Covenant Logistics Group Announces Third Quarter 2025 Financial and Operating Results

Rhea-AI Summary

Covenant Logistics Group (NYSE: CVLG) reported third quarter 2025 results for the period ended September 30, 2025. Total revenue was $296,889,000 and net income was $9.1 million ($0.35 per diluted share), with adjusted EPS of $0.44.

Operating income declined to $7.9 million and adjusted operating income was $15.0 million. The combined Truckload segment showed weaker margins, while Managed Freight freight revenue rose 14.0% and Dedicated freight revenue rose 10.8%. A 49% equity-method investment in TEL contributed $3.6 million pre-tax income. The company announced cost actions and exits that generated ~<$0.1 million> net adjustments in the quarter and will discuss results on a conference call on Oct 23, 2025.

Positive

• Managed Freight freight revenue +14.0% Q3 2025
• Dedicated freight revenue +10.8% Q3 2025
• TEL equity-method contribution $3.6 million pre-tax
• Adjusted operating income $14,977,000 Q3 2025

Negative

• Operating income down to $7,926,000 Q3 2025
• Combined Truckload segment operating income $9,178,000 Q3 2025
• Adjusted net income down to $11,517,000 Q3 2025
• Operating ratio worsened to 97.3% Q3 2025 (from 94.4%)

Insights

Transportation finance analyst

Q3 results show lower profitability and margin pressure driven by Truckload costs and under‑utilization.

Revenue grew modestly to $296,889 for the quarter while GAAP operating income fell to $7,926 and diluted EPS declined to $0.35, versus $0.47 a year ago. Asset‑light segments delivered flat to modest growth, but the Truckload segment showed lower utilization, higher operating costs, and a meaningful drop in segment operating income from $23,066 to $9,178.

Key dependencies and risks include continued overcapacity and muted demand, elevated insurance and claims expense (reported as 4 cents per mile, up 24% year‑over‑year on a per mile basis), rising driver and equipment costs, and a headwind from TEL’s pre‑tax contribution declining to $3.6 million due to customer bankruptcies. Management is reallocating capital toward asset‑light growth and plans modest Truckload fleet contraction; these actions may depress near‑term results and expose the company to volatile used equipment markets.

Watch near term metrics for traction: adjusted EPS trends in upcoming quarters, changes in Combined Truckload average miles per tractor (currently 28,306 for the quarter), utilization rates, and the outcome of the conference call on October 23, 2025. Also monitor fourth quarter insurance expense and execution on exiting underperforming contracts over the next few quarters.

CHATTANOOGA, Tenn., Oct. 22, 2025 (GLOBE NEWSWIRE) -- Covenant Logistics Group, Inc. (NYSE: CVLG) (“Covenant” or the “Company”) announced today financial and operating results for the third quarter ended September 30, 2025. The Company’s conference call to discuss the quarter will be held at 10:00 A.M. Eastern Time on Thursday, October 23, 2025.

Chairman and Chief Executive Officer, David R. Parker, commented: “Our third quarter results of $0.35 per diluted share, or $0.44 per diluted share on a non-GAAP adjusted basis, reflect essentially flat year-over-year performance in our asset-light business units and lower performance in our Truckload business units, mainly attributable to higher costs and under-utilized equipment. It was a busy quarter internally as we continued to invest in the future while managing costs during a prolonged period of overcapacity and muted demand.

“We continued to invest in and grow within certain industries that our dedicated fleet services with new start-up contracts, which weighed on third quarter margins but are expected to improve over time. Meanwhile, we continue to evaluate contracts in the rest of our Truckload business for improvement or exit. Overall, we expect modest contraction in our combined Truckload fleet and growth in our asset light segments as we allocate capital toward better returning business units. This process may impact quarterly financial results as we grow and shrink certain segments, adjust staffing needs, and dispose of equipment in potentially volatile used equipment markets.

“Our 49% equity method investment with Transport Enterprise Leasing (“TEL”) contributed pre-tax net income of $3.6 million, or $0.10 per share, compared to $4.0 million, or $0.11 per share, in the prior year quarter. The decline in TEL’s earnings is a result of customer bankruptcies that have accelerated over the past twelve months. While TEL’s overall business model remains healthy, we expect this headwind to continue for the foreseeable short term.

“Finally, I would be remiss not to acknowledge the unexpected passing of Lew Thompson, founder of Lew Thompson and Son Trucking Company, which we acquired in April 2023. Lew was a great friend and business partner, and his wisdom, humor, and storytelling will be missed by all. Lew was also a great mentor to the team that assumed day-to-day management of the business.   We are confident this talented team will continue to ensure an exceptional customer experience, and we will honor Lew by continuing to serve our customers in a manner that would make him proud.”

Third Quarter Financial Performance:

		Three Months Ended September 30,								Nine Months Ended September 30,
($000s, except per share information)		2025				2024				2025				2024
Total Revenue		$	296,889			$	287,885			$	869,098			$	854,145
Freight Revenue, Excludes Fuel Surcharge		$	268,840			$	258,599			$	788,591			$	762,796
Operating Income		$	7,926			$	16,235			$	27,116			$	36,147
Adjusted Operating Income(1)		$	14,977			$	19,327			$	40,853			$	52,797
Operating Ratio			97.3	%			94.4	%			96.9	%			95.8	%
Adjusted Operating Ratio(1)			94.4	%			92.5	%			94.8	%			93.1	%
Net Income		$	9,093			$	13,033			$	25,496			$	29,202
Adjusted Net Income(1)		$	11,517			$	15,224			$	32,927			$	41,297
Earnings per Diluted Share		$	0.35			$	0.47			$	0.94			$	1.06
Adjusted Earnings per Diluted Share (“Adjusted EPS”)(1)		$	0.44			$	0.54			$	1.22			$	1.49

(1)		Represents non-GAAP measures.

Mr. Parker continued, “The third quarter included approximately $0.1 million in net items that have been excluded from adjusted financial results. Among these items was a $3.8 million gain from discontinued operations relating to a litigation settlement associated with our factoring business that was exited in 2020. Offsetting this gain was $3.7 million of expenses in severance and abandonment of certain underutilized leased facilities and systems related to exiting a large Managed Freight contract and the planned exit of legacy Dedicated contracts not providing sufficient returns. While these decisions were difficult and created a cost headwind in the quarter, we believe they needed to be made to improve the long-term cost profile of the Company. A detail of these costs is summarized in the table below.”  

Gain item:
Gain proceeds from discontinued operations	$3.8 million
Expense items:
Employee separation costs	$1.4 million
Lease abandonment and customer exit costs	$0.4 million
Abandonment of long-lived software	$1.9 million
Net third quarter adjustments	$0.1 million

  

Truckload Operating Data and Statistics

		Three Months Ended September 30,								Nine Months Ended September 30,
($000s, except statistical information)		2025				2024				2025				2024
Combined Truckload
Total Revenue		$	199,652			$	199,029			$	587,531			$	590,457
Freight Revenue, excludes Fuel Surcharge		$	171,765			$	170,039			$	507,489			$	500,005
Segment Operating Income(1)		$	9,178			$	23,066			$	30,407			$	67,395
Adj. Seg. Operating Income(2)		$	9,977			$	14,464			$	25,775			$	37,281
Segment Operating Ratio(1)			95.4	%			88.4	%			94.8	%			88.6	%
Adj. Seg. Operating Ratio(2)			94.2	%			91.5	%			94.9	%			92.5	%
Average Freight Revenue per Tractor per Week		$	5,445			$	5,637			$	5,469			$	5,672
Average Freight Revenue per Total Mile		$	2.53			$	2.41			$	2.53			$	2.38
Average Miles per Tractor per Period			28,306				30,733				84,456				93,196
Weighted Average Tractors for Period			2,400				2,295				2,379				2,252
Expedited
Total Revenue		$	94,632			$	104,314			$	286,625			$	317,795
Freight Revenue, excludes Fuel Surcharge		$	80,184			$	87,363			$	243,662			$	262,881
Segment Operating Income(1)		$	5,079			$	12,272			$	18,135			$	35,973
Adj. Seg. Operating Income(2)		$	5,140			$	7,000			$	14,870			$	17,619
Segment Operating Ratio(1)			94.6	%			88.2	%			93.7	%			88.7	%
Adj. Seg. Operating Ratio(2)			93.6	%			92.0	%			93.9	%			93.3	%
Average Freight Revenue per Tractor per Week		$	7,082			$	7,452			$	7,281			$	7,454
Average Freight Revenue per Total Mile		$	2.10			$	2.09			$	2.11			$	2.08
Average Miles per Tractor per Period			44,275				46,796				134,288				140,191
Weighted Average Tractors for Period			861				892				858				901
Dedicated
Total Revenue		$	105,020			$	94,715			$	300,906			$	272,662
Freight Revenue, excludes Fuel Surcharge		$	91,581			$	82,676			$	263,827			$	237,124
Segment Operating Income(1)		$	4,099			$	10,794			$	12,272			$	31,422
Adj. Seg. Operating Income(2)		$	4,837			$	7,464			$	10,905			$	19,662
Segment Operating Ratio(1)			96.1	%			88.6	%			95.9	%			88.5	%
Adj. Seg. Operating Ratio(2)			94.7	%			91.0	%			95.9	%			91.7	%
Average Freight Revenue per Tractor per Week		$	4,529			$	4,484			$	4,446			$	4,484
Average Freight Revenue per Total Mile		$	3.07			$	2.87			$	3.08			$	2.84
Average Miles per Tractor per Period			19,365				20,521				56,352				61,855
Weighted Average Tractors for Period			1,539				1,403				1,521				1,351

(1)		Segment operating income and segment operating ratio exclude indirect costs not directly attributable to any one reportable segment, amortization of intangible assets, and contingent consideration liability adjustments to match the information our Chief Operating Decision Maker uses to evaluate the operating results of our reportable segments. The prior year periods have been conformed to this presentation.
(2)		Represents non-GAAP measures.

Combined Truckload Revenue

Paul Bunn, the Company’s President commented on truckload operations, “For the quarter, total revenue in our truckload operations increased 0.3%, to $199.7 million. The increase in total revenue consisted of $1.7 million more freight revenue and $1.1 million less fuel surcharge revenue, which varies with the cost of fuel. Freight revenue grew by $1.7 million, or 1.0%, as a result of a 4.6% increase in the average tractor fleet, partially offset by lower equipment utilization.”

Expedited Truckload Revenue

Mr. Bunn added, “Freight revenue in our Expedited segment decreased $7.2 million, or 8.2%. Average total tractors decreased by 31 units, or 3.4%, to 861, compared to 892 in the prior year quarter. Average freight revenue per tractor per week decreased 5.0% as a result of a 5.4% decrease in utilization, partially offset by a small increase in freight revenue per total mile.”

Dedicated Truckload Revenue

“For the quarter, freight revenue in our Dedicated segment increased $8.9 million, or 10.8%. Average total tractors increased by 136 units, or 9.7%, to 1,539, compared to 1,403 in the prior year’s quarter. Average freight revenue per tractor per week increased 1.0% as a result of a 7.0% increase in freight revenue per total mile, partially offset by a 5.7% decrease in utilization.”

Combined Truckload Operating Expenses

Mr. Bunn continued, “Rising operating costs in our Truckload segment negatively impacted operating margins compared to the prior year quarter. Higher costs primarily include salaries, wages and related expenses, insurance, and both variable and fixed expenses necessary to seat and operate our equipment. Some expense increases were expected, as they relate to growth in high-service and low-mileage operations. The expense increases were partially offset by a 5.0% increase in freight revenue per total mile.

“Salaries, wages and related expenses increased year-over-year by 5 cents, or approximately 4%, on a per total mile basis. The increase was driven primarily from the year-over-year impact of significant growth in our dedicated protein supply chain business as well as employee separation costs incurred during the quarter. As we grow our dedicated fleet in niche services, it requires hiring and retaining skilled drivers and maintenance professionals to operate and maintain specialized equipment on loads that typically move heavy weights on non-paved roads with shorter lengths of haul, resulting in higher costs on a per total mile basis. Additionally, as the freight market improves and the driver market tightens, we anticipate that driver pay will continue to rise.

“Safety continues to be our priority as we consistently strive to raise our own standards by hiring highly qualified drivers, implementing proactive training sessions, and investing in and implementing safety equipment and technology. For the past several years, our safety statistics have been at or near the best in our history. However, given the self-insured portions, potential additional premiums in certain layers based upon experience, and limits of our insurance program, and the risk of extremely large awards and settlements in our industry (so-called “nuclear verdicts/settlements”), the amount of expense recognized from period to period can fluctuate materially. Insurance and claims expense for the current quarter was 4 cents per mile, or 24% higher than the prior year on a per total mile basis as a result of the incurrence and development of certain large claims. At a minimum, we anticipate the fourth quarter insurance expense to remain elevated compared to historical amounts.

“Equipment related expenses, including Operations and maintenance and Depreciation and amortization, increased approximately 8 cents per total mile, or approximately 15%, compared to the prior year quarter primarily due to an increased amount of unproductive equipment. In addition, costs associated with seating our equipment, including recruiting and onboarding expenses, contributed to the increase compared to the prior year. Going forward, as the driver market tightens, we anticipate the cost of recruiting and onboarding to remain elevated.

Managed Freight Segment

		Three Months Ended September 30,								Nine Months Ended September 30,
($000s)		2025				2024				2025				2024
Freight Revenue		$	72,220			$	63,385			$	206,620			$	186,668
Segment Operating Income(1)		$	2,960			$	2,946			$	10,962			$	9,483
Adj. Seg. Operating Income(2)		$	3,035			$	2,716			$	10,555			$	8,843
Segment Operating Ratio(1)			95.9	%			95.4	%			94.7	%			94.9	%
Adj. Seg. Operating Ratio(2)			95.8	%			95.7	%			94.9	%			95.3	%

(1)		Segment operating income and segment operating ratio exclude indirect costs not directly attributable to any one reportable segment, amortization of intangible assets, and contingent consideration liability adjustments to match the information our Chief Operating Decision Maker uses to evaluate the operating results of our reportable segments. The prior year periods have been conformed to this presentation.
(2)		Represents non-GAAP measures.

“For the quarter, Managed Freight’s freight revenue increased 14.0%, from the prior year quarter. Operating income improved 0.4% and adjusted operating income improved 11.7% compared to the third quarter of 2024. The growth in this segment is attributable to new business awarded in the year by a large customer that will no longer continue in the fourth quarter.”

Warehousing Segment

		Three Months Ended September 30,								Nine Months Ended September 30,
($000s)		2025				2024				2025				2024
Freight Revenue		$	24,802			$	25,175			$	74,429			$	76,123
Segment Operating Income (1)		$	2,498			$	2,751			$	6,258			$	8,536
Adj. Seg. Operating Income (2)		$	1,963			$	2,147			$	4,521			$	6,673
Segment Operating Ratio (1)			90.0	%			89.2	%			91.6	%			88.9	%
Adj. Seg. Operating Ratio (2)			92.1	%			91.5	%			93.9	%			91.2	%

(1	)	Segment operating income and segment operating ratio exclude indirect costs not directly attributable to any one reportable segment, amortization of intangible assets, and contingent consideration liability adjustments to match the information our Chief Operating Decision Maker uses to evaluate the operating results of our reportable segments. The prior year periods have been conformed to this presentation.
(2	)	Represents non-GAAP measures.

“For the quarter, Warehousing’s results were fairly comparable to the prior year with reduced revenue of $0.4 million and operating income and adjusted operating income reduced $0.3 million compared to the third quarter of 2024. In the fourth quarter, we are anticipating growth in this segment from a large new facility start up with an existing customer scheduled to begin in November 2025.”

Capitalization, Liquidity and Capital Expenditures

Tripp Grant, the Company’s Chief Financial Officer, added the following comments: “At September 30, 2025, our total indebtedness, composed of total debt and finance lease obligations, net of cash (“net indebtedness”), increased by $48.7 million to approximately $268.3 million as compared to December 31, 2024. In addition, our net indebtedness to total capitalization increased to 38.8% at September 30, 2025, from 33.4% at December 31, 2024.

“The increase to net indebtedness in the first three quarters of the year is primarily attributable to acquisition-related payments of $19.2 million and repurchasing approximately $36.2 million of common stock outstanding.

“At September 30, 2025, we had cash and cash equivalents totaling $2.7 million. Under our ABL credit facility, we had no outstanding borrowings, undrawn letters of credit outstanding of $19.9 million, and available borrowing capacity of $90.1 million.

“At the end of the quarter, we had $1.2 million in assets held for sale that we anticipate disposing of within twelve months. The average age of our tractors increased to 23 months compared to 20 months a year ago.

“Our expectations for net capital equipment expenditures in the fourth quarter is $15 million to $20 million.”

Outlook

Mr. Parker concluded, “Our outlook is impacted by both short-term and long-term factors. In the short term, we expect our Adjusted EPS for the fourth quarter to be sequentially lower than our Adjusted EPS for the third quarter. The reasons include expected lower profits from our minority investment in TEL attributable to credit losses in their small-carrier customer base, the impact of the U.S. government shutdown on our Department of Defense business, an expected increase in claims accruals, and loss of a large Managed Freight customer rolling off faster than the results of Star Logistics Solutions ramp. These negative factors are expected to more than outweigh our current expectation of a modest peak season boost to Expedited and Managed Freight.

“Over the intermediate to long term, I am more excited today than I have been in the last three years. From a freight environment perspective, capacity exits seem to be accelerating based on publicly announced bankruptcies of small carriers and our observation of TEL’s customer base, as well as increased enforcement of government policies concerning English language and non-domiciled drivers. In addition, there are potential demand drivers from unwinding excess inventories from import pull-forwards, tax and monetary policies, and clarification of trade policy. We have internal plans and opportunities to continue to grow certain dedicated and warehouse business that has the potential to yield acceptable margins and hold or downsize our other Truckload capacity until returns improve. To the extent we downsize capacity, we may experience severance, equipment disposal, and other costs that create uneven results in a given quarter but are expected to lead to stronger and more sustained results over time.

“In sum, we expect improving market conditions and our internal plan to produce operating leverage and higher earnings and return on capital over time, although individual quarters may be volatile. With an experienced team, an attractive business mix, and a disciplined approach to capital allocation, we believe Covenant is well-positioned for the future.”

Conference Call Information

The Company will host a live conference call tomorrow, October 23, 2025, at 10:00 a.m. Eastern time to discuss the quarter. Individuals may access the call by dialing 877-550-1505 (U.S./Canada) and 0800-524-4760 (International). An audio replay will be available for one week following the call at 800-645-7964, access code 3895#. For additional financial and statistical information regarding the Company that is expected to be discussed during the conference call, please visit our website at www.covenantlogistics.com/investors under the icon “Earnings Info.”

Covenant Logistics Group, Inc., through its subsidiaries, offers a portfolio of transportation and logistics services to customers throughout the United States. Primary services include asset- based expedited and dedicated truckload capacity, as well as asset-light warehousing, transportation management, and freight brokerage capability. In addition, Transport Enterprise Leasing is an affiliated company providing revenue equipment sales and leasing services to the trucking industry. Covenant's Class A common stock is traded on the New York Stock Exchange under the symbol, “CVLG.”

⁽¹⁾ See GAAP to Non-GAAP Reconciliation in the schedules included with this release. In addition to operating income, segment operating income, operating ratio, segment operating income, net income, and earnings per diluted share, we use adjusted operating income, adjusted segment operating income, adjusted operating ratio, adjusted segment operating ratio, adjusted net income, and adjusted earnings per diluted share, non-GAAP measures, as key measures of profitability. Adjusted operating income, adjusted segment operating income, adjusted operating ratio, adjusted segment operating ratio, adjusted net income, and adjusted earnings per diluted share are not substitutes for operating income, segment operating income, operating ratio, segment operating income, net income, and earnings per diluted share measured in accordance with GAAP. There are limitations to using non-GAAP financial measures. We believe our presentation of these non-GAAP financial measures are useful because it provides investors and securities analysts with supplemental information that we use internally for purposes of assessing profitability. Further, our Board and management use non-GAAP operating income, segment operating income, operating ratio, segment operating income, net income, and earnings per diluted share measures on a supplemental basis to remove items that may not be an indicator of performance from period-to-period. Although we believe that adjusted operating income, adjusted segment operating income, adjusted operating ratio, adjusted segment operating ratio, adjusted net income, and adjusted earnings per diluted share improves comparability in analyzing our period-to-period performance, they could limit comparability to other companies in our industry, if those companies define such measures differently. Because of these limitations, adjusted operating income, adjusted segment operating income, adjusted operating ratio, adjusted segment operating ratio, adjusted net income, and adjusted earnings per diluted share should not be considered measures of income generated by our business or discretionary cash available to us to invest in the growth of our business. Management compensates for these limitations by primarily relying on GAAP results and using non-GAAP financial measures on a supplemental basis.

This press release contains certain statements that may be considered forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, and such statements are subject to the safe harbor created by those sections and the Private Securities Litigation Reform Act of 1995, as amended. Such statements may be identified by their use of terms or phrases such as “expects,” “estimates,” “projects,” “believes,” “anticipates,” “plans,” “could,” “continue,” “would,” “may,” “will,” "intends," “outlook,” “focus,” “seek,” “potential,” “mission,” “continue,” “goal,” “target,” “objective,” derivations thereof, and similar terms and phrases. Forward-looking statements are based upon the current beliefs and expectations of our management and are inherently subject to risks and uncertainties, some of which cannot be predicted or quantified, which could cause future events and actual results to differ materially from those set forth in, contemplated by, or underlying the forward-looking statements. In this press release, statements relating to equipment age, net capital expenditures and related priorities, benefits, and returns, capital allocation alternatives, expectations for the general freight market, our ability to grow our dedicated fleet, the driver market, including driver pay and recruiting, future insurance and claims expense, margin, and return on capital, future repurchases under the stock repurchase program, if any, progress toward our strategic goals and the expected impact of achieving such goals, and the statements under “Outlook” are forward-looking statements. The following factors, among others could cause actual results to differ materially from those in the forward-looking statements: Our business is subject to economic, credit, business, and regulatory factors affecting the truckload industry that are largely beyond our control; We may not be successful in achieving our strategic plan; We operate in a highly competitive and fragmented industry; We may not grow substantially in the future and we may not be successful in improving our profitability; We may not make acquisitions in the future, or if we do, we may not be successful in our acquisition strategy; The conflicts in Ukraine and the Middle East, expansion of such conflicts to other areas or countries or similar conflicts, as well as rising tensions between China and Taiwan, could adversely impact our business and financial results; Increases in driver compensation or difficulties attracting and retaining qualified drivers could have a materially adverse effect on our profitability and the ability to maintain or grow our fleet; Our engagement of independent contractors to provide a portion of our capacity exposes us to different risks than we face with our tractors driven by company drivers; We derive a significant portion of our revenues from our major customers; Fluctuations in the price or availability of fuel, the volume and terms of diesel fuel purchase commitments, surcharge collection, and hedging activities may increase our costs of operation; We depend on third-party providers, particularly in our Managed Freight segment; We depend on the proper functioning and availability of our management information and communication systems and other information technology assets (including the data contained therein) and a system failure or unavailability, including those caused by cybersecurity breaches internally or with third-parties, or an inability to effectively upgrade such systems and assets could cause a significant disruption to our business; If we are unable to retain our key employees, our business, financial condition, and results of operations could be harmed; Seasonality and the impact of weather and climate change and other catastrophic events affect our operations and profitability; We self-insure for a significant portion of our claims exposure, which could significantly increase the volatility of, and decrease the amount of, our earnings; Our self-insurance for auto liability claims and our use of captive insurance companies could adversely impact our operations; We have experienced, and may experience additional, erosion of available limits in our aggregate insurance policies; We may experience additional expense to reinstate insurance policies due to liability claims; We operate in a highly regulated industry; If our independent contractor drivers are deemed by regulators or judicial process to be employees, our business, financial condition, and results of operations could be adversely affected; Developments in labor and employment law and any unionizing efforts by employees could have a materially adverse effect on our results of operations; The Compliance Safety Accountability program adopted by the Federal Motor Carrier Safety Administration could adversely affect our profitability and operations, our ability to maintain or grow our fleet, and our customer relationships; Receipt of an unfavorable Department of Transportation safety rating at any of our motor carriers could have a materially adverse effect on our operations and profitability; Compliance with various environmental laws and regulations; Regulatory changes related to climate change could increase our costs significantly; Changes to trade regulation, quotas, duties, or tariffs; Litigation may adversely affect our business, financial condition, and results of operations; Conflicting views on environmental, social and governance matters may have a negative impact on our business, impose additional costs on us, and expose us to additional risks; A large-scale outbreak of avian flu or related illness among the nation’s poultry flock may adversely affect the revenues of our Dedicated segment; Our ABL credit facility and other financing arrangements contain certain covenants, restrictions, and requirements, and we may be unable to comply with such covenants, restrictions, and requirements; In the future, we may need to obtain additional financing that may not be available or, if it is available, may result in a reduction in the percentage ownership of our stockholders; Our indebtedness and finance and operating lease obligations could adversely affect our ability to respond to changes in our industry or business; Our profitability may be materially adversely impacted if our capital investments do not match customer demand or if there is a decline in the availability of funding sources for these investments; Increased prices for new revenue equipment, design changes of new engines, future uses of autonomous tractors, volatility in the used equipment market, decreased availability of new revenue equipment, and the failure of manufacturers to meet their sale or trade-back obligations to us could have a materially adverse effect on our business, financial condition, results of operations, and profitability; Our 49% owned subsidiary, Transport Enterprise Leasing, faces certain additional risks particular to its operations, any one of which could adversely affect our operating results; We could determine that our goodwill and other intangible assets are impaired, thus recognizing a related loss; Our Chairman of the Board and Chief Executive Officer and his wife control a large portion of our stock and have substantial control over us, which could limit other stockholders' ability to influence the outcome of key transactions, including changes of control; Provisions in our charter documents or Nevada law may inhibit a takeover, which could limit the price investors might be willing to pay for our Class A common stock; The market price of our Class A common stock may be volatile; We cannot guarantee the timing or amount of repurchases of our Class A common stock, or the declaration of future dividends, if any; Changes in taxation could lead to an increase of our tax exposure; If we fail to maintain effective internal control over financial reporting in the future, there could be an elevated possibility of a material misstatement, and such a misstatement could cause investors to lose confidence in our financial statements, which could have a material adverse effect on our stock price; and The effects of a widespread outbreak of an illness or disease, or any other public health crisis, as well as regulatory measures implemented in response to such events, could negatively impact the health and safety of our workforce and/or adversely impact our business and results of operations. The declaration of future dividends is subject to approval of our board of directors and various risks and uncertainties, including, but not limited to: our cash flow and cash needs; compliance with applicable law; restrictions on the payment of dividends under existing or future financing arrangements; changes in tax laws relating to corporate dividends; deterioration in our financial condition or results: and those risks, uncertainties, and other factors identified from time-to-time in our filings with the Securities and Exchange Commission. Readers should review and consider these factors along with the various disclosures by the Company in its press releases, stockholder reports, and filings with the Securities and Exchange Commission. We disclaim any obligation to update or revise any forward-looking statements to reflect actual results or changes in the factors affecting the forward-looking information.

For further information contact:

M. Paul Bunn, President
PBunn@covenantlogistics.com

Tripp Grant, Chief Financial Officer
TGrant@covenantlogistics.com

For copies of Company information contact:

Brooke McKenzie, Executive Administrative Assistant
BMcKenzie@covenantlogistics.com

Covenant Logistics Group, Inc. Key Financial and Operating Statistics
		Income Statement Data
		Three Months Ended September 30,												Nine Months Ended September 30,
($s in 000s, except per share data)		2025				2024				% Change				2025				2024				% Change
Revenues
Freight revenue		$	268,840			$	258,599				4.0	%		$	788,591			$	762,796				3.4	%
Fuel surcharge revenue			28,049				29,286				(4.2	%)			80,507				91,349				(11.9	%)
Total revenue		$	296,889			$	287,885				3.1	%		$	869,098			$	854,145				1.8	%
Operating expenses:
Salaries, wages, and related expenses			109,745				110,815								323,845				317,523
Fuel expense			29,506				28,545								85,663				88,590
Operations and maintenance			19,352				17,690								52,168				46,838
Revenue equipment rentals and purchased transportation			72,908				64,434								206,504				193,940
Operating taxes and licenses			3,304				3,227								10,326				8,871
Insurance and claims			14,179				12,241								46,769				44,779
Communications and utilities			1,631				1,330								4,580				4,005
General supplies and expenses			15,872				11,937								44,124				47,244
Depreciation and amortization			22,953				21,222								67,869				64,460
Loss on disposition of property and equipment, net			(487	)			209								134				1,748
Total operating expenses			288,963				271,650								841,982				817,998
Operating income			7,926				16,235								27,116				36,147
Interest expense, net			3,468				3,204								8,795				10,341
Income from equity method investment			(3,578	)			(3,993	)							(11,622	)			(11,763	)
Income from continuing operations before income taxes			8,036				17,024								29,943				37,569
Income tax expense			1,772				4,141								7,276				8,817
Income from continuing operations			6,264				12,883								22,667				28,752
Income from discontinued operations, net of tax			2,829				150								2,829				450
Net income		$	9,093			$	13,033							$	25,496			$	29,202
Basic earnings per share(1)
Income from continuing operations		$	0.25			$	0.49							$	0.88			$	1.09
Income from discontinued operations		$	0.11			$	0.01							$	0.11			$	0.02
Net income per basic share		$	0.36			$	0.49							$	0.99			$	1.11
Diluted earnings per share(1)
Income from continuing operations		$	0.24			$	0.46							$	0.83			$	1.04
Income from discontinued operations		$	0.11			$	0.01							$	0.10			$	0.02
Net income per diluted share		$	0.35			$	0.47							$	0.94			$	1.06
Basic weighted average shares outstanding (000s)			25,030				26,354								25,872				26,274
Diluted weighted average shares outstanding (000s)			26,301				27,802								27,156				27,654

(1)		Total may not sum due to rounding.

		Segment Freight Revenues
		Three Months Ended September 30,												Nine Months Ended September 30,
($s in 000's)		2025				2024				% Change				2025				2024				% Change
Expedited - Truckload		$	80,184			$	87,363				(8.2	%)		$	243,662			$	262,881				(7.3	%)
Dedicated - Truckload			91,581				82,676				10.8	%			263,827				237,124				11.3	%
Combined Truckload			171,765				170,039				1.0	%			507,489				500,005				1.5	%
Managed Freight			72,220				63,385				13.9	%			206,620				186,668				10.7	%
Warehousing			24,802				25,175				(1.5	%)			74,429				76,123				(2.2	%)
Other			53				-				100.0	%			53				-				100.0	%
Consolidated Freight Revenue		$	268,840			$	258,599				4.0	%		$	788,591			$	762,796				3.4	%

		Truckload Operating Statistics
		Three Months Ended September 30,												Nine Months Ended September 30,
		2025				2024				% Change				2025				2024				% Change
Average freight revenue per loaded mile		$	2.99			$	2.80				7.2	%		$	2.98			$	2.74				9.2	%
Average freight revenue per total mile		$	2.53			$	2.41				5.0	%		$	2.53			$	2.38				6.3	%
Average freight revenue per tractor per week		$	5,445			$	5,637				(3.4	%)		$	5,469			$	5,672				(3.6	%)
Average miles per tractor per period			28,306				30,733				(7.9	%)			84,456				93,196				(9.4	%)
Weighted avg. tractors for period			2,400				2,295				4.6	%			2,379				2,252				5.6	%
Tractors at end of period			1,487				2,306				(35.5	%)			1,487				2,306				(35.5	%)
Trailers at end of period			6,851				6,484				5.7	%			6,851				6,484				5.7	%

		Selected Balance Sheet Data
($s in '000's, except per share data)		9/30/2025				12/31/2024
Total assets		$	1,025,608			$	997,768
Total stockholders' equity		$	423,716			$	438,340
Total indebtedness, comprised of total debt and finance leases, net of cash		$	268,336			$	219,620
Net Indebtedness to Capitalization Ratio			38.8	%			33.4	%
Leverage Ratio(1)			2.14				1.65
Tangible book value per end-of-quarter basic share		$	10.03			$	10.17

(1)		Leverage Ratio is calculated as total indebtedness, comprised of total debt and finance leases, net of cash, divided by the trailing twelve months sum of operating income, depreciation and amortization, and gain on disposition of property and equipment, net.

Covenant Logistics Group, Inc. Non-GAAP Reconciliation (Unaudited) Adjusted Operating Income and Adjusted Operating Ratio(1)
(Dollars in thousands)		Three Months Ended September 30,												Nine Months Ended September 30,
GAAP Presentation		2025				2024				bps Change				2025				2024				bps Change
Total revenue		$	296,889			$	287,885							$	869,098			$	854,145
Total operating expenses			288,963				271,650								841,982				817,998
Operating income		$	7,926			$	16,235							$	27,116			$	36,147
Operating ratio			97.3	%			94.4	%			290				96.9	%			95.8	%			110
Non-GAAP Presentation		2025				2024				bps Change				2025				2024				bps Change
Total revenue		$	296,889			$	287,885							$	869,098			$	854,145
Fuel surcharge revenue			(28,049	)			(29,286	)							(80,507	)			(91,349	)
Freight revenue (total revenue, excluding fuel surcharge)			268,840				258,599								788,591				762,796
Total operating income			7,926				16,235								27,116				36,147
Adjusted for:
Amortization of intangibles(2)			2,653				2,372								7,770				7,116
Contingent consideration liability adjustment			710				720								2,130				9,534
Transaction costs			-				-								149				-
Employee separation costs			1,375				-								1,375				-
Lease abandonment and customer exit costs			429				-								429				-
Abandonment of long-lived software			1,884				-								1,884				-
Adjusted operating income			14,977				19,327								40,853				52,797
Adjusted operating ratio			94.4	%			92.5	%			190				94.8	%			93.1	%			170

(1)		Pursuant to the requirements of Regulation G, this table reconciles consolidated GAAP operating income and operating ratio to consolidated non-GAAP adjusted operating income and adjusted operating ratio.
(2)		"Amortization of intangibles" reflects the non-cash amortization expense relating to intangible assets.

Non-GAAP Reconciliation (Unaudited) Adjusted Net Income and Adjusted EPS(1)
(Dollars in thousands)		Three Months Ended September 30,								Nine Months Ended September 30,
		2025				2024				2025				2024
GAAP Presentation - Net income		$	9,093			$	13,033			$	25,496			$	29,202
Adjusted for:
Amortization of intangibles(2)			2,653				2,372				7,770				7,116
Discontinued operations reversal of loss contingency(3)			(3,773	)			(200	)			(3,773	)			(600	)
Contingent consideration liability adjustment			710				720				2,130				9,534
Transaction costs			-				-				149				-
Employee separation costs			1,375				-				1,375				-
Lease abandonment and customer exit costs			429				-				429				-
Abandonment of long-lived software			1,884				-				1,884				-
Total adjustments before taxes			3,278				2,892				9,964				16,050
Provision for income tax expense at effective rate			(854	)			(701	)			(2,533	)			(3,955	)
Tax effected adjustments		$	2,424			$	2,191			$	7,431			$	12,095
Non-GAAP Presentation - Adjusted net income		$	11,517			$	15,224			$	32,927			$	41,297
GAAP Presentation - Diluted earnings per share ("EPS")(4)		$	0.35			$	0.47			$	0.94			$	1.06
Adjusted for:
Amortization of intangibles(2)			0.10				0.09				0.29				0.26
Discontinued operations reversal of loss contingency(3)			(0.14	)			(0.01	)			(0.14	)			(0.03	)
Contingent consideration liability adjustment			0.03				0.02				0.08				0.34
Transaction costs			-				-				0.01				-
Employee separation costs			0.05				-				0.05				-
Lease abandonment and customer exit costs			0.02				-				0.02				-
Abandonment of long-lived software			0.07				-				0.07				-
Total adjustments before taxes			0.12				0.10				0.37				0.57
Provision for income tax expense at effective rate			(0.03	)			(0.03	)			(0.09	)			(0.14	)
Tax effected adjustments		$	0.09			$	0.07			$	0.28			$	0.43
Non-GAAP Presentation - Adjusted EPS		$	0.44			$	0.54			$	1.22			$	1.49

(1)		Pursuant to the requirements of Regulation G, this table reconciles consolidated GAAP net income to consolidated non-GAAP adjusted net income and consolidated GAAP diluted earnings per share to non-GAAP consolidated Adjusted EPS.
(2)		"Amortization of intangibles" reflects the non-cash amortization expense relating to intangible assets.
(3)		"Discontinued Operations reversal of loss contingency" reflects the non-cash reversal of a previously recorded loss contingency that is no longer considered probable. The original loss contingency was recorded in Q4 2020 as a result of our disposal of our former accounts receivable factoring segment, TFS.
(4)		Total may not sum due to rounding.

Covenant Logistics Group, Inc

Non-GAAP Reconciliation (Unaudited)

Adjusted Operating Income and Adjusted Operating Ratio (1)

(Dollars in thousands)		Three Months Ended September 30,
GAAP Presentation		2025																				2024
		Expedited				Dedicated				Combined Truckload				Managed Freight				Warehousing				Expedited				Dedicated				Combined Truckload				Managed Freight				Warehousing
Total revenue		$	94,632			$	105,020			$	199,652			$	72,220			$	24,964			$	104,314			$	94,715			$	199,029			$	63,385			$	25,471
Total segment operating expenses(2)			89,553				100,921				190,474				69,260				22,466				92,042				83,921				175,963				60,439				22,720
Segment operating income(2)		$	5,079			$	4,099			$	9,178			$	2,960			$	2,498			$	12,272			$	10,794			$	23,066			$	2,946			$	2,751
Segment operating ratio(2)			94.6	%			96.1	%			95.4	%			95.9	%			90.0	%			88.2	%			88.6	%			88.4	%			95.4	%			89.2	%
Non-GAAP Presentation
Total revenue		$	94,632			$	105,020			$	199,652			$	72,220			$	24,964			$	104,314			$	94,715			$	199,029			$	63,385			$	25,471
Fuel surcharge revenue			(14,448	)			(13,439	)			(27,887	)			-				(162	)			(16,951	)			(12,039	)			(28,990	)			-				(296	)
Freight revenue (total revenue, excluding fuel surcharge)			80,184				91,581				171,765				72,220				24,802				87,363				82,676				170,039				63,385				25,175
Total segment operating income(2)		$	5,079			$	4,099				9,178			$	2,960			$	2,498			$	12,272			$	10,794				23,066			$	2,946			$	2,751
Adjusted for:
Other(3)			(1,548	)			(1,054	)			(2,602	)			(212	)			(535	)			(5,272	)			(3,330	)			(8,602	)			(230	)			(604	)
Employee separation costs			680				622				1,302				73				-				-				-				-				-				-
Lease abandonment and customer exit costs			49				166				215				214				-				-				-				-				-				-
Abandonment of long-lived software			880				1,004				1,884				-				-				-				-				-				-				-
Adjusted segment operating income			5,140				4,837				9,977				3,035				1,963				7,000				7,464				14,464				2,716				2,147
Adjusted segment operating ratio			93.6	%			94.7	%			94.2	%			95.8	%			92.1	%			92.0	%			91.0	%			91.5	%			95.7	%			91.5	%

		Nine Months Ended September 30,
GAAP Presentation		2025																				2024
		Expedited				Dedicated				Combined Truckload				Managed Freight				Warehousing				Expedited				Dedicated				Combined Truckload				Managed Freight				Warehousing
Total revenue		$	286,625			$	300,906			$	587,531			$	206,620			$	74,894			$	317,795			$	272,662			$	590,457			$	186,668			$	77,020
Total segment operating expenses(2)			268,490				288,634				557,124				195,658				68,636				281,822				241,240				523,062				177,185				68,484
Segment operating income(2)		$	18,135			$	12,272			$	30,407			$	10,962			$	6,258			$	35,973			$	31,422			$	67,395			$	9,483			$	8,536
Segment operating ratio(2)			93.7	%			95.9	%			94.8	%			94.7	%			91.6	%			88.7	%			88.5	%			88.6	%			94.9	%			88.9	%
Non-GAAP Presentation
Total revenue		$	286,625			$	300,906			$	587,531			$	206,620			$	74,894			$	317,795			$	272,662			$	590,457			$	186,668			$	77,020
Fuel surcharge revenue			(42,963	)			(37,079	)			(80,042	)			-				(465	)			(54,914	)			(35,538	)			(90,452	)			-				(897	)
Freight revenue (total revenue, excluding fuel surcharge)			243,662				263,827				507,489				206,620				74,429				262,881				237,124				500,005				186,668				76,123
Total segment operating income(2)		$	18,135			$	12,272			$	30,407			$	10,962			$	6,258			$	35,973			$	31,422			$	67,395			$	9,483			$	8,536
Adjusted for:
Other(3)			(4,874	)			(3,308	)			(8,182	)			(694	)			(1,737	)			(18,354	)			(11,760	)			(30,114	)			(640	)			(1,863	)
Transaction costs			-				149				149				-				-				-				-				-				-				-
Employee separation costs			680				622				1,302				73				-				-				-				-				-				-
Lease abandonment and customer exit costs			49				166				215				214				-				-				-				-				-				-
Abandonment of long-lived software			880				1,004				1,884				-				-				-				-				-				-				-
Adjusted segment operating income			14,870				10,905				25,775				10,555				4,521				17,619				19,662				37,281				8,843				6,673
Adjusted segment operating ratio			93.9	%			95.9	%			94.9	%			94.9	%			93.9	%			93.3	%			91.7	%			92.5	%			95.3	%			91.2	%

(1)		Pursuant to the requirements of Regulation G, this table reconciles consolidated GAAP segment operating income and segment operating ratio to consolidated non-GAAP adjusted segment operating income and adjusted segment operating ratio.
(2)		Segment operating expenses, segment operating income, and segment operating ratio exclude indirect costs not directly attributable to any one reportable segment, amortization of intangible assets, and contingent consideration liability adjustments to match the information our Chief Operating Decision Maker uses to evaluate the operating results of our reportable segments. The prior year periods have been conformed to this presentation.
(3)		Represents indirect costs not directly attributable to any one reportable segment, amortization of intangible assets, and contingent consideration liability adjustments.

FAQ

What were Covenant Logistics (CVLG) Q3 2025 total revenue and EPS?

Total revenue was $296,889,000 and diluted EPS was $0.35 for Q3 2025.

What was Covenant's adjusted EPS and adjusted operating income in Q3 2025?

Adjusted EPS was $0.44 and adjusted operating income was $14,977,000 in Q3 2025.

How did Covenant's Truckload performance affect Q3 2025 results (CVLG)?

Truckload margins weakened; combined Truckload operating income fell to $9,178,000 in Q3 2025, driven by higher costs and lower utilization.

How much did Covenant's 49% investment in TEL contribute in Q3 2025?

The TEL equity-method investment contributed $3.6 million pre-tax in Q3 2025 (about $0.10 per share).

Did any Covenant segments show growth in Q3 2025 and which?

Yes: Managed Freight freight revenue increased 14.0% and Dedicated freight revenue increased 10.8% year-over-year in Q3 2025.

When is Covenant's Q3 2025 earnings call and how can investors listen?

The company will hold its conference call on Oct 23, 2025 at 10:00 A.M. ET; access details are available via the company's investor relations channels.