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Knight-Swift reports 15.9% increase in H1 revenue as operating income increases 73.0% 21 July 2021

Q2 operating income climbs 87.1% as revenue per tractor increases 10.3%

Knight-Swift Transportation Holdings Inc. has reported Q2, 2021 net income attributable to Knight-Swift of US$152.8 million and Adjusted Net Income Attributable to Knight-Swift of US$163.0 million. Q2 operating income climbed 87.1% to US$191.1 million. Total revenue increased 24.0% in Q2, 2021 to reach US$1,315.7 million. Consolidated revenue, excluding trucking fuel surcharge, grew by 21.6% during Q2, 2021 to US$1,212.9 million, reflecting meaningful growth across all reportable segments. The Company generated consolidated Adjusted Net Income Attributable to Knight-Swift of US$163.0 million, which represents a 68.9% increase from US$96.5 million during Q2, 2020. Revenue per tractor was up 10.3% despite lower fleet utilisation as a result of the difficult driver sourcing environment.

For the H1, 2021 period, total revenue increased 15.9% to US$2,346.0 million. Operating income climbed 73.0% to US$353.4 million, as net income rose 93.8% to US$283.0 million.

In Q2, the Trucking segment increased revenue, excluding fuel surcharge and intersegment transactions, by 8.2% to US$882.6 million, resulting in a 460 basis point improvement in the Adjusted Operating Ratio to 80.9% in Q2, 2021 from 85.5% in Q2, 2020. Operating income increased 56.3% to US$168.5 million overcoming inflationary pressures related to sourcing and retaining drivers. Year-over-year revenue, excluding fuel surcharge and intersegment transactions, grew by 8.2% in the second quarter. Average revenue per tractor increased by 10.3%, driven by an 18.8% increase in revenue per loaded mile, excluding fuel surcharge and intersegment transactions. Consumer demand remained strong, while capacity remained constrained across our industry, which is driving up sourcing costs and corresponding rates. A year-over-year rate improvement was partially offset by driver-related sourcing expenses, as well as an 8.0% decline in miles per tractor due to an increase in unseated tractors. On a sequential basis, miles per tractor remained relatively flat.

In Q2, the Logistics segment more than doubled revenue to US$162.2 million and increased operating income by 372.5% to US$14.4 million. Brokerage load volumes grew by 55.3% and revenue per load increased by 55.8% (including the results of UTXL beginning June 1, 2021). Excluding the results of UTXL, brokerage load volumes grew by 49.6% and revenue per load increased by 47.5%. Brokerage gross margin was 15.7% in the second quarters of 2021 and 2020, while Adjusted Operating Ratio improved by 440 basis points to 91.1% in Q2, 2021 from 95.5% in Q2, 2020. Within the power-only service offering, revenue grew by 410.5% as a result of a 141.5% increase in load volumes. Power-only represented 26.9% of brokerage revenue and over 25% of total Q2, 2021 brokerage load volumes. During 2020, the Company introduced the Select platform, which digitally matches shippers with available capacity across its brands through frictionless transactions. During Q2, 2021, more than 4,500 carriers were digitally matched with loads through the platform, achieving an 18.2% sequential increase in Select platform load volumes.

In Q2, the Intermodal segment grew revenue nearly 40.0% to US$115.3 million and improved its Adjusted Operating Ratio by over 1,000 basis points to 95.0% in Q2, 2021, compared to the same quarter last year. Operating income was US$5.8 million, up from losses of US$4.5 million. Intermodal is exhibiting solid momentum, and the Company expect operational improvements in cost structure and network design in the coming quarters to lead to continued improvement.