Radiant Logistics 2027 Q1 Earnings Call

Thank you. Good afternoon, everyone, and thank you for joining in on today's call. We are pleased to report a solid start to fiscal 2027, delivering $12.2 million in adjusted EBITDA for our first fiscal quarter ended September 30, 2026. Our first fiscal quarter results were strong across the board, with revenue up 23.4%, adjusted gross profit up 15.3%, adjusted net income up 91.1%, adjusted EBITDA up 79.4%, and adjusted EBITDA margin expanding 630 basis points, all measured against the comparable prior year period. Adjusted EBITDA grew significantly faster than adjusted gross profit, reflecting the operating leverage in our model, including lower SG&A as a percentage of adjusted gross profit, driven by the consolidation of our transportation management systems and the non-recurrence of the $1.3 million credit loss related to First Brands bankruptcy in the prior year period.

Our year-over-year improvement was driven principally by our U.S. operations, where adjusted EBITDA more than doubled, with notable strength in our international air freight, intermodal, and over-the-road brokerage services. On the domestic side, we continue to be encouraged by our growing pipeline of prospective users of Navegate, our proprietary technology platform that provides customers with better visibility and tools to manage complex supply chains. We now have over 150 active customers on the platform, with one of our enterprise customers now actively managing over 1,500 vendors, and who used the platform to book over 7,500 shipments during the quarter ended September 30. More broadly, capacity has continued to access the North America truckload and intermodal markets through a combination of carrier attrition, tighter driver availability, and the normalization of a fleet that had expanded aggressively in prior years.

Tender rejections and other cyclical indicators remain well above balanced market levels throughout the quarter and into the fall, and contract rates have moved meaningfully higher year over year, even as seasonal softness and a shift of longer haul freight towards intermodal caused spot rates to fluctuate. We view these developments as constructive for our domestic operations in general and our U.S. brokerage operations in particular, and we believe the intermodal shift plays to the strength of our bimodal truck and intermodal offering at Radiant Road & Rail. If these trends continue, we believe they support a more broad-based and durable recovery for the domestic freight market.

Also during the quarter, we extended our two-decade track record of one of the industry's premier freight forwarding agent networks with our move into the truck brokerage and intermodal space, with the launch of a new independent agent program at Radiant Road & Rail, which we did in August. This program brings the same value proposition that has long distinguished our freight forwarding business, access to our carrier network, technology platform, back office infrastructure, and a clear structured path to build long-term equity value and built-in exit strategy to a new population of logistics entrepreneurs. We're pleased with the early response to the program and see this as a meaningful new avenue of growth as we bring the Radiant model to an entirely new market, one in which a tighter capacity environment increases the value of the carrier access and purchasing power our platform provides.

Building on this strategy, and effective October 1 of this year, we acquired the Dallas operations of Whitacre Logistics. We are keen to accelerate the growth of our bimodal brokerage platform, and this transaction represents a tremendous opportunity to support the acquired account base with our robust technology platform and offer Radiant Road & Rail's current and prospective agent partners and customers an expanded service offering, including domestic and international forwarding, customs brokerage, and a range of other value-added services. The international picture, while still shaped by a complex and evolving trade environment, continued to show improvement during our first fiscal quarter. Global trade flows continue to be influenced by two significant forces.

The first is the ongoing disruption to traditional ocean shipping routes stemming from a restricted flow of commercial traffic through the Straits of Hormuz and continued Houthi activity affecting Red Sea and Suez Canal transits, which has kept capacity tight across key international trade lanes. Against that backdrop, ocean freight rates, which have risen sharply since the onset of the Middle East disruption in late February, held at elevated levels throughout the quarter as carriers maintained capacity discipline, a marked shift from the prolonged downturn in ocean pricing that preceded the current disruption. At the same time, elevated fuel prices and conflict-related rerouting have added cost pressure across air and ocean markets, and we continue to monitor the impact on our margins. Volatility of this kind increases the premium customers place on reliable capacity and experienced partners.

The second is the ongoing transformation of the global tariff landscape, with U.S. trade policy sustaining a high degree of compliance complexity for shippers. With the temporary Section 122 surcharge having expired in July, Section 232 and 301 measures remaining in place, and U.S. Customs and Border Protection phasing into its process for refunding IEEPA duties, shippers continue to adapt to rapidly changing requirements. This complexity, together with elevated IEEPA refund-related filing activity across the industry, has continued to drive demand for our customs brokerage expertise as customers rely on experienced partners to navigate an evolving tariff structure. More recently, escalating tariff actions between the U.S. and Canada, including U.S. tariffs imposed in late August and Canada's retaliatory measures that took effect on September 8th, against the backdrop of an ongoing USMCA review, added a further layer of complexity for shippers moving goods across our shared borders.

While it's early to gauge the full impact, we expect this cross-border dynamic to remain a source of demand for our customs brokerage and compliance capabilities, and it may also create additional international air and ocean freight forwarding opportunities for our Canadian operations as shippers look to diversify away from cross-border trucking and rail. Notably, our air freight performance continued to be up meaningfully during the quarter, driven in large part by our work in support of disaster relief following typhoon activities in the Western Pacific earlier this year. More broadly, global air cargo demand continued to grow during the quarter, even as elevated jet fuel prices and constrained Middle East capacity kept air freight rates firm. We are entering this next phase of the cycle from a position of real financial strength.

In August of this year, we completed an amended and restated $200 million senior credit facility, extending its maturity to 2031 and expanding our acquisition-focused accordion to $100 million and improving our price terms. We also ended the quarter with no net debt. That capacity, together with our long-term strategy of growing organically where our network gives us an advantage and supplementing that growth through disciplined acquisitions, positions us well to build on the encouraging signs of a domestic freight recovery while continuing to help customers navigate a volatile global trade environment. With that, I'll turn it over to Todd Macomber, our CFO, to walk us through our detailed financial results, and then we'll open it up for Q&A.

Thanks, Bohn, and good afternoon, everyone. Today, we will be discussing our financial results, including adjusted net income and adjusted EBITDA for the three months ended September 30th, 2026. For the three months ended September 30th, 2026, we reported net income attributable to Radiant Logistics of $6,141,000 on $279.8 million of revenues, or $0.13 per basic and fully diluted share. For the three months ended September 30th, 2025, we reported net income attributable to Radiant Logistics of $1,293,000 on $226.7 million of revenues, or $0.03 per basic and fully diluted share. This represents an increase of approximately $4,848,000 of net income over the comparable prior year period, or 374.9%. For adjusted net income, we reported $8,615,000 for the three months ended September 30th, 2026, compared to adjusted net income of $4,467,000 for the three months ended September 30th, 2025.

This represents an increase of approximately $4,148,000, or approximately 92.9%. For adjusted EBITDA, we reported $12,180,000 for the three months ended September 30, 2026, compared to adjusted EBITDA of $6,797,000 for the three months ended September 30, 2025. This represents an increase of approximately $5,383,000, or approximately 79.2%. With that, I will turn the call over to our moderator to facilitate any Q&A from our callers.