similar to this year will be bid and effective in the first quarter. And then we see bid and effective, call it, another 38% in the second quarter. So, you're talking about the vast majority of that business being in RFP and being effective in the first half of the year. And so that would be likely the timeline where you'd really start to see that take hold, I would say, call it, the second half of the year.
And just when you say bid and effective in the quarter, you mean by the end of the quarter?
Yes, sir.
It's actually moving.
Yes. The effect of the implementations typically will kind of move throughout a quarter, but the vast majority go in at the end of the quarter and then are effective starting that following quarter.
And in shorter-term, I mean, the midpoint of your guidance, which you called out, looks for earnings decline in the fourth quarter. Can you walk us through how you feel about seasonality in the first half of next year before this business potentially starts to ramp? Just to kind of level set the starting point for next year or before second half that looks like it could be very strong.
Sure, Bascome. This is Kevin. We think that we're going back to more of a normalized seasonality, which has been very hard the last couple of years between COVID and tariffs and the pull forward last year on -- related to the East Coast, West Coast port authorities and strikes. So, what we're anticipating is unlike what we saw in '25 with the pull forward in the first quarter is that we would see first quarter be sequentially down from fourth quarter and potentially the weakest quarter of the year. And then you'll see the ramp-up as we hit sort of that peak season in spring for the home improvement companies. And then you have a little lull there at around the holidays, Memorial and 4th of July and then a stronger third quarter leading into the peak season that we're in now. So, a little more normalized. But again, that is something that has been a couple of years since we've seen.
Our next question comes from Richard Harnan with Deutsche Bank.
So, gentlemen, we recently heard from one of your key railroad partners discussing some more aggressive competitive dynamics in association with its pending Transcontinental Rail merger. So maybe you can talk specifically about that. Are you noticing more aggressive competition? Is that allowing you to take more opportunity as maybe your rail partners lean into trying to capture more growth? Or is it making it more challenging? That's my first question.
Sure. Yes. This is Phil. Yes, I'd say it's definitely an opportunity, right? And you see volume moving off of one of our rail partners. There's certainly a desire and alignment to make sure that we can get that business back moving on their network. And we think we have a very strong value proposition to go deliver on that, both on service and costs. And so, I would tell you there's a great deal of alignment as we enter bid season and feel we're in a good position to go out and compete.
And then just could you tell us where we are with respect to like the Marten acquisition? So I think you said Kevin, down earnings in Q4. But I would think that with the Marten acquisition, you're talking about bringing that on and being accretive. So curious how that factors in and if like the volume figures you shared were inclusive of Marten, just like level set where we are in that acquisition.
Yes. Thanks for the question. Yes. So, Marten, we do expect to be slightly accretive this quarter. They just came on. We closed the deal the last day of the quarter. So, we're seeing that volume today. But right now, as we look ahead, we're still not sure exactly how long peak season is going to last. We do have some late year degradation of margins in both Dedicated and in Intermodal as you're using a lot of fixed cost and not the right amount of volume to utilize all that around the holidays. So that is sort of what standard happens in the ICS segment. And then on the logistics side, we do have -- while we have new business coming on in Final Mile, we do have some start-up costs that is going to pressure that -- those margins as well. So, between those things, right now, that's our best estimate of what we're going to see here in fourth quarter.
Our next question comes from Bruce Chan of Stifel.
Maybe just to start, I want to make sure that I understand the peak comments correctly because you said that it's been stronger in September and you expect some of the strength you've been seeing through October to continue into November, but you're also tempering the midpoint of your guidance on lower peak volumes. So maybe just help me to synthesize that, if you could.
Sure. Yes. I think the main thing is follow typical seasonality would tell you around or after the Thanksgiving holiday, intermodal volumes just start to slow down. And I would anticipate a sequential slowdown from October into November leading up to that point. So, it's really just the conclusion of peak that impacts the ITS margins on a sequential basis. From a logistics perspective, the new volume and business wins that we're bringing on both in CFS as well as in the Final Mile business are helping to keep us in a more stable footprint Q3 to Q4, where we are anticipating a similar sort of impact for brokerage, which would soften in the December time frame.
Now if we see things continue and November is more robust, that's certainly upside. If it continues like it did last year into December, that's certainly upside, but we were trying to build in what typical seasonality would tell you and obviously, dialogue with our customers around their expectations. But demand has been great in September. I think we did a really nice job. October was also very strong. And so, it's good to see a peak. And I would just also highlight that sets up a more positive framework for discussions as we enter this season as well.
I would like to just point out, though, last year, fourth quarter, we had $4.5 million of peak season surcharges, and we're not expecting to be anywhere close to that this year. On to the point, that it went all the way through the end of the year and well into January. And really, I think that was the pull forward of the port strike. So, I don't -- we don't see that phenomenon this year.
That's helpful. Maybe just a follow-up on that point. I guess, how are you feeling about your ability to cover any peak repositioning costs here with your surcharges just given that the volume expectations are maybe a little bit in sharper focus. And then if we do see that stronger peak materialize, are you going to have an offsetting impact on the margins?
No, no. I think we've done a really good job on our empty repositioning plan. We had some elevated costs in the third quarter, which were more than offset by surcharges, and it would be the same outcome here. And we're pretty diligent on setting those plans, making sure we have clarity with our customers on their expectations and then being in a position to support. So, I wouldn't anticipate repositioning costs have a material impact in a negative way at all.
Our next question comes from Jonathan Chappell of Evercore ISI.
Still, I want to tie a couple of things together here because it may be the most important thing, I think, as we try to transition to '26. You said 48% bid effective 1Q, 38% in 2Q. We have the potential positive tailwinds from the merger and maybe there's some clarity on it by that point, but still probably doesn't close until '27. And then on the other hand, you're kind of talking about potential slowing around the holidays, typical seasonality would have 1Q down on 4Q. So, are you expecting kind of a favorable demand backdrop that could help you with that 48% in 1Q and really kind of set the pace for yields for the rest of the year? Or is there a chance that by the time we have line of sight on a merger, it's kind of the second half of '26, and you really don't see that benefit you until bid season '27?
Yes. No, I think it's a good question. I think it's obviously a little early for us to be getting into 2026. But I would tell you the level of engagement I'm getting from customers and their desire to really start to take advantage of the service opportunities that could exist now is real. To your point, yes, I think as the integration process takes place is when you're really going to see that take hold. That's going to be when you start to be able to get some of the pricing that is probably more aggressive and takes advantage of those transits as well into place. So yes, do I think it will be much more material as the merger is closed and progresses? Absolutely. But I also think we're having those discussions now and customers are certainly highly engaged. And so, there is upside opportunity in '26.
I think you frame that with as well the tightening capacity backdrop likely through the regulatory requirements as well as just lower capital expenditures being below replacement levels. I think consumers getting some help with rate cuts and tax benefits. And then as I look at us more broadly, we've got a great balance sheet, great free cash flow, a ton of new business we're bringing on in Final Mile and managed trans and then the great backdrop that we have of a fantastic intermodal service product and additional cost outs. I think it's a good framework for 2026.
And a super quick follow-up, and I think this was kind of danced around a little bit, but maybe just to speak to it directly. East down 12% you would have thought the East maybe had a little bit of a better comp because of the threat of the East Coast port strikes last year at the end of the third quarter. Is that associated with what's been happening with Norfolk and CSX? Norfolk is your partner. They've directly called out the share shift there. Is that that? Or is it something completely outside of the potential rail merger?
No. Yes, I think it's a good question. We do not believe it's associated with anything going on there. I think if you look at our volumes last year, we were up 39%, I believe, in the third quarter in local East last year. We've seen opportunities to generate really strong returns off the West Coast and been allocating capacity there. I think that Eastern market did get more competitive. But if you look at it on a 2-year stack basis, we're still far exceeding market performance. And so, I think our view is we're still doing very well, but had such significant growth last year that we couldn't quite overlap it. Yes. If you look at the 2-year growth in the East, it's 23%. So still very healthy.
Our next question comes from Brian Ossenbeck of JPMorgan.
Maybe just to be a little more specific on the opportunities. I don't know if you would call the Louisville Lane, an example of something that might be done with the potential merger, but it did sound like that was at least worthy enough to merit the comment here on the call. Is that truckload conversion? Is that related to some of the new services? Can you get a little more detail on that?
Yes, yes. I mean on Louisville, in particular, there was a business -- we were actually able to dray over Chicago, which is highly inefficient and not that competitive. So, we're able to improve service, improve the cost structure to our customers, and it's led to us converting business that was ramping Chicago, but also get some new business with customers that we weren't accessing before. So that's exciting. As we think about this watershed opportunity where we've really been at a disadvantage historically, just given transit as well as long-haul dray that isn't matched. We think the opportunity in those lanes is somewhere around 2.5 million loads. So, we're pretty excited about that opportunity as we start to structure those services and think we'll have a differentiated service to go to market with.
So, you would this is like an example of some potential watershed opportunities in the future. I guess, what stops from doing more of these in the near-term before you even get to the potential transaction because it looks like that wasn't a critical factor here, still put this out there?
Yes, absolutely. I think it's about setting up the single line service, right? And I know there's a focus on creating those partnerships now, but at the same time, being cognizant of the process. So, I think there's certainly opportunities. We're actually in advance of this building out our local drayage network around a lot of those watershed areas. And so that's -- we're trying to make sure we're in a position where as those services are established, we're able to take advantage of them right away.
Just one other quick one. Can you just talk about the brokerage restructuring? I think you mentioned earlier, Phil, like what was the cost for that? How long is that going to take? And what's the end result or the metrics you're targeting coming out of that?
Yes. So, we went through the restructuring in the quarter, really didn't take effect until probably near the end. We really didn't really see -- realize much of the benefits until the end of the quarter. And that's what drove the 7% productivity. It was improvement. So, it was really about focusing our team on higher-value services, making sure that we're productive and focused and putting ourselves in a structure where we can make sure we're going after the highest return revenue quality load. And now that we're in that structure, we're very focused on automating everything we can. We've done a really nice job there, but at the same time, going after these more high-value products to help us differentiate and win. So, I think the productivity enhancement that we highlighted is just the start, and the fourth quarter should be a nice improvement on top of that.
Our next question comes from Brady Lierz of Stephens.
I wanted to kind of follow up on a question from earlier about uses of cash from here. You have this potential merger between your 2-rail partners that could be approved sometime in the next 18 months or so. Is there any increased investment in containers or the network that you would need to do in '26 or '27 to kind of support that potential growth? Or will that not come until after the merger is approved, if it is? Just how should we think -- or we expect you to balance investing to support that potential for increased growth versus additional M&A or share repurchases over the next 18 months?
Yes. Great. Thanks for the question, Brady. This is Kevin. So, a couple of things. I'll start with the network and a couple of things that we already have underway that was happening before this. We've been upgrading our actual transportation system on the intermodal side all year, and we expect to be on the new platform full bore all of our transactions by the end of the first quarter here in '26. So that investment has been going on regardless of this. The other thing you may recall, we do have staff containers today. So, with the stack containers, and we believe that we can improve our utilization of those stack containers even before the rail merger, we think that we have 30% to 35% additional capacity already in-house. So, there's no additional container requirements for that. And then in the longer-term, as we see some of this quicker service, that will even enhance our ability to use our current fleet to handle more loads.
We are seeing, as Phil mentioned, and are thinking about setting our CapEx for next year regarding tractors and replacements and exactly what our drayage network would look like. So, there are some possibilities there. And then last, like we just did with the Marten transaction, we're certainly open to other potential M&As on any intermodal opportunities that are out there if it makes sense for us.
Yes. The only other thing I'd add, I think is the drayage investments are certainly something we're going to be cognizant of and potential buildout of the network, but I don't think that's going to be overly material. But I think our strategy of diversification has certainly benefited the organization and our margins over this prolonged cyclical downturn. And so, as we look at acquisition opportunities at the bottom of that cycle, we think there are good opportunities to keep investing and while making sure that we're positioned to put capital towards the intermodal business as well.
Our next question comes from Daniel Moore of Baird.
Real quick question. I'm curious, from a capacity standpoint, how much excess capacity in intermodal would you say you have today? It strikes me that UPNS, assuming the proposed transaction is approved and goes through, has a very, very healthy appetite for domestic intermodal growth based on the selling points to the STB. I'm just curious how you think about that opportunity set relative to the capacity you have today? And as you explore M&A opportunities, I'm also curious, as a follow-up, what sort of leverage would you feel comfortable taking on?
Thank you. Great questions. Yes. So, I think on the capacity side, if you look at just our stacked containers as they say, it's about 25% of the total fleet. If you then go to -- with just slight utilization improvements that are in line with where we should be operating, that's about another 10% incremental, so 35% capacity. And if we then get reduced transit times, in particular on some of these transcontinental lanes, we think that could be potentially an additional 10% capacity availability. So, you're looking at some significant capacity available for us to absorb growth without having to put additional capital into containers. And I think we're excited about what that could mean for us and the operational leverage that we would have through that.
On the acquisition side, I think we've trying to be very targeted, and we try to be very thoughtful in our approach and make sure that it's a good cultural fit, that it aligns with our strategy and that the business is complementary to the organization and is going to be able to be integrated effectively. I think we're currently obviously below our leverage target and -- which is, call it, 1x our net debt-to-EBITDA range. And I think we'd be willing to go up to 2 if we found the right transaction and then be -- make sure that we're in a place where we could delever very quickly once we got to that point.
Yes. I'd just like to add, so right now, we have net debt of $136 million. As Phil said, we are willing to leverage up. We did in the second quarter, renewed our revolver and increased that by $100 million as we want to be agile. And if a good opportunity comes that we could act fast. I think we're known in the market as a good M&A partner. And so, we want to be able to take advantage of deals that come up.
Our next question comes from Jason Seidl of TD Cowen.
This is Elliot Alper on for Jason Seidl. Maybe just one question on Final Mile. Can you talk about the new business wins ramping up, why some of those are shifted maybe into the fourth quarter or into next year as well as some more detail on sub seasonality you're seeing in your legacy business? And ultimately, is housing the real kicker for this segment to materially gain traction into 2026?
Well, yes, the housing segment coming back to life would be a huge benefit to this business. And we have gotten some really good builder wins with customers. So that's great, and it's good to see the positive signs there. On the ramp, we were displacing existing providers. And I think with customers, they want to be cautious in making sure there's no disruption to their business as those transitions take place. And so really no more complicated than we had aligned on a schedule and just in being cautious and making sure that the transitions go well. They were moved out slightly. As we have onboarded the business and the vast majority has been coming in, in October, we have seen it ramp to what we thought, which is great.
Oftentimes, you think that spend -- the award might be much higher than reality. But in these instances, it's really met our expectations, and some exceeded them as we head into Black Friday. So yes, so we're pleased with how that business is performing. We need to go out and execute for our customers, and it will definitely offset some of that softness, as you mentioned, just with the broader housing market.
Our next question comes from the line of Tom Wadewitz of UBS.
This is Mike Triano on for Tom. So, revenue per load in intermodal was up year-over-year in 3Q for, I think, the first time since 1Q of '23. It sounds like mix and surcharges played a factor. But do you have any early thoughts on '26 and where conversations could be starting the year from an intermodal pricing perspective?
Yes. I think as we're starting bid season, I don't think a ton has changed, right? It's still a competitive environment. Head haul rates, you're able to take rates up. Backhaul rates are still quite competitive. We have a really good service product and value proposition. And I think we're being really targeted with our rail partners on what we want to go after and being explicit with our customers on that. Only other thing I'd just highlight again is that our customers are really engaged in this merger process. And as they're looking at the potential for capacity tightening, they want to think about how can they build resiliency into their supply chain. And we think that working with us and converting business to intermodal is a great way to do that. And at this point, there's still a very good value proposition that's on the table. So yes, so I would say, generally feeling pretty good about where this season is kicking off.
Are customers bringing up the non-domiciled CDL and ELP issue? Like do you think that there's interest to potentially convert more volume to intermodal next year in case truck capacity does tighten.
Yes, absolutely. I mean I think if you look at it, it's not that it's going to happen overnight, but there is organic exits that are already taking place. You see the CapEx Numbers and Class 8 orders being under replacement levels is something to watch as well. And then you throw the language proficiency, the non-domiciled CDL regulations on top of that, it's incremental and continues to move things along. So once again, it's not overnight, but if demand holds up and the consumer stays resilient and you see this capacity continue to attrit at a faster pace, you could be into more of a tightening cycle, and I think it's certainly in the mind of our customers.
Our next question comes from the line of Ravi Shanker of Morgan Stanley.
This is Madison on for Ravi. Just first off, I know there's been a lot of focus on tech and AI, particularly in the logistics business, but also kind of just across the industry. I was wondering if you can speak a little bit about the initiatives you have underway and how they differentiate you versus peers.
Yes, sure. So, this is Phil. We have a really good ROI focus and process when we look at investments in technology. Last several years, it's been a focus on establishing the right foundational technologies. And as we've gotten those in place with our businesses, we're then really able to layer in automation. I think this quarter, one that really stands out is our managed transportation business, where you see a 50% improvement in year-over-year productivity. And that's because we enable that team with technology, and they're able to automate tasks and be closer to our customers and take on more through that process. So that's one, I think, great example. Our Final Mile business where we have our call centers is highly automated within our brokerage, we're really focused on our pricing and capacity generation as well as track and trace functions, appointing functions. All those are highly automated processes.
And then the last one that I think has really been beneficial to our team here at Hub and just our general productivity is in the communications with our drivers and going in identifying where a lot of those communications and touch points are happening and automating those to put the data and utilize all of our devices to make the right decisions and then having our teams then focus on the exceptions versus touching every single one of those points. So, we believe we have a great road map. It's about getting those foundations in place first and then really attacking those automation opportunities as we can identify them.
And then maybe this isn't as much of a dynamic for you guys, but just wondering if you're seeing at all any kind of impact from the government shutdown?
No, not at this time, no. I mean we have such a consumer-oriented business. We haven't seen an impact.
Our last question comes from Brandon Oglenski of Barclays.
And Phil, I know you said it's not going to happen overnight, but I think there's a certain Twitter Ranger out there that might disagree every other night. I'm not sure. But I guess maybe along those lines, it looks like -- I mean, your commentary sounded better on the bid season in the next year, and maybe you want to clarify that, but maybe we can finally get traction on pricing and get margins higher for the industry, too, not just your business. But if we roll into next year and it's like another year of very low-rate increases, do we have to start thinking, hey, this is the fourth year and GDP is up? Like what do we do differently as a business to try to secure better profitability, better returns?
Yes. No, I completely agree. And I think that's what our mantra here has been focused on controlling what we can control. Let's not worry about the cycle, and that's why we're utilizing our balance sheet to invest in growth. We're focusing on taking costs out and driving productivity. We're focused on growing with our rail partners, bringing on new wins across all of our offerings. I think we are really just going out and executing with the mindset that, yes, we aren't going to get cyclical help. And if we do, then that is upside, and we're ready to take advantage of that. But we're certainly not going to be sitting around hoping that, that is the thing, the catalyst that helps improve earnings. We're taking the actions right now, in my view, to position Hub to perform regardless of what the cycle does next year.
And maybe I'll push this a little bit harder, though, but you did sound maybe a little bit more upbeat on the bid process into next year. Should we take that as maybe potentially better pricing?
Yes. Yes, absolutely. I think there's definitely that opportunity. I think we want to see that capacity tighten. We certainly want to get our foundational network established at the front end of bid season. That's important to make sure we keep winning in balanced lanes, and we do see great opportunities in the head haul right now. So yes, I mean, there's certainly that opportunity. We want to make sure we're driving growth but also making sure we're repairing our margins. So as the pricing opportunity is there, we will certainly be attacking it as well.
I would now like to turn the conference back to Phil Yeager for closing remarks.
Great. Well, thank you so much for joining our call this evening. We appreciate your time. And as always, Kevin, Garrett and I are available for any questions. Thank you so much, and have a good evening.
Ladies and gentlemen, this concludes today's conference call with Hub Group. Thank you for joining, and you may now disconnect.
Hub Group, Inc. Class A — Q3 2025 Earnings Call
Financial data from Hub Group, Inc. Class A
Revenue
Revenue is the sum of all sales generated by a company, e.g. for its products or services.
Revenue (TTM) metric explainedDirect Costs
Direct costs are the costs incurred directly in connection with the manufacture of the product or service.
Gross Profit
Gross Profit indicates how much of the revenue remains in the company after deducting direct production costs. If the percentage share of sales is calculated, this is referred to as the gross margin.
Gross Profit metric explainedSelling and Administrative Expenses
Selling, general and administrative expenses (SG&A) include all expenses for marketing and sales as well as the general administration of the company.
Research and Development Expense
Research and development costs (R&D) provide information on how much the company invests in the research and development of its products. The costs are particularly interesting as a percentage of revenue and in comparison to direct competitors.
EBITDA
EBITDA (Earnings Before Interest, Taxes, Depreciation and Amortization) is the company's earnings before interest, taxes, depreciation and amortization. The EBITDA margin is calculated as a percentage of sales.
Depreciation and Amortization
Depreciation represents reductions in the value of the company's assets (e.g. due to wear and tear on machinery).
EBIT (Operating Income)
EBIT (Earnings Before Interest and Taxes) is the company's profit before interest and taxes, also known as the operating income. The EBIT Margin is calculated as a percentage of sales at
.
Net Profit
Net Profit represents the profit or loss after deduction of all costs.
Net Profit metric explainedStocksGuide Premium
| Sep '25 |
+/-
%
|
||
| Revenue | 3,729 3,729 |
6%
6%
100%
|
|
| - Direct Costs | - - |
-
-
|
|
| Gross Profit | - - |
-
-
|
|
| - Selling and Administrative Expenses | 3,413 3,413 |
6%
6%
92%
|
|
| - Research and Development Expense | - - |
-
-
|
|
| EBITDA | 276 276 |
2%
2%
7%
|
|
| - Depreciation and Amortization | 129 129 |
11%
11%
3%
|
|
| EBIT (Operating Income) EBIT | 146 146 |
8%
8%
4%
|
|
| Net Profit | 105 105 |
3%
3%
3%
|
|
In millions USD.
Don't miss a Thing! We will send you all news about Hub Group, Inc. Class A directly to your mailbox free of charge.
If you wish, we will send you an e-mail every morning with news on stocks of your portfolios.
Hub Group, Inc. Class A Stock News
Company Profile
Hub Group, Inc. engages in the provision of multi-modal transportation and logistics solutions. Its services include comprehensive intermodal, truck brokerage, dedicated trucking, managed transportation, freight consolidation, warehousing, international transportation and other logistics services. The company was founded by Phillip C. Yeager in 1971 and is headquartered in Oak Brook, IL.
StocksGuide Premium
| Head office | United States |
| CEO | Mr. Yeager |
| Employees | 6,604 |
| Founded | 1971 |
| Website | www.hubgroup.com |
