Knight-Swift Transportation’s third quarter was marked by revenue growth that surpassed Wall Street’s expectations, but profitability fell short, leading to a significant negative market reaction. Management attributed the underperformance to a combination of cost pressures—including insurance and claims costs at U.S. Xpress—and soft sales volumes. CEO Adam Miller highlighted that “freight markets still grappl[ed] with uncertainty,” noting that atypical demand patterns and weak seasonal trends persisted. The company also faced unusual expenses related to brand consolidation and insurance settlements, further weighing on margins.
Is now the time to buy KNX? Find out in our full research report (it’s free for active Edge members).
Knight-Swift Transportation (KNX) Q3 CY2025 Highlights:
- Revenue: $1.93 billion vs analyst estimates of $1.90 billion (2.7% year-on-year growth, 1.7% beat)
- Adjusted EPS: $0.32 vs analyst expectations of $0.37 (13.2% miss)
- Adjusted EBITDA: $285 million vs analyst estimates of $290.9 million (14.8% margin, 2% miss)
- Adjusted EPS guidance for Q4 CY2025 is $0.37 at the midpoint, below analyst estimates of $0.40
- Operating Margin: 2.6%, down from 4.3% in the same quarter last year
- Sales Volumes fell 2.6% year on year (-5.2% in the same quarter last year)
- Market Capitalization: $7.10 billion
While we enjoy listening to the management's commentary, our favorite part of earnings calls are the analyst questions. Those are unscripted and can often highlight topics that management teams would rather avoid or topics where the answer is complicated. Here is what has caught our attention.
Our Top 5 Analyst Questions From Knight-Swift Transportation’s Q3 Earnings Call
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Scott Group (Wolfe Research) asked about the impact of regulatory enforcement on capacity and private fleet trends. CEO Adam Miller explained that enforcement varies by state and is starting to tighten capacity, but the full impact will unfold over time as more fleets reassess outsourcing versus internalization.
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Richa Harnain (Deutsche Bank) questioned the apparent disconnect between strong Q3 LTL margins and softer Q4 outlook. CFO Andrew Hess clarified that the sequential margin decline is due to seasonality and volume sensitivity, noting that pricing remains disciplined and cost initiatives are ongoing.
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Ariel Rosa (Citigroup) inquired about the progress of cost-cutting initiatives across segments. Hess highlighted permanent reductions in fixed costs and early-stage technology adoption, with the most significant benefits expected to materialize in 2026.
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Ken Hoexter (Bank of America) asked for clarification on EPS adjustments and seasonal demand patterns. Miller confirmed that only abnormal charges were excluded from adjusted EPS and acknowledged that some peak projects are underway, but broad-based demand for the fourth quarter remains limited.
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Jonathan Chappell (Evercore ISI) questioned the company’s support for the potential UNP and NSC rail merger. Miller responded that long-haul freight is not a core focus for Knight-Swift’s truckload business, and that intermodal offerings could complement customer needs without cannibalizing truckload volumes.
Catalysts in Upcoming Quarters
In coming quarters, the StockStory team will be monitoring (1) regulatory enforcement trends and their impact on industry capacity and driver availability, (2) progress on cost reduction and operational efficiency initiatives in truckload and LTL segments, and (3) customer contract renewals and shifts in carrier selection strategies. The pace of technology adoption and integration of the AAA Cooper brand across LTL will also be key factors to watch.
Knight-Swift Transportation currently trades at $43.76, down from $47.38 just before the earnings. In the wake of this quarter, is it a buy or sell? Find out in our full research report (it’s free for active Edge members).
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