Operating income rose 255.1% to $178.71M, but the year-earlier quarter carried $34.8M of impairments and an $11.2M loss contingency 8-K. Excluding the impairments, the increase is 109.9%. Management says 2027 needs further meaningful rate growth.
Knight-Swift Transportation Holdings Inc. · Q3 2026 · Reported 21 Oct 2026 · US
Key figures
Million USD | Q3 2026 | Q3 2025 | Change |
|---|---|---|---|
Revenue | 2,200.93 | 1,927.06 | +14.2 % |
Operating income | 178.71 | 50.33 | +255.1 % |
Net income | 118.27 | 7.86 | +1404.5 % |
Diluted EPS | 0.72 USD/share | 0.05 USD/share | +1340.0 % |
Operating margin | 8.1 % | 2.6 % | +5.5 pp |
Net margin | 5.4 % | 0.4 % | +5.0 pp |
Figures in USD, as reported. Margins are computed from the reported lines.
Operating income more than tripled, but a charge-laden prior year inflates the gain
Revenue rose 14.2% to $2.20B, while revenue excluding truckload and LTL fuel surcharge grew 7.7% 8-K. Operating income reached $178.71M against $50.33M a year earlier, and operating margin was 8.1% against 2.6% 8-K. The year-earlier quarter included a $34.8M impairment charge, mainly from combining the LTL brands under one trade name, and an $11.2M loss contingency 8-K.
In calculations that exclude each item (not company figures), operating income rose 109.9% and the margin was 4.4% a year earlier without the impairment, and 190.5% and 3.2% without the loss contingency. The company-defined Adjusted Operating Income rose 87.4% to $198.5M 8-K. The current quarter also carries $6.3M of securitization costs in operating income that were reported in interest expense before 2026, which depresses the operating comparison 8-K.
Truckload pricing and network efficiency did the work, while LTL slipped
Truckload revenue excluding fuel surcharge and intersegment transactions grew 6.5% as revenue per loaded mile rose 9.7%, partly offset by a 3.0% drop in loaded miles 8-K. Adjusted Operating Ratio improved 700 basis points to 89.2%, which management attributes to pricing, loaded miles per tractor and a 170 basis point cut in empty miles 8-K. Segment Adjusted Operating Income was $124.6M against $41.2M a year earlier 8-K.
The other segments were mixed. LTL Adjusted Operating Ratio worsened 80 basis points to 91.4%, and its Adjusted Operating Income fell 8.4%, with a $4.6M decrease in gains on sale named as the main driver 8-K. Intermodal revenue grew 30.6% and its Adjusted Operating Ratio improved 200 basis points to 97.8% 8-K.
Net income outran operating income because interest and tax both fell
Net income was $118.27M against $7.86M, and diluted EPS $0.72 against $0.05 8-K. Management cites a $22.8M reduction in interest expense and a 19.6 percentage point drop in the effective tax rate, to 27.4% from 47.0% 8-K. My reading is that part of the interest decline reflects the securitization reclassification into operating costs. Company-defined Adjusted EPS was $0.83 against $0.32 8-K.
Cash flow is reported year to date: operating cash flow was $799.9M for the nine months against $543.4M a year earlier, and company-defined free cash flow was $373.2M (non-GAAP) 8-K. That improvement is year-to-date, so it does not isolate the third quarter.
What to watch next
Whether 2027 rate gains arrive: the CEO expects ongoing cost inflation and capacity constraints to require further meaningful rate growth in 2027 to support margin repair and fleet investment 8-K.
Driver supply: seated truck count stabilized in July and held through the quarter, but sourcing quality drivers is described as as challenging as in years 8-K.
Whether LTL margins recover as management expects, given the Adjusted Operating Ratio rose 80 basis points to 91.4% 8-K.
Sources
Produced by Clarifo Research with the Clarifo financial research engine from the company's public filings. AI was used in parts of the analysis and drafting. Figures are checked automatically against the filings they come from. This is not investment advice.