Forward Air Nearly Triples Operating Income to $44 Million in Q3

Forward Air nearly tripled its operating income to $44 million in the third quarter of 2026, up from $15 million a year earlier, as record quarterly revenue and broad-based margin gains lifted consolidated EBITDA to $101 million from $78 million. Operating revenue rose to $674 million from $632 million, and the EBITDA margin — calculated under the company's credit agreement — expanded to 15.1% from 12.3%, Chief Financial Officer Jamie Pierson said on the earnings call.

The quarter marked the company's highest quarterly revenue for two consecutive quarters, President and CEO Shawn Stewart said. He attributed the improvement to gains across all three segments — Expedited Freight, Omni Logistics and Intermodal — rather than any single business.

What drove the Freight segment's gains?

Expedited Freight posted the sharpest improvement. Segment EBITDA reached $45 million, up 50% from $30 million a year earlier, while its EBITDA margin rose to 13.3% from 11.5%. The operating ratio improved to 89.2% from 92.5% as shipments and tonnage per day increased.

Pierson detailed the volume picture: shipments up 7.9%, weight up 6.9% and revenue excluding fuel up 4.3%. He said the company remained focused on freight characteristics, network density and using its infrastructure more efficiently.

Stewart added that Forward Air has added more than 50 drivers since the beginning of the year, and estimated the network still carries 15% to 18% excess capacity. He said he was not concerned about the company's ability to add drivers as volumes grow.

Omni Logistics reported EBITDA of $35 million, compared with $33 million a year earlier, with its margin rising to 11.3% from 9.6%. Management cited demand and efficiency improvements in its air and ocean and contract logistics services. Intermodal EBITDA increased to $9 million from $8 million, though its margin slipped to 14.3% from 14.5%. Stewart said the segment posted its strongest revenue in more than three years, led by higher drayage revenue per shipment.

What happened with the major customer?

Forward Air recently reached a two-year agreement with one of its largest customers to retain a significant portion of the services it provides. The customer's decision to transition some services reflected its own operational and supplier diversification initiatives, not dissatisfaction with Forward Air's service, Stewart said.

The transition began this month and is expected to run through March 2027. Stewart said revenue from the retained services has grown during 2026 and should exceed the $250 million the company recorded from that customer in all of 2025. He also said he expects Omni Logistics as a whole to grow revenue.

Why did the Intermodal sale stall?

The company is pausing its planned sale of the Intermodal business. Pierson said the process had not yielded the valuation the company wanted, and management would seek to add more quarters of strong performance before potentially revisiting a sale.

"We very well may revisit the sale if and when the market reflects what we believe is the fair value," Pierson said. A transaction remains possible, he added, but would not occur on the previously communicated timeline.

How does the cash position look?

Third-quarter cash provided by operating activities fell to $35 million from $53 million a year earlier. For the first nine months, however, operating cash flow rose to $76 million from $67 million. Liquidity stood at $446 million at quarter-end, comprising $185 million in cash and $261 million available under the revolving credit facility.

The sale of two smaller legacy Omni businesses benefited liquidity by approximately $25 million with minimal effect on consolidated EBITDA, Pierson said. Leverage ended the quarter below five times — nearly one full turn lower than a year earlier.

On the fourth quarter, Pierson said trends were similar to those at the end of the third quarter, though he cautioned that the fourth quarter has fewer working days and that the third is typically among the company's strongest. Management declined to provide specific 2027 margin guidance.

What is Forward Air?

Forward Air Corporation (NASDAQ: FWRD) is a transportation and logistics company providing time-definite freight and supply chain services. Its offerings span expedited less-than-truckload transportation, truckload services, intermodal and drayage operations, final-mile delivery and other logistics solutions built for shipments requiring reliable transit times. The company serves businesses across North America and supports domestic and international supply chains through a network of terminals, transportation partners and logistics facilities.

The takeaway: record revenue, a deleveraged balance sheet and a retained customer contract give management room to wait for a better price on Intermodal.