Radiant Logistics, Inc. (RLGT) Q2 2026 Earnings Call Transcript
Access earnings results, analyst expectations, report, slides, earnings call, and transcript.
Overview
The earnings call revealed declining net income and revenues, dependence on non-routine projects, and market challenges in the freight sector. Despite a stock buyback program, financial metrics like adjusted net income and EBITDA also declined. The Q&A section highlighted uncertainties and management's lack of specific guidance on the Navigate platform's revenue, further impacting sentiment. Overall, the negative financial trends and lack of clear guidance suggest a negative stock price reaction in the short term.
Key Financial Performance
Adjusted EBITDA (Q2 FY2025) $11.8 million, increased by $5.7 million or 93.4% year-over-year (excluding $5.9 million from the Milton project in the prior year). Growth attributed to $3.6 million from U.S. operations, $1.4 million from Canadian operations, and $0.7 million from acquisitions.
Adjusted Gross Profit Margin (Q2 FY2025) 27.3%, improved by 340 basis points year-over-year. Improvement due to the absence of the lower-margin Milton project.
Adjusted EBITDA Margin (Q2 FY2025) 18.6%, expanded by 780 basis points year-over-year (excluding the Milton project). Expansion reflects operational efficiency and disciplined cost management.
Net Income (Q2 FY2025) $5.35 million on $232.1 million of revenues, decreased by $1.1 million or 18% year-over-year. Decrease due to lower revenues compared to the prior year.
Adjusted Net Income (Q2 FY2025) $8.76 million, decreased by $2.6 million or 24.5% year-over-year. Decrease attributed to lower revenues and absence of the Milton project.
Adjusted EBITDA (6 months ended December 31, 2025) $18.57 million, decreased by $2 million or 13.5% year-over-year. Decrease due to lower revenues and absence of the Milton project.
Net Income (6 months ended December 31, 2025) $6.6 million on $458.8 million of revenues, decreased by $3.25 million or 33% year-over-year. Decrease due to lower revenues compared to the prior year.
Adjusted Net Income (6 months ended December 31, 2025) $12.54 million, decreased by $6.04 million or 32.5% year-over-year. Decrease attributed to lower revenues and absence of the Milton project.
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Operating Highlights
Navigate platform: Proprietary global trade management and collaboration platform that enhances visibility, automation, and decision-making for supply chain management. It supports both domestic and international shipments and offers quick deployment, reducing costs and optimizing routing.
Ray AI-powered agent: AI-powered agent focused on streamlining quote requests from international agents. It automates routine administrative tasks, improving response times, service quality, and operational efficiencies. Future plans include expanding Ray's capabilities into additional AI-powered solutions.
Market positioning: Navigate platform and Ray AI agent are positioned as competitive differentiators in the logistics market, enhancing operational efficiency and customer service.
Adjusted EBITDA: Generated $11.8 million in adjusted EBITDA for Q2 FY2025, reflecting a 93.4% increase when excluding the prior year's Milton project impact.
Gross profit margin: Improved by 340 basis points to 27.3% compared to the prior year's 23.9%, indicating strong margin management.
Operational efficiency: Adjusted EBITDA margin expanded by 780 basis points to 18.6%, driven by cost management and efficiency improvements.
Capital allocation strategy: Focused on a balanced approach including agent station conversions, synergistic tuck-in acquisitions, stock buybacks, and investments in sales resources and technology deployment.
Stock buyback program: Acquired $2.7 million worth of stock in Q2 FY2025 as part of the ongoing buyback program.
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Risk or Challenges
Year-over-Year Revenue and Income Decline: The company experienced a decrease in net income and revenues compared to the prior year. Net income decreased by $1.1 million (18%) for the quarter and $3.245 million (33%) for the six months ended December 31, 2025. Revenues also declined, indicating potential challenges in maintaining growth.
Dependence on Non-Routine Projects: The prior year's financial performance was bolstered by the Milton project, a non-routine, high-margin initiative. The absence of similar projects in the current period highlights a reliance on such opportunities for significant revenue and EBITDA contributions.
Market Challenges in Freight Sector: The company acknowledged navigating a challenging freight market, which could impact margins and operational performance.
Decline in Adjusted Net Income and EBITDA: Adjusted net income and EBITDA both declined compared to the prior year. Adjusted net income decreased by 24.5% for the quarter and 32.5% for the six months, while adjusted EBITDA decreased by 2% for the quarter and 13.5% for the six months, reflecting operational and financial pressures.
Economic and Competitive Pressures: The company faces economic uncertainties and competitive pressures, as evidenced by the need to focus on operational efficiency and cost management to maintain margins.
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Guidance & Outlook
Navigate Platform: The company is optimistic about the Navigate platform, which is expected to serve as a catalyst for organic growth in the coming quarters. It offers enhanced visibility, automation, and faster decision-making for supply chain management, with streamlined deployment measured in weeks.
AI-Powered Agent Ray: The launch of Ray, an AI-powered agent, is expected to streamline quote request administration, improve response times, enhance service quality, and drive operational efficiencies. The company plans to expand Ray's capabilities into additional AI-powered solutions in the coming quarters.
Capital Allocation Strategy: The company plans to continue its balanced approach to capital allocation, including agent station conversions, synergistic tuck-in acquisitions, and stock buybacks. Investments in incremental sales resources and the deployment of Navigate technology are also planned.
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Shareholder Return Plan
Stock Buyback Program: Radiant Logistics acquired $2.7 million of its stock during the three months ended December 31, 2025. The company plans to continue its balanced approach to capital allocation, which includes stock buybacks alongside other initiatives such as agent station conversions and synergistic tuck-in acquisitions.
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Key Q&A
Q:Can you talk about the current demand environment and any project work from severe weather in the March quarter?
A:The demand environment is showing some improvement, with good growth in international and ocean imports, though the latter remains relatively soft. The Navigate technology platform is helping in this environment. There is a tightening of capacity, with tender rejection rates rising, but the benefits of this dynamic were not seen in the December quarter. For the March quarter, which is seasonally slow, the impact of capacity tightening on margins will be interesting to observe. Regarding project work from severe weather, there is nothing on the books yet, though the recent cold weather in the Southeast may cause some slowness.
Q:Should we expect any project work from severe weather at the beginning of the calendar year?
A:There is nothing currently in process for broader natural disasters like fires or hurricanes. The recent cold weather in the Southeast may cause some slowness, but no specific project work is planned.
Q:How much revenue do you expect from the Navigate platform this year?
A:Specific revenue numbers were not disclosed. However, the platform is gaining traction as customers onboard their vendors, leading to increased visibility and control. There is also inbound interest from vendors themselves, creating a compounding effect. The platform has applications across various industry verticals and ecosystems.
Q:Review of Unclear Management Responses
A:Management avoided providing specific revenue numbers for the Navigate platform, instead discussing its broader potential and positive feedback without concrete details.
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Earnings Word Cloud
The most frequently occurring keywords in this quarter's earning call
AI agent
AI solution
Founder CEO
Hurricane Milton
IV fluid
Milton project
ability freight
acquisition margin
administration request
administration task
advantage catalyst
agent focus
agent service
agent world
air charter
approach capital
basis point
buyback respect
capability AI
capital allocation
charter unit
comp period
cost journey
course approach
debt relative
decision
deployment technology
efficiency capability
efficiency cost
period margin
project period
quarter
store
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