Radiant Logistics' Q4 2025: Contradictions Emerge on Trade Tensions, Earnings Guidance, and Ocean Pricing and Capacity

The above is the analysis of the conflicting points in this earnings call

Date of Call: September 15, 2025

Financials Results

• Revenue: $220.6M, up 7.1% YOY vs $206.0M in Q4 FY2024
• EPS: $0.10 per diluted share, flat YOY vs $0.10 in Q4 FY2024

Business Commentary:

* Revenue and Earnings Trends: - Radiant Logistics reported revenue of $220.6 million for Q4 2025, with a 2.6% increase over the prior year period. - The company's adjusted EBITDA for the year ended June 30, 2025, was $38.8 million, up 24.4% from the previous year. - These improvements were primarily driven by the company's acquisition efforts, with acquisitions contributing $6 million in adjusted EBITDA.

• Acquisition and International Expansion:
• Radiant Logistics completed several acquisitions, including Seattle-based Cascade Transportation and Los Angeles-based Transcon Shipping, which contributed significantly to the financial results.
• The acquisition of Mexico-based Weport was seen as a strategic move to expand the company's North American footprint and support its existing customer base.

• This expansion is expected to enhance Radiant's competitive position in the global logistics market.

• Trade Policy and Market Dynamics:

• The company noted volatility in its operations due to ongoing U.S. trade negotiations and tariff issues, which affected customer supply chains.
• Radiant is positioning itself to respond to these changes by diversifying service offerings and leveraging its technology capabilities.

• Despite these challenges, Radiant expects a surge in global trade once tariff disputes are resolved, which could benefit its international operations.

• Balance Sheet and Financial Management:

• Radiant maintained a strong balance sheet with $23 million in cash and only $20 million drawn on its $200 million credit facility as of June 30, 2025.
• The company plans to thoughtfully relever its balance sheet through strategic acquisitions, stock buybacks, and agent station conversions to create long-term shareholder value.

Sentiment Analysis:

• Management highlighted FY2025 adjusted EBITDA of $38.8M, up 24.4% YOY, and strong balance sheet with ~$23M cash and $20M drawn on a $200M facility. However, they expect near-term volatility from tariffs and trade policy, noted a muted peak season, and Q4 adjusted EBITDA declined 13.1% YOY with adjusted net income down 21.3% YOY.

Q&A:

• Question from Elliot Alper (TD Cowen): How are changing trade policies impacting the business, especially in Mexico after the Weport acquisition?
  Response: Trade remains volatile with a shift from China to Southeast Asia and Mexico; Weport strengthens Radiant’s Mexico platform to offer a comprehensive North American solution.

• Question from Elliot Alper (TD Cowen): With import volatility and added TEU capacity, how are you and customers managing operations?
  Response: Shippers time shipments around tariffs and use Canada/Mexico; customs brokerage activity is elevated and Radiant is supporting customers through rapid changes.

• Question from Elliot Alper (TD Cowen): Q4 adjusted EBITDA/margins were light—any pull-forward dynamics?
  Response: Less pull-forward this quarter; it’s timing-related volatility rather than a structural issue.

• Question from Mark Argento (Lake Street Capital Markets): D&A fell about $3.6M—was there a write-down?
  Response: No; amortization from the 2015 Wheels acquisition rolled off after its 10-year life, establishing a new baseline.

• Question from Mark Argento (Lake Street Capital Markets): Any constraints to doing more M&A (e.g., 10–15 per year)?
  Response: Deal capacity is ample; the main constraint is integration. Multiple platforms (US forwarding/intermodal, Canada, Mexico) support continued active, disciplined M&A.

• Question from Mark Argento (Lake Street Capital Markets): Are you seeing peak-season/tariff-related activity shifts?
  Response: Expect a muted peak; continued sourcing shift to SE Asia and strong Mexico growth; expanded Mexico presence supports nearshoring trends.

• Question from Jeffrey Kauffman (Vertical Research Partners): What is the leverage target as you relever?
  Response: Target around ~2.5x; may temporarily flex slightly higher for the right deal, but not to 4–5x.

• Question from Jeffrey Kauffman (Vertical Research Partners): Was the Weport deal a special situation given tariff uncertainty?
  Response: Opportunistic with the right partner; adds true international air/ocean capability in Mexico, complementing existing cross-border services.

• Question from Jeffrey Kauffman (Vertical Research Partners): Clarify the D&A step-down and EBITDA impact?
  Response: Wheels amortization ended around end of Q3; lowers D&A going forward, aiding net income; EBITDA is unaffected.

• Question from Jeffrey Kauffman (Vertical Research Partners): Is the contingent consideration adjustment a one-off?
  Response: It’s remeasured quarterly; adjustments up or down reflect earn-outs designed to avoid over/underpaying for acquisitions.

• Question from Jeffrey Kauffman (Vertical Research Partners): Why was tax expense a benefit this quarter vs. the expected 24% rate?
  Response: Year-end true-up from prior overestimation; use a normalized rate going forward.

• Question from Michael Vermut (Newland Capital Management): With recent acquisitions, what should we expect over the next 1–2 years?
  Response: Driving a unified sales effort to cross-sell and grow wallet share; rolling out Navegate’s collaboration platform with early positive customer feedback.