Knight-Swift Transportation (NYSE:KNX) reported higher third-quarter earnings and revenue as pricing, network efficiency and logistics margin recovery supported results across its asset-based businesses. Management said the company is seeing strengthening conditions in the one-way truckload market, while its fourth-quarter outlook calls for further truckload improvement offset by typical seasonal declines in other operations.
Third-quarter consolidated revenue rose 14.2% year over year, while revenue excluding truckload and less-than-truckload fuel surcharges increased 7.7%, Chief Financial Officer Andrew Hess said. Operating income increased $128 million, or 255.1%, from the prior-year quarter, while adjusted operating income rose $93 million, or 87.4%.
GAAP diluted earnings per share were $0.72, compared with $0.05 a year earlier. Adjusted EPS was $0.83, up from $0.32 in the third quarter of 2025. The company’s adjusted operating ratio improved 450 basis points year over year to 89.3%.
Truckload margins improve as rates accelerate
Chief Executive Officer Adam Miller said Knight-Swift’s core truckload margins are approaching more familiar levels after an extended downturn, though he said there remains work to do before operating results return to normal levels. He characterized freight demand as broadly stable but said demand for the company’s capacity has been strong.
Miller said the company has more peak-season project arrangements in place than at any point since the pandemic, with tenders already beginning under several projects. He attributed the market tightening principally to supply reductions, as carriers have exited the industry, liquidated assets or shifted one-way capacity into dedicated operations.
“The Truckload freight market continues to remain tight,” Miller said, adding that the company’s spot rates and tender rejection trends have been stronger than broader market indicators.
Hess said realized truckload revenue per mile accelerated during the quarter, moving from a 2.5% year-over-year increase in the first quarter to a 12.2% increase in the third quarter, excluding fuel surcharge and stated on a total-mile basis. Cost per mile remained in a range of 3.3% to 3.8% over that period. As a result, 68% of third-quarter rate improvement flowed through to margin, compared with 50% in the second quarter.
The company said one-way operating margins exceeded dedicated margins in the quarter for the first time in several years. Knight-Swift is prioritizing efforts to seat more trucks and raise utilization, which management said would allow it to capture more freight opportunities at attractive incremental margins.
The company has 12 CDL academies and partner schools at seven additional terminals, with plans to add more academies in coming months. Its U.S. Xpress training program, modeled after Knight-Swift’s legacy program, has continued to add students. Dedicated fleet size has grown approximately 3.5% since mid-second quarter, while dedicated revenue excluding fuel surcharge rose nearly 4% sequentially.
Management said driver pay increases have been targeted by market, fleet and tenure rather than broad-based. In the third quarter, miles per seated tractor increased 2.7% year over year, while empty miles declined 170 basis points.
Contract pricing and 2027 setup
During the question-and-answer session, Miller said major national bids have largely concluded, but mini-bids and turn-back bids remain active. He said discussions for the 2027 bid season are beginning and that Knight-Swift expects to begin the process seeking low- to mid-double-digit contractual rate increases.
The pace of future increases will depend on capacity exits, regulatory developments and demand conditions, he said. While the company does not expect demand alone to drive the cycle, Miller said stable demand has been sufficient for supply constraints to support rate and margin improvement.
Management said it is cautiously pursuing organic growth through higher utilization, filling open trucks and eventually expanding truck count. Miller said the company has increased recruiting resources and is testing compensation approaches across its brands, while Hess said investments in academies, recruiting technology, onboarding and retention could support progress in seated truck count during 2027.
LTL, logistics and intermodal results
Knight-Swift said its LTL demand environment was steady, with pockets of improvement. The company is continuing to shift its network from a regional model toward a more national freight profile, marked by longer hauls and heavier shipments. Weight per shipment reached its highest level in three years during September after declining in July and August.
Management said the transition is taking longer than expected and currently creates linehaul inefficiencies and additional network touchpoints. However, it expects greater density and a maturing freight mix to support better efficiency and margins over time. Miller said the company could begin expanding organically into the Northeast in 2027 if volume and cost-management progress continue.
In Logistics, adjusted operating income increased nearly 20% year over year despite a 1% revenue decline. Brad Stewart, treasurer and senior vice president of investor relations, said contractual pricing resets and seasonally lower spot-market capacity costs helped produce the first year-over-year gross-margin percentage improvement in four quarters.
Stewart said the company expects third-party capacity to tighten seasonally in the fourth quarter and has seen early signs of that trend in October. The company has continued refining carrier-vetting practices amid an evolving broker-liability landscape and said its third-party carrier count largely stabilized during the quarter.
Intermodal posted its second consecutive quarter of strong year-over-year revenue and load-count growth, reaching its highest quarterly load count in more than five years. Revenue per load rose 15.2% year over year, or 5.5% excluding fuel surcharge. Management cited improved service, network balance, cross-selling to truckload customers and customer interest in intermodal amid tight trucking capacity and high diesel prices.
Fourth-quarter outlook
Knight-Swift projected fourth-quarter adjusted EPS of $0.78 to $0.84. The forecast incorporates recent trends in volumes, spot rates, bid activity, driver hiring and seasonal truckload projects.
The company expects truckload operating income to improve meaningfully sequentially as rate realization and project activity increase. However, it expects seasonally lower earnings in LTL and its All Other Segments category, which includes warehousing, independent contractor services and support activities.
All Other Segments is expected to post an operating loss in the fourth quarter. Management said warehousing revenue typically slows during the holiday period because customers minimize store-infrastructure activity, while the fixed-cost base remains higher following recent facility expansion. The outlook also includes an estimated $6.5 million of accounts-receivable securitization costs that had been recorded in interest expense in prior years.
About Knight-Swift Transportation (NYSE:KNX)
Knight-Swift Transportation Holdings Inc is a transportation and logistics company that provides freight services across North America. The company operates one of the largest truckload fleets in the United States and serves a broad range of industries through its network of company-owned equipment, independent contractors, terminals and distribution facilities.
Its services include dry-van, refrigerated and flatbed truckload transportation; dedicated and expedited delivery; less-than-truckload shipping; freight brokerage; intermodal transportation; cross-border logistics; and warehousing and other supply-chain services.
