Old Dominion Freight Line, Inc. (ODFL) Earnings

Management highlights

### Financial and Service Performance Highlights - Achieved strong Q2 2026 results with double-digit revenue growth, 450 basis point operating ratio improvement, and record diluted EPS, driven by improving demand trends, disciplined yield management, and consistent operational execution. - Delivered industry-leading service metrics: 99% on-time delivery and a 0.1% claims ratio, with ~1,000 lane adjustments implemented year-to-date to improve transit times. ### Strategic Priorities - Maintain a long-term focus on consistent investments in network capacity, technology, and employees, even during periods of soft domestic economic demand, to support best-in-class service and capture long-term market share growth. - Execute disciplined, account-level pricing to offset cost inflation and fund reinvestment in the business, with a focus on individual account profitability to support long-term yield stability. ### Operational Updates - Month-to-date July 2026 revenue per day is tracking 7.5% to 8% higher than July 2025, with LTL tons per day down ~1.0% YoY, but sequential tonnage performance is significantly better than historical 10-year average seasonality. - 3PL/third-party brokerage revenue grew at a rate consistent with overall company revenue in Q2 2026, with the company maintaining consistent profitability-focused pricing for all accounts regardless of whether they are direct or via 3PL. - Increased 2026 capital expenditure guidance to $380 million (up $115 million from the original plan) to capture strategic purchase opportunities: $60 million additional for tractors and trailers, and $55 million additional for real estate and service center expansion, aligned with the company's long-term capital plan.

Guidance

- Third quarter 2026 revenue is expected to range from ~$1.52 billion (if 7.5% to 8% year-over-year growth holds through the quarter) to ~$1.54 to $1.55 billion (if current momentum continues, equaling 10% year-over-year revenue growth). - Excluding fuel surcharges, third quarter LTL revenue per hundredweight growth is expected to be 4% to 4.5%, below Q2's 5.5% rate due to freight mix changes, specifically improving weight per shipment which management frames as a positive long-term trend. - The 2026 effective tax rate is expected to be 25.0% for the third quarter. - Normalized third quarter operating ratio is expected to increase 150 to 200 basis points from Q2's 70.1% GAAP operating ratio, in line with typical historical seasonality after adjusting for the $17.2 million Q2 net gain on property disposal. - The company's long-term operating ratio target remains a sub-70% annual operating ratio, with a clear pathway to further 500 basis points of improvement over time as volume growth drives operating leverage. - 2026 full-year capital expenditures are now guided to ~$380 million, up from the original full-year plan.

Segment performance

Old Dominion Freight Line operates as a single less-than-truckload (LTL) freight segment. For Q2 2026, total company revenue increased 10.4% year-over-year to $1.55 billion. LTL revenue per hundredweight increased 15.2% YoY, partially offset by a 4.1% YoY decrease in LTL tons per day; excluding fuel surcharges, LTL revenue per hundredweight increased 5.5% YoY. Sequentially compared to Q1 2026, Q2 revenue per day rose 14.6%, LTL tons per day rose 4.0%, and LTL shipments per day rose 3.2%. Operating ratio improved 450 basis points YoY to 70.1%, with diluted earnings per share up 32.3% YoY to $1.68, matching the company's 2022 Q3 record. Operating cash flow for Q2 2026 was $272.7 million, and $646.3 million for the first half of 2026. Capital expenditures were $77.0 million in Q2 and $139.6 million H1 2026.

Risks & headwinds

- Month-to-month demand trends remain choppy, creating near-term volatility in tonnage and revenue growth that deviates from long-term average seasonality. - Fuel costs have re-inflected upward after stabilizing in Q2, creating potential headwinds for operating margins if price increases do not reverse. - Autonomous truck deployment faces unresolvable (in the near-to-medium term) regulatory, operational, and security challenges, including cargo theft risk and handling of unexpected on-highway scenarios, that limit near-term adoption. - Rising insurance premium inflation, which the company has already managed for years, is creating additional cost pressure for 3PL brokers that may disrupt existing brokerage market dynamics if it forces pricing adjustments. - The company faces potential macroeconomic headwinds from ongoing inflation concerns and global geopolitical events that have kept a lid on broader demand growth even as current trends are improving.

Analyst Q&A

• Q: What is the current state of freight shifting from the tight truckload (TL) market to LTL, and how is July demand trending? /

  A: Management stated that the TL-to-LTL freight shift is still in early innings, with no large material shift in shipment weight profiles that would indicate a major market inflection to date. Demand continues to improve overall, with choppy month-to-month performance normalizing over the full quarter, and July 2026 volume is tracking 3 million pounds per day higher than projected by normal seasonality, consistent with customer restocking trends. Management expects the shift to continue as strong TL rates persist, leaving ample room for future growth.

• Q: What are your expectations for Q3 revenue and operating ratio, adjusting for the Q2 property gain? /

  A: Management guided to a baseline Q3 revenue of $1.52 billion if 7.5-8% July growth holds, rising to $1.54-$1.55 billion (10% YoY growth) if current momentum continues. They expect GAAP operating ratio to increase 150-200 basis points sequentially from Q2, which is in line with normal seasonality after adjusting for the one-time Q2 property gain. The baseline assumes an average diesel price of $4.95 per gallon for the quarter.

• Q: Have you seen capacity constraints at peer carriers driving incremental freight to Old Dominion, and what capacity do you have available? /

  A: Management confirmed they are seeing temporary incremental freight from peers that are facing pickup delays and capacity constraints in the Midwest, partially driven by early TL-to-LTL spillover. Old Dominion has no capacity constraints for equipment, drivers, or service center real estate, with over 35% excess service center capacity currently available. This consistent available capacity is a core part of the company's value proposition that supports market share gains when peers face constraints.

• Q: What is driving the increase to your 2026 capital expenditure plan, and do you need additional capacity to handle growing volumes? /

  A: The $115 million increase to the $380 million full-year CapEx plan comes from strategic opportunities that align with the company's 5- and 10-year network plan, not an immediate need for additional capacity. The increase includes strategic real estate purchases in hard-to-enter markets, accelerated timing of existing projects pulled from 2027, and accelerated equipment purchases also pulled from 2027. The company already has ample excess capacity to handle near-term volume growth, with no material headcount increases expected for the remainder of 2026 even with sequential tonnage growth.

• Q: What is your view on autonomous trucks for line-haul operations, and are you planning to deploy the technology soon? /

  A: Management stated the company continually evaluates new technology, but autonomous trucks face multiple unaddressed barriers to large-scale nationwide deployment for LTL operations. Key concerns include uncertain per-mile cost that does not yet deliver an attractive return on investment, operational challenges of handling unexpected on-highway scenarios without a driver, increased cargo theft risk, and outstanding regulatory hurdles. The company does not plan to be an early adopter, and will only deploy the technology if it meets the company's strict return on investment and service quality requirements.