TFI International Q2 Earnings Call Recap: Strong Free Cash Flow, Operational Improvements, and Challenges Ahead

TFI International reported a 20% increase in free cash flow to $182mln, but revenue before fuel surcharge fell to $1.8bln from $2bln YoY. Adjusted net income decreased to $112mln from $146mln, and adjusted EPS dropped to $1.34 from $1.71. The company expressed optimism about the potential revival of U.S. industrial freight, driven by anticipated government stimulus and tax cuts.

TFI International Inc. (NYSE: TFII) reported its second-quarter (Q2) 2025 financial results, showcasing a mixed performance amid subdued market conditions. The company reported a 20% increase in free cash flow to $182 million, while revenue before fuel surcharge fell to $1.8 billion from $2 billion year-over-year (YoY). Adjusted net income decreased to $112 million from $146 million, and adjusted earnings per share (EPS) dropped to $1.34 from $1.71. Despite these declines, TFI International expressed optimism about the potential revival of U.S. industrial freight, driven by anticipated government stimulus and tax cuts.

Key Financial Highlights

- Revenue Before Fuel Surcharge: $1.8 billion (down 10.0% from Q2 2024) [3]
- Operating Income: $170 million (down from $206 million in Q2 2024) [4]
- Adjusted Net Income: $112 million (down from $146 million in Q2 2024) [4]
- Adjusted EPS: $1.34 (down from $1.71 in Q2 2024) [4]
- Free Cash Flow: $182 million (up 20% from Q2 2024) [4]

Segment Performance

- Less-Than-Truckload (LTL) Segment: Revenue before fuel surcharge declined by 11% YoY to $704 million, and operating income fell to $74 million from $110 million. The operating ratio increased to 89.5% from 86.2% [1].
- Truckload Segment: Revenue before fuel surcharge decreased to $712 million from $738 million, and operating income fell to $71 million from $81 million. The operating ratio increased to 90.1% from 89% [1].
- Logistics Segment: Revenue before fuel surcharge declined to $393 million from $442 million, and operating income fell to $38 million from $51 million. The operating margin decreased to 9.6% from 11.4% [1].

Outlook and Strategic Initiatives

TFI International emphasized its strong balance sheet and operational efficiencies, aiming to capitalize on future demand. The company expects free cash flow to potentially reach close to $1 billion in a normal environment. Additionally, TFI International plans to focus on strategic investments to drive long-term profitability.

The company's shares are up 5.6% from a week ago, trading at 17 times the next 12-month earnings, compared to a P/E of 12 three months ago. Analysts have a "buy" recommendation with a median 12-month price target of C$140.00 [2].

Risks and Considerations

Despite the positive outlook, TFI International faces several risks, including potential macroeconomic headwinds and the need to prove control over TForce Freight before considering larger transactions in 2026.

References

[1] https://finance.yahoo.com/news/tfi-international-inc-tfii-q2-070621237.html
[2] https://www.tradingview.com/news/reuters.com,2025:newsml_PLX38E521:0-tfi-international-q2-adjusted-eps-beats-estimates/
[3] https://finance.yahoo.com/news/tfi-international-second-quarter-2025-103023528.html
[4] https://www.globenewswire.com/news-release/2025/07/28/3122830/0/en/TFI-International-Announces-2025-Second-Quarter-Results.html