Freight delivery company Knight-Swift Transportation (NYSE:KNX) beat Wall Street’s revenue expectations in Q1 CY2025, but sales were flat year on year at $1.82 billion. Its non-GAAP profit of $0.28 per share was 18.4% above analysts’ consensus estimates.

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  • Revenue: $1.82 billion vs analyst estimates of $1.8 billion (flat year on year, 1.6% beat)

  • Adjusted EPS: $0.28 vs analyst estimates of $0.24 (18.4% beat)

  • Adjusted EBITDA: $264.1 million vs analyst estimates of $261.9 million (14.5% margin, 0.8% beat)

  • Adjusted EPS guidance for Q2 CY2025 is $0.34 at the midpoint, below analyst estimates of $0.40

  • Operating Margin: 3.7%, up from 1.1% in the same quarter last year

  • Free Cash Flow was $69.99 million, up from -$104 million in the same quarter last year

  • Sales Volumes fell 5.3% year on year (38.8% in the same quarter last year)

  • Market Capitalization: $6.31 billion

Knight-Swift Transportation’s first quarter results reflected a market environment shaped by ongoing uncertainty around U.S. trade policy and shifting shipper behaviors. CEO Adam Miller noted that while early indicators in the quarter were positive, severe weather and growing caution among shippers—sparked by tariff discussions and food trade policy—contributed to lower than expected shipment volumes. Management highlighted that operational adjustments, such as tightening the equipment fleet and cost reductions, helped offset these headwinds and improve margins compared to the prior year.

Looking ahead, the company adopted a notably cautious stance in its forward guidance, reflecting the unpredictability in freight demand tied to both consumer sentiment and potential trade policy changes. As Miller explained, “With all that being said, during April, market conditions have largely been stable with where we exited the first quarter, but there is a wide range of possible paths forward from here.” Knight-Swift will only provide quarterly guidance for now, citing the risk of further volume declines if trade policy remains unsettled.

Management attributed the quarter’s performance to a mix of operational discipline, network diversification, and external market pressures. The following factors were central to business fundamentals this quarter:

  • Truckload Segment Restructuring: The company reduced underutilized tractors and trailers, aiming to lower depreciation and boost utilization. This tightening of the equipment fleet, combined with moderate increases in contract rates, was cited as a key lever for margin improvement.

  • LTL Network Expansion: The less-than-truckload (LTL) business continued to grow, with seven new facilities opened and daily shipments up 30% year over year in March. However, rapid volume growth led to higher short-term costs and operational inefficiencies, particularly in newly integrated regions.

  • Cost Controls and Claims Management: Management emphasized ongoing efforts to control variable and fixed costs, including reductions in overhead, more efficient maintenance, and improved safety and claims handling. These initiatives supported the company’s ability to lower cost per mile for a third consecutive quarter.

  • Impact of Trade Policy Uncertainty: Shipper activity was mixed, with some customers pausing orders due to tariff concerns. Management reported that about one-third of customers were in “wait-and-see” mode, drawing down inventories rather than placing new orders, which negatively affected shipment volumes.

  • Modest Pricing Environment: Despite a weak spot market, Knight-Swift achieved low to mid-single digit increases in contract rates during annual bid season. However, the expected momentum in rate increases did not materialize, and management warned that continued spot market weakness could limit realized revenue per mile in the near term.