Landstar System (LSTR) investor relations material

Executive summary

• Q2 2025 revenue was $1.211B, down 1% year-over-year, with EPS of $1.20 and net income of $41.9M, reflecting a 28% year-over-year net income decline.

• Truck revenue per load increased 2.6% year-over-year, with heavy haul services up 9% and unsided/platform equipment up 3.2%.

• Operating income fell 17.3% to $56.3M, impacted by higher insurance and claims costs and a $4.8M supply chain fraud charge.

• Freight environment remained soft, with demand affected by inflation, trade policy, and volatile market conditions.

• The company maintained a strong balance sheet, continued capital returns, and invested in technology and equipment.

Financial highlights

• Gross profit for Q2 2025 was $109M (9% margin), down from $120M (9.8%) in Q2 2024; variable contribution margin was 14.1%.

• Cash and short-term investments ended at $426M; net cash was $340.7M with a debt to capital ratio of 9%.

• Free cash flow for Q2 2025 was $62.8M, down from $142.3M in Q2 2024.

• Insurance and claims costs rose to $30.4M (6.6% of BCO revenue) due to higher accident severity and cargo theft.

• $97M in dividends and $103M in share repurchases in H1 2025; 686,459 shares repurchased year-to-date.

Outlook and guidance

• No formal Q3 guidance; July truck loads up 1% year-over-year, but revenue per load down 3%.

• Q3 variable contribution margin expected to be flat sequentially; SG&A to decline by ~$3M, partially offset by a $1.5M event cost.

• Management expects elevated legal/professional fees and a pending legal case could materially impact results.

• Company anticipates $30M in property acquisitions, mainly for equipment and IT, in the remainder of 2025.

• Available cash, cash flow, and borrowing capacity are considered adequate for obligations and growth.