Forward Air (NASDAQ:FWRD) executives highlighted steady consolidated results, improving earnings quality, and progress on a strategic alternatives review during the company’s fourth-quarter and full-year 2025 earnings call. Management also pointed to ongoing transformation initiatives, technology modernization efforts, and signs that freight markets may be nearing an inflection point, while emphasizing that clear evidence of a sustained recovery has not yet emerged.
Strategic alternatives review “nearing the conclusion”
CEO Shawn Stewart said the company has continued to make progress on its strategic alternatives review since the last update in November and believes it is “nearing the conclusion.” Stewart described the process as “extremely comprehensive” and said a difficult logistics environment and broader economic backdrop contributed to its duration. He added that the company remains focused on operating performance and preparing for an eventual market turn, and said the company will share updates when it has them.
Full-year profitability and “improving earnings quality”
For full-year 2025, Stewart said Forward Air reported consolidated EBITDA (as calculated under its credit agreement) of $307 million, compared with $311 million in 2024. He also said adjusted EBITDA improved $40 million year-over-year to $293 million, compared with $253 million in 2024, attributing the improvement to the roll-off of historical pro forma and synergy savings that had been included previously.
CFO Jamie Pierson said fourth-quarter consolidated EBITDA was $77 million, compared with $72 million in the fourth quarter of 2024, describing it as another “solid” quarter. Pierson noted that fourth-quarter operating expenses were negatively impacted by a $20 million non-cash impairment charge related to software implementation costs, which the company adds back under the credit agreement calculation.
Pierson also said prior-quarter consolidated EBITDA figures were adjusted to reflect fourth-quarter cost-structure actions, citing credit agreement treatment that allows adding back certain pro forma savings and spreading them into earlier periods. He directed listeners to the company’s slide presentation for details.
Segment performance: Expedited improvement, Omni “new heights,” Intermodal pressured
Management emphasized margin and EBITDA gains in Expedited Freight and Omni Logistics, while citing ongoing weakness in Intermodal tied to port activity and customer softness.
- Expedited Freight: Pierson said fourth-quarter reported EBITDA rose to $25 million from $18 million a year earlier, and the reported EBITDA margin increased 350 basis points to 10.1% from 6.6%. For the full year, Stewart and Pierson said corrective pricing actions and efforts to align the cost structure with lower volumes improved the segment’s reported EBITDA margin by 110 basis points to 10.9% from 9.8%, despite a decline in tonnage. Stewart said the company expects volume declines to moderate in 2026 as it laps those pricing actions.
- Omni Logistics: Pierson said Omni delivered its highest revenue, reported EBITDA, and reported EBITDA margin (excluding a goodwill impairment) since the January 2024 acquisition. Fourth-quarter reported EBITDA improved to $36 million from $32 million, with margin at 10% versus 9.8%. For the full year, he said Omni reported EBITDA (excluding goodwill impairment impact) nearly doubled to $124 million from $67 million, and margin increased 360 basis points to 9.2% from 5.6%.
- Intermodal: Pierson said the segment faced a challenging market, particularly in port activity, citing trade-related softness among core customers and seasonality. Fourth-quarter reported EBITDA declined to $7 million from $10 million, and margin fell to 14.2% from 17.5%. For the full year, Intermodal reported EBITDA of $35 million, compared with $37 million in 2024, with margin of 15.1% versus 16%.
In Q&A, Pierson attributed weaker intermodal revenue per shipment to supply-and-demand dynamics tied to lower port volumes, describing the pricing environment as more elastic than in the linehaul business. Stewart added that intermodal results can be influenced by the mix between dray/rail moves and container storage revenue at the company’s depot yards, noting that storage revenue helped support margins in the quarter.
Operating model and transformation initiatives
Stewart outlined operational steps taken in 2025 to reposition the business during a multi-year freight recession. He said the company unified U.S. domestic operations through a “One Ground Network,” consolidating U.S. domestic ground operations under a single leadership structure and integrating linehaul, pickup and delivery, truckload brokerage, and expedited services into one organization. Stewart said sales channels will continue to operate independently, while operations remain “channel agnostic,” focused on consistent execution, on-time performance, and claims results.
Stewart also said the company created a new Latin America regional structure spanning Mexico, Brazil, Peru, Colombia, and Chile, anchored by an international freight station in Miami. He described the Miami gateway as a connector between Latin America and global markets, supporting import and export security, reliability, and service.
On reporting, Stewart said the company provided additional transparency during the year, including revenue by product and revenue by region, as it plans to transition away from reporting by a legacy/legal structure.
Cash flow, liquidity, and signs of leverage in a recovery
Pierson said cash used by operating activities in the fourth quarter was $23 million, unchanged from the prior year. For full-year 2025, he said Forward Air generated $44 million of cash from operating activities, compared with using $69 million in 2024, a $113 million year-over-year improvement. He also pointed to non-GAAP operating cash flow of $32 million in the fourth quarter and $209 million for full-year 2025, as shown in the company’s presentation.
Forward Air ended 2025 with $367 million of liquidity, comprised of $106 million in cash and $261 million of revolver availability, compared with $105 million in cash and $382 million of liquidity at the end of 2024. Pierson said the company has “no meaningful maturities for almost five years,” which he described as providing cushion and time to improve operations.
Pierson emphasized operating leverage, saying that with excess capacity in the domestic ground network and cost-out initiatives implemented, each additional shipment should have a disproportionate positive contribution to results. In response to questions about a recovery, Pierson said he did not see “meaningful positive signs” as 2025 ended, but said a recent spike in truckload spot rates and tender rejections gave him hope the market could be nearing an inflection point. He added that he would look for sustained PMI above 50 and continued increases in spot rates and tender rejections before “declaring victory.”
When asked about near-term business trends, Pierson said the company does not provide that level of detail and characterized the early-year pattern as typical seasonality.
Looking to 2026, Stewart said priorities include profitable long-term growth, expanding synergistic service offerings, and continuing leadership buildout. He highlighted three executive additions: Fabio Mendonça as President of Latin America, Joanna Zhu as President of Asia Pacific, and Lance Sons as Chief Information Officer. Stewart also described plans to upgrade the technology stack, including a “One ERP” initiative to consolidate multiple financial systems into a single platform through a phased rollout, with the first phase completed earlier in the month and the final phase targeted by year-end. He also said the company plans to consolidate a decentralized global HRIS system into one worldwide system.
In the Q&A, management described Omni’s performance as driven by diversification and organic growth across offerings, along with “synergy selling” efforts to expand wallet share across customers using only some of its services. Stewart also noted an uptick in duty drawback activity in customs brokerage tied to tariff-related dynamics, but said it was not a significant revenue stream.
Asked about contract logistics exposure to data centers and high-tech, management pointed to a product-mix slide in the presentation and said the vertical includes tech, data, and medical, among others. Stewart said the company is participating in data center activity and gaining momentum, citing its handling of high-value movements from warehouses into data center clean rooms.
About Forward Air (NASDAQ:FWRD)
Forward Air Corporation is a leading North American provider of expedited ground transportation and related logistics services, specializing in time-sensitive shipments. The company offers a comprehensive suite of solutions including less-than-truckload (LTL) expedited freight, consolidation and distribution services, container drayage, and final-mile delivery. By integrating transportation management with warehousing, inventory control, and technology-driven tracking, Forward Air supports customers across a variety of industries such as manufacturing, retail, automotive and chemicals.
Founded in 1981 and headquartered in Greeneville, Tennessee, Forward Air has developed a broad network of service centers, terminals and rail ramps throughout the United States, Canada and Puerto Rico.
