Hello, and welcome to the Hub Group Preliminary Fourth Quarter and Full Year 2025 Results Conference Call. And it's now my pleasure to turn the call over to the company. You may now begin.

And welcome to the Hub Group Preliminary Fourth Quarter and Full Year 2025 Results Conference Call. Joining on the call are Phil Yeager, Hub Group's President, Chief Executive Officer, and Vice Chairman, and Kevin Beth, Chief Financial Officer and Treasurer. Statements made on this call that are not historical facts are forward-looking statements. These forward-looking statements are not guarantees of future performance and involve risks, uncertainties, and other factors that might cause the actual performance of Hub Group to differ materially from those expressed or implied by those statements. Further information on these risks and uncertainties are included at the end of our press release and in our most recent Form 10K and other periodic reports filed with the SEC, which are posted on our website. The financial results that we will be discussing today are preliminary and may change, including as a result of adjustments that may arise in connection with the ongoing audit of our consolidated financial statements for the year ended December 31st, 2025. There could be no assurance that the company's final results will not differ from the preliminary results, and any changes could be material. Finally, the preliminary financial results should not be viewed as a substitute for full financial statements prepared in accordance with GAAP, and are not necessarily indicative of results that may be achieved in future periods. I now turn the call over to CEO Bill Yeager.

Good afternoon, and welcome to Hub Group's conference call to discuss our preliminary fourth quarter 2025 financial results. Joining me today is Kevin Best, Upgroup's Chief Financial Officer, and Garrett Holland, our Senior Vice President of Investor Relations. Before we dive into our preliminary results, as you saw in the press release we issued this afternoon, in the course of our quarter and year-end closing process, we identified a calculation error that resulted in the understatement of purchase transportation costs and accounts payable. As a result, we are delayed in finalizing our financial results for the fourth quarter and full year 2025. We will reshape results for earlier quarters in 2025 when we file our 10K. Accuracy and transparency in reporting on our performance is of the utmost importance at Hub Group, and we have taken steps to strengthen and enhance our controls. Kevin will discuss this in greater detail, but as noted in our press release, there is no expected impact on total cash and cash equivalents or operating cash flow for any periods, and we have provided estimated impact to purchase transportation and warehousing costs for the nine months ended September 30th, 2025, based on our team's initial review. Now I'd like to turn to our preliminary financial results that we are able to review today, along with details on execution of our strategy and trends we are seeing in the market. The last year was a continuation of a challenging market cycle with stable demand and an oversupply of capacity. We performed well and focused on controlling what we can control, delivering record service levels across our platform, and in particular, our intermodal segment, while managing our costs, adding new business wins, and investing in our business, including equipment, technology, and acquisitions. We executed our strategy while maintaining our strong balance sheet and cash flow profile. 2025 preliminary operating cash flow is approximately $194 million. I will now discuss our segment performance beginning with ITS. Fourth quarter ITS revenue declined slightly year-over-year. We experienced a lighter peak season than last year in this segment while continuing to focus on cost management and and operational discipline in both intermodal and dedicated. Intermodal performance remains strong and we delivered another year of record service and market share gains. For the fourth quarter, volumes increased 1% year-over-year while revenue per load was flat but up 3% sequentially. Transcon volume was up 1%, Local East was down 4%, and Local West was down 1% while refrigerated volumes increased 150% and Mexico volumes increased 33%. Intermodal volume finished October up 2% year-over-year, down 3% year-over-year in November, and up 3% year-over-year in December. In January, intermodal volume decreased 4% year-over-year with significant impact from the winter storm against a challenging growth comparison from a year ago as shippers pulled forward orders ahead of tariffs. We work extremely well with our rail partners during PEAK, delivering a 90 basis point improvement in year-over-year on-time performance, positioning us well for intermodal volume growth in 2026 bid season. Throughout the year, our excellent service performance and the consolidation with our rail partners drove enhanced engagement with our customers who are excited about the opportunity for improved transits and costs in a single rail network, which along with With our consistent focus on cost reduction and efficiency gains, we believe will position us well in intermodal in 2026 and beyond. Given the strong value proposition across our business lines driven by quality service and savings, especially for the intermodal offering, we remain optimistic regarding the 2026 bid cycle. Incumbency and strong service on awards in recent years is expected to provide a strong foundation to grow from, and new logos have engaged with us to establish service. We remain focused on supporting growth with customers, building on the momentum from business awarded last year, and further improving network balance to reduce backhaul costs. With respect to demand, shippers are cautiously optimistic with potential benefits from stimulus measures countering lingering inflationary pressure. In dedicated, revenue declined in the fourth quarter due to lost sites from earlier in the year, but we were able to partially offset this impact through operational discipline and service improvements. We have significantly improved service levels, which is leading to a strong pipeline of growth opportunities with existing clients, and we are excited about the recent trends in the business. Fourth quarter logistics segment revenue reflects softer demand across business lines, partially offset by new business wins. In CFS, we have performed well through our warehouse consolidation, leading to a 630 basis point improvement year-over-year in space utilization. We see additional opportunities for further efficiency improvements, and we expect to be better positioned for further growth. In final mile, we are in the process of completing the onboarding of significant new business wins, which has helped to offset negative myths and lost sites. In order to successfully onboard the business, we have made investments in the relationships that are continuing into the first quarter to ensure a seamless transition in startup. Although the volume underperformed in the fourth quarter due to onboarding delays and minor scope changes, we are confident that the steps we are taking now will help drive volume growth well into the future. For the fourth quarter, brokerage volumes declined 10% year-over-year with revenue per load down 4% as LTL volume slowed while truckload and refrigerated volume benefited from project freight and market tightness in the latter portion of the quarter. Market conditions have remained tighter due to weather as we entered 2026, and we are seeing opportunities to support customers with spot opportunities. Our fourth quarter productivity improved 41% year-over-year due to our investments in technology and our restructuring, and we expect this to position us well for the current market backdrop and its conditions involved. Finally, managed transportation performed well throughout 2025 and is expected to continue to perform well in 2026 as we brought on new business in the fourth quarter and have a strong pipeline of additional growth opportunities. Our strong value proposition of continuous improvement, savings, and technology continues to resonate with our clients. Our fourth quarter productivity improved 12% compared to the prior year, which is enabling our ability to invest in the business and position for growth. We are pleased with our operational performance in 2025 in challenging market conditions. As we look ahead to 2026, we believe we are well positioned to support our customers in this evolving environment and excited about our opportunities for growth. We continue to see signs of tightening capacity due to regulatory enforcement along with challenging market conditions and cost inflation forcing out under-capitalized carriers. However, demand and inventory levels remain balanced, and the consumer has stayed resilient. With the increased tax refund disbursements, we are hopeful that supply and demand will move to equilibrium, leading to opportunities for intermodal conversion and growth across all our services. It is too early to determine whether a sustained market inflection is imminent, but we believe we are well-positioned, regardless of market conditions, due to our best-in-class service and team, efficient cross-structure, financial flexibility, and ongoing strategic investments. With stabilizing market conditions and excellent service, as well as rail consolidation expected in 2027, we have the ability to convert business from over-the-road to rail. We believe our logistics services are well-positioned due to our focus on productivity, service, and continuous improvement. Last, we maintain a strong balance sheet and capital flexibility to invest in our business for the long term. We expect to remain disciplined with capital deployment, continuing a balanced approach, returning capital to shareholders through our dividend and share repurchases, while evaluating potential M&A opportunities that meet appropriate return thresholds. As of today, we have approximately $142 million remaining under our share repurchase program. To sum up, although there is some uncertainty near term in the industry, we see all these drivers creating an exciting backdrop for hub group in 2026 and beyond with that i will hand the call over to kevin to discuss our preliminary financial results thank you phil before walking through our preliminary fourth quarter and full year 2025 financial results and our 2026 outlook i want to touch on the accounting item outlined in our release that phil mentioned at the start of the call.

The company identified an error that resulted in an understatement of purchase transportation costs and accounts payable in the first nine months of 2025. The total amount of the reduction to accounts payable and purchase transportation costs related to this issue that was recorded during these periods is $77 million. Based on our analysis to date, we estimate the correction of the error will increase purchase transportation and warehousing costs for the nine months ended September 30th, 2025, but cannot yet estimate what the resulting increase to purchase transportation and warehousing costs and accounts payable will be. There is no expected impact on HUB's total cash and cash equivalents or operating cash flows for any period. We are working to report our full and final financial results for 2025 as soon as possible. We plan to include the restated quarterly financial information for Q1, Q2, and Q3 2025 in our 2025 Forum 10-K. The team is committed to transparency and resolution of the accounting matter. Now, turning to our preliminary results. For the full year, we expect consolidated operating revenue of $3.7 billion, a 7% decrease over prior year. Full-year 2025 ITS segment operating revenue is expected to be approximately $2.2 billion, which includes low single-digit year-over-year decrease during the fourth quarter. Fourth quarter intermodal volume growth of 1% and stable revenue per load, despite lower surcharge revenue, was offset by lower dedicated revenue during the quarter. We realized peak surcharges of approximately $900,000 in Q4, representing a year-over-year difference of $4 million. Full-year logistic segment operating revenue is expected to be approximately $1.6 billion, inclusive of a high single-digit year-over-year decrease during the fourth quarter. Fourth-quarter performance reflects lower brokerage revenue, select customer attrition at CFS, and softer underlying final mile of demand, partially offset by new customer onboardings. Building on Phil's earlier remarks, peak season activity was largely in line with expectations, but muted overall relative to prior years. We saw select customers reaching out with project freight activity, and we saw pockets of tightness, particularly off the west coast, to start the quarter. However, many shippers pulled forward inventory over the course of the year and had less urgency to move product. Tightening capacity conditions later in the quarter reflected the combination of lower driver supply from policy actions and weather disruptions. Freight market dynamics clearly remain fluid and closer to balance than any time in recent years. Now turning to our cash flow. Preliminary cash flow from operations for the full year was $194 million. Our full year CapEx was approximately $45 million, in line with our estimate of less than $50 million. Integrations related to the acquisitions of Martin Intermodal Assets and West Coast Final Mile Provider SIS LLC are complete and the businesses are performing well. Importantly, our balance sheet and financial position remain strong. Debt at December 31, 2025 totaled approximately $229 million, which after giving effect to cash of approximately $113 million resulted in net debt of approximately $116 million, a decrease of approximately $50 million compared to December 31st, 2024. In 2025, we returned $44 million to shareholders through dividends and stock repurchases. Turning to our preliminary 2026 guidance, Revenue is projected to be between $3.65 billion to $3.95 billion for the full year. For our ICS segment, we expect revenue will largely be driven by intermodal volume growth through the year. We expect dedicated performance will be slightly lower compared to 2025 due to lost customer sites, which will continue to offset new awards in the near term. For logistics, excluding our broker's business, we expect recovering revenue through the year due to new business wins and improving profitability, led by final mile and managed transportation. For brokers, we expect volume pressure continues in the near term and weighs on logistics segment profitability. For the year, we expect capital expenditures of $35 million to $45 million as we continue to focus on technology projects and opportunistic replacements for tractors given favorable purchase terms and recent changes for bonus depreciation. We do not plan to purchase containers in 2026. As still noted, our capital allocation plan continues to guide us and starts with investing in the business that supports long-term growth and improved efficiency across tractors, technology, and container capacity. As you know, we consider M&A opportunistically to complement organic growth, and the bar for M&A is high given our discipline due diligence process and return focus. And finally, we remain focused on returning capital directly to shareholders through our quarterly dividend and share repurchases. Our current dividend also returns approximately $7.5 million to shareholders quarterly, and as still noted, we have approximately $142 million remaining under our current share repurchase authorization. We expect to continue to balance capital deployment priorities and opportunistically repurchase shares as market conditions and opportunities evolve. Our balance sheet is in great shape and has been fortified by the cash flow resiliency of our operating model through this industry downturn. We remain focused on ways to maximize shareholder value. We will share additional details on the 2026 outlook when we release our full fourth quarter and full year 2025 financial results. And now I'll turn it back over to Phil for his closing remarks.

Thanks, Kevin. To sum up for today, break market conditions remain challenging through 2025, but the Hub Group team adapted and remained focused on serving our customers and controlling expenses. To start 2026, we are seeing positive trends in the marketplace, as reflected in improving ISM new orders and spot market activity. Our balance sheet and cash generation remain strong and should provide significant capital flexibility as we remain disciplined with capital deployment. Operating momentum and a strong focus on execution has carried us into 2026, and we will continue to lead with service as the freight market backdrop evolves. Phil and Joyce Jaeger founded this company 55 years ago based on the principles of service, integrity, and innovation. And the success of this business has been and continues to be based on living those values every day. We are excited about the growth prospects for Hub Group and extending that legacy of performance.

Ladies and gentlemen, this concludes today's call with Hub Group. Thank you for joining. You may now disconnect.