Knight-Swift Q3 Net Income Plummets 72% Amid Soaring Costs

TL;DR

**KNX's Q3 profit crash is a red flag; rising costs are eating into revenue, making it a tough haul for investors.**

AI Summary

Knight-Swift Transportation Holdings Inc. (KNX) reported a significant decline in net income for the quarter ended September 30, 2025, falling to $8.332 million from $30.059 million in the prior year, a 72.3% decrease. Diluted EPS also dropped from $0.19 to $0.05. Total revenue, however, saw a modest increase of 2.7% to $1.927 billion from $1.877 billion, driven by a rise in revenue excluding fuel surcharge to $1.721 billion from $1.681 billion. Operating expenses surged by 4.5% to $1.877 billion, primarily due to a substantial increase in insurance and claims expenses, which rose 34.6% to $116.497 million, and impairments, which jumped from $1.008 million to $34.805 million. The company also increased its revolving line of credit borrowings to $707 million from $232 million at year-end 2024, and repaid $1.561 billion in finance leases and long-term debt year-to-date. Dividends declared per share increased to $0.18 from $0.16 in the prior year quarter.

Why It Matters

This filing reveals a challenging quarter for Knight-Swift, with a sharp drop in profitability despite revenue growth. The significant increase in insurance and claims, coupled with higher impairments, suggests potential operational or market pressures impacting the trucking industry. For investors, this raises concerns about margin compression and the company's ability to manage rising costs in a competitive environment. Employees might face pressure if cost-cutting measures are implemented, while customers could see pricing adjustments. The broader market will watch if these cost trends are isolated to KNX or indicative of wider industry headwinds, potentially affecting other transportation players.

Risk Assessment

Risk Level: high — The risk level is high due to the 72.3% decline in net income for the quarter, from $30.059 million to $8.332 million, despite a revenue increase. This significant drop is primarily driven by a 34.6% surge in insurance and claims expenses to $116.497 million and a massive increase in impairments from $1.008 million to $34.805 million, indicating substantial operational challenges and potential asset value erosion.

Analyst Insight

Investors should exercise caution and consider reducing exposure to KNX given the sharp decline in net income and significant cost increases. Monitor future filings closely for signs of cost control improvements and stabilization in insurance and claims expenses, as these are critical for a rebound in profitability.

Financial Highlights

debt To Equity

0.77

revenue

$1.927B

operating Margin

N/A

total Assets

$12.619B

total Debt

$2.465B

net Income

$8.332M

eps

$0.05

gross Margin

N/A

cash Position

$192.677M

revenue Growth

+2.7%

Revenue Breakdown

Key Numbers

• $8.332M — Net Income (Q3 2025) (Decreased 72.3% from $30.059M in Q3 2024)
• $1.927B — Total Revenue (Q3 2025) (Increased 2.7% from $1.877B in Q3 2024)
• $0.05 — Diluted EPS (Q3 2025) (Decreased from $0.19 in Q3 2024)
• $116.497M — Insurance and Claims (Q3 2025) (Increased 34.6% from $86.510M in Q3 2024)
• $34.805M — Impairments (Q3 2025) (Increased significantly from $1.008M in Q3 2024)
• $707.000M — Revolving Line of Credit (Sept 30, 2025) (Increased from $232.000M at Dec 31, 2024)
• $1.561B — Repayments of Finance Leases and Long-Term Debt (YTD Sept 30, 2025) (Increased from $214.881M YTD Sept 30, 2024)
• $0.18 — Dividends Declared Per Share (Q3 2025) (Increased from $0.16 in Q3 2024)

Key Players & Entities

• Knight-Swift Transportation Holdings Inc. (company) — Registrant
• New York Stock Exchange (regulator) — Exchange where common stock is registered
• $8.332 million (dollar_amount) — Net income for Q3 2025
• $30.059 million (dollar_amount) — Net income for Q3 2024
• $1.927 billion (dollar_amount) — Total revenue for Q3 2025
• $1.877 billion (dollar_amount) — Total revenue for Q3 2024
• $116.497 million (dollar_amount) — Insurance and claims expense for Q3 2025
• $86.510 million (dollar_amount) — Insurance and claims expense for Q3 2024
• $34.805 million (dollar_amount) — Impairments for Q3 2025
• $1.008 million (dollar_amount) — Impairments for Q3 2024

FAQ

Risk Factors

• Increased Insurance and Claims Expenses [high — operational]: Insurance and claims expenses surged by 34.6% to $116.497 million in Q3 2025, significantly impacting profitability. This increase suggests a rise in accident frequency or severity, or higher insurance premiums.
• Significant Impairments [high — operational]: Impairment charges jumped from $1.008 million to $34.805 million year-to-date. This indicates potential write-downs of assets, possibly due to underperformance or obsolescence, which directly reduced net income.
• Increased Revolving Line of Credit Usage [medium — financial]: Borrowings under the revolving line of credit increased substantially to $707 million from $232 million at year-end 2024. This indicates a greater reliance on short-term debt financing.
• Large Debt and Lease Repayments [medium — financial]: The company repaid $1.561 billion in finance leases and long-term debt year-to-date, a significant increase from $214.881 million in the prior year. While deleveraging is positive, the scale of repayments may strain cash flow.
• Economic Sensitivity of Freight Demand [medium — market]: As a transportation provider, Knight-Swift's revenue and profitability are sensitive to overall economic conditions, which can affect freight volumes and pricing. A slowdown in the economy could negatively impact demand for services.

Industry Context

The freight transportation industry is highly competitive and cyclical, heavily influenced by economic conditions. Knight-Swift operates in a segment facing challenges from rising operating costs, particularly insurance and claims, alongside fluctuating demand. Technological advancements and capacity management remain key strategic considerations for industry players.

Regulatory Implications

The transportation sector is subject to stringent safety and environmental regulations. Changes in labor laws, emissions standards, or driver hour regulations could increase operating costs or require significant capital investment. Compliance with these evolving regulations is crucial for maintaining operational efficiency and avoiding penalties.

What Investors Should Do

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Key Dates

• 2025-09-30: Quarter ended September 30, 2025 — Reported a significant decline in net income and EPS, despite a modest revenue increase, driven by higher operating expenses.
• 2024-12-31: Year-end 2024 — Revolving line of credit borrowings stood at $232 million.
• 2025-01-01: Year-to-date September 30, 2025 — Repaid $1.561 billion in finance leases and long-term debt.
• 2024-01-01: Year-to-date September 30, 2024 — Repaid $214.881 million in finance leases and long-term debt.

Glossary

Diluted EPS

Earnings per share (EPS) calculated by dividing net income by the total number of diluted shares outstanding. Diluted shares include common stock equivalents like stock options and convertible securities. (Indicates the profitability available to each outstanding share of common stock, considering all potential dilutive securities.)

Impairments

A reduction in the carrying value of an asset on the balance sheet when its fair value or recoverable amount falls below its book value. (A significant increase in impairments suggests potential issues with asset performance or valuation, directly impacting net income.)

Revolving line of credit

A type of credit facility that allows a company to borrow, repay, and re-borrow funds up to a certain limit over a specified period. (An increase in borrowings indicates greater reliance on short-term debt, potentially for working capital or operational needs.)

Finance lease liabilities

Liabilities arising from leases that transfer substantially all the risks and rewards of ownership of an asset to the lessee. (Repayments of these liabilities reduce debt and impact cash flow. Significant repayments can indicate deleveraging efforts or asset disposal.)

Revenue excluding fuel surcharge

Total revenue generated from transportation services, excluding any amounts collected specifically to cover fuel costs. (This metric provides a clearer view of the core operational revenue, unaffected by volatile fuel prices.)

Year-Over-Year Comparison

Knight-Swift reported a stark contrast in profitability compared to the prior year, with net income dropping 72.3% and diluted EPS falling from $0.19 to $0.05, despite a 2.7% increase in total revenue. This decline was primarily driven by a significant surge in operating expenses, most notably a 34.6% rise in insurance and claims costs and a substantial increase in impairment charges. The company also saw a considerable increase in its use of its revolving line of credit, indicating a shift in its short-term financing strategy.

Key Financial Figures

• $0.01 — hange on which registered Common Stock $0.01 Par Value KNX New York Stock Exchange

Filing Documents

• knx-20250930.htm (10-Q) — 2558KB
• knx-ex101x9302025.htm (EX-10.1) — 1292KB
• knx-ex311x9302025.htm (EX-31.1) — 10KB
• knx-ex312x9302025.htm (EX-31.2) — 11KB
• knx-ex321x9302025.htm (EX-32.1) — 9KB
• knx-ex322x9302025.htm (EX-32.2) — 9KB
• image_0.jpg (GRAPHIC) — 0KB
• knx-20250930_g1.jpg (GRAPHIC) — 92KB
• 0001492691-25-000074.txt ( ) — 11343KB
• knx-20250930.xsd (EX-101.SCH) — 39KB
• knx-20250930_cal.xml (EX-101.CAL) — 65KB
• knx-20250930_def.xml (EX-101.DEF) — 252KB
• knx-20250930_lab.xml (EX-101.LAB) — 546KB
• knx-20250930_pre.xml (EX-101.PRE) — 378KB
• knx-20250930_htm.xml (XML) — 1668KB

FINANCIAL INFORMATION PAGE

PART I FINANCIAL INFORMATION PAGE

Financial Statements

Item 1. Financial Statements 5 Condensed Consolidated Balance Sheets (Unaudited) — September 30, 2025 and December 31, 2024 5 Condensed Consolidated Statements of Comprehensive Income (Unaudited) — Quarter and year-to-date ended September 30, 2025 and 2024 6 Condensed Consolidated Statements of Cash Flows (Unaudited) — Y ear-to-date ended September 30, 2025 and 2024 7 Condensed Consolidated Statements of Stockholders' Equity (Unaudited) — Quarters and year-to-date ended S eptember 30, 2025 and 2024 9 Note 1 — Introduction and Basis of Presentation 11 Note 2 — Recently Issued Accounting Pronouncements 12 Note 3 — Acquisitions 13 Note 4 — Income Taxes 14 Note 5 — Accounts Receivable Securitization 14 Note 6 — Debt and Financing 16 Note 7 — Defined Benefit Pension Plan 18 Note 8 — Purchase Commitments 18 Note 9 — Contingencies and Legal Proceedings 19 Note 10 — Share Repurchase Plans 19 Note 11 — Weighted Average Shares Outstanding 20 Note 12 — Fair Value Measurement 21 Note 13 — Related Party Transactions 24 Note 14 — Financial Information by Segment and Geography 25

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 28

Quantitative and Qualitative Disclosures About Market Risk

Item 3. Quantitative and Qualitative Disclosures About Market Risk 61

Controls and Procedures

Item 4. Controls and Procedures 61

OTHER INFORMATION

PART II OTHER INFORMATION

Legal Proceedings

Item 1. Legal Proceedings 63

Risk Factors

Item 1A. Risk Factors 63

Unregistered Sales of Equity Securities and Use of Proceeds

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds 63

Defaults Upon Senior Securities

Item 3. Defaults Upon Senior Securities 63

Mine Safety Disclosures

Item 4. Mine Safety Disclosures 63

Other Information

Item 5. Other Information 63

Exhibits

Item 6. Exhibits 64

Signatures

Signatures 65 2 Table of Contents KNIGHT-SWIFT TRANSPORTATION HOLDINGS INC. GLOSSARY OF TERMS The following glossary defines certain acronyms and terms used in this Quarterly Report on Form 10-Q. These acronyms and terms are specific to our company, commonly used in our industry, or are otherwise frequently used throughout our document. Term Definition Knight-Swift/the Company/Management/We/Us/Our Unless otherwise indicated or the context otherwise requires, these terms represent Knight-Swift Transportation Holdings Inc. and its subsidiaries. 2017 Merger The September 8, 2017 merger of Knight Transportation, Inc. and its subsidiaries and Swift Transportation Company and its subsidiaries, pursuant to which we became Knight-Swift Transportation Holdings Inc. 2021 Debt Agreement The Company's unsecured credit agreement, entered into on September 3, 2021, consisting of the 2021 Revolver and 2021 Term Loans, which are defined below 2025 Debt Agreement The Company's unsecured credit agreement, entered into on July 8, 2025, consisting of the 2025 Revolver and 2025 Term Loans, which are defined below 2021 Prudential Notes Third amended and restated note purchase and private shelf agreement, entered into on September 3, 2021 by ACT with unrelated financial entities 2021 Revolver Revolving line of credit under the 2021 Debt Agreement, maturing on September 3, 2026 2025 Revolver Revolving line of credit under the 2025 Debt Agreement, maturing on July 8, 2030 2021 Term Loans The Company's term loans under the 2021 Debt Agreement, collectively consisting of the 2021 Term Loan A-1, 2021 Term Loan A-2 and 2021 Term Loan A-3 2025 Term Loans The Company's term loans under the 2025 Debt Agreement, collectively consisting of the 2025 Term Loan A-1 and 2025 Term Loan A-2 2021 Term Loan A-1 The Company's term loan under the 2021 Debt Agreement, which matured on December 3, 2022 2021 Term Loan A-2 The Company's term loan under the 2021 Debt Agreement, maturing on

FINANCIAL INFORMATION

PART I FINANCIAL INFORMATION

FINANCIAL STATEMENTS

ITEM 1. FINANCIAL STATEMENTS Condensed Consolidated Balance Sheets (Unaudited) September 30, 2025 December 31, 2024 (In thousands, except per share data) ASSETS Current assets: Cash and cash equivalents $ 192,677 $ 218,261 Cash and cash equivalents – restricted 101,677 147,684 Trade receivables, net of allowance for doubtful accounts of $ 37,349 and $ 37,797 , respectively 864,539 803,696 Contract balance – revenue in transit 8,687 7,238 Prepaid expenses 116,851 123,089 Assets held for sale 69,295 82,993 Income tax receivable 79,376 37,260 Other current assets 35,181 28,520 Total current assets 1,468,283 1,448,741 Gross property and equipment 7,327,009 7,104,514 Less: accumulated depreciation and amortization ( 2,571,761 ) ( 2,401,129 ) Property and equipment, net 4,755,248 4,703,385 Operating lease right-of-use-assets 297,060 372,841 Goodwill 3,962,142 3,962,142 Intangible assets, net 1,970,565 2,057,044 Other long-term assets 165,425 154,379 Total assets $ 12,618,723 $ 12,698,532 LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Accounts payable $ 251,567 $ 329,697 Accrued payroll and purchased transportation 213,761 194,875 Accrued liabilities 58,337 64,100 Claims accruals – current portion 268,831 249,953 Finance lease liabilities and long-term debt – current portion 204,731 288,428 Operating lease liabilities – current portion 107,952 120,715 Accounts receivable securitization – current portion — 458,983 Total current liabilities 1,105,179 1,706,751 Revolving line of credit 707,000 232,000 Long-term debt – less current portion 1,052,969 1,445,313 Finance lease liabilities – less current portion 479,883 457,303 Operating lease liabilities – less current portion 209,788 274,549 Accounts receivable securitization 455,200 — Claims accruals – less current portion 340,981 335,880 Deferred tax liabilities 941,123 919,814 Other long-term liabilities 205,540 210,117 Total liabilities 5,497,663 5,581,727 Commitments