Hello, and welcome to the Hub Group Preliminary Fourth Quarter and Full Year 2025 Results Conference Call. It is now my pleasure to turn the call over to the company. You may now begin. Hello. And welcome to the Hub Group preliminary fourth quarter and full year 2025 results conference call.

Joining on the call are Phillip 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 is included at the end of our press release and in our most recent Form 10 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 12/31/2025. There can 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, Phillip Yeager. Good afternoon. Welcome to Hub Group's conference call to discuss our preliminary fourth quarter 2025 financial results. Joining me today is Kevin Beth, Hub Group'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 restate results for earlier quarters in 2020 when we file our 10-K. 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 an estimated impact of purchased transportation and warehousing costs for the nine months ended 09/30/2025 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 the 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 on our strategy while maintaining our strong balance sheet and cash flow profile. 2025 preliminary operating cash flow 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 operational discipline, in both intermodal and dedicated. Intermodal performance remained 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 worked 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 the 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 transit and costs in a single rail network.…

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 undercapitalized 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 cost 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. Lastly, 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 cost 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 09/30/2025 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 Group's total cash and cash equivalents or operating cash flows for any periods. 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 Form 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 the prior year. Full year 2025 ITS segment operating revenue is expected to be approximately $2.2 billion, which includes a 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 Logistics segment…

Thanks, Kevin. To sum up for today, freight market conditions remained 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 Yeager founded this company fifty-five 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.