Werner Enterprises (NASDAQ:WERN) outlined a more optimistic outlook for 2026 while detailing fourth-quarter and full-year 2025 results that reflected continued pressure in the freight market, particularly in its One-Way truckload business. Management said it has focused on cost actions, productivity improvements, and technology investments during what it described as a prolonged multi-year downturn, while also repositioning the portfolio toward more resilient Dedicated operations.
Strategic shift: One-Way restructuring and FirstFleet acquisition
Chairman and CEO Derek Leathers said the company began a strategic restructuring of its One-Way truckload operation in the fourth quarter, narrowing the business toward “specialized, expedited cross-border Mexico and engineered” freight. He described the target model as a “smaller, more productive, and specialized fleet,” supported by asset-light PowerLink carriers.
In addition, Werner highlighted its recently completed acquisition of FirstFleet, a pure-play Dedicated trucking provider. Leathers said the deal accelerates Werner’s portfolio shift toward higher-margin Dedicated work with large shippers. The company closed the acquisition on January 27, and management said it expects the transaction to be immediately accretive.
Fourth-quarter 2025 results
Executive Vice President, Treasurer, and CFO Chris Wikoff reported fourth-quarter revenue of $738 million, down 2% year-over-year, while full-year revenue also declined 2%. Adjusted operating income was $11.3 million, producing a 1.5% adjusted operating margin, and adjusted EPS was $0.05.
Wikoff noted gains on sales of property and equipment of $2.4 million in the quarter, down from $6.5 million a year earlier, when results included a $5.1 million real estate gain.
Truckload Transportation Services: Dedicated strength offset by One-Way pressure
Truckload Transportation Services (TTS) revenue in the fourth quarter totaled $513 million, down 3%, and revenue excluding fuel surcharges declined 3% to $455 million. TTS adjusted operating income was $12.7 million, and adjusted operating margin net of fuel was 2.8%, down 30 basis points. Wikoff said Dedicated fleet growth, lower insurance costs, and higher equipment gains were more than offset by margin degradation in the One-Way trucking business.
- Total TTS average trucks: 7,340, down 2.1% year-over-year; the fleet ended the quarter down 5%, reflecting the One-Way restructuring.
- Dedicated: Revenue excluding fuel of $292 million, up 1%; Dedicated represented 65% of TTS trucking revenue, up from 63% a year ago. Dedicated average trucks increased 2.4% to 4,954, while Dedicated revenue per truck per week decreased 1.1% in the quarter but was slightly positive for the full year.
- One-Way: Revenue excluding fuel of $156 million, down 8%; average trucks fell 10% to 2,386. Revenue per truck per week increased 2.2% due to higher miles per truck, while revenue per total mile declined slightly due to what management described as mix changes tied to restructuring actions.
The company recorded a $44.2 million restructuring charge in the fourth quarter tied to the One-Way changes. Wikoff said $42.7 million of the charge was non-cash, including $21.7 million of intangible asset impairment and $21.0 million related to revenue equipment.
Logistics: Intermodal and Final Mile growth, brokerage margin pressure
Logistics revenue was $208 million, representing 28% of total fourth-quarter revenue, and decreased 3% year-over-year and 11% sequentially as the company prioritized yield management. Truckload Logistics revenue fell 8% on 9% fewer shipments and gross margin contraction, which management linked to rising purchased transportation costs that accelerated in December.
Wikoff said purchased transportation costs moderated slightly in January but remained elevated, keeping pressure on gross margin into the first quarter. Leathers added that large storms across much of Werner’s operating footprint further weighed on brokerage margins, though the company expects moderation as pricing agreements reset and efficiency initiatives progress.
Intermodal revenue rose 24% largely on volume growth, while Final Mile revenue increased 4%. Logistics adjusted operating margin was 0.5%, down 60 basis points, though management noted Logistics operating expenses in the quarter were the lowest since before the ReedTMS acquisition in late 2022, citing technology investments as a driver.
Cash flow, balance sheet, and FirstFleet transaction details
Werner ended 2025 with $60 million in cash and total liquidity of $702 million, including $642 million of availability under credit facilities. Operating cash flow was $62 million in the fourth quarter and $182 million for the full year. Full-year capital expenditures were $163 million, less than 6% of revenue, and free cash flow was $19 million, or just under 1% of revenue.
Total debt at year-end was $752 million, up 16% from the prior year. Wikoff said the company has “no near-term maturities” and maintains access to capital.
For FirstFleet, Wikoff said the total purchase price was $282.8 million, including $245 million for the operating company and $37.8 million for acquired real estate. Approximately $48 million was deferred consideration, including a $35 million earnout payable after March 2027 if earned. The deal was funded with cash on hand and incremental debt, including additional revolver draws and assumed FirstFleet capital leases. As of January 31, 2026, Werner’s total borrowings under its revolver and accounts receivable securitization facility were $884.6 million, up $132.6 million from year-end 2025. Assumed capital leases were estimated at $57 million, contributing to an estimated $189.7 million increase in debt since year-end.
Management said FirstFleet brings more than $615 million in trailing 12-month revenue and 2,400 tractors, expanding Werner’s Dedicated scale and network density. The company reiterated expectations for $18 million in annual cost synergies and said it believes FirstFleet’s margins can converge with Werner’s traditional Dedicated margins over 18 to 24 months. Leathers said about one-third of identified synergies could be realized during calendar 2026, with a two-thirds run-rate by year-end.
Looking ahead, Werner introduced 2026 guidance that includes FirstFleet and said it is shifting its fleet metric from end-of-period trucks to average trucks. The company guided to a 23% to 28% increase in average trucks for the full year, including FirstFleet, while noting organic fleet levels may decline early in the year due to the One-Way restructuring before improving later. Net capital expenditures are expected to range from $185 million to $225 million, with the upper end allowing for a potential pre-buy in the second half of 2026 ahead of 2027 EPA emissions changes. Management also guided to Dedicated revenue per truck per week down 1% to up 2% for the full year and said it expects low- to mid-single-digit contractual rate increases in Dedicated.
During Q&A, executives cautioned that the first quarter began with several headwinds, including Winter Storm Fern, ongoing One-Way restructuring work, and brokerage margin compression, but reiterated expectations for a more meaningful improvement beginning in the second quarter as restructuring benefits start to flow through.
About Werner Enterprises (NASDAQ:WERN)
Werner Enterprises, Inc, founded in 1956 by Clarence L. “Chris” Werner, is a leading transportation and logistics provider based in Omaha, Nebraska. The company began as a one‐truck operation and has since grown into one of North America’s largest carriers, offering an array of services to support diverse supply chains.
Werner’s core business activities include full truckload dry van services, dedicated contract carriage, intermodal transport and brokerage solutions. The company also provides value-added services such as warehousing, freight management and fleet maintenance through its network of terminals and service centers.
