Werner Enterprises (NASDAQ: WERN) hit by lower Q2 2026 earnings
Werner Enterprises reported much weaker profitability for the quarter ended June 30, 2026 despite higher revenue. Operating revenues rose to $933.9 million, up 24% year over year, helped by the January acquisition of FirstFleet, but operating margin fell to 1.8% from 8.8%.
Net income attributable to Werner dropped to $6.4 million in the quarter and $2.1 million for the first six months of 2026, with diluted EPS of $0.11 and $0.03 versus $0.72 and $0.55 a year earlier. Management cites higher fuel, insurance and claims expenses, restructuring and impairment costs in the One-Way Truckload business, and the absence of a large prior-year insurance liability reversal as key pressures.
Werner closed the FirstFleet acquisition with a provisional GAAP purchase price of $214.8 million, including a $30.0 million contingent earnout, adding $169.1 million of Q2 revenue and $277.0 million year-to-date. Long-term debt increased to $793.0 million, including full utilization of the receivables facility, while borrowing capacity under the main credit agreement was $599.9 million. The company is restructuring its One-Way Truckload operations and has incurred cumulative restructuring and impairment charges of $48.3 million. It also recorded an $18.0 million class-action settlement liability, pending final court approval.
Positive
- None.
Negative
- Net income attributable to Werner fell sharply to $6.4 million in Q2 2026 and $2.1 million for the first half, with diluted EPS dropping to $0.11 and $0.03 from $0.72 and $0.55 a year earlier.
- Operating profitability deteriorated significantly, with consolidated operating margin declining to 1.8% from 8.8% in Q2 2025, driven by higher fuel, insurance and claims, restructuring and impairment costs, and the absence of a prior-year $45.7 million insurance liability reversal.
Filing Explained
As of June 30, 2026, Werner had no receivables-facility capacity, $599.9 million under its main facility, and $793,000 thousand due in 2027.
The company’s quarterly report covers the period ended
A Form 10-Q is an unaudited quarterly report covering interim financial statements and updates to risks and liquidity. The receivables facility is a secured borrowing backed by eligible receivables, and those receivables remain on the company’s balance sheet because the arrangement does not qualify as a sale.
At June 30, total debt was
The debt maturity table lists
Key Figures
Q2 2026 Operating Revenues: $933,927 thousand
Q2 2026 Net Income Attributable to Werner: $6,350 thousand
Q2 2026 Diluted EPS: $0.11
+5 more
8 metrics
Q2 2026 Operating Revenues
$933,927 thousand
Operating revenues for the three months ended June 30, 2026
Q2 2026 Net Income Attributable to Werner
$6,350 thousand
Net income attributable to Werner for the three months ended June 30, 2026
Q2 2026 Diluted EPS
$0.11
Diluted earnings per share for the three months ended June 30, 2026
FirstFleet Purchase Price
$214,755 thousand
Total provisional GAAP purchase price including contingent consideration
FirstFleet Q2 2026 Revenues
$169,100 thousand
Revenues from FirstFleet included in consolidated results for Q2 2026
Long-Term Debt
$793,000 thousand
Long-term debt, net of current portion, at June 30, 2026
Available Borrowing Capacity
$599,900 thousand
Available capacity under the 2022 Credit Agreement at June 30, 2026
Committed Property and Equipment Purchases
$139,800 thousand
Commitments for property and equipment at June 30, 2026
Key Terms
contingent earnout, redeemable noncontrolling interest, operating lease right-of-use assets, cash flow hedges, +2 more
6 terms
contingent earnout financial
"The potential undiscounted future contingent earnout payment that we could be required to make is between $0 and $35.0 million."
A contingent earnout is a deal feature in which the seller of a business receives additional future payments only if the company hits agreed performance milestones (such as revenue, profit, or customer targets) over a set period. It matters to investors because it shifts some purchase price risk to the seller, aligns incentives for future performance, and affects expected cash flow and valuation—like promising bonus pay if a newly bought car actually delivers the promised fuel economy.
redeemable noncontrolling interest financial
"Temporary equity - redeemable noncontrolling interest represents the portion of a consolidated entity in which we do not have a direct equity ownership."
A redeemable noncontrolling interest is a minority ownership stake in a business that the minority owner can require to be bought back for cash or that must be redeemed under set conditions. Investors care because it is not permanent equity: it represents a foreseeable cash obligation and can reduce the parent company’s reported equity and available cash, much like a loan from a roommate you must repay on request rather than shared ownership of the house.
operating lease right-of-use assets financial
"Other non-current assets of $39.7 million were reclassified to operating lease right-of-use assets, net, as of December 31, 2025."
An operating lease right-of-use (ROU) asset is an accounting entry that shows the value of a leased item you have the legal right to use—like a building, vehicle, or equipment—recorded on a company’s balance sheet along with the corresponding lease obligation. Investors care because it adds to reported assets and liabilities, changing measures like leverage and return on assets much like bringing a long-term rental onto the company’s financial snapshot, which can affect credit terms and valuation.
cash flow hedges financial
"We have designated our interest rate swap agreements as cash flow hedges with changes in fair value recorded in other comprehensive income."
A cash flow hedge is an accounting label companies use when they enter financial contracts—like currency or interest-rate agreements—to protect expected future cash payments or receipts from unpredictable moves. For investors, it signals that the company is trying to smooth out future cash variability (think of locking in a price to avoid surprises), which can reduce reported profit swings but also means the company has exposure to derivative instruments and their associated risks.
performance obligations financial
"Remaining performance obligations represent the transaction price allocated to future reporting periods for freight shipments started but not completed."
Performance obligations are the specific promises a company makes to deliver goods or services to a customer under a contract, treated as separate deliverables when a customer can benefit from them on their own. Investors care because these promises determine when and how much revenue a company records — like breaking a bundled purchase into separate billable parts — which affects reported earnings, growth trends and the clarity of future cash flows.
credit facility financial
"On December 20, 2022, we entered into a $1.075 billion unsecured credit facility with a group of lenders."
A credit facility is a flexible loan arrangement that allows a borrower to access funds up to a set limit whenever needed, similar to a company having an overdraft option on a bank account. It matters to investors because it indicates how easily a business can secure cash when required, affecting its ability to manage expenses, invest, or respond to financial challenges.
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FAQ
How did Werner Enterprises (WERN) perform financially in Q2 2026?
Werner Enterprises (WERN) generated $933.9 million in Q2 2026 operating revenues, up 24% year over year, but net income attributable to Werner declined to $6.4 million, with diluted EPS of $0.11 compared to $0.72 in Q2 2025 as margins compressed.
What impact did the FirstFleet acquisition have on WERN’s 2026 results?
The FirstFleet acquisition added scale to Werner, contributing $169.1 million of revenue in Q2 2026 and $277.0 million year-to-date, with net income of $1.1 million and $3.0 million respectively, and increased assets, goodwill, intangible assets, and lease liabilities.
How leveraged is Werner Enterprises (WERN) as of June 30, 2026?
As of June 30, 2026, Werner had long-term debt of $793.0 million, comprising $443.0 million under its 2022 Credit Agreement and $350.0 million under its receivables facility, with additional borrowing capacity of $599.9 million under the credit agreement.
What restructuring is Werner Enterprises (WERN) undertaking in its One-Way Truckload business?
Werner is restructuring its One-Way Truckload business to enhance long-term profitability by exiting selected unprofitable freight and shifting fleet composition, incurring cumulative $48.3 million in restructuring and impairment costs as of June 30, 2026, including revenue equipment and intangible impairments.
What major legal settlement does WERN disclose in this period?
Werner reached a combined $18.0 million settlement agreement in consolidated class action lawsuits titled Abarca et al. v. Werner, covering driver wage-related claims, with $17.7 million accrued as of June 30, 2026; the settlement remains subject to final court approval.
How did the Werner Logistics segment perform in Q2 2026 for WERN?
Werner Logistics posted Q2 2026 revenues of $211.7 million, down 4.3% year over year, and recorded an operating loss of $3.9 million versus operating income of $4.3 million in Q2 2025, as purchased transportation and other operating expenses outpaced revenue.
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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
| [Mark | one] | ||||
| QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 | |||||
For the quarterly period ended June 30, 2026
OR
| TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 | |||||
Commission File Number: 0-14690
(Exact name of registrant as specified in its charter)
| (State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) | |||||||||||||
| , | ||||||||||||||
| (Address of principal executive offices) | (Zip Code) | |||||||||||||
(402 ) 895-6640
(Registrant’s telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||||||||||||
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
| ☒ | Accelerated filer | ☐ | ||||||||||||||||||
| Non-accelerated filer | ☐ | Smaller reporting company | ||||||||||||||||||
| Emerging growth company | ||||||||||||||||||||
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒
As of July 31, 2026, 59,977,156 shares of the registrant’s common stock, par value $0.01 per share, were outstanding.
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WERNER ENTERPRISES, INC.
INDEX
| PAGE | ||||||||
PART I – FINANCIAL INFORMATION | ||||||||
Cautionary Note Regarding Forward-Looking Statements | 3 | |||||||
| Item 1. | Financial Statements: | 4 | ||||||
Consolidated Statements of Income for the Three and Six Months Ended June 30, 2026 and 2025 | 4 | |||||||
Consolidated Statements of Comprehensive Income for the Three and Six Months Ended June 30, 2026 and 2025 | 5 | |||||||
Consolidated Condensed Balance Sheets as of June 30, 2026 and December 31, 2025 | 6 | |||||||
Consolidated Statements of Cash Flows for the Six Months Ended June 30, 2026 and 2025 | 7 | |||||||
Consolidated Statements of Stockholders’ Equity and Temporary Equity - Redeemable Noncontrolling Interest for the Three and Six Months Ended June 30, 2026 and 2025 | 9 | |||||||
Note 1 - Basis of Presentation and Recent Accounting Pronouncements | 11 | |||||||
Note 2 - Business Acquisition | 12 | |||||||
Note 3 - Revenue | 14 | |||||||
Note 4 - Assets Held for Sale | 15 | |||||||
Note 5 - Goodwill and Intangible Assets | 15 | |||||||
Note 6 - Leases | 16 | |||||||
Note 7 - Fair Value | 18 | |||||||
Note 8 - Investments | 19 | |||||||
Note 9 - Debt and Credit Facilities | 20 | |||||||
Note 10 - Commitments and Contingencies | 22 | |||||||
Note 11 - Restructuring and Impairment Costs | 22 | |||||||
Note 12 - Earnings Per Share | 23 | |||||||
Note 13 - Segment Information | 24 | |||||||
Note 14 - Subsequent Event | 28 | |||||||
| Item 2. | Management’s Discussion and Analysis of Financial Condition and Results of Operations | 29 | ||||||
| Item 3. | Quantitative and Qualitative Disclosures About Market Risk | 40 | ||||||
| Item 4. | Controls and Procedures | 41 | ||||||
PART II – OTHER INFORMATION | ||||||||
| Item 1. | Legal Proceedings | 42 | ||||||
| Item 1A. | Risk Factors | 42 | ||||||
| Item 2. | Unregistered Sales of Equity Securities, Use of Proceeds, and Issuer Purchases of Equity Securities | 42 | ||||||
| Item 5. | Other Information | 42 | ||||||
| Item 6. | Exhibits | 43 | ||||||
2
Table of Contents
PART I
FINANCIAL INFORMATION
Cautionary Note Regarding Forward-Looking Statements:
This Quarterly Report on Form 10-Q contains historical information and forward-looking statements based on information currently available to our management. The forward-looking statements in this report, including those made in Item 2 (Management’s Discussion and Analysis of Financial Condition and Results of Operations) of Part I, are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995, as amended. These safe harbor provisions encourage reporting companies to provide prospective information to investors. Forward-looking statements can be identified by the use of certain words, such as “anticipate,” “believe,” “estimate,” “expect,” “intend,” “plan,” “project” and other similar terms and language. We believe the forward-looking statements are reasonable based on currently available information. However, forward-looking statements involve risks, uncertainties and assumptions, whether known or unknown, that could cause our actual results, business, financial condition and cash flows to differ materially from those anticipated in the forward-looking statements. A discussion of important factors relating to forward-looking statements is included in Part II, Item 1A (Risk Factors) of this Quarterly Report and in Part I, Item 1A (Risk Factors) of our Annual Report on Form 10-K for the year ended December 31, 2025 (“2025 Form 10-K”). Readers should not unduly rely on the forward-looking statements included in this Form 10-Q because such statements speak only to the date they were made. Unless otherwise required by applicable securities laws, we undertake no obligation or duty to update or revise any forward-looking statements contained herein to reflect subsequent events or circumstances or the occurrence of unanticipated events.
3
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ITEM 1. FINANCIAL STATEMENTS
WERNER ENTERPRISES, INC.
CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
| Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||||||
| (In thousands, except per share amounts) | 2026 | 2025 | 2026 | 2025 | |||||||||||||||||||
| Operating revenues | $ | $ | $ | $ | |||||||||||||||||||
| Operating expenses: | |||||||||||||||||||||||
| Salaries, wages and benefits | |||||||||||||||||||||||
| Fuel | |||||||||||||||||||||||
| Supplies and maintenance | |||||||||||||||||||||||
| Taxes and licenses | |||||||||||||||||||||||
| Insurance and claims | ( | ||||||||||||||||||||||
| Depreciation and amortization | |||||||||||||||||||||||
| Rent and purchased transportation | |||||||||||||||||||||||
| Communications and utilities | |||||||||||||||||||||||
| Restructuring and impairment | |||||||||||||||||||||||
| Other | ( | ( | |||||||||||||||||||||
| Total operating expenses | |||||||||||||||||||||||
| Operating income | |||||||||||||||||||||||
| Other expense (income): | |||||||||||||||||||||||
| Interest expense | |||||||||||||||||||||||
| Interest income | ( | ( | ( | ( | |||||||||||||||||||
| Loss (gain) on investments in equity securities | ( | ||||||||||||||||||||||
| Earnings from equity method investments | ( | ( | ( | ( | |||||||||||||||||||
| Other | ( | ||||||||||||||||||||||
| Total other expense, net | |||||||||||||||||||||||
| Income before income taxes | |||||||||||||||||||||||
| Income tax expense | |||||||||||||||||||||||
| Net income | |||||||||||||||||||||||
| Net loss attributable to noncontrolling interest | |||||||||||||||||||||||
| Net income attributable to Werner | $ | $ | $ | $ | |||||||||||||||||||
| Earnings per share: | |||||||||||||||||||||||
| Basic | $ | $ | $ | $ | |||||||||||||||||||
| Diluted | $ | $ | $ | $ | |||||||||||||||||||
| Weighted-average common shares outstanding: | |||||||||||||||||||||||
| Basic | |||||||||||||||||||||||
| Diluted | |||||||||||||||||||||||
See Notes to Consolidated Financial Statements (Unaudited).
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WERNER ENTERPRISES, INC.
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(Unaudited)
| Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||||||
| (In thousands) | 2026 | 2025 | 2026 | 2025 | |||||||||||||||||||
| Net income | $ | $ | $ | $ | |||||||||||||||||||
| Other comprehensive income: | |||||||||||||||||||||||
| Foreign currency translation adjustments | |||||||||||||||||||||||
| Change in fair value of interest rate swaps, net of tax | ( | ( | |||||||||||||||||||||
| Other comprehensive income | |||||||||||||||||||||||
| Comprehensive income | |||||||||||||||||||||||
| Comprehensive loss attributable to noncontrolling interest | |||||||||||||||||||||||
| Comprehensive income attributable to Werner | $ | $ | $ | $ | |||||||||||||||||||
See Notes to Consolidated Financial Statements (Unaudited).
5
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WERNER ENTERPRISES, INC.
CONSOLIDATED CONDENSED BALANCE SHEETS
| (In thousands, except share amounts) | June 30, 2026 | December 31, 2025 | |||||||||
| (Unaudited) | |||||||||||
| ASSETS | |||||||||||
| Current assets: | |||||||||||
| Cash and cash equivalents | $ | $ | |||||||||
Accounts receivable, trade, less allowance of $ | |||||||||||
| Other receivables | |||||||||||
| Inventories and supplies | |||||||||||
| Prepaid expenses | |||||||||||
| Assets held for sale | |||||||||||
| Other current assets | |||||||||||
| Total current assets | |||||||||||
| Property and equipment, at cost | |||||||||||
| Less – accumulated depreciation | |||||||||||
| Property and equipment, net | |||||||||||
| Finance lease right-of-use assets, net | |||||||||||
| Goodwill | |||||||||||
| Intangible assets, net | |||||||||||
| Operating lease right-of-use assets, net | |||||||||||
| Other non-current assets | |||||||||||
| Total assets | $ | $ | |||||||||
| LIABILITIES, TEMPORARY EQUITY AND STOCKHOLDERS’ EQUITY | |||||||||||
| Current liabilities: | |||||||||||
| Accounts payable | $ | $ | |||||||||
| Insurance and claims accruals | |||||||||||
| Accrued payroll | |||||||||||
| Accrued expenses | |||||||||||
| Current maturities of finance lease liabilities | |||||||||||
| Current maturities of operating lease liabilities | |||||||||||
| Other current liabilities | |||||||||||
| Total current liabilities | |||||||||||
| Long-term debt, net of current portion | |||||||||||
| Finance lease liabilities, less current maturities | |||||||||||
| Operating lease liabilities, less current maturities | |||||||||||
| Other long-term liabilities | |||||||||||
| Insurance and claims accruals, net of current portion | |||||||||||
| Deferred income taxes | |||||||||||
| Total liabilities | |||||||||||
| Commitments and contingencies | |||||||||||
| Temporary equity - redeemable noncontrolling interest | |||||||||||
| Stockholders’ equity: | |||||||||||
Common stock, $ | |||||||||||
| Paid-in capital | |||||||||||
| Retained earnings | |||||||||||
| Accumulated other comprehensive loss | ( | ( | |||||||||
Treasury stock, at cost; | ( | ( | |||||||||
| Total stockholders’ equity | |||||||||||
| Total liabilities, temporary equity and stockholders’ equity | $ | $ | |||||||||
See Notes to Consolidated Financial Statements (Unaudited).
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WERNER ENTERPRISES, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
| Six Months Ended June 30, | |||||||||||
| (In thousands) | 2026 | 2025 | |||||||||
| Cash flows from operating activities: | |||||||||||
| Net income | $ | $ | |||||||||
| Adjustments to reconcile net income to net cash provided by operating activities: | |||||||||||
| Depreciation and amortization | |||||||||||
| Deferred income taxes | ( | ( | |||||||||
| Amortization of operating lease right-of-use assets | |||||||||||
| Gain on disposal of property and equipment | ( | ( | |||||||||
| Restructuring and impairment | |||||||||||
| Non-cash equity compensation | |||||||||||
| Insurance and claims accruals, net of current portion | ( | ( | |||||||||
| Loss (gain) on investments in equity securities | ( | ||||||||||
| Earnings from equity method investment | ( | ( | |||||||||
| Gain on contingent earnout liability settlement | ( | ||||||||||
| Other | ( | ( | |||||||||
| Changes in certain working capital items: | |||||||||||
| Accounts receivable, net | ( | ( | |||||||||
| Other current assets | |||||||||||
| Accounts payable | |||||||||||
| Operating lease liabilities | ( | ( | |||||||||
| Other current liabilities | ( | ||||||||||
| Net cash provided by operating activities | |||||||||||
| Cash flows from investing activities: | |||||||||||
| Additions to property and equipment | ( | ( | |||||||||
| Proceeds from sales of property and equipment, including assets held for sale | |||||||||||
| Net cash invested in acquisition | ( | ||||||||||
| Investment in equity securities | ( | ( | |||||||||
| Payments to acquire equity method investment | ( | ( | |||||||||
| Issuance of notes receivable | ( | ( | |||||||||
| Collections of notes receivable | |||||||||||
| Net cash used in investing activities | ( | ( | |||||||||
| Cash flows from financing activities: | |||||||||||
| Repayments of short-term debt | ( | ( | |||||||||
| Proceeds from issuance of short-term debt | |||||||||||
| Repayments of long-term debt | ( | ( | |||||||||
| Proceeds from issuance of long-term debt | |||||||||||
| Principal installments on finance lease obligations | ( | ||||||||||
| Dividends on common stock | ( | ( | |||||||||
| Repurchases of common stock | ( | ||||||||||
| Tax withholding related to net share settlements of restricted stock awards | ( | ( | |||||||||
| Other | ( | ||||||||||
| Net cash provided by (used in) financing activities | ( | ||||||||||
| Effect of exchange rate fluctuations on cash | |||||||||||
| Net increase (decrease) in cash and cash equivalents | ( | ||||||||||
| Cash and cash equivalents, beginning of period | |||||||||||
| Cash and cash equivalents, end of period | $ | $ | |||||||||
See Notes to Consolidated Financial Statements (Unaudited).
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WERNER ENTERPRISES, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS (CONTINUED)
(Unaudited)
| Six Months Ended June 30, | |||||||||||
| (In thousands) | 2026 | 2025 | |||||||||
| Supplemental disclosures of cash flow information: | |||||||||||
| Interest paid | $ | $ | |||||||||
| Income taxes paid | |||||||||||
| Supplemental schedule of non-cash investing and financing activities: | |||||||||||
| Notes receivable issued upon sale of property and equipment | $ | $ | |||||||||
| Change in fair value of interest rate swaps | ( | ||||||||||
| Property and equipment acquired included in accounts payable | |||||||||||
| Dividends accrued but not yet paid at end of period | |||||||||||
| Contingent consideration associated with acquisition | |||||||||||
See Notes to Consolidated Financial Statements (Unaudited).
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WERNER ENTERPRISES, INC.
CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY AND
TEMPORARY EQUITY - REDEEMABLE NONCONTROLLING INTEREST
(Unaudited)
| Three Months Ended June 30, 2026 | |||||||||||||||||||||||||||||||||||||||||
| (In thousands, except share and per share amounts) | Common Stock | Paid-In Capital | Retained Earnings | Accumulated Other Comprehensive Loss | Treasury Stock | Total Stockholders’ Equity | Temporary Equity - Redeemable Noncontrolling Interest | ||||||||||||||||||||||||||||||||||
| Balance, March 31, 2026 | $ | $ | $ | $ | ( | $ | ( | $ | $ | ||||||||||||||||||||||||||||||||
| Net income attributable to Werner | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||
| Net loss attributable to noncontrolling interest | — | — | — | — | — | — | ( | ||||||||||||||||||||||||||||||||||
| Other comprehensive income | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||
Dividends on common stock ($ | — | — | ( | — | — | ( | — | ||||||||||||||||||||||||||||||||||
Common stock issued for stock-based compensation, including tax effects, | — | ( | — | — | ( | — | |||||||||||||||||||||||||||||||||||
| Non-cash equity compensation expense | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||
| Balance, June 30, 2026 | $ | $ | $ | $ | ( | $ | ( | $ | $ | ||||||||||||||||||||||||||||||||
| Three Months Ended June 30, 2025 | |||||||||||||||||||||||||||||||||||||||||
| (In thousands, except share and per share amounts) | Common Stock | Paid-In Capital | Retained Earnings | Accumulated Other Comprehensive Loss | Treasury Stock | Total Stockholders’ Equity | Temporary Equity - Redeemable Noncontrolling Interest | ||||||||||||||||||||||||||||||||||
| Balance, March 31, 2025 | $ | $ | $ | $ | ( | $ | ( | $ | $ | ||||||||||||||||||||||||||||||||
| Net income attributable to Werner | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||
| Net loss attributable to noncontrolling interest | — | — | — | — | — | — | ( | ||||||||||||||||||||||||||||||||||
| Other comprehensive income | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||
Repurchases of common stock, | — | — | — | — | ( | ( | — | ||||||||||||||||||||||||||||||||||
Dividends on common stock ($ | — | — | ( | — | — | ( | — | ||||||||||||||||||||||||||||||||||
Common stock issued for stock-based compensation, including tax effects, | — | ( | — | — | ( | — | |||||||||||||||||||||||||||||||||||
| Non-cash equity compensation expense | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||
| Distribution to noncontrolling interest | — | — | — | — | — | — | ( | ||||||||||||||||||||||||||||||||||
| Balance, June 30, 2025 | $ | $ | $ | $ | ( | $ | ( | $ | $ | ||||||||||||||||||||||||||||||||
See Notes to Consolidated Financial Statements (Unaudited).
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WERNER ENTERPRISES, INC.
CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY AND
TEMPORARY EQUITY - REDEEMABLE NONCONTROLLING INTEREST (CONTINUED)
(Unaudited)
| Six Months Ended June 30, 2026 | |||||||||||||||||||||||||||||||||||||||||
| (In thousands, except share and per share amounts) | Common Stock | Paid-In Capital | Retained Earnings | Accumulated Other Comprehensive Loss | Treasury Stock | Total Stockholders’ Equity | Temporary Equity - Redeemable Noncontrolling Interest | ||||||||||||||||||||||||||||||||||
| Balance, December 31, 2025 | $ | $ | $ | $ | ( | $ | ( | $ | $ | ||||||||||||||||||||||||||||||||
| Net income attributable to Werner | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||
| Net loss attributable to noncontrolling interest | — | — | — | — | — | — | ( | ||||||||||||||||||||||||||||||||||
| Other comprehensive income | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||
Dividends on common stock ($ | — | — | ( | — | — | ( | — | ||||||||||||||||||||||||||||||||||
Common stock issued for stock-based compensation, including tax effects, | — | ( | — | — | ( | — | |||||||||||||||||||||||||||||||||||
| Non-cash equity compensation expense | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||
| Balance, June 30, 2026 | $ | $ | $ | $ | ( | $ | ( | $ | $ | ||||||||||||||||||||||||||||||||
| Six Months Ended June 30, 2025 | |||||||||||||||||||||||||||||||||||||||||
| (In thousands, except share and per share amounts) | Common Stock | Paid-In Capital | Retained Earnings | Accumulated Other Comprehensive Loss | Treasury Stock | Total Stockholders’ Equity | Temporary Equity - Redeemable Noncontrolling Interest | ||||||||||||||||||||||||||||||||||
| Balance, December 31, 2024 | $ | $ | $ | $ | ( | $ | ( | $ | $ | ||||||||||||||||||||||||||||||||
| Net income attributable to Werner | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||
| Net loss attributable to noncontrolling interest | — | — | — | — | — | — | ( | ||||||||||||||||||||||||||||||||||
| Other comprehensive income | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||
Repurchases of common stock, | — | — | — | — | ( | ( | — | ||||||||||||||||||||||||||||||||||
Dividends on common stock ($ | — | — | ( | — | — | ( | — | ||||||||||||||||||||||||||||||||||
Common stock issued for stock-based compensation, including tax effects, | — | ( | — | — | ( | — | |||||||||||||||||||||||||||||||||||
| Non-cash equity compensation expense | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||
| Distribution to noncontrolling interest | — | — | — | — | — | — | ( | ||||||||||||||||||||||||||||||||||
| Balance, June 30, 2025 | $ | $ | $ | $ | ( | $ | ( | $ | $ | ||||||||||||||||||||||||||||||||
See Notes to Consolidated Financial Statements (Unaudited).
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WERNER ENTERPRISES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
(1) BASIS OF PRESENTATION AND RECENT ACCOUNTING PRONOUNCEMENTS
Basis of Presentation
The accompanying unaudited interim consolidated financial statements include the accounts of Werner Enterprises, Inc. and its subsidiaries (collectively, the “Company” or “Werner”). Redeemable noncontrolling interest on the consolidated condensed balance sheets represents the portion of a consolidated entity in which we do not have a direct equity ownership. In these notes, the terms “we,” “us,” or “our” refer to Werner Enterprises, Inc. and its subsidiaries. All significant intercompany accounts and transactions relating to these entities have been eliminated.
These consolidated financial statements have been prepared in accordance with the U.S. Securities and Exchange Commission (“SEC”) instructions to Form 10-Q and, in the opinion of management, reflect all adjustments, which are all of normal recurring nature, necessary to present fairly the financial condition, results of operations and cash flows for the periods presented in conformity with U.S. generally accepted accounting principles (“GAAP”). These consolidated financial statements do not include all information and footnotes required by GAAP for complete financial statements; although in management’s opinion, the disclosures are adequate so that the information presented is not misleading.
Operating results for the three and six months ended June 30, 2026 are not necessarily indicative of the results that may be expected for the year ending December 31, 2026. In the opinion of management, the information set forth on the accompanying consolidated condensed balance sheets is fairly stated in all material respects in relation to the consolidated balance sheets from which it has been derived.
These consolidated financial statements and notes thereto should be read in conjunction with the consolidated financial statements and accompanying notes contained in our 2025 Form 10-K.
Reclassifications
New Accounting Pronouncements
In July 2025, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2025-05 Financial Instruments – Credit Losses (Topic 326) – Measurement of Credit Losses for Accounts Receivable and Contract Assets, which provides a practical expedient permitting entities to assume that conditions at the balance sheet date remain unchanged for the remaining life of the asset when estimating expected credit losses for current accounts receivable and current contract assets under Topic 606 – Revenue from Contracts with Customers. On January 1, 2026, we adopted ASU 2025-05 using a prospective approach. We elected the practical expedient upon the adoption of ASU 2025-05, and adoption of the standard did not have a material impact to our results of operations, cash flows, and financial condition.
Recently Issued Accounting Pronouncements, Not Yet Effective
In November 2024, the FASB issued ASU 2024-03 Income Statement – Reporting Comprehensive Income – Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses, requiring public business entities to disclose additional information about specific expense categories in the notes to the financial statements at interim and annual reporting periods, including purchases of inventory, employee compensation, depreciation, and intangible asset amortization. The provisions of this update are effective for annual periods beginning after December 15, 2026, and interim reporting periods beginning after December 15, 2027, using either a prospective or retrospective approach. We are evaluating the impact of adopting ASU 2024-03, and we expect this ASU to impact our disclosures but not our results of operations, cash flows, and financial condition.
In September 2025, the FASB issued ASU 2025-06 Intangibles – Goodwill and Other – Internal-Use Software (Subtopic 350-40), which simplifies the capitalization guidance by removing all references to software development project stages so that the guidance is neutral to different software development methods. The amendments in this ASU are effective for annual reporting periods beginning after December 15, 2027, and interim reporting periods within those annual reporting periods, with
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early adoption permitted. The amendments in this update permit an entity to apply the new guidance using a prospective, retrospective or modified transition approach. We plan to adopt this ASU for our fiscal year beginning January 1, 2028 using a prospective approach. Although we are evaluating the impact of adopting ASU 2025-06 on our results of operations, cash flows, and financial position, we do not expect a material effect upon adoption.
(2) BUSINESS ACQUISITION
On January 27, 2026, we acquired 100 % of the equity interests in FirstEnterprises, Inc. (“FirstFleet”). Separately, under a real estate purchase agreement, we acquired 11 properties from FirstFleet. The purchase price in accordance with GAAP for this acquisition was $214.8 million, which is reflective of cash paid of $184.8 million as well as a contingent earnout valued at $30.0 million on the acquisition date. The contingent earnout is dependent on gross revenue net of fuel surcharge metrics for the period April 1, 2026 through March 31, 2027. The potential undiscounted future contingent earnout payment that we could be required to make is between $0 and $35.0 million. We funded these transactions using cash on hand and our existing revolving credit facility. The cash paid was reduced by the finance lease liabilities assumed in connection with the transaction.
Headquartered in Murfreesboro, Tennessee, FirstFleet brings added scale to Werner with approximately 2,400 tractors, 11,000 trailers and 37 strategically located properties near 130 customer sites around the country. The results of operations for FirstFleet are included in our consolidated financial statements beginning January 27, 2026. Revenues generated by FirstFleet are reported in our Dedicated operating segment within the Truckload Transportation Services (“TTS”) reportable segment. For the three and six months ended June 30, 2026, our consolidated operating results included FirstFleet revenues of $169.1 million and $277.0 million, respectively, and net income of $1.1 million and $3.0 million, respectively. We incurred transaction costs related to the acquisition, such as legal and professional fees, of $4.3 million and $10.3 million for the three and six months ended June 30, 2026, respectively, which is included in other operating expenses on the consolidated statements of income.
Provisional Purchase Price Allocation
We accounted for the FirstFleet purchase using the acquisition method of accounting under GAAP. The purchase price has been allocated to the assets acquired and liabilities assumed using market data and valuation techniques. The estimated fair values of the assets acquired and liabilities assumed are considered provisional for FirstFleet, pending the completion of acquired tangible assets valuations, the assessment of operating and finance leases right-of-use assets and related liabilities, independent valuation of acquired intangible assets, calculations of deferred taxes based upon the underlying tax basis of assets acquired and liabilities assumed and the income taxes receivable, and the determination of insurance reserve liabilities. The determination of estimated fair values requires management to make significant estimates and assumptions. We believe that the information available provides a reasonable basis for estimating the values of assets acquired and liabilities assumed in the FirstFleet acquisition; however, these provisional estimates may be adjusted upon the availability of new information regarding facts and circumstances which existed at the acquisition date, and such adjustments may impact future earnings. We expect to finalize the valuation of assets and liabilities for FirstFleet as soon as practicable, but not later than one year from the acquisition date. Any adjustments to the initial estimates of the fair value of the acquired assets and liabilities assumed in the FirstFleet acquisition will be recorded as adjustments to the respective assets and liabilities, with the residual amounts allocated to goodwill. As of June 30, 2026, no adjustments have been made to the provisional purchase price allocation.
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The following table summarizes the provisional purchase price allocation for FirstFleet as of June 30, 2026 (in thousands):
Provisional Purchase Price | ||||||||||||||||||||
Cash consideration paid | $ | (1) | ||||||||||||||||||
Contingent consideration arrangement | (2) | |||||||||||||||||||
Deferred cash payments | (3) | |||||||||||||||||||
Total provisional purchase price (fair value of consideration) | ||||||||||||||||||||
Provisional Purchase Price Allocation | ||||||||||||||||||||
Accounts receivable, trade | ||||||||||||||||||||
| Inventories and supplies | ||||||||||||||||||||
| Prepaid expenses | ||||||||||||||||||||
| Other current assets | ||||||||||||||||||||
Property and equipment | ||||||||||||||||||||
Finance lease right-of-use assets | ||||||||||||||||||||
| Goodwill | ||||||||||||||||||||
| Intangible assets | ||||||||||||||||||||
Operating lease right-of-use assets | ||||||||||||||||||||
| Other non-current assets | ||||||||||||||||||||
| Total assets acquired | ||||||||||||||||||||
| Accounts payable | ||||||||||||||||||||
| Insurance and claims accruals | ||||||||||||||||||||
| Accrued payroll | ||||||||||||||||||||
| Accrued expenses | ||||||||||||||||||||
| Current maturities of operating lease liabilities | ||||||||||||||||||||
| Current maturities of finance lease liabilities | ||||||||||||||||||||
| Other current liabilities | ||||||||||||||||||||
| Finance lease liabilities, less current maturities | ||||||||||||||||||||
| Operating lease liabilities, less current maturities | ||||||||||||||||||||
| Insurance and claims accruals, net of current portion | ||||||||||||||||||||
| Deferred income taxes | ||||||||||||||||||||
| Total liabilities assumed | ||||||||||||||||||||
| Total provisional purchase price allocated | $ | |||||||||||||||||||
(1) At closing, $11.9 million of the cash consideration was placed in escrow to secure certain indemnification obligations of the sellers and to cover post-closing adjustments. During the six months ended June 30, 2026, $5.9 million was returned to the sellers. As of June 30, 2026, $6.0 million remains in escrow subject to the satisfaction of certain indemnification and post-closing obligations.
(2) The FirstFleet contingent consideration is recorded in other current liabilities on the consolidated condensed balance sheet as of June 30, 2026. For additional information regarding the valuation of the contingent liability, see Note 7 – Fair Value.
The following unaudited pro forma information combines the historical operations of the Company and FirstFleet giving effect to the FirstFleet acquisition, and related transactions as if consummated on January 1, 2025, the beginning of the comparable prior annual reporting period. The unaudited pro forma financial information is based on currently available information, is presented for informational purposes only, and is not indicative of future operations or results had the FirstFleet acquisition been completed as of January 1, 2025 or any other date.
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The following table summarizes the unaudited pro forma financial information (in thousands):
| Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||||||
| 2025 | 2026 | 2025 | |||||||||||||||||||||
| Operating revenues | $ | $ | $ | ||||||||||||||||||||
| Net income | |||||||||||||||||||||||
| Earnings per share - basic | |||||||||||||||||||||||
| Earnings per share - diluted | |||||||||||||||||||||||
The unaudited pro forma financial information includes certain adjustments such as recognition of assets acquired at estimated fair values and related depreciation and amortization, interest expense on acquisition financing, elimination of transaction costs incurred by the Company and FirstFleet that were directly related to the acquisition, and related income tax effects of these items. The adjustments do not reflect potential revenue enhancements, cost savings or operating synergies that we expect to realize after the acquisition.
Goodwill and Intangible Assets
Goodwill represents the excess of cost over the fair value of net identifiable tangible and intangible assets acquired in a business combination. Goodwill and intangible assets with indefinite lives are not amortized. Goodwill is reviewed for potential impairment on an annual basis or more frequently if indicators of a potential impairment exist. Goodwill associated with the acquisition was primarily attributable to acquiring and retaining the existing FirstFleet network and the anticipated synergies from combining the operations of the Company and FirstFleet. None of the goodwill associated with the acquisition is expected to be deductible for income tax purposes. All goodwill is assigned to our TTS segment.
We preliminarily allocated $22.6 million of the purchase price to finite-lived intangible assets, consisting of customer relationships. The estimated fair values of the intangible assets were determined, with the assistance of an independent third-party valuation firm, using the multi-period excess earnings method. This method is a form of the income approach, which requires a forecast of all the expected future cash flows.
The following table summarizes the acquired intangible assets and the respective weighted-average estimated amortization period:
| Estimated Fair Value (in thousands) | Weighted-Average Estimated Amortization Period (Years) | ||||||||||
| Customer relationships | $ | ||||||||||
(3) REVENUE
Revenue Recognition
Revenues are recognized over time as control of the promised services is transferred to our customers, in an amount that reflects the consideration we expect to be entitled to in exchange for those services.
The following table presents our revenues disaggregated by revenue source (in thousands):
| Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||||||
| 2026 | 2025 | 2026 | 2025 | ||||||||||||||||||||
| Truckload Transportation Services | $ | $ | $ | $ | |||||||||||||||||||
| Werner Logistics | |||||||||||||||||||||||
| Inter-segment eliminations | ( | ( | ( | ||||||||||||||||||||
| Transportation services | |||||||||||||||||||||||
| Other revenues | |||||||||||||||||||||||
| Total revenues | $ | $ | $ | $ | |||||||||||||||||||
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The following table presents our revenues disaggregated by geographic areas in which we conduct business (in thousands):
| Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||||||
| 2026 | 2025 | 2026 | 2025 | ||||||||||||||||||||
| United States | $ | $ | $ | $ | |||||||||||||||||||
| Mexico | |||||||||||||||||||||||
| Canada | |||||||||||||||||||||||
| Total revenues | $ | $ | $ | $ | |||||||||||||||||||
Operating revenues for foreign countries include revenues for (i) shipments with an origin or destination in that country and (ii) other services provided in that country. If both the origin and destination are in a foreign country, the revenues are attributed to the country of origin.
Contract Balances and Accounts Receivable
A receivable is an unconditional right to consideration and is recognized when shipments have been completed and the related performance obligation has been fully satisfied. At June 30, 2026 and December 31, 2025, the accounts receivable, trade, net, balance was $490.9 million and $394.9 million, respectively. Contract assets represent a conditional right to consideration in exchange for goods or services and are transferred to receivables when the rights become unconditional. At June 30, 2026 and December 31, 2025, the balance of contract assets was $6.4 million and $5.3 million, respectively. We have recognized contract assets within the other current assets financial statement caption on the consolidated condensed balance sheets. These contract assets are considered current assets as they will be settled in less than 12 months.
Contract liabilities represent advance consideration received from customers and are recognized as revenues over time as the related performance obligation is satisfied. At June 30, 2026 and December 31, 2025, the balance of contract liabilities was $1.7 million and $1.1 million, respectively. The amount of revenues recognized in the six months ended June 30, 2026 that was included in the December 31, 2025 contract liability balance was $1.1 million. We have recognized contract liabilities within the accounts payable financial statement caption on the consolidated condensed balance sheets. These contract liabilities are considered current liabilities as they will be settled in less than 12 months.
Performance Obligations
We have elected to apply the practical expedient in Accounting Standards Codification (“ASC”) Topic 606, Revenue From Contracts With Customers, to not disclose the value of remaining performance obligations for contracts with an original expected length of one year or less. Remaining performance obligations represent the transaction price allocated to future reporting periods for freight shipments started but not completed at the reporting date that we expect to recognize as revenue in the period subsequent to the reporting date; transit times generally average approximately 3 days.
During the six months ended June 30, 2026 and 2025, revenues recognized from performance obligations related to prior periods (for example, due to changes in transaction price) were not material.
(4) ASSETS HELD FOR SALE
Assets held for sale consist of tractors and trailers removed from service and held for sale. These assets held for sale are recorded at the lower of carrying amount or fair value less cost to sell, and are expected to be sold within the next 12 months. The entire $12.0 million and $32.6 million recorded in assets held for sale at June 30, 2026 and December 31, 2025, respectively, are comprised of revenue equipment. Net gains or losses on disposals of property and equipment classified as assets held for sale are recorded in restructuring and impairment on the consolidated statements of income. During the three and six months ended June 30, 2026, the Company incurred impairment losses of $4.1
(5) GOODWILL AND INTANGIBLE ASSETS
The following table summarizes changes in the carrying amount of goodwill by segment for the six months ended June 30, 2026 (in thousands):
| TTS | Werner Logistics | Total | |||||||||||||||
Balance as of December 31, 2025 | $ | $ | $ | ||||||||||||||
| Goodwill recorded in acquisition of FirstFleet | |||||||||||||||||
Balance as of June 30, 2026 | $ | $ | $ | ||||||||||||||
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The following table presents acquired intangible assets (in thousands):
| June 30, 2026 | December 31, 2025 | ||||||||||||||||||||||||||||||||||
| Gross Carrying Amount | Accumulated Amortization | Net Carrying Amount | Gross Carrying Amount | Accumulated Amortization | Net Carrying Amount | ||||||||||||||||||||||||||||||
| Customer relationships | $ | $ | ( | $ | $ | $ | ( | $ | |||||||||||||||||||||||||||
| Trade names | ( | ( | |||||||||||||||||||||||||||||||||
| Total intangible assets | $ | $ | ( | $ | $ | $ | ( | $ | |||||||||||||||||||||||||||
(6) LEASES
Lessee Disclosures
We lease real estate under operating leases and revenue equipment (tractors and trailers) under both operating and finance leases. The leases have terms which range from 2 years to 18 years, and some include options to renew. Renewal terms are included in the lease term when it is reasonably certain that we will exercise the option to renew.
Operating leases are included in operating lease right-of-use assets, net, current maturities of operating lease liabilities and operating lease liabilities, less current maturities on the consolidated condensed balance sheets. Finance leases are included in finance lease right-of-use assets, net, current maturities of finance lease liabilities and finance lease liabilities, less current maturities on the consolidated condensed balance sheets.
We assess whether an arrangement is a lease or contains a lease at inception. These assets and liabilities are recognized based on the present value of future minimum lease payments over the lease term at commencement date (or acquisition date, for leases assumed in a business combination), using our incremental borrowing rate because the rate implicit in each lease is not readily determinable. We have certain contracts for real estate that may contain lease and non-lease components which we have elected to treat as a single lease component. Lease expense for operating leases is recognized on a straight-line basis over the lease term. Variable lease expense is recognized in the period in which the obligation for those payments is incurred. Lease expense for operating leases, and any variable lease expense, is reported in rent and purchased transportation on the consolidated statements of income. We recognize the amortization of the right-of-use asset for our finance leases on a straight-line basis over the shorter of the lease term or the useful life of the right-of-use asset in depreciation and amortization expense on the consolidated statements of income. The interest expense related to finance leases is recognized using the effective interest method based on the discount rate determined at lease commencement and is included within interest expense on the consolidated statements of income.
The following table presents the weighted average remaining lease term and discount rate:
| June 30, 2026 | December 31, 2025 | ||||||||||
| Weighted-average remaining lease term (years) | |||||||||||
| Operating leases | |||||||||||
| Finance leases | N/A | ||||||||||
| Weighted-average discount rate | |||||||||||
| Operating leases | % | % | |||||||||
| Finance leases | % | N/A | |||||||||
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The following table presents the maturities of operating and finance lease liabilities as of June 30, 2026 (in thousands):
| Operating Leases | Finance Leases | ||||||||||
| 2026 (remaining) | $ | $ | |||||||||
| 2027 | |||||||||||
| 2028 | |||||||||||
| 2029 | |||||||||||
| 2030 | |||||||||||
| Thereafter | |||||||||||
Total undiscounted lease payments | $ | $ | |||||||||
| Less: Imputed interest | ( | ( | |||||||||
Present value of lease liabilities | $ | $ | |||||||||
The following table presents supplemental disclosures for the consolidated statements of cash flows (in thousands):
| Six Months Ended June 30, | |||||||||||
| 2026 | 2025 | ||||||||||
| Cash paid for amounts included in the measurement of lease liabilities | |||||||||||
| Operating cash flows for operating leases | $ | $ | |||||||||
| Operating cash flows for finance leases | N/A | ||||||||||
| Financing cash flows for finance leases | N/A | ||||||||||
| Right-of-use assets obtained in exchange for new lease liabilities | |||||||||||
| Operating leases | $ | $ | |||||||||
| Finance leases | N/A | ||||||||||
The following table presents the classification of lease cost components (in thousands):
| Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||||||||||||
| Financial Statement Classification | 2026 | 2025 | 2026 | 2025 | ||||||||||||||||||||||
| Operating lease cost | Rent and purchased transportation | $ | $ | $ | $ | |||||||||||||||||||||
| Short-term lease cost | Rent and purchased transportation | |||||||||||||||||||||||||
| Variable lease cost | Rent and purchased transportation | |||||||||||||||||||||||||
| Finance lease cost | ||||||||||||||||||||||||||
| Amortization of right-of-use assets | Depreciation and amortization | N/A | N/A | |||||||||||||||||||||||
| Interest on lease liabilities | Interest Expense | N/A | N/A | |||||||||||||||||||||||
| Total lease cost | $ | $ | $ | $ | ||||||||||||||||||||||
Lessor Disclosures
We are the lessor of tractors and trailers (revenue equipment) under operating leases with initial terms of 1 year to 10 years. At times, we also lease or sublease real estate to third parties. We recognize revenue for such leases on a straight-line basis over the term of the lease. Revenues were $3.1 million and $6.4 million for the three and six months ended June 30, 2026, respectively, and $2.9 million and $5.5 million for the three and six months ended June 30, 2025, respectively.
The following table presents information about the maturities of these operating leases as of June 30, 2026 (in thousands):
| 2026 (remaining) | $ | ||||
| 2027 | |||||
| 2028 | |||||
| 2029 | |||||
| 2030 | |||||
| Thereafter | |||||
| Total | $ | ||||
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The owned assets underlying our leases as lessor primarily consist of revenue equipment. As of June 30, 2026 and December 31, 2025, the gross carrying value of such revenue equipment underlying these leases was $72.9 million and $72.5 million, respectively, and accumulated depreciation was $31.0 million and $32.0 million, respectively. Depreciation expense for these assets was $2.3 million and $4.6 million for the three and six months ended June 30, 2026, respectively, and $2.1 million and $4.1 million for the three and six months ended June 30, 2025, respectively.
(7) FAIR VALUE
Fair Value Measurement — Definition and Hierarchy
ASC 820-10, Fair Value Measurement, defines fair value as the price that would be received to sell an asset or paid to transfer a liability (an exit price) in an orderly transaction between market participants at the measurement date.
ASC 820-10 establishes a hierarchy for inputs used in measuring fair value that maximizes the use of observable inputs and minimizes the use of unobservable inputs by requiring that the most observable inputs be used when available. Observable inputs reflect the assumptions market participants would use in pricing the asset or liability, developed based on market data obtained from sources independent of the Company. Unobservable inputs reflect our own assumptions about the assumptions market participants would use in pricing the asset or liability, developed based on the best information available in the circumstances.
The fair value hierarchy prioritizes the inputs to valuation techniques used to measure fair value into three broad levels, as follows:
Level 1 — Quoted prices (unadjusted) in active markets for identical assets or liabilities that we have the ability to access.
Level 2 — Inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either directly or indirectly. Such inputs include quoted prices in markets that are not active, quoted prices for similar assets and liabilities in active and inactive markets, inputs other than quoted prices that are observable for the asset or liability and inputs that are derived principally from or corroborated by observable market data by correlation or other means.
Level 3 — Unobservable inputs for the asset or liability, where there is little, if any, observable market activity or data for the asset or liability.
In general, and where applicable, we use quoted prices in active markets for identical assets or liabilities to determine fair value. This pricing methodology applies to our Level 1 assets and liabilities. If quoted prices in active markets for identical assets and liabilities are not available to determine fair value, then we use quoted prices for similar assets and liabilities or inputs other than the quoted prices that are observable, either directly or indirectly. This pricing methodology would apply to Level 2 assets and liabilities.
The following table presents the fair value hierarchy for our assets and liabilities measured at fair value on a recurring basis (in thousands):
| Level in Fair Value Hierarchy | Fair Value | |||||||||||||||||||
| June 30, 2026 | December 31, 2025 | |||||||||||||||||||
| Assets | ||||||||||||||||||||
| Other non-current assets | ||||||||||||||||||||
Pay-fixed interest rate swaps (1) | 2 | $ | $ | |||||||||||||||||
Equity securities (2) | 2 | |||||||||||||||||||
| Total assets at fair value | $ | $ | ||||||||||||||||||
| Liabilities | ||||||||||||||||||||
| Other current liabilities | ||||||||||||||||||||
Pay-fixed interest rate swaps (1) | 2 | $ | $ | |||||||||||||||||
| Contingent consideration associated with acquisition | 3 | |||||||||||||||||||
| Total other current liabilities | ||||||||||||||||||||
| Other long-term liabilities: | ||||||||||||||||||||
Pay-fixed interest rate swaps (1) | 2 | |||||||||||||||||||
| Total liabilities at fair value | $ | $ | ||||||||||||||||||
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(1) Pay-fixed interest rate swaps are measured on a recurring basis by netting the discounted future fixed cash payments and the discounted expected variable cash receipts. The variable cash receipts are based on the expectation of future interest rates (forward curves) derived from observed market interest rate curves. See Note 9 – Debt and Credit Facilities for further information on our interest rate swaps.
(2) Represents our investment in an autonomous technology company. For additional information regarding the valuation of this equity security, see Note 8 – Investments.
The following table presents changes in the fair value of our contingent earnout liability (in thousands):
| Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||||||
| 2026 | 2025 | 2026 | 2025 | ||||||||||||||||||||
Balance at beginning of period | $ | $ | $ | $ | |||||||||||||||||||
Contingent consideration associated with the acquisition of FirstFleet (1) | |||||||||||||||||||||||
Payment for contingent consideration (2) | ( | ( | |||||||||||||||||||||
Change in fair value (3) | ( | ( | |||||||||||||||||||||
Balance at end of period | $ | $ | $ | $ | |||||||||||||||||||
(1) For additional information regarding our FirstFleet contingent consideration arrangement, see Note 2 – Business Acquisition.
(2) The final outcome of the contingent consideration arrangement related to the Baylor Trucking, Inc. acquisition was negotiated and paid in April 2025, as certain financial performance goals were achieved. The contingent earnout period was scheduled to end on October 31, 2025.
The estimated fair value of our contingent consideration arrangement is based upon a Black-Scholes-Merton valuation model for the acquired entity. The fair value of the contingent consideration is a Level 3 measurement within the fair value hierarchy. Additionally, as the liability is stated at present value, the passage of time alone will increase the estimated fair value of the liability each reporting period. Any change in the fair value of the contingent consideration subsequent to the acquisition date and prior to settlement will be recognized in other operating expenses on the consolidated statements of income.
We have ownership interests in investments, primarily Mastery Logistics Systems, Inc. (“MLSI”), which do not have readily determinable fair values and are accounted for using the measurement alternative in ASC 321, Investments - Equity Securities. Our ownership interest in Autotech Fund III, L.P. (“Autotech Fund III”) and Autotech Fund IV, L.P. (“Autotech Fund IV”) (collectively, the “Autotech Funds”) are accounted for under ASC 323, Investments - Equity Method and Joint Ventures. For additional information regarding the valuation of these investments, see Note 8 – Investments.
Fair Value of Financial Instruments Not Recorded at Fair Value
Cash and cash equivalents, accounts receivable trade, and accounts payable are short-term in nature and accordingly are carried at amounts that approximate fair value. The carrying amount of our variable-rate long-term debt approximates fair value due to the duration of our credit arrangements and the variable interest rates.
(8) INVESTMENTS
Equity Investments without Readily Determinable Fair Values
Our strategic equity investments without readily determinable fair values primarily consist of our investment in MLSI, a transportation management systems company. MLSI has developed a cloud-based transportation management system using its SaaS technology, and we have obtained a license. Our investments are being accounted for under ASC 321 using the measurement alternative and are recorded in other non-current assets on the consolidated condensed balance sheets. We record changes in the values of our investments based on events that occur that would indicate the values have changed, in loss (gain) on investments in equity securities on the consolidated statements of income. As of June 30, 2026 and December 31, 2025, the value of our investment in MLSI was $109.9 0.4
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The following table summarizes the activity related to our equity investments without readily determinable fair values during the periods presented (in thousands):
| Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||||||
| 2026 | 2025 | 2026 | 2025 | ||||||||||||||||||||
Investment in equity securities | $ | $ | $ | $ | |||||||||||||||||||
As of June 30, 2026, cumulative upward adjustments on our equity securities without readily determinable fair values totaled $64.9 million.
Equity Investments with Readily Determinable Fair Values
We own a strategic minority equity investment in an autonomous technology company, which is being accounted for under ASC 321 and is recorded in other non-current assets on the consolidated condensed balance sheets. As of June 30, 2026 and December 31, 2025, the value of this investment was $0.1
The following table summarizes the activity related to our equity investments with readily determinable fair values during the periods presented (in thousands):
| Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||||||
| 2026 | 2025 | 2026 | 2025 | ||||||||||||||||||||
| Loss (gain) on investments in equity securities | $ | $ | $ | ( | $ | ||||||||||||||||||
Equity Method Investment
We have committed to make a $20.0 million and a $10.0 million investment in Autotech Fund III and Autotech Fund IV, respectively, pursuant to limited partnership agreements. The Autotech Funds are managed by Autotech Ventures, a venture capital firm focused on ground transportation technology. Our interest in each fund individually and in the aggregate, which represents an ownership percentage of less than 20 %, is being accounted for under ASC 323. As a limited partner in each fund, we make periodic capital contributions toward these total commitment amounts. As of June 30, 2026 and December 31, 2025, the value of our investment in the Autotech Funds was $14.5 million and $11.7 million, respectively, and is recorded in other non-current assets on the consolidated condensed balance sheets. As of June 30, 2026, the carrying amount of Autotech Fund III was updated using operating results through March 31, 2026, as this is the most recent information available to us at this time. As of June 30, 2026, the carrying amount of Autotech Fund IV approximates its fair value.
The following table summarizes the activity related to our equity method investments during the periods presented (in thousands):
| Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||||||||||||
| 2026 | 2025 | 2026 | 2025 | |||||||||||||||||||||||
| Capital contributions | $ | $ | $ | $ | ||||||||||||||||||||||
| Earnings from equity method investments | ( | ( | ( | ( | ||||||||||||||||||||||
(9) DEBT AND CREDIT FACILITIES
On December 20, 2022, we entered into a $1.075 billion unsecured credit facility with a group of lenders (the “2022 Credit Agreement”), replacing our previous credit facilities. The 2022 Credit Agreement is scheduled to mature on December 20, 2027, and has a $100.0 million maximum limit for the aggregate amount of letters of credit issued.
Revolving credit loans drawn under the 2022 Credit Agreement bear interest, at our option, at (i) the Base Rate (the highest of (a) the Prime Rate, (b) the Federal Funds Rate plus 0.50 %, or (c) the one-month Term Secured Overnight Financing Rate (“SOFR”) plus 1.10 %), plus a margin ranging between 0.125 % and 0.750 %, or (ii) Term SOFR plus 0.10 % and a margin ranging between 1.125 % and 1.750 %. Swingline loans drawn under the 2022 Credit Agreement bear interest at the Base Rate, as defined above, plus a margin ranging between 0.125 % and 0.750 %. The 2022 Credit Agreement also requires us to pay quarterly (i) a letter of credit commission on the daily amount available to be drawn under such standby letters of credit at rates ranging between 1.125 % and 1.750 % per annum and (ii) a nonrefundable commitment fee on the average daily unused amount of the commitment at rates ranging between 0.125 % and 0.250 % per annum. The margin, letter of credit commission, and commitment fee rates are based on our ratio of net funded debt to earnings before interest, income taxes, depreciation and amortization (“EBITDA”). There are no scheduled principal payments due on the 2022 Credit Agreement until the maturity date, and interest is payable in arrears at periodic intervals not to exceed three months.
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Availability of such funds under the 2022 Credit Agreement is conditional upon various customary terms and covenants. Such covenants include, among other things, two financial covenants requiring us (i) not to exceed a maximum ratio of net funded debt to EBITDA and (ii) to exceed a minimum ratio of EBITDA to interest expense. As of June 30, 2026, we were in compliance with these covenants.
We have entered into variable-for-fixed interest rate swap agreements in order to limit our exposure to increases in interest rates on a portion of our variable-rate indebtedness. Under the terms of our interest rate swap agreements, we receive monthly variable-rate interest payments based on one-month Term SOFR and make monthly fixed-rate interest payments as specified in the interest rate swap agreements. We have designated our interest rate swap agreements as cash flow hedges. Changes in fair value of outstanding derivatives in cash flow hedges are recorded in other comprehensive income (loss) in the consolidated statements of comprehensive income until earnings are impacted by the hedged transactions. In June 2026, we entered into two variable-for-fixed interest rate swap agreements with an aggregate notional amount of $90.0 million, maturing in June 2029. Subsequent to the end of the quarter, in July 2026, two variable-for-fixed interest rate swap agreements with an aggregate notional amount of $90.0 million matured. For additional information regarding our interest rate swaps, see Note 7 - Fair Value.
On March 27, 2025, the Company and Werner Receivables Company, LLC (“WRC”), a newly-formed wholly-owned subsidiary of the Company, entered into a Loan Security Agreement (“LSA”) with various lenders. The LSA is scheduled to terminate on September 21, 2027, 90 days prior to the 2022 Credit Agreement maturity date, unless extended by the parties and is subject to earlier termination as provided in the LSA. The LSA is a secured borrowing that is collateralized by eligible receivables, for which the Company is the servicing agent. WRC is a bankruptcy remote, special purpose entity and the borrower under the LSA. The Company has contributed and from time to time sells a designated pool of eligible accounts receivables to WRC which, in turn, may borrow funds under the LSA on a revolving basis. The collateral is available to satisfy the claims related to the lenders’ interests in the receivables and unavailable to satisfy claims of the Company and its subsidiaries. The LSA does not qualify for sale treatment. Accordingly, the Company’s eligible receivables remain on our condensed consolidated balance sheets in accounts receivable, trade, less allowance.
On June 5, 2026, we entered into a third amendment to the LSA with various lenders, increasing the maximum funding available for eligible receivables from $325.0 million to $350.0 million, which may increase to $400.0 million upon WRC’s request and acceptance by the lenders. The third amendment to the LSA also incorporates language from the Performance Guaranty Agreement entered into by the Company on June 5, 2026, which provides an unconditional, irrevocable guaranty to the secured parties under the LSA, supporting the obligations (monetary and non-monetary) of WRC, the Company as the servicer, and any other originators under the LSA. The guaranty remains in effect until all obligations are paid and performed in full. As of June 30, 2026, the performance risk under the guaranty is considered remote due to no adverse credit indicators. Subsequent to the end of the quarter, on July 7, 2026, we entered into a fourth amendment to the LSA, increasing the maximum funding available from $350.0 million to $375.0 million. Borrowings under the LSA bear interest at (i) a commercial paper rate or (ii) one-month Term SOFR, plus 0.10 %. The LSA also requires us to pay nonrefundable drawn and undrawn fees on the average daily used and unused amounts of the commitment, respectively.
The LSA is subject various affirmative and negative covenants, representations and warranties, and default and termination provisions customary for facilities of this type, including a minimum borrower’s net worth covenant. As of June 30, 2026, we were in compliance with these covenants.
The following table presents total debt under the 2022 Credit Agreement and the LSA (together, “the Credit Facilities”) (in thousands):
| June 30, 2026 | December 31, 2025 | ||||||||||
| Long-term debt, net of current portion | |||||||||||
| 2022 Credit Agreement | $ | $ | |||||||||
LSA (weighted average interest rate of | |||||||||||
| Total long-term debt, net of current portion | |||||||||||
Total debt (1) | $ | $ | |||||||||
(1) As of June 30, 2026, we effectively fixed the interest rate on a portion of our outstanding variable-rate debt using the following interest rate swaps:
•$90.0 million which is effectively fixed at 6.24 % with interest rate swap agreements through July 2026;
•$75.0 million which is effectively fixed at 6.36 % with an interest rate swap agreement through April 2027;
•$75.0 million which is effectively fixed at 6.21 % with an interest rate swap agreement through May 2027;
•$60.0 million which is effectively fixed at 5.27 % with interest rate swap agreements through July 2028;
•$75.0 million which is effectively fixed at 5.26 % with an interest rate swap agreement through August 2028; and
•$90.0 million which is effectively fixed at 5.58 % with interest rate swap agreements through June 2029.
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Our total available borrowing capacity was $599.9 million as of June 30, 2026, consisting of $599.9 million under the 2022 Credit Agreement after considering $32.1 million in stand-by letters of credit under which we are obligated. As of June 30, 2026, no borrowing capacity was available under the LSA.
Availability under the LSA is calculated as follows (in thousands):
| June 30, 2026 | |||||
| Borrowing base, based on eligible receivables | $ | ||||
| Less: outstanding borrowings | ( | ||||
| Availability under LSA | $ | ||||
For information regarding the fair value of our debt and interest rate swaps, see Note 7 – Fair Value.
At June 30, 2026, the aggregate maturities of future debt principal payments under the Credit Facilities are as follows (in thousands):
| 2026 (remaining) | $ | ||||
| 2027 | |||||
| 2028 | |||||
| 2029 | |||||
| Total | $ | ||||
(10) COMMITMENTS AND CONTINGENCIES
We have committed to property and equipment purchases of approximately $139.8 million at June 30, 2026.
We are involved in certain claims and pending litigation, including the litigation described herein, arising in the ordinary course of business. The majority of these claims relate to bodily injury, property damage, cargo and workers’ compensation incurred in the transportation of freight, as well as certain class action litigation related to personnel and employment matters. We accrue for the uninsured portion of contingent losses from these and other pending claims when it is both probable that a liability has been incurred and the amount of the loss can be reasonably estimated. Based on the knowledge of the facts, management believes the resolution of claims and pending litigation, taking into account existing reserves, will not have a material adverse effect on our consolidated financial statements. Moreover, the results of complex legal proceedings are difficult to predict, and our view of these matters may change in the future as the litigation and related events unfold.
(11) RESTRUCTURING AND IMPAIRMENT COSTS
During the fourth quarter 2025, we began to incur costs in connection with the strategic restructuring of our One-Way Truckload business to enhance long-term profitability and fleet utilization by maximizing production and mitigating unprofitable freight. Key steps in this initiative include exiting selective unprofitable regional and short-haul truckload freight, further integrating our one-way acquisition operations, and a further shift in the One-Way Truckload fleet composition toward more specialized, expedited (“Expedited”), and team capacity. This repositioning focuses on eliminating underperforming business. We believe this restructuring reflects the necessary steps to rationalize our assets and business model for future margin expansion.
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The following table summarizes activity in our restructuring liability during the three and six months ended June 30, 2026, which is included in other current liabilities on the consolidated condensed balance sheets (in thousands):
| Other Revenue Equipment Costs | |||||||||||||||||||||||||||||
| Restructuring liability balance, March 31, 2026 | $ | ||||||||||||||||||||||||||||
| Costs paid or otherwise settled | ( | ||||||||||||||||||||||||||||
| Restructuring liability balance, June 30, 2026 | $ | ||||||||||||||||||||||||||||
| Other Revenue Equipment Costs | |||||||||||||||||||||||||||||
| Restructuring liability balance, December 31, 2025 | $ | ||||||||||||||||||||||||||||
| Costs paid or otherwise settled | ( | ||||||||||||||||||||||||||||
| Restructuring liability balance, June 30, 2026 | $ | ||||||||||||||||||||||||||||
During the three and six months ended June 30, 2026, we recognized $4.1
The following table summarizes the cumulative amount of restructuring and impairment costs incurred as of June 30, 2026 related to the restructuring of our One-Way Truckload business (in thousands):
| Financial Statement Classification | Intangible Asset Impairment | Revenue Equipment Impairment | Other Revenue Equipment Costs | Current Assets (1) | Total | |||||||||||||||||||||||||||
| Restructuring and impairment | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||
(1) Costs relating to the removal of prepaid expenses, inventory, and other current assets.
(12) EARNINGS PER SHARE
Basic earnings per share is computed by dividing net income attributable to Werner by the weighted average number of common shares outstanding during the period. Diluted earnings per share is computed by dividing net income attributable to Werner by the weighted average number of common shares outstanding plus the effect of dilutive potential common shares outstanding during the period using the treasury stock method. Dilutive potential common shares include outstanding restricted stock awards. Performance awards are excluded from the calculation of dilutive potential common shares until the threshold performance conditions have been satisfied. There are no differences in the numerators of our computations of basic and diluted loss per share for any periods presented.
The computation of basic and diluted earnings per share is shown below (in thousands, except per share amounts).
| Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||||||
| 2026 | 2025 | 2026 | 2025 | ||||||||||||||||||||
| Net income attributable to Werner | $ | $ | $ | $ | |||||||||||||||||||
| Weighted average common shares outstanding | |||||||||||||||||||||||
| Dilutive effect of stock-based awards | |||||||||||||||||||||||
| Shares used in computing diluted earnings per share | |||||||||||||||||||||||
| Basic earnings per share | $ | $ | $ | $ | |||||||||||||||||||
| Diluted earnings per share | $ | $ | $ | $ | |||||||||||||||||||
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(13) SEGMENT INFORMATION
We have two reportable segments – TTS and Werner Logistics.
The TTS reportable segment consists of two operating segments, Dedicated and One-Way Truckload. These operating segments are aggregated because they have similar economic characteristics and meet the other aggregation criteria described in the accounting guidance for segment reporting. Dedicated provides truckload services dedicated to a specific customer, generally for a retail distribution center or manufacturing facility, utilizing either dry van or specialized trailers. One-Way Truckload is comprised of the following operating fleets: (i) the medium-to-long-haul van (“Van”) fleet transports a variety of consumer nondurable products and other commodities in truckload quantities over irregular routes using dry van trailers, including Mexico cross-border routes; (ii) the expedited (“Expedited”) fleet provides time-sensitive truckload services utilizing driver teams; (iii) the regional short-haul (“Regional”) fleet provides comparable truckload van service within geographic regions across the United States; and (iv) the Temperature Controlled fleet provides truckload services for temperature sensitive products over irregular routes utilizing temperature-controlled trailers. Revenues for the TTS segment include a small amount of non-trucking revenues which consist primarily of the intra-Mexico portion of cross-border shipments delivered to or from Mexico where we utilize a third-party capacity provider. Results of operations for FirstFleet are included in our Dedicated operating segment within the TTS reportable segment beginning January 27, 2026. For additional information regarding the FirstFleet acquisition, see Note 2 – Business Acquisition.
The Werner Logistics segment provides non-asset-based transportation and logistics services. Werner Logistics provides services throughout North America and generates the majority of our non-trucking revenues through three divisions. These three Werner Logistics divisions are as follows: (i) Truckload Logistics, which uses contracted carriers to complete shipments for brokerage customers and freight management customers for which we offer a full range of single-source logistics management services and solutions; (ii) the Intermodal (“Intermodal”) division offers rail transportation through alliances with rail and drayage providers as an alternative to truck transportation; and (iii) Werner Final Mile (“Final Mile”) offers residential and commercial deliveries of large or heavy items using third-party agents, independent contractors, and Company employees with two-person delivery teams operating a liftgate straight truck.
The accounting policies of the segments are the same as those described in the summary of significant accounting policies contained in our 2025 Form 10-K. Inter-segment transactions between reporting segments have been recorded at amounts approximating market and are eliminated in consolidation.
The chief operating officer of the Company is our chief operating decision maker (“CODM”). Our CODM evaluates the operating results of each individual segment, using monthly divisional financial statements, to asses performance and to allocate resources to each segment. Our divisional financial statements detail the revenues and operating expenses of each individual segment netting to operating income (loss) that allows the CODM to make operational decisions regarding each individual segment.
We do not prepare separate balance sheets by segment and, as a result, assets are not separately identifiable by segment. Based on our operations, certain revenue-generating assets (primarily tractors and trailers) are interchangeable between segments. Depreciation for these interchangeable assets is allocated to segments based on the actual number of units utilized by the segment during the period. Other depreciation and amortization is allocated to segments based on specific identification or as a percentage of a metric such as average number of tractors.
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The following tables summarize our segment information (in thousands):
| Three Months Ended June 30, 2026 | |||||||||||||||||
| Truckload Transportation Services | Werner Logistics | Total | |||||||||||||||
| Revenues from external customers | $ | $ | $ | ||||||||||||||
| Inter-segment revenues | ( | ( | |||||||||||||||
| Reportable segment revenues | |||||||||||||||||
Reconciliation of revenues: | |||||||||||||||||
Other revenues (1) | |||||||||||||||||
| Elimination of inter-segment revenues | |||||||||||||||||
| Consolidated revenues | $ | ||||||||||||||||
Less operating expenses: (2) | |||||||||||||||||
Salaries, wages and benefits | |||||||||||||||||
| Fuel | |||||||||||||||||
| Supplies and maintenance | |||||||||||||||||
| Taxes and licenses | |||||||||||||||||
| Insurance and claims | |||||||||||||||||
| Depreciation and amortization | |||||||||||||||||
| Rent and purchased transportation | |||||||||||||||||
| Communications and utilities | |||||||||||||||||
| Gains on sales of property and equipment | ( | ( | ( | ||||||||||||||
Other segment items (3) | |||||||||||||||||
| Reportable segment operating expenses | |||||||||||||||||
| Reportable segment operating income (loss) | $ | $ | ( | $ | |||||||||||||
Reconciliation of operating income: | |||||||||||||||||
Other operating loss (1) | ( | ||||||||||||||||
| Consolidated operating income | $ | ||||||||||||||||
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| Three Months Ended June 30, 2025 | |||||||||||||||||
| Truckload Transportation Services | Werner Logistics | Total | |||||||||||||||
| Revenues from external customers | $ | $ | $ | ||||||||||||||
| Inter-segment revenues | |||||||||||||||||
| Reportable segment revenues | |||||||||||||||||
Reconciliation of revenues: | |||||||||||||||||
Other revenues (1) | |||||||||||||||||
| Elimination of inter-segment revenues | ( | ||||||||||||||||
| Consolidated revenues | $ | ||||||||||||||||
Less operating expenses: (2) | |||||||||||||||||
Salaries, wages and benefits (4) | |||||||||||||||||
| Fuel | |||||||||||||||||
| Supplies and maintenance | |||||||||||||||||
| Taxes and licenses | |||||||||||||||||
Insurance and claims (5) | ( | ( | |||||||||||||||
| Depreciation and amortization | |||||||||||||||||
| Rent and purchased transportation | |||||||||||||||||
| Communications and utilities | |||||||||||||||||
| Gains on sales of property and equipment | ( | ( | ( | ||||||||||||||
Other segment items (3) | ( | ( | |||||||||||||||
| Reportable segment operating expenses | |||||||||||||||||
| Reportable segment operating income | $ | $ | $ | ||||||||||||||
Reconciliation of operating income: | |||||||||||||||||
Other operating loss (1) | ( | ||||||||||||||||
| Consolidated operating income | $ | ||||||||||||||||
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| Six Months Ended June 30, 2026 | |||||||||||||||||
| Truckload Transportation Services | Werner Logistics | Total | |||||||||||||||
| Revenues from external customers | $ | $ | $ | ||||||||||||||
| Inter-segment revenues | |||||||||||||||||
| Reportable segment revenues | |||||||||||||||||
Reconciliation of revenues: | |||||||||||||||||
Other revenues (1) | |||||||||||||||||
| Elimination of inter-segment revenues | ( | ||||||||||||||||
| Consolidated revenues | $ | ||||||||||||||||
Less operating expenses: (2) | |||||||||||||||||
| Salaries, wages and benefits | $ | ||||||||||||||||
| Fuel | |||||||||||||||||
| Supplies and maintenance | |||||||||||||||||
| Taxes and licenses | |||||||||||||||||
| Insurance and claims | |||||||||||||||||
| Depreciation and amortization | |||||||||||||||||
| Rent and purchased transportation | |||||||||||||||||
| Communications and utilities | |||||||||||||||||
| Gains on sales of property and equipment | ( | ( | ( | ||||||||||||||
Other segment items (3) | |||||||||||||||||
| Reportable segment operating expenses | |||||||||||||||||
| Reportable segment operating income (loss) | $ | $ | ( | $ | |||||||||||||
Reconciliation of operating income: | |||||||||||||||||
Other operating loss (1) | ( | ||||||||||||||||
| Consolidated operating income | $ | ||||||||||||||||
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| Six Months Ended June 30, 2025 | |||||||||||||||||
| Truckload Transportation Services | Werner Logistics | Total | |||||||||||||||
| Revenues from external customers | $ | $ | $ | ||||||||||||||
| Inter-segment revenues | |||||||||||||||||
| Reportable segment revenues | |||||||||||||||||
Reconciliation of revenues: | |||||||||||||||||
Other revenues (1) | |||||||||||||||||
| Elimination of inter-segment revenues | ( | ||||||||||||||||
| Consolidated revenues | $ | ||||||||||||||||
Less operating expenses: (2) | |||||||||||||||||
Salaries, wages and benefits (4) | |||||||||||||||||
| Fuel | |||||||||||||||||
| Supplies and maintenance | |||||||||||||||||
| Taxes and licenses | |||||||||||||||||
Insurance and claims (5) | |||||||||||||||||
| Depreciation and amortization | |||||||||||||||||
| Rent and purchased transportation | |||||||||||||||||
| Communications and utilities | |||||||||||||||||
| Gains on sales of property and equipment | ( | ( | ( | ||||||||||||||
Other segment items (3) | |||||||||||||||||
| Reportable segment operating expenses | |||||||||||||||||
| Reportable segment operating income | $ | $ | $ | ||||||||||||||
Reconciliation of operating income: | |||||||||||||||||
Other operating loss (1) | ( | ||||||||||||||||
| Consolidated operating income | $ | ||||||||||||||||
(1) Revenues and operating income or loss from segments below the quantitative thresholds for determining reportable segments. Those segments include driver training schools, transportation-related activities such as third-party equipment maintenance and equipment leasing, other business activities, and corporate related items which are incidental to our activities and are not attributable to any of our operating segments.
(2) The significant expense categories and amounts align with the segment-level information that is regularly provided to the chief operating decision maker. Inter-segment expenses are included within the amounts shown.
(3) Other segment items for each reportable segment primarily includes costs for professional services. During the three and six months ended June 30, 2026, other segment items for the TTS segment incurred $4.1 7.9 million and $7.8 million, respectively, to the contingent earnout liability related to the Baylor Trucking, Inc. acquisition. For additional information regarding this contingent consideration arrangement, see Note 7 – Fair Value.
(4) During the three and six months ended June 30, 2025, salaries, wages and benefits for the TTS and Werner Logistics segments included severance costs of $0.9 0.4
(14) SUBSEQUENT EVENT
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ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Management’s Discussion and Analysis of Financial Condition and Results of Operations (“MD&A”) summarizes the financial statements from management’s perspective with respect to our financial condition, results of operations, liquidity and other factors that may affect actual results. The MD&A is organized in the following sections:
•FirstFleet Acquisition
•Overview
•Results of Operations
•Liquidity and Capital Resources
•Regulations
•Critical Accounting Estimates
The MD&A should be read in conjunction with our 2025 Form 10-K.
FirstFleet Acquisition:
On January 27, 2026, we acquired 100% of the equity interests of FirstFleet, headquartered in Murfreesboro, Tennessee, for $245.0 million, which includes a maximum $35.0 million earnout based on gross revenue net of fuel surcharge for the period April 1, 2026, through March 31, 2027, and a $5.9 million deferred transaction bonus payout. Under a separate agreement, we also acquired real estate properties from FirstFleet for $37.8 million. FirstFleet brings added scale to Werner with approximately 2,400 tractors, 11,000 trailers and 37 strategically located properties near 130 customer sites around the country.
We funded these transactions using cash on hand and our existing revolving credit facility, in addition to assuming $57.2 million of finance lease liabilities. Additional information regarding the FirstFleet acquisition is included in Note 2 in the Notes to Consolidated Financial Statements under Item 1 of Part I of this Form 10-Q.
Overview:
We have two reportable segments, TTS and Werner Logistics, and we operate in the truckload and logistics sectors of the transportation industry. In the truckload sector, we focus on transporting consumer nondurable products that generally ship more consistently throughout the year. In the logistics sector, besides managing transportation requirements for individual customers, we provide additional sources of truck capacity, alternative modes of transportation, a North American delivery network and systems analysis to optimize transportation needs. Our success depends on our ability to efficiently and effectively manage our resources in the delivery of truckload transportation and logistics services to our customers. Resource requirements vary with customer demand, which may be subject to seasonal or general economic conditions. Our ability to adapt to changes in customer transportation requirements is essential to efficiently deploy resources and make capital investments in tractors and trailers (with respect to our TTS segment) or obtain qualified third-party capacity at a reasonable price (with respect to our Werner Logistics segment). We may also be affected by our customers’ financial failures or loss of customer business.
Revenues for the operating segments (Dedicated and One-Way Truckload) within our TTS reportable segment are typically generated on a per-mile basis and also include revenues such as stop charges, loading and unloading charges, equipment detention charges and equipment repositioning charges. To mitigate our risk to fuel price increases, we recover additional fuel surcharge revenues from our customers that generally recoup a majority of the increased fuel costs; however, we cannot assure that current recovery levels will continue in future periods. Because fuel surcharge revenues fluctuate in response to changes in fuel costs, we identify them separately and exclude them from the statistical calculations to provide a more meaningful comparison between periods. The key statistics used to evaluate trucking revenues, net of fuel surcharge, are (i) average revenues per tractor per week, (ii) One-Way Truckload average revenues per total mile, (iii) average percentage of empty miles (miles without trailer cargo), (iv) average trip length (in loaded miles) and (v) average number of tractors in service. General economic conditions, seasonal trucking industry freight patterns and industry capacity are important factors that impact these statistics. Our TTS segment also generates a small amount of revenues categorized as non-trucking revenues, which consist primarily of the intra-Mexico portion of cross-border shipments delivered to or from Mexico where the TTS segment utilizes a third-party capacity provider. We exclude such revenues from the statistical calculations.
Our most significant resource requirements are company drivers, independent contractors, tractors, and trailers with respect to our TTS segment, and qualified third-party capacity providers with respect to our Werner Logistics segment. Independent contractors supply their own tractors and drivers and are responsible for their operating expenses. Our financial results are affected by company driver and independent contractor availability and the markets for new and used revenue equipment. We are self-insured for a significant portion of bodily injury, property damage and cargo claims; workers’ compensation claims; and associate health claims (supplemented by premium-based insurance coverage above certain dollar levels). For that reason,
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our financial results may also be affected by driver safety, medical costs, weather, legal and regulatory environments and insurance coverage costs to protect against catastrophic losses.
The operating ratio is a common industry measure used to evaluate our profitability and that of our TTS segment operating fleets. The operating ratio consists of operating expenses expressed as a percentage of operating revenues. The most significant variable expenses that impact the TTS segment are driver salaries and benefits, fuel, fuel taxes (included in taxes and licenses expense), payments to independent contractors (included in rent and purchased transportation expense), supplies and maintenance and insurance and claims. As discussed further in the comparison of operating results for second quarter 2026 to second quarter 2025, several industry-wide issues have caused, and could continue to cause, costs to increase in future periods. These issues include shortages of drivers or independent contractors, changing fuel prices, changing used truck and trailer pricing, compliance with new or proposed regulations and tightening of the commercial truck liability insurance market. Our main fixed costs include depreciation expense for tractors and trailers and non-driver salaries, wages and benefits. The TTS segment requires substantial cash expenditures for tractor and trailer purchases. We fund these purchases with net cash from operations and financing available under our existing credit facilities, as management deems necessary.
We provide non-trucking services primarily through the three divisions within our Werner Logistics segment (Truckload Logistics, Intermodal, and Final Mile). Unlike our TTS segment, the Werner Logistics segment is less asset-intensive and is instead dependent upon qualified associates, information systems and qualified third-party capacity providers. The largest expense item related to the Werner Logistics segment is the cost of purchased transportation we pay to third-party capacity providers. This expense item is recorded as rent and purchased transportation expense. Other operating expenses consist primarily of salaries, wages and benefits, as well as depreciation and amortization, supplies and maintenance, and other general expenses. We evaluate the Werner Logistics segment’s financial performance by reviewing operating expenses and operating income expressed as a percentage of revenues. Purchased transportation expenses as a percentage of revenues can be impacted by the rates charged to customers and the costs of securing third-party capacity. We have a mix of contracted long-term rates and variable rates for the cost of third-party capacity, and we cannot assure that our operating results will not be adversely impacted in the future if our ability to obtain qualified third-party capacity providers changes or the rates of such providers increase.
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Results of Operations:
The following table sets forth the consolidated statements of income in dollars and as a percentage of total operating revenues and the percentage increase or decrease in the dollar amounts of those items compared to the prior year.
Three Months Ended (3ME) June 30, | Six Months Ended (6ME) June 30, | Percentage Change in Dollar Amounts | |||||||||||||||||||||||||||||||||||||||
| 2026 | 2025 | 2026 | 2025 | 3ME | 6ME | ||||||||||||||||||||||||||||||||||||
| (in thousands) | $ | % | $ | % | $ | % | $ | % | % | % | |||||||||||||||||||||||||||||||
| Operating revenues | $ | 933,927 | 100.0 | $ | 753,148 | 100.0 | $ | 1,742,537 | 100.0 | $ | 1,465,262 | 100.0 | 24.0 | 18.9 | |||||||||||||||||||||||||||
| Operating expenses: | |||||||||||||||||||||||||||||||||||||||||
| Salaries, wages and benefits | 310,964 | 33.3 | 250,451 | 33.2 | 590,625 | 33.9 | 493,676 | 33.7 | 24.2 | 19.6 | |||||||||||||||||||||||||||||||
| Fuel | 119,897 | 12.8 | 60,401 | 8.0 | 202,342 | 11.6 | 123,493 | 8.4 | 98.5 | 63.8 | |||||||||||||||||||||||||||||||
| Supplies and maintenance | 77,648 | 8.3 | 62,260 | 8.3 | 145,453 | 8.3 | 122,300 | 8.3 | 24.7 | 18.9 | |||||||||||||||||||||||||||||||
| Taxes and licenses | 23,383 | 2.5 | 23,100 | 3.1 | 46,211 | 2.7 | 45,444 | 3.1 | 1.2 | 1.7 | |||||||||||||||||||||||||||||||
| Insurance and claims | 41,425 | 4.4 | (6,813) | (0.9) | 83,353 | 4.8 | 36,964 | 2.5 | 708.0 | 125.5 | |||||||||||||||||||||||||||||||
| Depreciation and amortization | 78,811 | 8.4 | 70,757 | 9.4 | 155,008 | 8.9 | 140,806 | 9.6 | 11.4 | 10.1 | |||||||||||||||||||||||||||||||
| Rent and purchased transportation | 248,927 | 26.7 | 228,280 | 30.3 | 470,031 | 27.0 | 434,422 | 29.7 | 9.0 | 8.2 | |||||||||||||||||||||||||||||||
| Communications and utilities | 4,866 | 0.6 | 3,730 | 0.5 | 9,457 | 0.5 | 8,087 | 0.6 | 30.5 | 16.9 | |||||||||||||||||||||||||||||||
| Restructuring and impairment | 4,094 | 0.4 | — | — | 4,094 | 0.2 | — | — | N/A | N/A | |||||||||||||||||||||||||||||||
| Other | 6,991 | 0.8 | (5,339) | (0.7) | 15,047 | 0.9 | (419) | — | 230.9 | 3,691.2 | |||||||||||||||||||||||||||||||
| Total operating expenses | 917,006 | 98.2 | 686,827 | 91.2 | 1,721,621 | 98.8 | 1,404,773 | 95.9 | 33.5 | 22.6 | |||||||||||||||||||||||||||||||
| Operating income | 16,921 | 1.8 | 66,321 | 8.8 | 20,916 | 1.2 | 60,489 | 4.1 | (74.5) | (65.4) | |||||||||||||||||||||||||||||||
| Total other expense, net | 9,583 | 1.0 | 7,231 | 1.0 | 19,520 | 1.1 | 14,787 | 1.0 | 32.5 | 32.0 | |||||||||||||||||||||||||||||||
| Income before income taxes | 7,338 | 0.8 | 59,090 | 7.8 | 1,396 | 0.1 | 45,702 | 3.1 | (87.6) | (96.9) | |||||||||||||||||||||||||||||||
| Income tax expense | 2,003 | 0.2 | 15,468 | 2.0 | 522 | — | 12,301 | 0.8 | (87.1) | (95.8) | |||||||||||||||||||||||||||||||
| Net income | 5,335 | 0.6 | 43,622 | 5.8 | 874 | 0.1 | 33,401 | 2.3 | (87.8) | (97.4) | |||||||||||||||||||||||||||||||
| Net loss attributable to noncontrolling interest | 1,015 | 0.1 | 440 | 0.1 | 1,214 | — | 563 | — | 130.7 | 115.6 | |||||||||||||||||||||||||||||||
| Net income attributable to Werner | $ | 6,350 | 0.7 | $ | 44,062 | 5.9 | $ | 2,088 | 0.1 | $ | 33,964 | 2.3 | (85.6) | (93.9) | |||||||||||||||||||||||||||
The following tables set forth the operating revenues, operating expenses and operating income for the TTS segment and certain statistical data regarding our TTS segment operations, as well as statistical data for One-Way Truckload and Dedicated operations within TTS.
| Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||||||||||||||||||||||||||||||
| 2026 | 2025 | 2026 | 2025 | ||||||||||||||||||||||||||||||||||||||||||||
| TTS segment (in thousands) | $ | % | $ | % | $ | % | $ | % | |||||||||||||||||||||||||||||||||||||||
| Trucking revenues, net of fuel surcharge | $ | 572,224 | $ | 450,903 | $ | 1,080,505 | $ | 883,976 | |||||||||||||||||||||||||||||||||||||||
| Trucking fuel surcharge revenues | 120,569 | 55,201 | 199,037 | 112,841 | |||||||||||||||||||||||||||||||||||||||||||
| Non-trucking and other operating revenues | 9,779 | 11,543 | 17,342 | 22,705 | |||||||||||||||||||||||||||||||||||||||||||
| Operating revenues | 702,572 | 100.0 | 517,647 | 100.0 | 1,296,884 | 100.0 | 1,019,522 | 100.0 | |||||||||||||||||||||||||||||||||||||||
| Operating expenses | 675,454 | 96.1 | 453,558 | 87.6 | 1,255,828 | 96.8 | 956,349 | 93.8 | |||||||||||||||||||||||||||||||||||||||
| Operating income | $ | 27,118 | 3.9 | $ | 64,089 | 12.4 | $ | 41,056 | 3.2 | $ | 63,173 | 6.2 | |||||||||||||||||||||||||||||||||||
31
| Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||||||||||||||||||
| TTS segment | 2026 | 2025 | % Change | 2026 | 2025 | % Change | |||||||||||||||||||||||||||||
| Average tractors in service | 8,712 | 7,489 | 16.3 | % | 8,583 | 7,452 | 15.2 | % | |||||||||||||||||||||||||||
Average revenues per tractor per week (1) | $ | 5,053 | $ | 4,632 | 9.1 | % | $ | 4,842 | $ | 4,563 | 6.1 | % | |||||||||||||||||||||||
| Total tractors (at quarter end) | |||||||||||||||||||||||||||||||||||
| Company | 8,380 | 7,215 | 16.1 | % | 8,380 | 7,215 | 16.1 | % | |||||||||||||||||||||||||||
| Independent contractor | 315 | 330 | (4.5) | % | 315 | 330 | (4.5) | % | |||||||||||||||||||||||||||
| Total tractors | 8,695 | 7,545 | 15.2 | % | 8,695 | 7,545 | 15.2 | % | |||||||||||||||||||||||||||
| Total trailers (at quarter end) | 35,510 | 24,660 | 44.0 | % | 35,510 | 24,660 | 44.0 | % | |||||||||||||||||||||||||||
One-Way Truckload | |||||||||||||||||||||||||||||||||||
| Trucking revenues, net of fuel surcharge (in 000’s) | $ | 137,948 | $ | 164,083 | (15.9) | % | $ | 274,349 | $ | 318,504 | (13.9) | % | |||||||||||||||||||||||
| Average tractors in service | 1,736 | 2,634 | (34.1) | % | 1,929 | 2,633 | (26.7) | % | |||||||||||||||||||||||||||
| Total tractors (at quarter end) | 1,735 | 2,655 | (34.7) | % | 1,735 | 2,655 | (34.7) | % | |||||||||||||||||||||||||||
| Average percentage of empty miles | 14.94 | % | 15.50 | % | (3.6) | % | 15.27 | % | 15.75 | % | (3.0) | % | |||||||||||||||||||||||
Average revenues per tractor per week (1) | $ | 6,114 | $ | 4,787 | 27.7 | % | $ | 5,529 | $ | 4,650 | 18.9 | % | |||||||||||||||||||||||
Average % change in revenues per total mile (1) | 10.4 | % | 2.7 | % | 7.0 | % | 1.5 | % | |||||||||||||||||||||||||||
| Average % change in total miles per tractor per week | 15.7 | % | (2.3) | % | 10.8 | % | (2.9) | % | |||||||||||||||||||||||||||
| Average completed trip length in miles (loaded) | 685 | 581 | 17.9 | % | 679 | 579 | 17.3 | % | |||||||||||||||||||||||||||
Dedicated | |||||||||||||||||||||||||||||||||||
| Trucking revenues, net of fuel surcharge (in 000’s) | $ | 434,276 | $ | 286,820 | 51.4 | % | $ | 806,156 | $ | 565,472 | 42.6 | % | |||||||||||||||||||||||
| Average tractors in service | 6,976 | 4,855 | 43.7 | % | 6,654 | 4,819 | 38.1 | % | |||||||||||||||||||||||||||
| Total tractors (at quarter end) | 6,960 | 4,890 | 42.3 | % | 6,960 | 4,890 | 42.3 | % | |||||||||||||||||||||||||||
Average revenues per tractor per week (1) | $ | 4,789 | $ | 4,542 | 5.4 | % | $ | 4,654 | $ | 4,512 | 3.1 | % | |||||||||||||||||||||||
(1)Net of fuel surcharge revenues.
The following tables set forth the Werner Logistics segment’s revenues, purchased transportation expense, other operating expenses (primarily salaries, wages and benefits expense), total operating expenses, and operating income (loss), as well as certain statistical data regarding the Werner Logistics segment.
| Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||||||||||||||||||||||||||||||
| 2026 | 2025 | 2026 | 2025 | ||||||||||||||||||||||||||||||||||||||||||||
| Werner Logistics segment (in thousands) | $ | % | $ | % | $ | % | $ | % | |||||||||||||||||||||||||||||||||||||||
| Operating revenues | $ | 211,732 | 100.0 | $ | 221,177 | 100.0 | $ | 407,568 | 100.0 | $ | 416,735 | 100.0 | |||||||||||||||||||||||||||||||||||
| Operating expenses: | |||||||||||||||||||||||||||||||||||||||||||||||
| Purchased transportation expense | 185,744 | 87.7 | 188,326 | 85.1 | 354,274 | 86.9 | 355,484 | 85.3 | |||||||||||||||||||||||||||||||||||||||
| Other operating expenses | 29,858 | 14.1 | 28,523 | 12.9 | 59,169 | 14.5 | 57,398 | 13.8 | |||||||||||||||||||||||||||||||||||||||
| Total operating expenses | 215,602 | 101.8 | 216,849 | 98.0 | 413,443 | 101.4 | 412,882 | 99.1 | |||||||||||||||||||||||||||||||||||||||
| Operating income (loss) | $ | (3,870) | (1.8) | $ | 4,328 | 2.0 | $ | (5,875) | (1.4) | $ | 3,853 | 0.9 | |||||||||||||||||||||||||||||||||||
| Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||||||||||||||||||
| Werner Logistics segment | 2026 | 2025 | % Change | 2026 | 2025 | % Change | |||||||||||||||||||||||||||||
| Average tractors in service | 27 | 28 | (3.6) | % | 26 | 24 | 8.3 | % | |||||||||||||||||||||||||||
| Total tractors (at quarter end) | 27 | 23 | 17.4 | % | 27 | 23 | 17.4 | % | |||||||||||||||||||||||||||
| Total trailers (at quarter end) | 2,470 | 3,650 | (32.3) | % | 2,470 | 3,650 | (32.3) | % | |||||||||||||||||||||||||||
| Total containers (at quarter end) | 375 | 200 | 87.5 | % | 375 | 200 | 87.5 | % | |||||||||||||||||||||||||||
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Three Months Ended June 30, 2026 Compared to Three Months Ended June 30, 2025
Operating Revenues and Operating Profitability
Operating revenues increased 24.0% for the three months ended June 30, 2026, compared to the same period of the prior year. When comparing second quarter 2026 to second quarter 2025, TTS segment revenues increased $184.9 million, or 35.7%, and Werner Logistics revenues decreased $9.4 million, or 4.3%. The increase in TTS segment revenues was primarily due to $169.1 million of operating revenues related to our FirstFleet acquisition in the second quarter 2026. We had operating income of $16.9 million in second quarter 2026 compared to operating income of $66.3 million in second quarter 2025, and our operating margin percentage decreased to 1.8% in second quarter 2026 from 8.8% in second quarter 2025. TTS segment had operating income of $27.1 million in second quarter 2026 compared to operating income of $64.1 million in second quarter 2025, and its operating margin percentage decreased to 3.9% in second quarter 2026 from 12.4% in second quarter 2025. The decrease in our consolidated and TTS segment operating results during the second quarter 2026 was due primarily to the prior year impacts of a $45.7 million liability reversal through insurance and claims expense as a result of a previously disclosed favorable decision related to a lawsuit arising from a December 2014 accident, and a net favorable change of $7.9 million to the contingent earnout liability related to the Baylor Trucking, Inc. acquisition. For additional information related to the contingent consideration arrangement, see Note 7 in the Notes to Consolidated Financial Statements (Unaudited) set forth in Part I of this report. These impacts from the prior year were partially offset by the addition of FirstFleet operating results, profitability improvement in One-Way Truckload related to our recent restructuring efforts, and lower insurance and claims expense for our legacy business (not including FirstFleet) during the second quarter 2026. In fourth quarter 2025, we began a strategic restructuring of our One-Way Truckload business, a decisive action designed to significantly enhance long-term profitability and fleet utilization by maximizing production and mitigating unprofitable freight. Key steps in this initiative include exiting selective unprofitable regional and short-haul truckload freight, further integrating our one-way acquisition operations, and a further shift in the One-Way Truckload fleet composition toward more specialized, Expedited, and team capacity. This repositioning is focused on eliminating underperforming business. For additional information related to the restructuring and impairment charges, see Note 11 in the Notes to Consolidated Financial Statements (Unaudited) set forth in Part I of this report.
Werner Logistics had an operating loss of $3.9 million in second quarter 2026 compared to operating income of $4.3 million in second quarter 2025, and its operating margin percentage decreased to (1.8)% in second quarter 2026 from 2.0% in second quarter 2025. Truckload Logistics operating margin was pressured during second quarter 2026, as higher spot freight rates drove an increase in purchased transportation costs as a percentage of operating revenues. We are focused on proactively engaging with customers on resetting to higher contract rates. We believe the margin pressure is mostly transitory as contract rates are reset. As a result, we expect Logistics margins to improve during the second half of 2026.
In January 2026, we expanded our Dedicated offering through the acquisition of FirstFleet, adding scale, density and exposure to what we believe are more resilient customer markets, including grocery and food & beverage. At the same time, we also restructured our One-Way Truckload business to create a more balanced and higher-producing network to improve profitability. Our Dedicated business remains strong as customer retention remains high, and we have been successful in continuing to secure rate increases on renewals. In addition, Dedicated customers are expanding existing fleets, and we continue to have success with customers in new markets. Werner Logistics profitability continues to be impacted by ongoing pricing pressure. Industry capacity has continued to contract driven by regulatory enforcement actions related to non-domiciled commercial driver's licenses (“CDLs”), B1 Visas, and English Language Proficiency standards. In addition, increased competition for high-quality drivers, combined with rising fuel, insurance and equipment replacement costs, may further limit capacity. We anticipate further capacity attrition, along with seasonal peak volumes, to improve freight rates through the remainder of 2026.
In the TTS segment, trucking revenues, net of fuel surcharge, increased 26.9% in second quarter 2026 compared to second quarter 2025 due to a 16.3% increase in the average number of tractors in service and a 9.1% increase in average revenues per tractor per week, net of fuel surcharge. The TTS segment average number of tractors in service increase was due primarily to a 43.7% increase in Dedicated average tractors in service, which was mostly due to the addition of FirstFleet, partially offset by a 34.1% decrease in One-Way Truckload average tractors in service as a result of our One-Way Truckload restructuring plan, and slightly lower legacy Dedicated tractors. The result of our One-Way Truckload restructuring is showing early gains, with second quarter 2026 One-Way Truckload average revenues per tractor per week, net of fuel surcharge increasing 27.7%, average total miles per tractor per week up 15.7%, and One-Way Truckload revenues per total mile, net of fuel surcharge increasing 10.4%, compared to second quarter 2025, reflecting the combined effect of our restructuring and pricing actions. We expect One-Way Truckload fleet average revenues per total mile, net of fuel surcharge, to increase 10% to 13% in third quarter 2026 compared to third quarter 2025, as we expect ongoing pricing improvement as more contract renewals become effective, alongside anticipated seasonal demand later in the year. The increase in TTS average revenues per tractor per week, net of fuel surcharge was also due to a 5.4% increase in Dedicated average revenues per tractor per week, net of fuel surcharge. We are raising our full-year 2026 guidance for Dedicated average revenues per tractor per week, net of fuel surcharge, from a range of flat or increase up to 3%, to a range of an increase of 3% to 5%, as we have been successful in securing price increases in contract renewals for both our legacy Dedicated fleet and FirstFleet business.
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The average number of tractors in service in the TTS segment increased 16.3% to 8,712 in second quarter 2026 from 7,489 in second quarter 2025. We ended second quarter 2026 with 8,695 tractors in the TTS segment, an increase of 1,150 tractors compared to the end of second quarter 2025, and a sequential decrease of 345 tractors compared to the end of the first quarter 2026. Within TTS, Dedicated ended second quarter 2026 with 6,960 tractors (or 80% of our total TTS segment fleet) compared to 4,890 tractors (or 65%) a year ago. We our revising our full-year 2026 guidance for TTS average tractors in service from up 23% to 28% to a range of up 16% to 18% when compared to the same period in 2025. A portion of our previously anticipated growth in the second half may be delayed beyond year end, in part from further productivity gains we are realizing with our revenue equipment across the TTS segment, coupled with a slower pace of driver hiring, as there are currently fewer quality drivers available across the industry.
Trucking fuel surcharge revenues increased 118.4% to $120.6 million in second quarter 2026 from $55.2 million in second quarter 2025 due primarily to higher average diesel fuel prices in second quarter 2026 and the impact of the FirstFleet acquisition. These revenues represent collections from customers for the increase in fuel and fuel-related expenses, including the fuel component of our independent contractor cost (recorded as rent and purchased transportation expense) and fuel taxes (recorded in taxes and licenses expense), when diesel fuel prices rise. Conversely, when fuel prices decrease, fuel surcharge revenues decrease. To lessen the effect of fluctuating fuel prices on our margins, we collect fuel surcharge revenues from our customers for the cost of diesel fuel and taxes in excess of specified base fuel price levels according to terms in our customer contracts. Fuel surcharge rates generally adjust weekly based on an independent U.S. Department of Energy fuel price survey which is released every Monday. Our fuel surcharge programs are designed to (i) recoup higher fuel costs from customers when fuel prices rise and (ii) provide customers with the benefit of lower fuel costs when fuel prices decline. These programs generally enable us to recover a majority, but not all, of the fuel price increases. The remaining portion is generally not recoverable because it results from empty and out-of-route miles (which are not billable to customers) and tractor idle time. Fuel prices that change rapidly in short time periods also impact our recovery because the surcharge rate in most programs only changes once per week.
Werner Logistics revenues are generated by its three divisions. Werner Logistics recorded a minimal amount of revenue and brokered freight expense in second quarter 2026 and $4.7 million in second quarter 2025 for certain shipments performed by the TTS segment (also recorded as trucking revenue by the TTS segment), and these transactions between reporting segments are eliminated in consolidation. In second quarter 2026, Werner Logistics revenues decreased $9.4 million, or 4.3%, compared to second quarter 2025. Truckload Logistics revenues (72% of total Werner Logistics segment revenues) decreased $17.8 million, or 10%, in second quarter 2026, driven by a decrease in shipments of 29%, partially offset by a 26% increase in revenue per shipment. Intermodal revenues (16% of total Werner Logistics segment revenues) increased $5.4 million, or 18%, due to an increase in shipments of 17% and a 2% increase in revenue per shipment. Final Mile revenues (12% of total Werner Logistics segment revenues) increased $3.0 million, or 14%, in second quarter 2026, and increased 13% sequentially.
Operating Expenses
Our operating ratio (operating expenses expressed as a percentage of operating revenues) was 98.2% in second quarter 2026 compared to 91.2% in second quarter 2025. Expense items that impacted the overall operating ratio are described on the following pages. The tables on pages 31 through 32 show the consolidated statements of income in dollars and as a percentage of total operating revenues and the percentage increase or decrease in the dollar amounts of those items compared to the same period of the prior year, as well as the operating ratios, operating margins, and certain statistical information for our two reportable segments, TTS and Werner Logistics.
Salaries, wages and benefits increased $60.5 million, or 24.2%, in second quarter 2026 compared to second quarter 2025, and increased 0.1% as a percentage of operating revenues. The higher dollar amount of salaries, wages and benefits expense was due primarily to increased driver and non-driver pay and higher benefit costs, as we had a higher average number of employees. These increases were due primarily to the impact of the FirstFleet acquisition. Non-driver salaries, wages and benefits in our non-trucking Werner Logistics segment decreased 1.7% in second quarter 2026 compared to second quarter 2025.
We renewed our workers’ compensation insurance coverage on April 1, 2026. Our coverage levels are the same as the prior policy year. We maintain a self-insurance retention of up to $2.0 million per claim. Our workers’ compensation insurance premiums for the policy year beginning April 2026 are $0.6 million higher than the previous policy year due to the FirstFleet acquisition.
Competition for high-quality drivers has increased. A competitive driver market presents labor challenges for customers and carriers alike. Several factors impacting the driver market include a declining number of, and increased competition for, driver training school graduates, aging truck driver demographics and increased truck safety regulations. We continue to take significant actions to strengthen our driver recruiting and retention as we strive to be the truckload employer of choice, including competitive driver pay, providing a modern tractor and trailer fleet with the latest safety equipment and technology, investing in our driver training school network and offering a wide variety of driving positions including daily and weekly
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home time opportunities. We are unable to predict whether we will experience future driver shortages or maintain our current driver retention rates. If such a driver shortage were to occur and driver pay rate increases became necessary to attract and retain drivers, our results of operations would be negatively impacted to the extent that we could not obtain corresponding freight rate increases.
Fuel increased $59.5 million, or 98.5%, in second quarter 2026 compared to second quarter 2025, and increased 4.8% as a percentage of operating revenues, due primarily to higher average diesel fuel prices in second quarter 2026 and the impact of the FirstFleet acquisition. Average diesel fuel prices were $1.67 per gallon higher in second quarter 2026 than in second quarter 2025, and were $1.08 per gallon higher than in first quarter 2026.
We continue to employ measures to improve our fuel mpg such as (i) limiting tractor engine idle time by installing auxiliary power units, (ii) optimizing the speed, weight and specifications of our equipment and (iii) implementing mpg-enhancing equipment changes to our fleet including new tractors, more aerodynamic tractor features, idle reduction systems, trailer tire inflation systems, trailer skirts and automated manual transmissions to reduce our fuel gallons purchased. However, fuel savings from mpg improvement is partially offset by higher depreciation expense and the additional cost of diesel exhaust fluid. Although our fuel management programs require significant capital investment and research and development, we intend to continue these and other environmentally conscious initiatives, including our active participation as a U.S. Environmental Protection Agency (“EPA”) SmartWay Transport Partner. The SmartWay Transport Partnership is a national voluntary program developed by the EPA and freight industry representatives to reduce greenhouse gases and air pollution and promote cleaner, more efficient ground freight transportation.
For July 2026, the average diesel fuel price per gallon was $1.31 higher than the average diesel fuel price per gallon in July 2025, and $1.38 higher than in third quarter 2025.
Shortages of fuel, increases in fuel prices and petroleum product rationing can have a material adverse effect on our operations and profitability. We are unable to predict whether fuel price levels will increase or decrease in the future or the extent to which fuel surcharges will be collected from customers. As of June 30, 2026, we had no derivative financial instruments to reduce our exposure to fuel price fluctuations.
Supplies and maintenance increased $15.4 million, or 24.7%, in second quarter 2026 compared to second quarter 2025, and was flat as a percentage of operating revenues. The expense increase was driven by an increase in over-the-road tractor and trailer maintenance, in-house tractor maintenance, and higher toll and tire costs in second quarter 2026, resulting primarily from the FirstFleet acquisition.
Insurance and claims increased $48.2 million, or 708.0%, in second quarter 2026 compared to second quarter 2025, and increased 5.3% as a percentage of operating revenues, due primarily to the impact of a $45.7 million liability reversal through insurance and claims expense in second quarter 2025 as a result of a favorable decision related to an adverse jury verdict rendered on May 17, 2018 for a December 2014 accident, effectively ending the lawsuit in favor of Werner. The addition of insurance and claims expense in connection with the FirstFleet acquisition in January 2026 is also contributing to the increase in insurance and claims expense year over year. These increases were partially offset by lower unfavorable reserve development in second quarter 2026 compared to the same period in 2025. The majority of our insurance and claims expense results from our claim experience and claim development under our self-insurance program; the remainder results from insurance premiums for claims in excess of our self-insured limits. We believe our elevated insurance and claims expense is generally a reflection of the ongoing unprecedented rise in verdicts and litigation settlements across the industry, particularly for larger carriers.
We renewed our liability insurance policies on August 1, 2026, and are responsible for the first $15.0 million per claim on all claims with an annual $7.5 million aggregate for claims between $15.0 million and $20.0 million, consistent with the prior year. We maintain liability insurance coverage with insurance carriers in excess of the $15.0 million per claim. Our liability insurance premiums per mile for the policy year that began August 1, 2026 increased approximately six percent from the previous policy year.
Depreciation and amortization expense increased $8.1 million, or 11.4%, in second quarter 2026 compared to second quarter 2025, and decreased 1.0% as a percentage of operating revenues due primarily to depreciation and amortization of tangible and intangible assets recorded in the FirstFleet acquisition. These increases were partially offset by lower intangible amortization driven by a restructuring of our One-Way Truckload operating segment during the fourth quarter 2025 that impaired certain customer relationships and trade names.
The average age of our tractor fleet was 3.0 years as of June 30, 2026, and the average age of our trailers was 6.3 years. We are continuing to invest in new tractors and trailers, technology, and our terminal network in 2026 to improve our driver experience, increase operational efficiency and more effectively manage our maintenance, safety and fuel costs.
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Rent and purchased transportation expense increased $20.6 million, or 9.0%, in second quarter 2026 compared to second quarter 2025, and decreased 3.6% as a percentage of operating revenues. Rent and purchased transportation expense consists mostly of payments to third-party capacity providers in the Werner Logistics segment and other non-trucking operations, payments to independent contractors in the TTS segment, and cloud-based technology fees. The payments to third-party capacity providers generally vary depending on changes in the volume of services generated by the Werner Logistics segment. Werner Logistics recorded a minimal amount of revenue and brokered freight expense in second quarter 2026 and $4.7 million in second quarter 2025 for certain shipments performed by the TTS segment (also recorded as trucking revenue by the TTS segment), and these transactions between reporting segments are eliminated in consolidation. Werner Logistics purchased transportation expense decreased $2.6 million in second quarter 2026, and increased to 87.7% as a percentage of Werner Logistics revenues in second quarter 2026 from 85.1% in second quarter 2025. The increase in the percentage of Werner Logistics revenues was due primarily to higher capacity costs year over year.
Rent and purchased transportation expense for the TTS segment increased $18.5 million in second quarter 2026 compared to second quarter 2025 due primarily to an increase in operating lease expense in connection with the FirstFleet acquisition and higher reimbursements to independent contractors related to higher average diesel fuel prices.
Challenging operating conditions continue to make independent contractor recruitment and retention difficult. Such conditions include inflationary cost increases that are the responsibility of independent contractors and a shortage of financing available to independent contractors for equipment purchases. Historically, we have been able to add company tractors and recruit additional company drivers to offset any decrease in the number of independent contractors. If a shortage of independent contractors and company drivers were to occur, increases in per-mile settlement rates (for independent contractors) and driver pay rates (for company drivers) may become necessary to attract and retain these drivers. These increased expenses could negatively affect our results of operations to the extent that we would not be able to obtain corresponding freight rate increases.
Restructuring and impairment expense was $4.1 million in second quarter 2026. As discussed above, we began a strategic restructuring of our One-Way Truckload business in fourth quarter 2025. We do not expect further restructuring expenses going forward.
Other operating expenses increased $12.3, or 230.9%, in second quarter 2026 compared to second quarter 2025, and increased 1.5% as a percentage of operating revenues due primarily to the impact of a $7.9 million net favorable change to the contingent earnout liability related to the Baylor Trucking, Inc. acquisition in the second quarter 2025. The increase in other operating expenses was also due to acquisition expenses of $4.3 million in connection with the FirstFleet acquisition and continued integration efforts and a decrease in net gains on sales of property and equipment (primarily used tractors and trailers). Gains on sales of property and equipment are reflected as a reduction of other operating expenses and are reported net of sales-related expenses (which include costs to prepare the equipment for sale). Gains on sales of property and equipment were $1.5 million in second quarter 2026 compared to $5.9 million in second quarter 2025. We sold more tractors and fewer trailers in second quarter 2026 compared to second quarter 2025, and realized lower average sale prices for our used equipment. We continue to anticipate increasing used equipment demand and resale values through the remainder of 2026. Increased supply of used equipment from regulatory enforcement is likely to be offset by equipment manufacturers production constraints, aging fleets, and higher-priced 2027 engines, which may be an incentive towards high quality used assets. As a result, we are narrowing our anticipated gains on our used equipment for full-year 2026 from a range between $8 million and $18 million to a range between $10 million and $14 million.
Other Expense (Income)
Other expense, net of other income, increased $2.4 million, or 32.5%, in second quarter 2026 compared to second quarter 2025, due primarily to a $2.2 million increase in net interest expense. Net interest expense increased due primarily to an increase in average debt outstanding, partially offset by a decrease in average interest rates. We continue to expect net interest expense to be between $40 million and $45 million for full-year 2026.
Income Tax Expense
Income tax expense decreased $13.5 million in second quarter 2026 compared to second quarter 2025 due to lower pre-tax income, partially offset by an increase in the effective income tax rate. Our effective income tax rate (income taxes expressed as a percentage of income before income taxes) increased to 27.3% in second quarter 2026 compared to 26.2% in second quarter 2025. We continue to estimate our full-year 2026 effective income tax rate to be approximately 25.5% to 26.5%.
Six Months Ended June 30, 2026 Compared to Six Months Ended June 30, 2025
Operating Revenues and Operating Profitability
Operating revenues increased 18.9% for the first six months of 2026, compared to the same period of the prior year. When comparing the first six months of 2026 to the first six months of 2025, TTS segment revenues increased $277.4 million, or
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27.2%, and Werner Logistics revenues decreased $9.2 million, or 2.2%. The increase in TTS segment revenues was primarily due to $277.0 million of operating revenues related to our FirstFleet acquisition in the first six months of 2026. In the TTS segment, trucking revenues, net of fuel surcharge, increased $196.5 million, due primarily to a 15.2% increase in average tractors in service and a 6.1% increase in average revenues per tractor per week, net of fuel surcharge. TTS segment fuel surcharge revenues for the first six months 2026 increased $86.2 million, or 76.4%, when compared to the same period of the prior year due to higher average diesel fuel prices and the impact of the FirstFleet acquisition. The decrease in Werner Logistics revenues was due primarily to lower volumes in Truckload Logistics, partially offset by higher volumes in Intermodal and increased Final Mile revenues. We had operating income of $20.9 million for the first six months of 2026 compared to $60.5 million for the first six months of 2025, and our operating margin percentage decreased to 1.2% for the first six months of 2026 from 4.1% for the first six months of 2025. TTS segment had operating income of $41.1 million for the first six months of 2026 compared to $63.2 million for the first six months of 2025, and its operating margin percentage decreased to 3.2% for the first six months of 2026 from 6.2% for the first six months of 2025. The decrease in our consolidated and TTS segment operating results during the first six months of 2026 was due primarily to the prior year impacts of a $45.7 million liability reversal through insurance and claims expense as a result of a previously disclosed favorable decision related to a lawsuit arising from a December 2014 accident, and a net favorable change of $7.8 million to the contingent earnout liability related to the Baylor Trucking, Inc. acquisition. These impacts from the prior year were partially offset by the addition of FirstFleet operating results, profitability improvement in One-Way Truckload related to our recent restructuring efforts, and lower insurance and claims expense for our legacy business (not including FirstFleet) during the first six months of 2026.
Werner Logistics had an operating loss of $5.9 million for the first six months of 2026 compared to operating income of $3.9 million for the first six months of 2025, and its operating margin percentage decreased to (1.4)% for the first six months of 2026 from 0.9% for the first six months of 2025, primarily due to continued operating margin pressure during the first six months of 2026, as higher spot freight rates drove an increase in purchased transportation costs as a percentage of operating revenues.
Operating Expenses
Our operating ratio (operating expenses expressed as a percentage of operating revenues) was 98.8% for the six months ended June 30, 2026 and 95.9% for the six months ended June 30, 2025. Expense items that impacted the overall operating ratio are described on the following pages. The tables on pages 31 through 32 show the consolidated statements of income in dollars and as a percentage of total operating revenues and the percentage increase or decrease in the dollar amounts of those items compared to the same period of the prior year, as well as the operating ratios, operating margins, and certain statistical information for our two reportable segments, TTS and Werner Logistics.
Salaries, wages and benefits increased $96.9 million, or 19.6%, in the first six months of 2026 compared to the same period in 2025, and increased 0.2% as a percentage of operating revenues. The higher dollar amount of salaries, wages and benefits expense was due primarily to increased driver and non-driver pay and higher benefit costs, as we had a higher average number of employees. These increases were due primarily to the impact of the FirstFleet acquisition. Non-driver salaries, wages and benefits in our non-trucking Werner Logistics segment decreased 3.2% in the first six months of 2026 compared to the same period in 2025.
Fuel increased $78.8 million, or 63.8%, in the first six months of 2026 compared to the same period in 2025, and increased 3.2% as a percentage of operating revenues due to higher average diesel fuel prices in the first six months of 2026 and the impact of the FirstFleet acquisition. Average diesel fuel prices were $1.08 per gallon higher in the first six months of 2026 than in same period in 2025.
Supplies and maintenance increased $23.2 million, or 18.9%, in the first six months of 2026 compared to the same period in 2025 and remained flat as a percentage of operating revenues. The expense increase was driven by an increase in over-the-road tractor and trailer maintenance, in-house tractor maintenance, and higher toll and office supply costs in the first six months of 2026, resulting primarily from the FirstFleet acquisition.
Insurance and claims increased $46.4 million, or 125.5% in the first six months of 2026 compared to the same period in 2025, and increased 2.3% as a percentage of operating revenues, due primarily to the impact of a $45.7 million liability reversal through insurance and claims expense in second quarter 2025 as a result of a favorable decision related to an adverse jury verdict rendered on May 17, 2018 for a December 2014 accident, effectively ending the lawsuit in favor of Werner. The addition of insurance and claims expense in connection with the FirstFleet acquisition in January 2026 is also contributing to the increase in insurance and claims expense year over year. These increases were partially offset by lower expense for liability claims, resulting primarily from lower unfavorable reserve development and lower expense for new claims in the first six months of 2026 compared to the same period in 2025.
Depreciation and amortization expense increased $14.2 million, or 10.1%, in the first six months of 2026 compared to the same period in 2025, and decreased 0.7% as a percentage of operating revenues due primarily to depreciation and amortization of
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tangible and intangible assets recorded in the FirstFleet acquisition. These increases were partially offset by lower intangible amortization driven by a restructuring of our One-Way Truckload operating segment during the fourth quarter 2025 that impaired certain customer relationships and trade names.
Werner Logistics purchased transportation expense decreased $1.2 million in the first six months of 2026 as a result of the decline in Werner Logistics revenues, and increased 1.6% as a percentage of Werner Logistics revenues to 86.9% in the first six months of 2026 from 85.3% in the same period in 2025. The increase in the percentage of Werner Logistics revenues was due primarily to higher capacity costs year over year. Rent and purchased transportation expense for the TTS segment increased $28.2 million in the first six months of 2026 compared to the same period in 2025 due primarily to an increase in operating lease expense in connection with the FirstFleet acquisition and higher reimbursements to independent contractors related to higher average diesel fuel prices.
Restructuring and impairment expense was $4.1 million in the first six months of 2026. As discussed above, we began a strategic restructuring of our One-Way Truckload business in fourth quarter 2025.
Other operating expenses increased $15.5 million in the first six months of 2026 compared to the same period in 2025, and increased 0.9% as a percentage of operating revenues. The expense increased due primarily to acquisition expenses of $10.3 million in connection with the FirstFleet acquisition and continued integration efforts, and a decrease in net gains on sales of property and equipment (primarily used tractors and trailers) in the first six months of 2026. The increase in other operating expenses was also impacted by a $7.8 million net favorable change to the contingent earnout liability related to the Baylor Trucking, Inc. acquisition in the second quarter of 2025. Gains on sales of property and equipment were $5.3 million in the first six months of 2026 compared to $8.8 million in the same period in 2025. We sold more tractors and fewer trailers in in the first six months of 2026 compared to the same period in 2025, and realized lower average sale prices for our used equipment.
Other Expense (Income)
Other expense, net of income, increased $4.7 million in the first six months of 2026 compared to the same period in 2025 due primarily to a $4.3 million increase in net interest expense. Net interest expense increased due primarily to an increase in average debt outstanding, partially offset by a decrease in average interest rates (see Note 9 in the Notes to Consolidated Financial Statements (Unaudited) set forth in Part I of this report for further information on our debt and interest rate swaps).
Income Tax Expense
Income tax expense decreased $11.8 million in the first six months of 2026 compared to the same period in 2025, due to lower pre-tax income, partially offset by an increase in the effective income tax rate. Our effective income tax rate increased to 37.4% in the first six months of 2026 compared to 26.9% in the first six months of 2025 due primarily to differences in discrete income tax items.
Liquidity and Capital Resources:
We closely manage our liquidity and capital resources. Our liquidity requirements depend on key variables, including the level of investment needed to support business strategies, the performance of the business, capital expenditures, borrowing arrangements, and working capital management. Capital expenditures, business acquisitions, stock repurchases, and dividend payments are components of our cash flow and capital management strategy, which to a large extent, can be adjusted in response to economic and other changes in the business environment. Management’s approach to capital allocation focuses on investing in key priorities that support our business and growth strategies and providing stockholder returns, while funding ongoing operations.
Management believes our financial position at June 30, 2026 is strong. As of June 30, 2026, we had $57.0 million of cash and cash equivalents and $1.4 billion of stockholders’ equity. Cash is invested primarily in short-term money market funds. In addition, we have a maximum amount of funding available of $1.4 billion under our Credit Facilities, for which our total available borrowing capacity was $599.9 million as of June 30, 2026 (see Note 9 in the Notes to Consolidated Financial Statements (Unaudited) set forth in Part I of this report for information regarding our credit facilities). We believe the six commercial banks in our $1.075 billion syndicated credit facility all have strong tier-one capital ratios and good loan-to-deposit ratios. We believe our liquid assets, cash generated from operating activities, and borrowing capacity under our existing credit facilities will provide sufficient funds to meet our cash requirements and our planned stockholder returns for the foreseeable future.
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Item 7 of Part II of our 2025 Form 10-K includes our disclosure of material cash requirements as of December 31, 2025. Except as described below, there were no other material changes in the nature of these items during the six months ended June 30, 2026.
•Debt Obligations and Interest Payments – As of June 30, 2026, we had outstanding debt under the Credit Facilities with an aggregate principal amount of $793.0 million, with no principal amount expected to be paid within 12 months. As of June 30, 2026, future interest payments associated with the Credit Facilities are estimated to be $57.5 million through 2027, with $41.7 million payable within 12 months. See Note 9 in the Notes to Consolidated Financial Statements under Item 1 of Part I of this Form 10-Q for further detail of the Credit Facilities and the timing of expected future principal payments.
•Finance Leases – We assumed finance leases in connection with our FirstFleet acquisition. As of June 30, 2026, we had finance lease payment obligations of $48.3 million, with $25.1 million payable within 12 months. See Note 6 in the Notes to Consolidated Financial Statements under Item 1 of Part I of this Form 10-Q for further detail of our finance lease obligations and the timing of expected future payments.
Cash Flows
During the six months ended June 30, 2026, we generated cash flow from operations of $167.3 million, a 121.8% or $91.9 million increase in cash flows compared to the same six-month period a year ago. The increase in net cash provided by operating activities was due primarily to an increase in earnings adjusted for various noncash items, and an increase in cash provided by working capital changes for the six-month period ended June 30, 2026. We were able to make capital expenditures, make strategic investments, and pay dividends with the net cash provided by operating activities, supplemented by borrowings under our existing credit facilities.
Net investing activities used $185.8 million and $63.9 million for the six-month periods ended June 30, 2026 and 2025, respectively. Net cash invested in our FirstFleet acquisition was $184.8 million for the six-month period ended June 30, 2026. Net proceeds from the sales of property and equipment (primarily revenue equipment) were $8.6 million for the six-month period ended June 30, 2026, compared to net property and equipment additions of $58.1 million during the same period of 2025. The decrease in net capital expenditures during the first half of 2026 was due to several factors, including selling more equipment and purchasing less following our One-Way Truckload segment restructuring efforts, modest incremental use of operating leases, and a decline in technology-related capital spending as we near completion of building the technology infrastructure for our future. We are raising our full-year 2026 estimated net capital expenditure range (primarily revenue equipment) from $185 million to $225 million to $215 million to $250 million, compared to net capital expenditures in 2025 of $162.7 million. The higher capital expenditures is expected to accelerate fleet modernization and reduce the average age of our tractor fleet. The increase in expenditures also reflects a strategic pre-buy of certain 2026 model-year tractors ahead of the 2027 emissions standards. These investments are expected to improve reliability, lower repair and maintenance costs, enhance driver satisfaction and customer service, and support higher equipment gains in future years. We intend to fund these net capital expenditures through cash flows from operations and financing available under our existing credit facilities, if necessary. As of June 30, 2026, we were committed to property and equipment purchases of approximately $139.8 million.
Net financing activities provided $15.2 million during the six months ended June 30, 2026, and used $1.8 million during the same period in 2025. We had net borrowings on our debt under our Credit Facilities of $41.0 million during the six months ended June 30, 2026, increasing our outstanding debt to $793.0 million at June 30, 2026. We had net borrowings on our debt under our Credit Facilities of $75.0 million during the six months ended June 30, 2025. We paid dividends of $16.8 million during the six months ended June 30, 2026 and $17.3 million during the same period in 2025. We currently plan to continue paying a quarterly dividend.
We did not repurchase any shares of common stock during the six months ended June 30, 2026. Financing activities for the same period in 2025 included common stock repurchases of 2,113,007 shares at a cost of $55.6 million, including broker commissions and excise taxes. As of June 30, 2026, the Company had not purchased any shares pursuant to our current Board of Directors repurchase authorization and had 5,000,000 shares remaining available for repurchase. The Company has repurchased, and may continue to repurchase, shares of the Company’s common stock. The timing and amount of such purchases depend upon economic and stock market conditions and other factors.
Regulations:
Item 1 of Part I of our 2025 Form 10-K includes a discussion of pending proposed and recently enacted federal, state, and local regulations that could have an impact on our operations.
Since the filing of our 2025 Form 10-K, the regulatory status of non-domiciled commercial driver’s licenses has transitioned from an Interim Final Rule ("IFR") to a Final Rule. On February 13, 2026, the Federal Motor Carrier Safety Administration
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published "Restoring Integrity to the Issuance of Non-Domiciled Commercial Driver’s Licenses," which became effective on March 16, 2026.
This Final Rule formally replaces the September 2025 IFR and establishes a restrictive eligibility standard for foreign-domiciled drivers. While the rule is currently being challenged in the U.S. Court of Appeals for the D.C. Circuit, the court has not issued a stay as of the effective date, and enforcement has commenced. Werner is currently assessing how these restrictions impact our driver recruiting pipelines and the potential for workforce attrition as existing non-compliant licenses expire.
There have been no other material changes in the status of the proposed regulations previously disclosed in the 2025 Form 10-K.
Critical Accounting Estimates:
The preparation of consolidated financial statements in conformity with accounting principles generally accepted in the United States of America requires us to make estimates and assumptions that affect the (i) reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and (ii) reported amounts of revenues and expenses during the reporting period. We evaluate these estimates on an ongoing basis as events and circumstances change, utilizing historical experience, consultation with experts and other methods considered reasonable in the particular circumstances. Actual results could differ from those estimates and may significantly impact our results of operations from period to period. It is also possible that materially different amounts would be reported if we used different estimates or assumptions.
Information regarding our Critical Accounting Estimates can be found in our 2025 Form 10-K. Estimates of accrued liabilities for insurance and claims for bodily injury and property damage is a critical accounting estimate that requires us to make significant judgments and estimates and affects our financial statements.
There have been no material changes to this critical accounting estimate from that discussed in our 2025 Form 10-K.
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
We are exposed to market risk from changes in commodity prices, foreign currency exchange rates, and interest rates.
Commodity Price Risk
The price and availability of diesel fuel are subject to fluctuations attributed to changes in the level of global oil production, refining capacity, regulatory changes, seasonality, weather and other market factors. Historically, we have recovered a majority, but not all, of fuel price increases from customers in the form of fuel surcharges. We implemented customer fuel surcharge programs with most of our customers to offset much of the higher fuel cost per gallon. However, we do not recover all of the fuel cost increase through these surcharge programs. As of June 30, 2026, we had no derivative financial instruments to reduce our exposure to fuel price fluctuations.
Foreign Currency Exchange Rate Risk
We conduct business in foreign countries, primarily in Mexico. To date, most foreign revenues are denominated in U.S. Dollars, and we receive payment for foreign freight services primarily in U.S. Dollars to reduce direct foreign currency risk. Assets and liabilities maintained by a foreign subsidiary company in the local currency are subject to foreign exchange gains or losses. Foreign currency translation gains and losses primarily relate to changes in the value of revenue equipment owned by a subsidiary in Mexico, whose functional currency is the Peso. Foreign currency translation gains were $0.9 million and $2.6 million for second quarter 2026 and 2025, respectively. These gains were recorded in accumulated other comprehensive loss within stockholders’ equity on the consolidated condensed balance sheets.
Interest Rate Risk
We manage interest rate exposure through a mix of variable interest rate debt and interest rate swap agreements. We had $465.0 million of variable interest rate debt outstanding at June 30, 2026, for which the interest rate is effectively fixed at 5.84% with interest rate swap agreements to reduce our exposure to interest rate increases. In addition, we had $328.0 million of variable interest rate debt outstanding at June 30, 2026. Interest on our credit facilities is based on variable rates, including the Secured Overnight Financing Rate (“SOFR”) and commercial paper rate. See Note 9 in the Notes to Consolidated Financial Statements (Unaudited) set forth in Part I of this report for further detail of our debt and interest rate swaps. Assuming this level of borrowing, a hypothetical one-percentage point increase in the SOFR and commercial paper rate would increase our interest expense by approximately $4.4 million for the next 12-month period.
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ITEM 4. CONTROLS AND PROCEDURES
As of the end of the period covered by this report, we carried out an evaluation, under the supervision and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design and operation of our disclosure controls and procedures, as defined in Rule 15d-15(e) of the Securities Exchange Act of 1934 (the “Exchange Act”). Our disclosure controls and procedures are designed to provide reasonable assurance of achieving the desired control objectives. Based upon that evaluation, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures are effective at a reasonable assurance level in enabling us to record, process, summarize and report information required to be included in our periodic filings with the SEC within the required time period and that such information is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure.
As previously disclosed, we completed the acquisition of FirstFleet on January 27, 2026. Management has excluded the internal control over financial reporting of FirstFleet from the scope of the assessment of the effectiveness of our disclosure controls and procedures. This exclusion is in accordance with the SEC's general guidance that an assessment of the effectiveness of internal control over financial reporting of a recently acquired business may be omitted from management's scope in the year of acquisition. Management continues to execute its integration plan, which includes evaluating and implementing corporate-level internal controls over FirstFleet’s separate information systems, accounting systems and operational processes. Since the date of acquisition, FirstFleet's financial results have been included in our consolidated financial statements and constituted approximately $413.2 million of total assets as of June 30, 2026, and $169.1 million and $277.0 million of revenues for the three and six months ended June 30, 2026, respectively.
Management, under the supervision of and with the participation of our Chief Executive Officer and Chief Financial Officer, concluded that, except for our ongoing integration activities related to the FirstFleet acquisition described above, no changes in our internal control over financial reporting occurred during our most recent fiscal quarter that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
We have confidence in our internal controls and procedures. Nevertheless, our management, including the Chief Executive Officer and Chief Financial Officer, does not expect that the internal controls or disclosure procedures and controls will prevent all errors or intentional fraud. An internal control system, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of such internal controls are met. Further, the design of an internal control system must reflect that resource constraints exist, and the benefits of controls must be evaluated relative to their costs. Because of the inherent limitations in all internal control systems, no evaluation of controls can provide absolute assurance that all control issues, misstatements and instances of fraud, if any, have been prevented or detected.
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PART II
OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
For information regarding legal proceedings, see Note 10 in the Notes to Consolidated Financial Statements (Unaudited) set forth in Part I of this report.
ITEM 1A. RISK FACTORS
In addition to the other information set forth in this report, you should carefully consider the factors discussed under Item 1A (Risk Factors) in our 2025 Form 10-K, which could materially affect our business, financial condition, and future results of operations. The risks described in this form 10-Q and in our 2025 Form 10‑K are not the only risks facing us. Additional risks and uncertainties not currently known to us or that we currently deem to be immaterial also may materially adversely affect our business, financial condition, and results of operations. In addition to the risk factors set forth in our 2025 Form 10‑K, we believe the following risks and uncertainties should be considered in evaluating our business.
Risk Factors Relating to Acquisitions
We may not realize all of the financial and strategic goals of our FirstFleet acquisition and may incur costs relating to integration.
We face various risks in connection with our acquisition and continuing integration of FirstFleet, including:
•We might not integrate FirstFleet's 11 locations into our existing network without service disruptions;
•We may not realize the benefits or cost savings anticipated to be derived from the FirstFleet acquisition as initially predicted, if at all, for a number of reasons, including if a larger than predicted number of customers decide not to continue to use FirstFleet's or our services;
•Increased leverage could restrict our access to future capital for operations and growth.
As a result of these risks and challenges, we may not realize the financial and strategic goals that we initially anticipated from the FirstFleet acquisition in a timely manner or at all. In addition, the integration of FirstFleet may be difficult, costly, and time consuming.
ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES, USE OF PROCEEDS, AND ISSUER PURCHASES OF EQUITY SECURITIES.
On August 11, 2025, we announced a new stock repurchase program in a Form 8-K under which the Company is authorized to repurchase up to 5,000,000 shares of its common stock. As of June 30, 2026, the Company had not purchased any shares pursuant to the new authorization and had 5,000,000 shares remaining available for repurchase. The Company may purchase shares from time to time depending on market, economic, and other factors. The authorization will continue unless withdrawn by the Board of Directors.
No shares of common stock were repurchased during second quarter 2026 by either the Company or any “affiliated purchaser,” as defined by Rule 10b-18 of the Exchange Act.
ITEM 5. OTHER INFORMATION
Director and Officer Trading Arrangements
During second quarter 2026, no Company director or officer adopted terminated
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Item 6. Exhibits.
| Exhibit No. | Exhibit | Incorporated by Reference to: | ||||||||||||
2.1 | Stock Purchase Agreement, dated January 27, 2026, by and among the Company, Mary B. Wilson, Gary L. Wilson Family Trust, Gary L. Wilson GST-Exempt Family Trust, and Wilson Children 2020 GST-Exempt Trust | Exhibit 10.1 to the Company’s Current Report on Form 8-K/A dated January 27, 2026 | ||||||||||||
3(i) | Restated Articles of Incorporation of Werner Enterprises, Inc. | Exhibit 3(i) to the Company’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2007 | ||||||||||||
3(ii) | Revised and Restated By-Laws of Werner Enterprises, Inc. | Exhibit 3(ii) to the Company’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2024 | ||||||||||||
10.1 | Amendment No. 3 to Loan and Security Agreement, dated as of June 5, 2026, by and among Werner Receivables Company, LLC as Borrower, Werner Enterprises, Inc as initial Servicer, Wells Fargo Bank, National Association as a Committed Lender and as a Group Agent, GTA Funding LLC as a Conduit Lender, and The Toronto-Dominion Bank, as a Related Committed Lender, as a Group Agent and as Administrative Agent | Exhibit 10.1 to the Company’s Current Report on Form 8-K dated June 5, 2026 | ||||||||||||
10.2 | Performance Guaranty, dated as of June 5, 2026, by and among Werner Enterprises, Inc. as Performance Guarantor, and The Toronto-Dominion Bank as Administrative Agent | Exhibit 10.2 to the Company’s Current Report on Form 8-K dated June 5, 2026 | ||||||||||||
10.3 | Amendment No. 4 to Loan and Security Agreement, dated as of July 7, 2026, by and among Werner Receivables Company, LLC as Borrower, Werner Enterprises, Inc as initial Servicer, Wells Fargo Bank, National Association as a Committed Lender and as a Group Agent, GTA Funding LLC as a Conduit Lender, and The Toronto-Dominion Bank, as a Related Committed Lender, as a Group Agent and as Administrative Agent | Filed herewith | ||||||||||||
31.1 | Certification of the Chief Executive Officer pursuant to Rules 13a-14(a) and 15d-14(a) of the Securities Exchange Act of 1934 (Section 302 of the Sarbanes-Oxley Act of 2002) | Filed herewith | ||||||||||||
31.2 | Certification of the Chief Financial Officer pursuant to Rules 13a-14(a) and 15d-14(a) of the Securities Exchange Act of 1934 (Section 302 of the Sarbanes-Oxley Act of 2002) | Filed herewith | ||||||||||||
32.1 | Certification of the Chief Executive Officer pursuant to 18 U.S.C. Section 1350 (Section 906 of the Sarbanes-Oxley Act of 2002) | Furnished herewith | ||||||||||||
32.2 | Certification of the Chief Financial Officer pursuant to 18 U.S.C. Section 1350 (Section 906 of the Sarbanes-Oxley Act of 2002) | Furnished herewith | ||||||||||||
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| Exhibit No. | Exhibit | Incorporated by Reference to: | ||||||||||||
| 101 | The following unaudited financial information from Werner Enterprises’ Quarterly Report on Form 10-Q for the quarter ended June 30, 2026, formatted in iXBRL (Inline Extensible Business Reporting Language) includes: (i) Consolidated Statements of Income for the three and six months ended June 30, 2026 and 2025, (ii) Consolidated Statements of Comprehensive Income for the three and six months ended June 30, 2026 and 2025, (iii) Consolidated Condensed Balance Sheets as of June 30, 2026 and December 31, 2025, (iv) Consolidated Statements of Cash Flows for the six months ended June 30, 2026 and 2025, (v) Consolidated Statements of Stockholders’ Equity and Temporary Equity - Redeemable Noncontrolling Interest for the three and six months ended June 30, 2026 and 2025, and (vi) the Notes to Consolidated Financial Statements (Unaudited) as of June 30, 2026. | |||||||||||||
| 104 | The cover page from this Quarterly Report on Form 10-Q for the quarter ended June 30, 2026, formatted in Inline XBRL (included as Exhibit 101). | |||||||||||||
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
| WERNER ENTERPRISES, INC. | |||||||||||
Date: August 7, 2026 | By: | /s/ Christopher D. Wikoff | |||||||||
| Christopher D. Wikoff | |||||||||||
| Executive Vice President, Chief Financial Officer and Treasurer | |||||||||||
Date: August 7, 2026 | By: | /s/ Alan G. Colson | |||||||||
| Alan G. Colson | |||||||||||
| Vice President, Controller and Principal Accounting Officer | |||||||||||
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