Proficient Auto Logistics (NASDAQ:PAL) executives said the company grew revenue and deliveries in 2025 despite a softer-than-expected automotive market in the back half of the year, while outlining plans to drive further margin improvement in 2026 largely through internal initiatives rather than a market rebound.
2025 performance and market backdrop
Chairman and CEO Rick O’Dell said the company delivered more than 2.3 million vehicles in 2025 and grew revenue to over $430 million, up 11% versus 2024. O’Dell described 2025 as a year in which the automotive market “peaked in March and April ahead of tariff impacts,” followed by a weaker environment than the company expected for the remainder of the year.
Quarterly profitability, claims, and goodwill impairment
Management said adjusted operating ratio in the fourth quarter was “modestly better” than the prior year, but results were pressured by reduced operating leverage tied to core market volume declines and elevated insurance claims expense. O’Dell said the claims impact stemmed from the recognition of a major claim under higher retention levels in the company’s new insurance program, which “muted underlying cost control and efficiency improvements for the quarter.”
CFO Brad Wright provided more detail during Q&A, noting the company consolidated its insurance programs and achieved a “significant reduction of premium” but took on higher retention. He said the company reserved up to its full $500,000 liability retention for one fourth-quarter accident and did not expect that to recur in the first quarter.
Separately, O’Dell said the company recorded a non-cash goodwill impairment charge of $27.8 million in the fourth quarter as part of its annual impairment review. He said the updated fair value, based on a discounted cash flow analysis, primarily reflected downward changes in market conditions since the IPO and did not affect liquidity, cash flow, or underlying operations.
Financial highlights and balance sheet trends
Wright said total operating revenue for 2025 was $430.4 million, up 10.7% year-over-year, and fourth-quarter operating revenue was $105.4 million, up 11.5% from the fourth quarter of 2024. Adjusted EBITDA for the full year was $40.2 million, which he said was essentially unchanged from the combined 2024 result, while fourth-quarter adjusted EBITDA was $9.2 million, up 32% year-over-year.
Total units delivered increased 16.2% in 2025, though Wright said revenue per unit declined about 6% as the market shifted away from spot opportunities. He added that the company has now “fully cycled” that shift and characterized revenue per unit as stable at current levels.
Wright also highlighted improving leverage, saying net debt to trailing 12-month adjusted EBITDA declined from 2.2x as of June 30 to 1.7x at September 30 and 1.5x at year-end 2025. He said the stronger position increases flexibility for future capital structure decisions. The company ended 2025 with 27.8 million common shares outstanding, essentially unchanged from the prior quarter.
2026 outlook: internal initiatives, pricing discipline, and cost actions
Looking ahead, executives said the broader market is expected to be a headwind. Wright noted the 2026 SAR forecast is lower than 2025 actual and has weakened since the company last reported, reflecting a fourth quarter that lacked a typical seasonal peak. As a result, he said any 2026 growth and profitability improvement is expected to come from internal initiatives “essentially unaided by the general market.”
Wright said the company is confident it can achieve year-over-year revenue growth in 2026 and reiterated an objective of 150 basis points of full-year improvement in adjusted operating ratio. However, he cautioned that the company will “fully cycle” larger share gains from early 2025 and the Brothers acquisition by the first quarter, and he emphasized profitability discipline in a competitive bidding environment.
Management said pricing remains pressured. O’Dell said automakers are pushing stringent cost mandates on procurement departments, while some carriers with underutilized capacity are bidding at rates the company views as unsustainable over typical multi-year terms. Wright said the company is seeing both wins and losses and will “bow out” of certain incumbent business when pricing falls below levels needed to attract and retain drivers and earn acceptable returns.
On mix and margin improvement, Wright pointed to an initiative to shift more work from third-party sub-haul to company-driver moves, which he said can be 300–400 basis points better on operating ratio on an apples-to-apples basis due to improved asset utilization.
For the first quarter, Wright said revenue is expected to be higher than the first quarter of 2025 but lower sequentially than the fourth quarter of 2025, noting the first quarter is seasonally the weakest and that early 2026 saw extended plant shutdowns and significant weather interference. He said the company expects modest sequential improvement in adjusted operating ratio as restructuring initiatives take effect and claims performance normalizes versus the fourth quarter.
Capital allocation, CapEx, and M&A posture
On capital allocation, Wright said the company’s priority remains strengthening the balance sheet through debt paydown, while noting improved leverage provides flexibility for potential acquisitions. He said share repurchases are not ruled out but are “at the lower end of the priority list.”
Wright also said CapEx is expected to remain relatively light absent a market improvement. Equipment CapEx was approximately $10.2 million in 2025, and the company expects $10–$15 million of maintenance CapEx in 2026 to keep average fleet life between five and six years.
Executives said they continue to build an acquisition pipeline. In response to an analyst question, O’Dell said the company is actively engaged on one opportunity and that Proficient would still expect to potentially complete 1–2 acquisitions per year.
In closing remarks, O’Dell said the company’s network has proven attractive to customers, citing 11% revenue growth in 2025, and said management has “a high level of confidence” in continued operating margin improvement, supported by strong cash flow and a strengthening balance sheet, while noting that the company still needs market conditions to improve.
About Proficient Auto Logistics (NASDAQ:PAL)
Proficient Auto Logistics, Inc focuses on providing auto transportation and logistics services in North America. It primarily focuses on transporting and delivering finished vehicles from automotive production facilities, ports of entry, and rail yards to a network of automotive dealerships. The company operates approximately 1,130 auto transport vehicles and trailers, including 615 company-owned transport vehicles and trailers. It serves auto companies, electric vehicle producers, auto dealers, auto auctions, rental car companies, and auto leasing companies.
