Hub (HUBG) 27 Apr 232023 Q1 Earnings call transcript

Company Profile

Participants

Phil Yeager	President and Chief Executive Officer
Brian Alexander	Chief Operating Officer
Geoff DeMartino	Chief Financial Officer
Jon Chappell	Evercore
Elliot Alper	Cowen and Company
Brian Ossenbeck	JPMorgan
Bascome Majors	Susquehanna
Scott Group	Wolfe Research
Tom Wadewitz	UBS
Justin Long	Stephens
Ravi Shanker	Morgan Stanley
David Zazula	Barclays

Call transcript

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Operator

Hello, and welcome to the Hub Group First Quarter 2023 Earnings Conference Call. Phil Yeager, Hub's President and CEO; Brian Alexander, Hub's Chief Operating Officer; and Geoff DeMartino, Hub's CFO, are joining me on the call. At this time, all participants are in a listen-only mode. A brief question-and-answer session will follow the formal presentation. In order for anyone to have an opportunity to participant, please limit your inquiries to one primary and one follow-up question.

happen during release of good represent as what made contained call faith statements to the future. in the may forward-looking the the course or judgment Any the in Company's best that such believe, of words these forward-looking use and and as be by expect, identified Statements the are of words. project anticipate variations can review cautionary statements the in Please the release.

differ to filings materially Company's Form actual other SEC regarding In these that the results those forward-looking addition, XX-K from in to you projected in the disclosures should cause factors refer could statements. and

conference a reminder, being As this is recorded.

to It is now the to my pleasure your Yeager. host, turn Phil over call

may You now begin.

Phil Yeager

afternoon, me and our Chief Good Group's With today Hub are in Financial Officer. Brian Geoff DeMartino, Group's for thank Officer; and Alexander, participating Operating call. first quarter earnings Hub you Chief

time to start support effort tireless is market has elevated, members this rapidly The all balanced. last for of down evolving one employment import in thanking the to Group has are shifted Hub by and another our environment. year. volumes across inventories I team their are our from loose, more become and rail improving, customers Capacity wanted this market are services fluid, customers more

world company we in this cost technology environment and over that to service. ability our our compete successfully class operating with our to and past have improvements improvements through made Intermodal enhancements, several years The disciplines the and our diversification, yield are customers supporting support

Intermodal, In improved has have times. rail service turn as customer

elevated underperformed expectations. more pricing have aggressive demand our However, a given environment, slower inventories as and as well import volumes

enabled to as our season. bid improved spend, service perform Our well well enhanced as levels in in in-sourcing and of third-party reduction partnerships drayage, operational us discipline have rail

volumes, fees. we which As anticipate network accessorial offset to velocity bid balance, awards lower pricing and are and realized, help will improved

strong our lines, long-term performance results to We generating pleased improving other which focus of our service cost I'm service and growth. environment. challenging outstanding the on drive our are maintain providing in very a will structure with

In great while and order are cross purchasing taking through percentage our team, brokerage, sales systems, successful maintaining enhanced share, we and count improved selling. enhancing margin power

dedicated through organic improved We and are with new wins. growing our customer returns business

of acquisition support our in-sourcing cross-selling warehousing from expanding very our synergy TAGG successful The has to and demand opportunities. are and footprint we been

Lastly, customer-led managed we and are and organic industry-leading level due in scale mile new and our to driving businesses, transportation growth service improvements. continuous final our

savings extremely solutions otherwise bringing new across are these an have all our integrating customers, value strong We of to pipeline separate of offerings service. and and by enhanced provides increased our onboardings which we

balance which service strong significant sheet strategy us are and cash of stay solutions, offerings, our asset-based extremely an platform. enhancing best-in-class and diversifying on our free our have technology investing flow, our to generating service, We focused providing in will executing allow

strong efficiency maintaining focus environment us will focus strategy, challenging long-term a execute while and We capital lead We shareholders. to while enhancements, help cost successfully navigate to currently growth. this and controls will returning on on believe this the

that, performance. over discounts I hand to to will Brian unit our With it business

Brian Alexander

continued in and reportable leading starting our And thank executing with segments, a Intermodal Phil. will team environment Solutions. and to freight you, also their efforts our our Thank experienced discuss value Transportation I I through our now delivering wanted and changing for customers. to

XX% and the declined XX%. first revenue in declined to X%, increase quarter X% revenue In the volume declined Local X% increased the a our a continue trucking for Intermodal grow we unit East the Intermodal first the that with rest pipeline the in strong quarter the of Intermodal operation dedicated year. quarter, revenue and by and declined Transcon ITS per declined XX%. X%, driven Local softer West

point percent elevated volume led ITS to year-over-year. XXX income which a decline as lower customer and a basis generated and operating Software in revenue revenue, softer import volume inventories accessorial by of

an this continue XXXX. pressure year. with to XX% second agreements improvements from but last year more These outside an offset cost are improved first We half certainly to increase have the runway in quarter that several rail drayage price dray through and include, cost, limited cost lower in-source improvements not XX% to the of

addition, In improved to the and and first continued transits economics. street rail consistent, are more leading improve much quarter to in service

are of bid to second have we we the pleased to We through year. the and them start with far half in the so wins materialize season, expect

in deliver in to savings product turn, to cost We a our service drive our will customers, continue a sustainability believe will long-term down continue which to growth. we bring superior sustainable to even Intermodal in invest that and business helps cycle to

to our turning Now Logistics segment.

our new and As we despite were grew an our as our logistics we freight held brokerage percent the our of by end-to-end with revenue successful points volume expanding And our quarter. in several supply market close approach to continue share customers. flat supporting chain, basis in income value XX customers challenging deepen integrated the operating with to to to first environment, a

Our overall illustrated our of decline XX% transportation as on we been and offerings. service in the our improvements, first successful but a quarter, lowering Logistics experienced in have executing cost the integrating segment yield purchase revenue in of

integrated have to synergies. past and non-asset successfully cross We our continue two harvest acquisitions selling

leverage as for buying integration position mode which upside, to non-asset our continued continue be pleased diversification, us selling our We has very Choptank with and cross further team growth. will brokerage provided

to end at and To logistics needs. volume they first two of million more in take the Hub support onboarded in and customers' inbound are XX to by this multimodal we outbound warehouse our Hub our supply onboard network as new chain logistics to service year. and of XXXX and our These support locations over strategic multipurpose freight quarter, to locations the West least footage growth, we two expect square the our

a have We and of logistics dates great QX. launch new onboardings with QX pipeline in

and Our ratio close our logistics deal grow strong. remains size to continues

in With these growth. position a our are of continue profitable to great trajectory enhancements, we

to to With hand performance. that, I'll Geoff it financial our over discuss

Geoff DeMartino

revenue quarter in highest history the generated conditions, of company. freight our we of market $X.X for is second which Thank quarter, you, billion revenue Brian. first the Despite the softer

focus Our income led of and operating continued cost on X.X% revenue. operating containment of to efficiency margin

statement our as segments. disclosing our release, income As and are detailed Logistics as in for presentation our and profitability ITS press updating well we revenue

account from Logistics. employee transportation to parties as operations incentive capacity. lower lower base. year costs represents non-office of in for costs benefits expanded This office and rose we the warehousing offset as warehousing prior of and employee dry paid through added prior by company a focus the revenue, our storage and TAGG These as acquisition was significantly cost the office compared increase and third carrier compensation expense. percentage containment. and the of costs These Purchase Salaries year, and to cost cost declined reflecting on our reflect our

of Our our software. claims and cost the to drayage depreciation fixed investments in the we due and from prior costs as increase invested both upgrade and G&A network drayage IT operation. assets company our terminal year, warehousing increased in and expansion

quarter Our for the was diluted share $X.XX. per earnings

performance within pricing Our hand. progressed, ended generated profitability. quarter quarter $XXX softened million in of the with We the on Intermodal as revenue in volumes, and EBITDA lower as of lower million particularly decline a cash impacted accessorial rapid $XXX and

inventory due the began for XXXX. factors our rising second levels. updating retailer macroeconomic of decline in to to conditions guidance are half XXXX and Demand We

are half improvement expect of later but We a for slight anticipating the to year. these least demand in first conditions XXXX, in persist at the

diluted $X per of and to between generate For XXXX, EPS expect share. we $X

$X.X from range will revenue billion to expect $X.X billion. We

for volume forecasting mid we Intermodal, single-digit For year. are declines the

to efficiency. partially expect year, lack softer revenue improved face be transportation accessorial We pricing this a of by lower which and operating purchase less surcharges will and offset costs

experienced year and of QX the EPS lowest similar be QX. in a at levels will as the we will expect rate, We QX from decline sequential

We as planned $XXX from initial year. ads we $XXX expenditure reduced our to revised capital container million for have estimate expectations the million for XXXX $XXX our our of million $XXX also million to to down

Based cash and our million guidance, of capital to capital zero we invest returning EBITDA business generate profile flow as This to the in shareholders. us expenditures our flexibility with on acquisitions would this net capital well with in debt combined positions through $XXX less free our to XXXX. expenditures balance, financial as over expect

operator open the line turn over I'll for the that, any to questions. With it to

Operator

[Operator comes the Jon Instructions] line of from Our of Evercore. first question Chappell

question Jon. please, Your

Jon Chappell

where trends and the you of January now? on March start as just Guys, through especially today, can through are with volume cadence right the it kind I the have overall we Intermodal from basically

Phil Yeager

XX, Intermodal a year-over-year on April volume also down January XX date. Sure. and down basis, to March down February down XX, X,

Geoff DeMartino

part I of the well I with month the Jon, April think necessarily big rolling would level to typical a which is And lower a being you seasonality think, in we the revision March see scene off. as haven't resetting a coming fees pricing is at as QX, where accessorial and guidance in seen stronger with

Jon Chappell

Yes, that makes sense.

Geoff DeMartino

such a such part level business. logistics performing year the about well. EMO business last It's just the off of feel a We our coming good and from big of part high

Jon Chappell

Phil, right think give by That buyback bank give for maybe been well. this you hoping of the in and some with you Does cash flow pause kind the and hearing some much the kind and Geoff than backdrop we've about generation pipeline, you now? question, kind otherwise amid cheap more past. you year the about opportunities? one the you as program of versus to more aligns timing have really how per acquisition create Last the talked Okay. the metrics kind massive what outstanding have do you've year, of quarter environments size this this do done bigger this of And picture pause, acquisitions environment weaker it you or does stocks of anyone's

Geoff DeMartino

state of ability plays our opportunity balance of both. have need pursue to our and rely of opportunities. the Well, free market affords We capital markets. a think an to to well fund situation cash given acquisition current actually our sheet. balance on our We profile think current off pipeline really good the I financing don't strengths, us our flow sheet do We the

now we're are you of companies Obviously, to that are would and pursuing types that willing are right as that expect, performing performing. talk are well those companies

about a pursue call. are our acquisition, If think have we the we feel we've so, pursue an not mentioned at this ability we this But return of last capital. position execute to in to talked now. like do we more past, don't And point on But the on the both. I right aggressively will in we that we're

Phil Yeager

more cash resilient just I that would and we've we've think I model changed past acquisitions free the a built profile. done Jon, the in through add

as focus or build said to as offering, bring our So help that to technology. new in as before, service on well differentiation continue businesses non-asset we've we're us scale going

things able be So, hoping, ready as we on a be are along to if and that a hopeful do will we're not, come certainly close year. if and we'll we to buyback. transaction enact But this as have don't Geoff mentioned, pipeline strong we the

Jon Chappell

Geoff. Got it. Thanks, Phil. Thanks,

Operator

Thank you.

Company. and Cowen question go next of Please Our from Elliot the line of ahead, comes Elliott. Alper

Elliott Alper

you for Thank Great. the question.

talked happened I to it change is your You seeing a quarter on and guidance $X at of change previous last in floor this guess, a factors that consumer that. what material kind about take volumes how or other play? quarter are you would spending

Geoff DeMartino

still. demand. period we It's will No, and it's are in of just We supply if. by a remain long really that, know that question think when that driven I loose. not Along think We with conditions certainly pretty correct.

tighten were the to those We If same lower to get be guidance. will to conditions gets for what would conditions expect well. both would expect end we the of of upper current year, the the need our as us our end to that's those stay guide, full To satisfied.

Phil Yeager

the issued guidance the We year see to quarter. and much stronger initially in when were anticipating would we be would And into that with continue sequential trend in we December January. that, improvement would coming we March I were from think

we re-pricing as I went are saw aggressive environment. think more a through quarter, we in we the

that We business. on seeing roll for fees we bid not are hoping off the the and we compliance are are accessorial getting awarded

with adjusted to so continuing the guidance. we we trend wanted in And that sure, April, make

So as feel we ahead, bid improve. look will we though think I as do compliance

all a having we compliance in good bid new And awards than will our are higher position. Our as level those, certainly reset a be we older ones.

think have we bid well very performed season. in I

day, the load on network. focused have velocity that really per maximizing the increasing in margin We

to starting import down come awards and so those trend see And and bid floor of increasing spot market if really lead inventory that together, the come to will materializing. and we a volumes that

improvement believe And why to and we so to sequential to are QX QX that's QX some see do going QX. from we

Elliott Alper

that's No, helpful. Thank really you.

on turnaround? off guess, progressing the commentary I volumes guess single-digit in and a of the decline how volume we on that year year for kind I maybe half down confidence mid should on back XX% of through Intermodal what So you a that kind the kind of think for of gives about April,

Geoff DeMartino

Yes.

So compliance part seeing it that last we think think that on new I the of piece level is but year, awards. are I other from comparable is

our lines, seeing our Intermodal which performance are help other in strong really business. feed also We to service

going We on. have be are coming to some nice wins that

it of of good we part it So part pipeline is of a have onboarding. also comps, is but

So, really to see materialize. those we just need

Brian Alexander

Yes, to Elliot. well. that This as is I'll add Brian.

think our certainly we with are customers win I finding where ways transactionally. bids participate and new to in win we

We other sticky volume win help with that Logistics of be are our become able us coupled some offerings to more to together it less price sensitive. that and and non-asset

So customers transload are solutions. or looking consolidation for

given We for logistics access those square our to are footage as able our throughout supply network. them to well as them

to the back So we in helping see half. that drive also

Operator

you. Thank

of from comes question next Our the line Ossenbeck JPMorgan. of Brian

Your question please, Brian.

Brian Ossenbeck

question. the taking for Thanks afternoon. Good

more bit, competition, volumes East. and down you that? where versus more talk wanted you IMC about in are the you across right to elaborate Is more more it to regions competition? but a be bit what a also see throw Thanks. truck? most to in That'd now pressure, obviously, where in And get truck? the board, expect spreads helpful. can on a year? Can little the this elaborate Is you little quite different of Local the And bit you if the seeing are the on are to they rest Just do the that throughout

Phil Yeager

Sure.

been certainly more So bid a it's season. competitive

segments I with truck and think, haul in more seeing and in segments, be shorter haul with longer both then intermodal. intermodal, we're that

Transcon more mostly in network, has is slower. been this As of the portion resiliency know, which bit import sort our also you on have dependent growth but which very little been our volumes, a environment, of has in

continue respond The winds seeing the seeing levels. are more positively We're economics can bring We to assurances. online. service come customers and our to we capacity increased

over I think as things tighten we see time. up

to would certainly been you competition would me It's any, that's more any anticipate competitive. anything surprising it it's versus be. increased So, or not where

maximum us, balance, For helps that us on focused more the we're day velocity. model margin and fluidity generate more creating that staying per load creating returns

mid-teens I low business, from think from in on a spreads local on to contract little perspective, business that under high anywhere bit haul just longer teens double markets. a really digits to it's the

what see again. would get really anticipate. bottom spread you tighter I the is start we certainly market So, some spot than come volumes and to wider But the think really if that'll online,

Brian Alexander

out-source competitive too, to I I in effort This service and add Brian. helping that's all successful to we've trade is our out power was as price in-source been technology as our Brian well here. street. of there, out the centralized fine terminals. We've to us as Yes, taking costs very our just of also, our improved an load as mentioned the end efficient rollout in well of of well a our on But trade that agreements. become rail in drive that as network. coming our improvement in and planning more we're

So helps that compete. all altogether us

Brian Ossenbeck

Okay. to the follow just on up And guidance. then

the guidance you expected, changed? in quicker anything numbers? or rolled accessorial either guess the of has off I Thank on in the is all bigger terms of that than of gain that in movers, out terms updated now And you're the Sounds else how assuming like needle guide as you. sales buybacks? Is one of

Geoff DeMartino

the year, Sure. that had in faster a just to your did thought. The We decline been does point quarter. than buyback. for assume guide does rapidly we the It pretty modeling assume revenue happened not

level the of going X minimal that sale as forward gain And about so there's going a minimal well. then million And quarter forward. on in

Phil Yeager

with or surcharge significant very in we revenues And well. didn't associated that as peak related a build season

Brian Ossenbeck

came or and there than were Geoff, no basis? net on thought you coming is more a that there altogether access Sorry, just out oils change was clarify, faster just net of out really just the to

Geoff DeMartino

got thought the We at year of quarter. in the we to point be the the end we'd by first

Operator

you. Thank

the from Susquehanna. of comes ahead. question Bascome next of Bascome. Please Majors Our line go

Bascome Majors

hoping cut? walk is done past in to through the comfortable first the that you've are you you walk levers granularly, conviction guidance range fortunately billion there? of and I was get us how Looking the revenue? you could assumptions that lower the what $X it. more that last today, get $X.X that XXXX, some cut lot you. and And than a end of of beyond you do the And How Thank are raising through the lowering

Geoff DeMartino

We Sure. our be to of tend guidance. pretty conservative

not first a us The big the reduction, softened throughout since firmed gets same it for the range. our If conditions year, are deal view lower have of provide really what the quarter was of us So what a with and come to of to up were basically be volume we the one conditions a were in we seeing. that's end did and again the sequentially the stay rest but flat to -- then. balanced to of

in would stronger sequentially improvement higher year. of for The the the come with a end range volume,

exist, If range play would revenue end expect at the coming improvement So higher the QX range in year, late that end the midpoint, back to down the volume. be closer volume, are in would of a the higher the sequential surcharge a full on we drive us would obviously which get to to see imply also well. flat the that of we or as single-digits into half. QX conditions for would has that to mid the To get

Brian Alexander

resilience Transcon hold they just headwinds, their share. new to their able to to increases, customer demand keep while also going they And close logos that's market costs continue those performance, I'll to comment as market, our well. are accelerate add The contained. to brokerage gain and really flat the is amongst and of their volume as on This been market with so even headwinds the have the operations Brian. able in

market, yields share their service, and diversified They to bring team move they and a the very that ahead and protect fast. that overall the helps of the moves So offering. market

Bascome Majors

both do just that initial you piece. I one Thank guide. could you cash believe at free flow thought about $XXX you for more the and of million said

CapEx. level? update Maybe Thank you. there like flow here. on range is at income looks cut new at You've a within least some capital working Any free what release cash the

Geoff DeMartino

I with less Sure. basis north $XXX my prepared had be CapEx EBITDA but of said we'd remarks, this million. guide, in on an

Operator

you. Thank

line question comes Scott. of Group from the next go Research. Wolfe ahead, Our Scott Please of

Scott Group

Thanks. Afternoon guys.

fell if wondering historical from Any there some ITS margin the little been What's but of trough X%, was a history give to to us could right. helpful. I help prior peak So this be maybe history could to XX% pandemic? more the bit of was Where It this color you sort margin, I think range?

Phil Yeager

Sure.

in press by in release, quarter. we in the So the did appendix, put XXXX

much XX.X%. whole XXXX was year the history, that back X.X% ITS of XXXX a didn't the range. around So XXXX, part that was full all kind go margin Company was recast of income timeframe back a as of overall puzzle. and the bigger And to We operating the but Intermodal back X% in

X.X% So of that would been big part -- have X% have driver a been certainly would a to intermodal. of that

it call to range. X% the of X% kind So

done we've out. taken business. of a the a to costs then, lot lot improve We've Since

yield to the and driver, go our mid mid well as as better to the from with of XXs disciplines. line. transportation north XXs operating is that's drayage we're below higher, efficiencies looking as along and that sourcing Certainly, as in another technology up the well. in today, management a taking have benefit service We well a historically But value big us up offers driver

Geoff DeMartino

we drivers a I we've count are coming to I so a candidates increased year-over-year. have now, that can We and get sustain far driver on XX%. Scott, at recruiter actually feel and we of we're think, that of that just backlog And XX% better our theXX% that highlighted, we're

we're where markets are oversubscribed. those So,

go this pursuing as that are but us up proving We the XX%. in of help have that to our that We're economics and to would well. a and to highlight environment. just also be sort gap ability very have improved we those aggressively out drivers helpful bit need markets, those win quite rail certainly certainly few agreements I are get to in make supporting will the we a to

Phil Yeager

our integrated share of drivers Yes, really optimization to ITS. well just in so and as we've we within drayage a lot that our as dedicated one that piece how amongst to drivers we've that intermodal add found our

Scott Group

And year big forward, in for base guidance maybe of quarters, talked and the I do quarter, to margin points the margin? we full quarter. in two less want going there cyclicality you XXX ITS the about just last why in -- sort would drop in a one QX last and like have be what's

rail it understand I want bit these want But the I cyclicality still So that of a just a just, lag? is the to in to margins contracts, understand happens of the variability on better. just play? I little is

Phil Yeager

Sure.

did think, and The -- that overall is ramp. I the the it's our of logistics of benefit and from though we our that cyclicality single and to line is where business the the some margin logistics the Intermodal business. to rate, expect to margins reality in segment particular sensitive variability biggest year-over-year, will going improve continue drive ITS part does

a weakness. such intermodal, and We expect price price as cyclical market periods of of there's to in periods going strength be

Last of price to the year we a of and going troughs the side. year, one This expect the price was obviously strength. weakness be period is

and levers ability of then factor so, there drayage, do overall from be more and intermodal, rail, the our coming variability our the within is logistics. will business the have of growing to part key just rail other contracts around And in-source with the flexibility while we the

Geoff DeMartino

on there than Scott, of on I that think we gains anticipated. I and a also is normalized I quickly highs just lag surcharges accessorial on rail fees agreements. sale, highlight, historic And off in coming would on those But more drastically we're would've have think

higher So, we feel on we now a that earnings off can grow floor set, of. we

I is strong. that's fast which that than I ever had per in the And Company. that think year we've very the second higher And also XXXX earnings believe share, our it's

free generating in which resilient and to model a with is difficult we've we've environment. I drayage a those a with really leading cash that think to sourcing continuing rail contracts more in built model flow feel-- we've the that done, high improve with lastly, diversification

Scott Group

good what's ITS the all in just year and though, full Do are points. guidance QX mind for margin? you sharing Those Yes.

Phil Yeager

It will down be QX. a were from where step we in

the, probably down XXX basis XXX Somewhere full points and in year. another for the

Scott Group

the time. Thank right. you guys. All Appreciate

Operator

you. Thank

Our comes from next line Tom. ahead, go UBS. of question Wadewitz Please Tom of the

Tom Wadewitz

Yes. the out about Good you ask to there. competitive afternoon. I bit a wanted dynamic little

prices is sense go I some much been as sense contract think down or won't Intermodal truckload rates. as a that quite has there maybe

So storage maybe fees broker I going that's your rates get away. But through not you then if you as asset is there the guess and is that's right. of, on down that, building stability as and truck impact and Intermodal or think guess, bad. and as the wanted get and most worse I that, excluding keeps bad a the not do thoughts I it to pressure see go base some XQ. might kind bit of

So, just around competitive really dynamic. Thanks.

Phil Yeager

sure. Yes,

I rates carriers assertion the per this through Obviously, having which think we Intermodal up are year-over-year brokers a outperforming that, the by I is lowest rates cycle group your So of X%, renewing is revenue full was strong. rate. think net In at truckload flows load QX, having around those accurate. our lower

with So, there. you agree I that? Brian, said to take want you what

Brian Alexander

Yes.

retain of what really out them we could we hard brokerage side. on moved is we environment spot, get saw into of that did those stable XX% in side think much so in the QX more I about in were a contracted. What to year was our we contracts contract our XX% worked and spot too, customers last

help to in well the our in as think side. starts illustrated as volume going our protect brokerage to that move up to that's drive market results, help to we brokerage more that and as volume seen have We

Phil Yeager

and we driven I to from be it to are to renewing just I by driven are think rates up, don't surprising And anticipate that what me we recession. the right going much now, pace see round really lower would consumer that be would a go

even that XX% re-pricing effective obviously additional not through that QX. of downside. be will that re-price the was think there XX % renewals now I we another there much quarter to left right our And and in that are is quarter fourth in are third after with if bids effective, just

think market a can there forward best bid thought have to from bit that, rates that a change. shift a pricing this I season. half, try out a to seen the little we get in been pull the and that they QX customers here few during you there customers hasn't But dramatic tell want of our is kind the back might

would go that So forward. read on be our

Brian Alexander

as are has they hearing one that's the nicely that QX. we piece of that Just moving have still customers have from played want in they that, volumes been seeing that Intermodal last we convert that road, rails service to the out as our really over stability well from and

We and that it. stability of the have of confidence in gained the consistency

trimmed So compete overall customers our we over have those with the on transits on price service to but to better not just road.

Tom Wadewitz

you to look change you a change? a makes It per absolute of I a versus have more way When the And percent a EPS talking you or granular, difference it. about are at Okay. then bit earnings of decline XQ suppose. I share of little similar one XQ, talk the about that's guidance the kind an the little decline XQ in

Phil Yeager

Percent.

Tom Wadewitz

Percent, right.

the for time. Okay, great. Thank you

Operator

Thank you.

line Our Justin next question comes Stephens. Long of of from the

question, Your Justin.

Justin Long

color the would was to love point. trending your at is cadence but on hear I get kind you of far so some to when kind and season, visibility level of look at XX% how that bid this of maybe guess it pricing of Phil, helpful bids of contract first

Phil Yeager

Sure.

head I perspective retaining that balance. that. for mix head target on incumbent we're of to I haul and think doing the lower haul we're on revenue mid-single, lower retention than think year-over-year kind trying so while focused a We're might on -- than business, haul, back component per a getting from really a of a that long better basis, be haul there's balance. certainly, far unit And us but really that where kind of So,

that despite And the or quarter. business basis per you in unit of during business up can renewing year-over-year I think X% the on the of XX% that that revenue a see majority being the

I So think into trying and a picking our renewals get better of the velocity truck view very season, digits in will network. than is spots and winning through well kind still -- it this single the and back that our really decline managing we're balance we're be going to on to really from do the

Justin Long

play are Got as rates going And to single is accessorial. it. know role mix a if digits, down I well and

So going in there into guidance on the trend about all the help what's and way think year-over-year a baked us basis? is forward a of yields can you

Geoff DeMartino

Sure.

would assuming be down, are one it'd flattened down be single. We

Justin Long

thing both thinking re-segmentation. you the ask both wanted you maybe last given and where you question us trend the I businesses those of -- the can range terms ITS How in about segment I it bit through margins of of to cycle? Okay. Is targeted are there think And logistics? a wanted try a kind give on margins in to operating differently,

Geoff DeMartino

I probably think last mean, our a the of business I on inter This environment. the side, be mean, Sure. year strong opposite. -- in pricing power going demonstrates is ITS year on the the I to

QX, in X.X%. we at were so And

If mean year the on strength softness. I you that's a kind range another think points. basis XXX and basis down full we're of of

a term maybe So, is the may good long midpoint average.

raising we but overall a we're doing we the efficiently. more upside. that mix bigger we logistics part are long-term come it'll I'm to ready there's And out if where today, the a sure think better the up of and side, yields operating business, and keep number, better definitely On margin. not with becomes

Phil Yeager

part the that logistics by will of segment. into acquisition drive we much how And be driven revenue

of come through high, not I haven't you're post had acquisition. costs think as with that burdened that as being so those we be some

we we'll together, XXXX on X% while out in a But that to the think operating tie end. continue a margin with outperform of just back when it and target would quite anticipate X.X%, I came to high to kind of totality I

the of ITS, driver the of Geoff really part of environment, like a you logistics the And portfolio we strong outperformance. mentioned be And environment have that the this, is that which balance will of in really in outperformance. be the see driver

Justin Long

it. That's Got the Thanks time. helpful. for

Operator

of Thank next of Stanley. Ravi question you. the comes Our [Operator line Instructions] from Morgan Shanker

question, Your Ravi.

Ravi Shanker

evening, Good Thank you. everyone.

and that just a couple of bit cycle if and follow-up to I relative call of kind prior a ups do of you, kind follow bad fair has this that floor pendulum kind about and the your the also more you ask just how of cycle be But been of think probably expectations. lies Just of Is view that of have there where mid recalibrated has your here, that if or I on you EPS on what and the to swings has normalized been a going EPS can of is think is? expectations. all almost the at long-term given EPS where new lot guidance floor changed that kind sort normalized discussion

Phil Yeager

prior think some that on question. addressed of the Phil I

kind I that prior the think margin, operating of margin to was north X% X.X%. cycle well through the we on and expect operating be income guide X.X% of will normalized our long-term income

be I last think opposite. good then of and strength, year obviously, pretty indication is to a is the going year, this the

to So, two are we going the guideposts. longer-term, be in of those middle

Ravi Shanker

the space the combination the of year of to kind the changes competitively months? of these in changing were from what And That's it a truck Hub kind loose, a five of of players that positioned jockeying kind kind What kind of period that. be at as offerings for last does that like Got of the it. you out mean opportunities very same helpful. risks and of right basically all maybe CP-KCS kind for the guys to but and the fundamentally looking place follow-up mean, taken have competition end whole, is rail the as kind market with of for are IMCs in of new kind are feels that XX Group obviously, such, the also maybe to I question. and and now Intermodal market three

Phil Yeager

Yes.

are that got to help us. just we really premium going Pacific. service Union by our excited It's Western the So launched Partner really southern about

as shoring take both in three near to advantage the the two opportunity as longer-term. It's days well near best term think the service. of than I better --

And be it's so focus to certainly area. and we can hope catalyst a a for growth be going

level with are are an partners Local needs market that want for our we to that and haul back us, to service, we see driver certainly making in our really more getting with cycle. up growth. normalized a be very and are East partner get that then getting we back to labor the We port us us, which import sustainable think I to volumes growth good service see improved to anticipating Coast of with shorter that rail challenges investments will make and West working And behind will a us, maintain really closely also the the in happen.

Ravi Shanker

good. Very Thank you.

Operator

Thank you.

Barclays. line Our Oglenski next of Brandon of the from comes question

Your question, Brandon.

David Zazula

revenue kind This is David the Zazula ask per competitor that's or load. on basis? of a what brokerage, net of on something the just for in that I unit kind mentioned disclosed, terms trending you'd something realize in XQ a I Brandon. If there you are I you trough of seeing trends levels are could those XQ I think had you as in on was Are market? know else but the guess not seeing

Brian Alexander

David. Thanks is sure. Brian. Yes, This

Choptank would in QX share the perform that I as about our But just two we April and in how strong trough. last gained the that volumes about and a holding mentioned as revenue. as of we've We of margin we've probably the quite with our expanded seen really over as that see quarters acquisition March. market. I market with We've think, of before, percent good faced have combination our be our we've gross same

the well back feel QX our is good half year we into so, And very full even stronger integrated brokerage our a and offering. with see too mention brokerage. to I'll logistics of our that, positioned

competitive, as a offering. bring the as service that provide we our and well them And side, stickier and just less and transportation stock capabilities, offerings capabilities, so, capacity consolidation we cross we customers bringing on than have price transloading we warehouse be to seen and stronger our them diversify that we're as we've business with more service

Phil Yeager

at the that thing to record is team we I'd that Phil, efforts is that, customer testament that's and positions brokerage. Only levels our that on But count cross-selling in add is the think our And sales we this have. the absorbing -- see to up tender customers us market asset-based be well of going does from that to begin the rejections there sure for spot they're and to maybe the some tighten those we're very make as carriers.

David Zazula

I have customers are as this talk dedicated, not maybe a dedicated but you Thanks, guess about can that's guess you that I anymore, very area about looking year? wanted place I was to a that for been you've or I into segment more wanted talk to capacity helpful. lean segment

Brian Alexander

right, you're Yes, David.

and stable of We have that for in last taking chain. seen a consistent customers capacity they've two lot out volatility the look years that experienced more in their supply

So our pipeline strong. is very

sight line it our and well We've lot in more have of also and within out our operation. we've drayage it cost that integrated efficiently of QX. ran as as We in of onboardings good Intermodal taken to model a QX

feel So growth. yes, we our very good dedicated about

David Zazula

you're would don't Great. if if the clean-up, have And then Geoff, and but segment, I if you mean, that. just by I a as handy take I up now know you I breaking them have know by segment, don't non-driver definitely employees,

Geoff DeMartino

our was just over at end headcount quarter. X,XXX office So, total the of

David Zazula

Much appreciated. Thank.

Operator

turn Thank to Yeager I conference like closing would for now back remarks. Phil you. the to

Phil Yeager

track history. Great. thank call year think year by our our strategy evening. plus is environment, continuing evidenced and this successfully and we'll team more you Hub on confident XX navigate challenging in Well position second long-term company's for I believe best being for Hub Group in I'm for to this joining that's our our and success.

As questions. a available and are I hope any have again, I Jeff Thank you evening. you and for great always, Brian,

Operator

you Thank for call. conference today's participating. concludes This

now You may disconnect.

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