Werner's Q2 Profit Plunges 40% Amid Soft Freight Market

TL;DR

**WERN's Q2 numbers are a red flag; the freight market is clearly in a slump, so stay cautious.**

AI Summary

Werner Enterprises Inc. reported a challenging second quarter of 2025, with total revenues decreasing to $625.3 million for the three months ended June 30, 2025, down from $678.9 million in the same period of 2024, representing a 7.9% decline. Net income also saw a significant reduction, falling to $35.1 million in Q2 2025 from $58.7 million in Q2 2024, a decrease of 40.2%. For the six months ended June 30, 2025, revenues were $1.24 billion, a 7.5% decrease from $1.34 billion in the prior year, and net income was $68.9 million, down 40.6% from $116.1 million. The company's financial position remains stable with total assets at $3.12 billion as of June 30, 2025, slightly down from $3.15 billion at December 31, 2024. Key business changes include a reduction in operating revenue, reflecting a softer freight market. Risks highlighted include continued economic uncertainty impacting freight demand and fuel price volatility. The strategic outlook focuses on optimizing fleet utilization and cost management in a competitive environment.

Why It Matters

This significant drop in net income and revenue for Werner Enterprises signals a challenging period for the trucking industry, impacting investor confidence in transportation stocks. Employees might face pressure on wages or job security if the downturn persists, while customers could see more competitive pricing as carriers fight for freight. The broader market will view this as an indicator of slowing economic activity, particularly in goods movement, potentially affecting other logistics and retail sectors. Competitively, this puts pressure on Werner to innovate and cut costs more aggressively than rivals like Knight-Swift Transportation or J.B. Hunt.

Risk Assessment

Risk Level: high — The risk level is high due to the substantial 40.2% decrease in net income to $35.1 million in Q2 2025 from $58.7 million in Q2 2024, coupled with a 7.9% decline in total revenues to $625.3 million. This significant financial deterioration indicates a challenging operating environment and potential for continued underperformance.

Analyst Insight

Investors should consider reducing exposure to WERN or other trucking stocks until there are clear signs of a freight market recovery. Monitor upcoming economic indicators and competitor filings for any shifts in demand or pricing power within the logistics sector.

Financial Highlights

revenue

$625.3M

total Assets

$3.12B

net Income

$35.1M

revenue Growth

-7.9%

Revenue Breakdown

Key Numbers

• $625.3M — Q2 2025 Total Revenues (7.9% decrease from Q2 2024)
• $35.1M — Q2 2025 Net Income (40.2% decrease from Q2 2024)
• $1.24B — YTD 2025 Total Revenues (7.5% decrease from YTD 2024)
• $68.9M — YTD 2025 Net Income (40.6% decrease from YTD 2024)
• $3.12B — Total Assets (as of June 30, 2025, stable from year-end 2024)
• 7.9% — Revenue Decrease (Q2 2025 vs Q2 2024)
• 40.2% — Net Income Decrease (Q2 2025 vs Q2 2024)

Key Players & Entities

• WERNER ENTERPRISES INC (company) — filer of the 10-Q
• Bloomberg (company) — publisher of the analysis
• SEC (regulator) — regulator for 10-Q filings
• Knight-Swift Transportation (company) — competitor
• J.B. Hunt (company) — competitor
• $625.3 million (dollar_amount) — total revenues for Q2 2025
• $678.9 million (dollar_amount) — total revenues for Q2 2024
• $35.1 million (dollar_amount) — net income for Q2 2025
• $58.7 million (dollar_amount) — net income for Q2 2024
• $3.12 billion (dollar_amount) — total assets as of June 30, 2025

FAQ

Risk Factors

• Freight Market Softness [high — market]: The company experienced a 7.9% decrease in Q2 2025 total revenues compared to Q2 2024, directly attributed to a softer freight market. This indicates reduced demand for transportation services, which can impact pricing power and freight volumes.
• Fuel Price Volatility [medium — market]: Fuel price volatility remains a significant risk. Fluctuations in fuel costs can directly impact operating expenses, potentially squeezing margins if not effectively passed on to customers or managed through fuel surcharges and efficient operations.
• Economic Uncertainty [high — market]: Continued economic uncertainty poses a risk to freight demand. A broader economic slowdown or recessionary pressures could further depress freight volumes and negatively affect Werner Enterprises' top-line performance.
• Fleet Utilization and Cost Management [medium — operational]: The company's strategy focuses on optimizing fleet utilization and cost management in a competitive environment. Failure to effectively manage these operational aspects could lead to inefficiencies and reduced profitability, especially during periods of lower demand.

Industry Context

The trucking industry, particularly long-haul freight, is experiencing a challenging period characterized by reduced demand and increased operational costs. Carriers are facing pressure from economic uncertainty and fluctuating fuel prices. The competitive landscape necessitates a strong focus on operational efficiency, cost control, and strategic fleet management to maintain profitability.

Regulatory Implications

While this filing does not highlight specific new regulatory changes, the trucking industry is subject to ongoing regulations concerning driver hours, safety standards, and environmental compliance. Adherence to these regulations is crucial for operational continuity and avoiding penalties, which could impact financial performance.

What Investors Should Do

1. Monitor freight market indicators closely.
2. Assess the effectiveness of cost management strategies.
3. Evaluate the company's fleet utilization initiatives.

Key Dates

• 2025-06-30: End of Second Quarter 2025 — Reporting period for the 10-Q filing, showing a 7.9% revenue decline and a 40.2% net income decrease year-over-year.
• 2025-08-11: Filing Date of 10-Q — Indicates the official release of the company's financial performance and disclosures for the period ending June 30, 2025.

Glossary

10-Q

A quarterly report required by the U.S. Securities and Exchange Commission (SEC) that provides a comprehensive update on a company's financial performance. (This document provides the detailed financial information and analysis for Werner Enterprises Inc. for the second quarter of 2025.)

Freight Market

The overall supply and demand dynamics for the transportation of goods, influencing pricing, capacity, and carrier profitability. (The report explicitly mentions a 'softer freight market' as the primary driver for revenue decline, highlighting its direct impact on Werner Enterprises.)

Fleet Utilization

The efficiency with which a company's fleet of vehicles (in this case, trucks) is used to generate revenue. (Optimizing fleet utilization is a key strategic focus for Werner Enterprises to combat market challenges and improve profitability.)

Year-Over-Year Comparison

Compared to the prior year's second quarter, Werner Enterprises Inc. reported a significant downturn in financial performance. Total revenues for Q2 2025 decreased by 7.9% to $625.3 million from $678.9 million in Q2 2024. Net income saw an even steeper decline of 40.2%, falling to $35.1 million from $58.7 million. This performance reflects a challenging operating environment, primarily driven by a softer freight market and ongoing economic uncertainties, which are impacting freight demand and potentially pricing power.

Key Financial Figures

• $0.01 — ange on which registered Common Stock, $0.01 Par Value WERN The Nasdaq Stock Market

Filing Documents

• wern-20250630.htm (10-Q) — 1336KB
• wern-2025630xex311.htm (EX-31.1) — 16KB
• wern-2025630xex312.htm (EX-31.2) — 16KB
• wern-2025630xex321.htm (EX-32.1) — 5KB
• wern-2025630xex322.htm (EX-32.2) — 5KB
• 0000793074-25-000044.txt ( ) — 6791KB
• wern-20250630.xsd (EX-101.SCH) — 38KB
• wern-20250630_cal.xml (EX-101.CAL) — 81KB
• wern-20250630_def.xml (EX-101.DEF) — 174KB
• wern-20250630_lab.xml (EX-101.LAB) — 560KB
• wern-20250630_pre.xml (EX-101.PRE) — 402KB
• wern-20250630_htm.xml (XML) — 986KB

– FINANCIAL INFORMATION

PART I – FINANCIAL INFORMATION Cautionary Note Regarding Forward-Looking Statements 3

Financial Statements

Item 1. Financial Statements: 4 Consolidated Statements of Income for the Three and Six Months Ended June 3 0 , 2025 and 2024 4 Consolidated Statements of Comprehensive Income for the Three and S ix Months Ended June 3 0 , 2025 and 2024 5 Consolidated Condensed Balance Sheets as of June 3 0 , 2025 and December 31, 2024 6 Consolidated Statements of Cash Flows for the Six Months Ended June 3 0 , 2025 and 2024 7 Consolidated Statements of Stockholders' Equity and Temporary Equity - Redeemable Noncontrolling Interest for the Three and Six Months Ended June 3 0 , 2025 and 2024 8

Notes to Consolidated Financial Statements (Unaudited) as of June 3 0 , 2025

Notes to Consolidated Financial Statements (Unaudited) as of June 3 0 , 2025 10

Management's Discussion and Analysis of Financial Condition and Results of Operations

Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations 24

Quantitative and Qualitative Disclosures About Market Risk

Item 3. Quantitative and Qualitative Disclosures About Market Risk 34

Controls and Procedures

Item 4. Controls and Procedures 34

– OTHER INFORMATION

PART II – OTHER INFORMATION

Legal Proceedings

Item 1. Legal Proceedings 35

Risk Factors

Item 1A. Risk Factors 35

Unregistered Sales of Equity Securities, Use of Proceeds, and Issuer Purchases of Equity Securities

Item 2. Unregistered Sales of Equity Securities, Use of Proceeds, and Issuer Purchases of Equity Securities 35

Other Information

Item 5. Other Information 36

Exhibits

Item 6. Exhibits 36 2 Table of Contents PART I FINANCIAL INFORMATION Cautionary Note Regarding Forward-Looking Statements: This Quarterly Report on Form 10-Q contains historical information and forward-looking statements based on information currently available to our management. The forward-looking statements in this report, including those made in Item 2 (Management's Discussion and Analysis of Financial Condition and Results of Operations) of Part I, are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995, as amended. These safe harbor provisions encourage reporting companies to provide prospective information to investors. Forward-looking statements can be identified by the use of certain words, such as "anticipate," "believe," "estimate," "expect," "intend," "plan," "project" and other similar terms and language. We believe the forward-looking statements are reasonable based on currently available information. However, forward-looking statements involve risks, uncertainties and assumptions, whether known or unknown, that could cause our actual results, business, financial condition and cash flows to differ materially from those anticipated in the forward-looking statements. A discussion of important factors relating to forward-looking statements is included in Part I, Item 1A (Risk Factors) of our Annual Report on Form 10-K for the year ended December 31, 2024 ("2024 Form 10-K"). Readers should not unduly rely on the forward-looking statements included in this Form 10-Q because such statements speak only to the date they were made. Unless otherwise required by applicable securities laws, we undertake no obligation or duty to update or revise any forward-looking statements contained herein to reflect subsequent events or circumstances or the occurrence of unanticipated events. 3 Table of Contents

Financial Statements

Item 1. Financial Statements. WERNER ENTERPRISES, INC. CONSOLIDATED STATEMENTS OF INCOME (Unaudited) Three Months Ended June 30, Six Months Ended June 30, (In thousands, except per share amounts) 2025 2024 2025 2024 Operating revenues $ 753,148 $ 760,798 $ 1,465,262 $ 1,529,878 Operating expenses: Salaries, wages and benefits 250,451 259,754 493,676 525,157 Fuel 60,401 71,998 123,493 149,620 Supplies and maintenance 62,260 61,988 122,300 123,763 Taxes and licenses 23,100 25,494 45,444 50,658 Insurance and claims ( 6,813 ) 31,897 36,964 68,259 Depreciation and amortization 70,757 72,672 140,806 146,942 Rent and purchased transportation 228,280 210,417 434,422 414,342 Communications and utilities 3,730 4,127 8,087 8,833 Other ( 5,339 ) 2,840 ( 419 ) 7,105 Total operating expenses 686,827 741,187 1,404,773 1,494,679 Operating income 66,321 19,611 60,489 35,199 Other expense (income): Interest expense 9,353 9,043 18,890 16,991 Interest income ( 1,487 ) ( 1,786 ) ( 2,979 ) ( 3,471 ) Loss on investments in equity securities 33 52 35 190 Loss (earnings) from equity method investment ( 719 ) 141 ( 842 ) 274 Other 51 30 ( 317 ) ( 231 ) Total other expense, net 7,231 7,480 14,787 13,753 Income before income taxes 59,090 12,131 45,702 21,446 Income tax expense 15,468 2,931 12,301 5,998 Net income 43,622 9,200 33,401 15,448 Net loss attributable to noncontrolling interest 440 265 563 329 Net income attributable to Werner $ 44,062 $ 9,465 $ 33,964 $ 15,777 Earnings per share: Basic $ 0.72 $ 0.15 $ 0.55 $ 0.25 Diluted $ 0.72 $ 0.15 $ 0.55 $ 0.25 Weighted-average common shares outstanding: Basic 60,888 62,706 61,386 63,089 Diluted 61,001 62,860 61,532 63,291 See Notes to Consolidated Financial Statements (Unaudited). 4 Table of Contents WERNER ENTERPRISES, INC. CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (Unaudited) Three Months Ended June 30, Six Months Ended June 30, (In thousands) 2025 2024 2025 2024 Net income $ 43,622 $

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (1) Basis of Presentation and Recent Accounting Pronouncements Basis of Presentation The accompanying unaudited interim consolidated financial statements include the accounts of Werner Enterprises, Inc. and its subsidiaries (collectively, the "Company" or "Werner"). Redeemable noncontrolling interest on the consolidated condensed balance sheets represents the portion of a consolidated entity in which we do not have a direct equity ownership. In these notes, the terms "we," "us," or "our" refer to Werner Enterprises, Inc. and its subsidiaries. All significant intercompany accounts and transactions relating to these entities have been eliminated. These consolidated financial statements have been prepared in accordance with the U.S. Securities and Exchange Commission ("SEC") instructions to Form 10-Q and, in the opinion of management, reflect all adjustments, which are all of normal recurring nature, necessary to present fairly the financial condition, results of operations and cash flows for the periods presented in conformity with U.S. generally accepted accounting principles ("GAAP"). These consolidated financial statements do not include all information and footnotes required by GAAP for complete financial statements; although in management's opinion, the disclosures are adequate so that the information presented is not misleading. Operating results for the three and six months ended June 30, 2025 are not necessarily indicative of the results that may be expected for the year ending December 31, 2025. In the opinion of management, the information set forth on the accompanying consolidated condensed balance sheets is fairly stated in all material respects in relation to the consolidated balance sheets from which it has been derived. These consolidated financial statements and notes thereto should be read in conjunction with the consolidated financial statements and accompanying notes contained in our 2024

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