Covenant Logistics (CVLG) investor relations material

Executive summary

• Achieved record Q2 2025 freight revenue of $276.5M, up 7.8% year-over-year, driven by dedicated fleet growth, managed freight, and a small acquisition, despite a competitive environment.

• Diluted EPS was $0.36, down from $0.44; net income fell to $9.8M, with operating income declining to $11.6M from $15.6M year-over-year.

• Repurchased 1.6M shares for $35.2M, reducing share count and increasing leverage; $13.8M remains under the $50M authorization.

• Minority investment in TEL contributed $4.3M pre-tax net income, in line with prior year.

• Margins remained compressed due to inflationary costs, high claims expense, and fuel price increases.

Financial highlights

• Total revenue rose to $302.9M, up 5.3% year-over-year; freight revenue up 7.8% to $276.5M.

• Adjusted operating income declined 19.6% to $15M; operating income was $11.6M, down from $15.6M.

• Net income for Q2 2025 was $9.8M ($0.36 per diluted share), compared to $12.2M ($0.44 per diluted share) in Q2 2024.

• Adjusted operating ratio for Q2 2025 was 94.6%, up from 92.7% in Q2 2024.

• Net cash provided by operating activities for the first six months was $46.7M, up from $44.1M year-over-year.

Outlook and guidance

• Management expects gradual improvement in general freight market fundamentals, though progress is uneven due to inventory, policy, and supply chain fluctuations.

• Managed Freight segment revenue is expected to decline in H2 2025 due to the loss of a key customer in July 2025.

• Focus remains on organic growth in Dedicated contracts, margin improvement, and evaluating acquisition opportunities.

• Expects net capital equipment expenditures of $50M–$60M for the remainder of the year.

• If the general freight market does not improve, mix change and seasonality are still expected to generate better results in H2 2025.