Management says one of its largest customers is discussing transitioning a significant portion of business beginning in early 2027; the customer accounted for roughly $250 million of 2025 revenue but Forward Air expects the actual loss to be less and no formal notice has been delivered.
The board is pivoting to divest non‑core assets, marketing the Intermodal unit and two legacy Omni businesses (about $394 million of 2025 revenue total), with the Omni sales expected in the next 60–90 days and Intermodal targeted by year‑end.
Q1 operating income rose to $20 million (from $5 million a year ago) while consolidated EBITDA held at about $70 million, and liquidity ended the quarter at roughly $402 million (including $141 million cash); management noted tightening capacity and early signs of volume recovery but remains cautious.
Forward Air (NASDAQ:FWRD) used its first-quarter 2026 earnings call to outline a potential transition of business from a major customer, provide an update on its strategic alternatives review, and discuss operating performance amid what management described as a still-challenging freight environment.
Large customer discussing transition beginning in 2027
President and CEO Shawn Stewart said the company is in discussions with “one of our largest customers” that is considering transitioning “a significant portion of their business to other providers,” although he emphasized that “no formal notices have been delivered” and that the scope and timing remain under discussion.
Stewart said Forward Air currently anticipates that “the majority of what will ultimately transition will start in early 2027 and take place throughout the balance of the year.” He added that management believes the potential shift has “little, if anything, to do with the impeccable level of service that we provide them,” and instead reflects the customer’s “internal diversification strategy.”
On the Q&A portion of the call, Stewart said the relationship is “very good” and described the work for the customer as “quite diverse and dynamic,” primarily “in contract logistics and some transportation.” CFO Jamie Pierson also said the company does not see “any meaningful impacts to the current year” and described the conversations as “positive” so far.
Later, Stewart clarified that the customer generated about “$250” million of Forward Air’s 2025 revenue, but said the company was disclosing “holistic” revenue for context and that it “does not by any means… state that we’re losing $250.” Stewart added, “It will be less than that.”
Stewart said the company’s board began a comprehensive strategic alternatives review in January 2025 to maximize shareholder value, and that Forward Air engaged in “extensive negotiations and discussions with multiple parties.” However, he said “no actionable proposals for sale of the company were received,” citing “a variety of factors,” including the customer development discussed on the call.
Forward Air is now “pivoting” to pursue sales of non-core assets. Stewart said the company is targeting the Intermodal segment and “two of our smaller legacy Omni businesses,” which together represented “approximately $394 million of our 2025 revenue.” He said the intended outcome is to “delever the balance sheet” and further focus around “service-sensitive logistics” across air, ocean, ground, and contract logistics.
Pierson provided additional timing details, saying the company anticipates the two smaller legacy Omni divestitures could close “in the next 60-90 days,” while the Intermodal process is “just kicking… off,” with an expectation to sell that business “by the end of the year.”
When asked which Omni units are being sold, Pierson said he would not disclose the names due to confidentiality with potential buyers. He added that of the $390 million-plus revenue tied to the assets being marketed, “$230 is Intermodal,” implying roughly $160 million relates to the two legacy Omni businesses.
First-quarter results: operating income rises, EBITDA steady
Stewart said the company reported first-quarter operating income of $20 million, up from $5 million a year earlier. He said consolidated EBITDA as calculated under the credit agreement was $70 million, compared to $73 million last year.
Pierson said consolidated EBITDA of $70 million compared with $73 million in the prior-year quarter, noting that the year-ago comparison benefited from $4 million of annualized cost reduction initiatives that were actioned in the second half of 2025 and reflected in historical consolidated EBITDA under the credit agreement’s mechanics. On an adjusted EBITDA basis, Pierson said Forward Air reported $70 million, compared with $69 million in the first quarter of last year.
Pierson discussed segment performance:
Expedited Freight: EBITDA of $28 million versus $26 million a year ago, with the “exact same margin of 10.4%.” He also noted sequential improvement from $25 million and a 10.1% margin in the fourth quarter of 2025.
Omni Logistics: Reported EBITDA of $25 million, “in line” with $26 million a year ago. Pierson said margin improved, attributing it to higher contract logistics volume with higher margins, offset by lower air and ocean volumes that carry lower margins.
Intermodal: EBITDA of $5 million and margin of 10.1%, down from $10 million and 16.4% a year ago. Pierson cited reduced port activity and international trade-related softness among several core customers, which pressured shipments and revenue per shipment.
On Intermodal’s business model, Stewart described it as “mainly port and rail head drayage” along with container yard management and storage. He said the segment uses owner-operators and includes owned and leased chassis.
Cash flow and liquidity highlighted amid uncertainty
Pierson said net cash provided by operating activities was $46 million in the first quarter, up from $28 million a year earlier. He said liquidity ended the quarter at $402 million, comprised of $141 million in cash and $261 million in revolver availability. Pierson called $141 million the “highest ending cash balance in the past eight quarters.”
Addressing credit agreement headroom, Pierson said Forward Air ended the quarter with “$40 million in cushion,” and reiterated that the company had “over $400 million in liquidity.”
Management points to tightening capacity and early demand signals
In prepared remarks, Stewart said domestic transportation supply has tightened, driven by increased regulatory and enforcement actions that have accelerated carrier exits, particularly among smaller operators. He also pointed to manufacturing PMIs remaining in expansion territory for four consecutive months as an indicator that the industrial economy may be nearing an “inflection point,” while noting that macro risks remain, including geopolitical tensions and fuel-price volatility.
During Q&A, Pierson said that “over the last two weeks of the quarter” and “going into April,” the company saw “a fairly strong volume environment,” while cautioning he did not want to “preordain that the recovery’s here.” On pricing, Stewart said he felt “really strong” about pricing across the business and emphasized consistent margins and profitability. Pierson added that the company is “not pricing for yield” or “for volume,” but “for profitability.”
Stewart also addressed a question about Amazon’s supply chain services announcement, saying there was “no correlation” between Amazon and the customer discussions. He said Forward Air is “not so susceptible” to the announcement “by our volumes,” adding that management will monitor developments but is “not overly concerned today.”
Stewart closed by saying the company has navigated a challenging environment “with discipline and focus,” while taking steps to strengthen the business and improve performance.
About Forward Air (NASDAQ:FWRD)
Forward Air Corporation is a leading North American provider of expedited ground transportation and related logistics services, specializing in time-sensitive shipments. The company offers a comprehensive suite of solutions including less-than-truckload (LTL) expedited freight, consolidation and distribution services, container drayage, and final-mile delivery. By integrating transportation management with warehousing, inventory control, and technology-driven tracking, Forward Air supports customers across a variety of industries such as manufacturing, retail, automotive and chemicals.
Founded in 1981 and headquartered in Greeneville, Tennessee, Forward Air has developed a broad network of service centers, terminals and rail ramps throughout the United States, Canada and Puerto Rico.
