Saia Posts Q2 Revenue Beat Margin Slips

Key Points

• - GAAP EPS of $2.67 surpassed analyst expectations by 11.7% in Q2 2025, EPS exceeded analyst expectations by 12%, but declined 30.2% from the prior year.

• - GAAP revenue was $817.1 million, edging out consensus estimates but slipped 0.7% from the prior year.

• - The operating ratio rose to 87.8%, reflecting persistent margin pressures as network expansion investments have yet to deliver full profitability.

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Saia (NASDAQ:SAIA), a major U.S. less-than-truckload (LTL) transportation provider, reported its second quarter results on July 25, 2025. The headline: GAAP revenue and earnings topped Wall Street expectations, but profitability remained under pressure as costs outpaced revenue growth. For the quarter, Saia posted EPS of $2.67, above the $2.39 GAAP analyst consensus, and GAAP revenue of $817.1 million, outpacing GAAP estimates by $9.5 million. However, both figures declined from the same period last year, with GAAP EPS down 30.2% year-over-year and revenue down 0.7% year-over-year. Margins faced a noticeable squeeze, shaped by wage inflation and the ongoing challenge of absorbing new terminal costs. Overall, while the GAAP revenue beat and disciplined capital spending were positives, execution risk remains elevated in the near term as network expansion continues to dilute profitability.

Source: Analyst estimates for the quarter provided by FactSet.

What Saia Does and How It Competes

Saia operates a nationwide less-than-truckload (LTL) freight network, moving shipments that are too large for parcel carriers but too small for full truckloads. The company has prioritized service quality, investing heavily in technology and training to minimize claims and increase on-time performance.

In recent years, Saia's focus has been on expanding its geographic footprint, especially through the acquisition of freight terminals from competitors and organic openings in new markets. Key success factors include predictable on-time deliveries, maintaining a competitive claims ratio, and managing operational costs as the network grows. Building shipment density—more shipments per route—remains central to Saia’s efforts to boost profitability as it brings new terminals up to speed.

Quarter in Review: Network Growth Meets Profitability Challenges

The quarter reflected a balancing act between long-term investment and short-term margin pressure. GAAP revenue came in just above the analyst consensus, outperforming by $9.5 million, but decreased 0.7% year-over-year. The modest topline contraction was countered by a more pronounced decline in profits, as operating income (GAAP) fell to $99.4 million from $137.6 million a year earlier—a drop of 27.8%.

This performance was driven largely by cost increases and changes in shipment mix. Salaries, wages, and benefits rose 5.0% to $390,975,000 year-over-year, primarily due to headcount growth from opening new facilities and a wage increase. Depreciation expense increased by 20.9% year-over-year, reflecting recent investments in real estate and equipment. Conversely, purchased transportation expenses dropped 5.4% year-over-year.

Network expansion continues to shape results. Terminals opened within the past three years led growth in shipping volume and revenue but have not yet reached the profit levels of legacy markets. Tonnage per workday increased 1.1%, while overall shipment counts fell 2.8%. Notably, the average weight per shipment rose—up 4.0% to 1,394 pounds—while revenue per shipment, excluding fuel surcharges, increased 2.7% to $298.71. The operating ratio—a key measure of efficiency in trucking, with lower numbers preferred—jumped to 87.8%. This reflects higher costs relative to revenue, partly due to underutilization of new terminals and weaker shipping trends at older, established locations.

Management kept the spotlight on service performance, reporting a claims ratio of 0.5%, signifying improvements in minimizing cargo damage or loss. Technology and process investments aimed at improving network efficiency are ongoing. Capital expenditures for the first half of the year totaled $375.6 million. Most of the new equipment is now in service, with remaining cuts in outlays aimed at real estate projects.

There were no dividend changes or trends to note during this period.

Looking Ahead: Guidance and Key Trends to Watch

Management did not issue formal revenue or earnings guidance for the second half of fiscal 2025. Instead, executive commentary emphasized a cautious outlook, with ongoing cost-control efforts and a continued focus on customer service as key priorities. The only quantitative guidance provided was for capital spending, expected to reach $600 million to $650 million for the full year 2025.

Going forward, investors should monitor how the company manages its cost structure as shipment growth from new markets is offset by softness in legacy terminals. Utilization rates at recently opened facilities and improvements in operating ratio will be important indicators of progress. Any improvement in shipment volumes, particularly if accompanied by better pricing, could help Saia restore operating leverage. Updates on shipment mix, regional volumes, and profitability trends by facility age will also be critical in upcoming quarters.

Revenue and net income presented using U.S. generally accepted accounting principles (GAAP) unless otherwise noted.

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