FedEx Freight (FDXF) investor relations material

Strategic and operational progress

• Achieved smooth separation and began trading as an independent company, with early execution reinforcing confidence in long-term strategies.

• Maintains focus on delivering commitments outlined at Investor Day, with a dedicated investment strategy and enhanced organizational accountability.

• Operates the largest and densest LTL network in North America, supported by a proven operating model and recent improvements in safety, claims, and customer service.

• Technology investments target improved visibility, efficiency, and customer experience, with ongoing expansion of automation and digital solutions.

• Dedicated LTL sales force and dual service model (Priority and Economy) drive commercial momentum and customer flexibility.

Financial outlook and capital allocation

• Expects slow, steady recovery in average daily volume from June to December, moving from a 5% decline to flat year-over-year by year-end.

• Margin guidance reflects 4%-6% revenue growth, with headwinds from variable comp and TSA agreements expected to ease by 2027.

• Plans further investments in operational technology and transformation, aiming for productivity improvements and long-term cost benefits.

• Capital allocation prioritizes reinvestment in the business, maintaining investment-grade leverage, and returning value to shareholders through dividends and share repurchases.

• CapEx currently focused on maintenance and optimization, with growth investments aligned to capacity needs.

Market positioning and growth opportunities

• Strategic focus on SMB, technology, healthcare, and grocery verticals, leveraging dedicated sales teams and tailored solutions.

• Expanded service offerings include retail flex, direct residential delivery, and cross-border solutions with Mexico and Canada.

• Enhanced pricing precision and frequent updates for 3PL customers, optimizing lane-level profitability.

• 30% network door capacity, 10%-15% equipment capacity, and 5%-10% driver capacity enable scalable growth without immediate resource expansion.

• Dual service model provides flexibility and similar margins, with potential for future margin differentiation as customer experience and pricing improve.