Radiant's Q1 2026 Earnings Call: Contradictions Unveiled on Tariffs, Mexico Expansion, and Government Shutdown Impacts

Date of Call: November 10, 2025

Financials Results

• Revenue: $226.7M, compared to $203.6M in the prior year (up $23.1M, ~11.4% YOY)
• EPS: $0.03 per basic and diluted share, compared to $0.07 in the prior year (net income declined ~61.7% YOY)

Guidance:

• Continue balanced capital allocation via agent station conversions, synergistic tuck‑in acquisitions and stock buybacks; expect to remain active in buybacks at current price levels.
• Expect incremental organic growth from Navegate within the next couple of quarters and will invest in sales resources to accelerate adoption.
• Near-term freight market remains challenging; core transportation likely to 'muddle along' with headwinds into calendar 2026.
• Leverage value‑added services (contract logistics, customs brokerage, technology) to mitigate freight market weakness.
• Plan to thoughtfully re‑lever the balance sheet while maintaining financial flexibility (net debt ~ $2M).

Business Commentary:

* Financial Performance and Market Conditions: - Radiant Logistics reported adjusted EBITDA of $6.8 million in Q1 2026, excluding a $1.3 million bad debt expense related to the First Brands bankruptcy. - The company experienced a decrease in net income of approximately $2.1 million over the comparable prior year period or 61.7%, and a decrease in adjusted net income of approximately $3.4 million or 43.3%. - These trends were attributed to persistent headwinds in the challenging freight market and the impact of the First Brands bankruptcy.

• Navegate Platform Deployment:
• Radiant Logistics highlighted the early stages of its Navegate platform integration, with plans for deployment supporting both international and domestic services.
• 
• The company aims for this platform to be a differentiator, reducing costs and optimizing routing for customers.

• The deployment is expected to drive organic growth, but the timeline for noticeable P&L impact is uncertain.

• Acquisition Strategy and Share Repurchase:

• Radiant Logistics completed the acquisition of Mexico-based Weport, increasing its presence in North America.
• The company has been actively repurchasing its shares, with $0.8 million acquired in Q1 2026 and $2.8 million in subsequent periods.

• These strategic moves are part of a balanced approach to continue profitable growth while re-leveraging its balance sheet.

• Regional and Service Focus:

• The company emphasized its presence in Canada and Mexico, with strong demand for contract logistics and warehousing services.
• This is driven by shippers attempting to mitigate tariff impacts and diversify their supply chains.
• Radiant Logistics is positioning itself to support these trends, focusing on value-added services and technology solutions.
  

  Sentiment Analysis:

  Overall Tone: Neutral

  • Management highlighted optimism about Navegate and buybacks ('particularly excited about the prospects of Navegate', 'we expect to continue to be active in our stock buybacks') but reported deterioration in profitability ('adjusted EBITDA $6.8M vs $9.45M prior year, down 28.1%') and persistent freight headwinds expected into calendar 2026.

Q&A:

• Question from Jason Seidl (TD Cowen): How deployed is Navegate today, how quickly can you roll it out to customers, and how many customers ultimately need it?
  Response: Navegate is integrated with the core SAP stack, now supports domestic and international use cases, can be sold bundled or unbundled, and will be rolled out selectively to customers — positioned as a scalable, differentiated offering to drive organic growth.

• Question from Jason Seidl (TD Cowen): How many quarters until Navegate has a noticeable P&L impact?
  Response: Management expects to report incremental organic growth from Navegate within the next couple of quarters, though widespread adoption will be a longer multi‑quarter journey.

• Question from Jason Seidl (TD Cowen): How should we think about the current quarter (Sept->Oct->Nov) and peak expectations?
  Response: Near term the freight market remains difficult; early signs of improvement in over‑the‑road brokerage pricing exist, but core transportation will likely remain muted and headwinds may persist into calendar 2026; value‑added services should help mitigate.

• Question from Jason Seidl (TD Cowen): What are you seeing on warehousing pricing?
  Response: Most warehousing exposure is in Canada (and Mexico), where demand/pricing remain strong due to tariff dynamics; minimal meaningful U.S. warehouse exposure.

• Question from Jeffrey Kauffman (Vertical Research Partners): Where are truck/air/ocean market pressures making a difference for Radiant and where are you insulated?
  Response: Radiant faces the same market headwinds as peers but has less pure retail exposure and relatively more government‑sector business, which is a partial positive offset.

• Question from Jeffrey Kauffman (Vertical Research Partners): Did the government shutdown affect your business?
  Response: Shutdown effects have begun to appear but are expected to be short‑term; management is optimistic it will be resolved in days/weeks.

• Question from Jeffrey Kauffman (Vertical Research Partners): What will Navegate enable 12 months from now that you couldn't do before?
  Response: Post‑integration, Navegate is operational and enables actionable vendor/supply‑chain management across domestic and international shipments with streamlined supplier onboarding, which management calls a 'game changer.'

• Question from Mark Argento (Lake Street Capital Markets): Any update on the Weport acquisition and the $1.3M First Brands bankruptcy charge — recoverable?
  Response: Weport strengthens Radiant's Mexico footprint and adds true Mexico air/ocean capability; the $1.3M First Brands charge was a surprise, is being evaluated for possible post‑petition recovery but currently uncertain and treated as a one‑off.

• Question from Michael Vermut (Newland Capital Management): Does Navegate change your addressable market or customer targets?
  Response: Navegate expands the opportunity set to larger, more complex shippers while also creating viral opportunities via suppliers; it broadens TAM beyond existing customers without excluding smaller shippers.

• Question from Michael Vermut (Newland Capital Management): Will buybacks accelerate if the stock stays at these levels?
  Response: Management will remain active in buybacks at current price points, viewing repurchases as an attractive use of capital, though they won't commit to specific magnitudes.

Contradiction Point 1

Impact of Tariffs and International Business

It highlights differing perspectives on the impact of tariffs and international business challenges, which are critical for understanding the company's global operations and financial stability.

How deployed is Navegate currently, how quickly can it be deployed to your customer base, and how many customers ultimately need it? - Jason Seidl (TD Cowen)

2026Q1: Challenges persist in international business. Overseas markets are affected by tariffs and pricing. - Bohn Crain(CEO)

How has changing trade policy impacted your business, particularly with your recent acquisition of Weport? - Elliot Alper (TD Cowen)

2025Q4: Radiant's presence across North America positions it to support customers navigating these changes. - Bohn Crain(CEO)

Contradiction Point 2

Opportunities in Mexico

It addresses the strategic importance of the Mexican market and the company's plans for growth, which are crucial for understanding Radiant's expansion strategy and potential future revenue.

Any updates on the Weport acquisition? - Mark Argento (Lake Street)

2026Q1: Weport acquisition strengthens Radiant's capabilities in Mexico, supporting existing and new customers there. - Bohn Crain(CEO)

Was the Mexican acquisition opportunistic or part of a broader international strategy? - Jeffrey Kauffman (Vertical Research Partners)

2025Q4: The acquisition was opportunistic and strengthens Radiant's international capabilities in Mexico, especially in air and ocean freight. - Bohn Crain(CEO)

Contradiction Point 3

Impact of International Trade Challenges and Opportunities

It involves the company's stance on international trade challenges and opportunities, which could impact the company's strategic positioning and financial performance.

Where is the market challenging Radiant, and where is the company not being affected? - Jeffrey Kauffman(Vertical Research Partners)

2026Q1: Radiant faces challenges similar to other players in the market, including international ocean rates and tariffs. Less exposure to retail, more to government spending. Short-term impacts from government shutdown are expected, but long-term effects from tariffs and demand-capacity imbalances are more significant. - Bohn Crain(CEO)

What drove the base business's outperformance this quarter? Given your comments on the bullwhip effect, how may it impact the June quarter? - Elliot Alper(Cowen)

2025Q3: We saw some slowing in international trade volumes, mainly due to trade tensions. However, we're optimistic about the future as these challenges create opportunities for us. We have a strong presence in Canada and Mexico, which benefits from the current trade dynamics. - Bohn Crain(CEO)

Contradiction Point 4

Impact of Government Shutdown

It highlights the company's expectations regarding the impact of government shutdowns on its operations, which could influence short-term financial performance.

How do you assess Navegate's current deployment status, deployment speed to customer base, and total number of customers ultimately needing it? - Jason Seidl(TD Cowen)

2026Q1: In addition, the impacts of the recent government shutdown were largely confined to January, with particularly strong volumes in the latter half of the month. The government shutdown did impact certain of our smaller less diversified customers, as well as our international business. - Bohn Crain(CEO)

Will the fourth quarter remain the second best of the year despite uncertainties? - Jeff Kauffman(Vertical Research Partners)

2025Q3: We expect softness in the June quarter. It is difficult to predict traditional seasonality with current uncertainties. We anticipate recapturing lost ground in fiscal 2027 [ph]. - Bohn Crain(CEO)

Contradiction Point 5

Impact of International Business Challenges

It highlights differing perspectives on the impact of international business challenges, specifically regarding tariffs and pricing, which can affect Radiant's performance and revenue expectations.

What is the current deployment status of Navegate, how quickly can it be deployed to your customer base, and how many customers ultimately require it? - Jason Seidl (TD Cowen)

2026Q1: Challenges persist in international business. Overseas markets are affected by tariffs and pricing. - Bohn Crain(CEO)

Can you discuss the December acquisition of TCB? - Elliot Alper (TD Cowen)

2025Q2: Our customs brokerage business, formed from acquiring Navigate, is relatively small but robust. We expect it to grow. We also have a strong technology platform for collaboration and management of PO and customs brokerage, which is a significant part of our value proposition. - Bohn Crain(CEO)