Slides
Page 1
Hub Group Overview Q2 Earnings Investor Presentation
Page 2
hubgroup.com D I S C LO S U R E CERTAIN FORWARD-LOOKING STATEMENTS Statements in this presentation are not historical facts are forward-looking statements, provided pursuant to the safe harbor established under the Private Securities Litigation Reform Act of 1995. 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 this discussion and, therefore, should be viewed with caution. Further information on the risks that may affect Hub Group’s business is included in filings it makes with the SEC from time to time, including those discussed under the “Risk Factors” section in Hub Group’s most recently filed periodic reports on Form 10-K and Form 10-Q and subsequent filings. Hub Group assumes no obligation to update any such forward-looking statements. NON-GAAP FINANCIAL MEASURE In this presentation, we present certain non-GAAP financial measures, including adjusted EPS, adjusted operating income, adjusted EBITDA, net debt/EBITDA, adjusted earnings, adjusted EBITDA less CapEx, net debt/adjusted EBITDA and cash EPS. As required by the rules of the Securities and Exchange Commission (“SEC”), we have provided herein a reconciliation of these non-GAAP financial measures to the most directly comparable measures under GAAP, along with an explanation why management believes these non-GAAP financial measures provide relevant and useful information. These non-GAAP financial measures should be viewed in addition to, and not as an alternative to or substitute for, measures determined in accordance with GAAP and are not necessarily comparable to non-GAAP measures that may be presented by other companies. You should assume that all numbers presented are unaudited unless otherwise noted. All trademarks, service marks and company names are the property of their respective owners. 2
Page 3
hubgroup.com Hub Group is a leading supply chain solutions provider offering Intermodal transportation and Logistics services to a wide range of shippers across the retail, consumer products, durable goods and automotive verticals. Drive performance through exceptional service and innovative solutions. Mission Vision Deliver the premier supply chain solution. H U B G R O U P O V E R V I E W Service, Integrity, and Innovation. Core Values Who We Are Revenue ($ in bn) $0 $2 $4 $6 2017 2018 2019 2020 2021 2022 2023 2024 Adjusted EPS 2017 2018 2019 2020 2021 2022 2023 2024 Adjusted EBITDA-CapEx1 ($ in mm) $0 $100 $200 $300 $400 2017 2018 2019 2020 2021 2022 2023 2024 Adjusted Cash EPS1 $0.00 $2.00 $4.00 $6.00 2017 2018 2019 2020 2021 2022 2023 2024 1Represents a non-GAAP financial measure; See Appendix for reconciliation to the most comparable measure under GAAP Note: 2017 restated with a normalized tax rate of 25% as 2017 results were impacted by changes in deferred tax liability due to the Job Act
Page 4
hubgroup.com 26% 28%11% 7% 6% 6% 5% 2% 2%7% Consumer Products Mass & Specialty Retail Durable Goods E-Commerce Discount Retail Paper Products Automotive Beverage, Wine & Spirits Healthcare Other Two Segments that Serve Diverse Set of Customers H U B G R O U P O V E R V I E W 55% 45% Intermodal & Transportation Solutions Logistics Total Revenue $4.0 Billion Revenue by Segment (% of total revenue) 38% 62% Intermodal & Tansportation Solutions Logistics Total Adj. Operating Income $157 Million Adjusted Operating Income by Segment FY 2024 FY 2024 Customer Diversification FY 2024 Intermodal & Transportation Solutions (ITS) • Intermodal: A market leader with ~51,200 containers including 2,100+ refrigerated containers on a pro forma basis following announced acquisition of Marten Intermodal • Dedicated: Top 20 business offering high service and regional density Logistics • Brokerage: Full range of offerings including dry van, refrigerated, expedited, LTL, and flatbed • Managed Transportation: Non-asset solutions with $1B of LTL freight under management • Final Mile: Non-asset operations with national coverage delivering appliances and other big and bulky goods • Consolidation & Fulfillment: ~7M sq. ft. of capacity across the U.S. providing significant savings by consolidating LTL into TL Total Revenue $4.0 Billion 4
Page 5
hubgroup.com Intermodal & Transportation Solutions (ITS) H U B G R O U P O V E R V I E W • Leader in the intermodal industry and award-winning service levels with approximately 51,200 containers including over 2,100 refrigerated containers, the second largest provider of temperature-controlled solutions in North America after the closing of the announced Marten Intermodal acquisition • Largest intermodal and cross-border carrier in Mexico through joint venture with EASO • High service, nationwide door-to-door transportation offering value, visibility, and reliability in both transcontinental and local lanes • Long-term rail provider relationship, primarily Union Pacific and Norfolk Southern • Award-winning nationwide transportation in transcontinental and local lanes • Our trucking transportation operation consists of approximately 3,300 employee drivers and 2,300 tractors supporting Intermodal and Dedicated, as well as over 4,600 trailers • Top 20 dedicated trucking operation offering high service, primarily for leading retailers and consumer goods companies • Young, well-maintained fleet of tractors delivering operational efficiencies • Nationwide presence with particular strength in west coast markets • Equipment, drivers, and support services shared between drayage and dedicated operations, enabled by technology Dedicated Intermodal
Page 6
hubgroup.com Logistics Segment H U B G R O U P O V E R V I E W • Full range of offerings including dry van, refrigerated, expedited, LTL, and flatbed • Superior service levels • Focused on contract, spot and projects • Best-in-class, proprietary operating technology • Multi-service offering including e-commerce fulfillment, transloading, consolidation, and specialty warehousing • Nationwide network with ~7M square feet of capacity • Offers high service and value to consumer goods businesses serving multiple channels • Consolidates pallets into full truckloads, offering significant savings relative to traditional LTL Consolidation & FulfillmentBrokerage • Non-asset transportation management and technology solutions • Contractual, high value add service with an attractive customer value proposition • Delivers customer savings, visibility, technology, and the benefits of scale • Important source of freight for our Intermodal and Brokerage service lines • $1bn of LTL freight under management Managed Transportation • Delivers appliances and other big and bulky goods, including appliance installations to residences in every U.S. zip code • Operates through a large national network of leased, third party and customer-owned facilities • Non-asset operations utilizing independent service providers • High service delivery offering Final Mile
Page 7
hubgroup.com Key Tenets of Our Strategy • Provide best-in-class customer service to drive organic growth • Invest in core business to improve efficiencies and cost structure • Deepen customer relationships by diversifying service offerings • Advance technology with intelligent automation • Cultivate a culture of service, integrity and innovation • Increase shareholder value by generating strong cash flow and executing our capital allocation plan H U B G R O U P O V E R V I E W Longstanding Customer and Industry Recognition KBX Logistics / Georgia-Pacific Intermodal Carrier of the Year Penske Logistics Intermodal Carrier Award Lowe’s Intermodal Carrier of the Year Intermodal Carrier of the Year, Online Big & Bulky Carrier of the Year, Dedicated Van Carrier of the Year Domestic Partner of the Year, Target Outstanding Partnership of the Year WK Kellogg Company Founders Day Award 7 Voted #2 and in the Top 3 for the Past 7 Years
Page 8
hubgroup.com Scale, Portfolio Mix & Profitability Structurally higher performance from cycle trough-to-trough validating strategy and execution T H E WAY A H E A D Significantly Improved Across Cycles 2017 2024 % C H A N G E Revenue Mix (% of Total) 925 bps Adjusted EBITDA $119M $349M 1.9x Adjusted EBITDA Margin 4% 9% 1.3x Adjusted EBITDA less CapEx $63M $298M 3.7x Adjusted Cash EPS $0.77 $2.34 2.0x Net Debt/Adjusted EBITDA 2.3x 0.5x (1.8x) 55% 45%Intermodal & Transportation Solutions Logistics 64% 36% 8 Logistics as a % of Revenue 2024 less 2017
Page 9
hubgroup.com Q2 2025 Performance H U B G R O U P O V E R V I E W
Page 10
hubgroup.com Highlights • Adjusted diluted earnings per share (EPS) of $0.45 for the second quarter • Second quarter revenue of $906 million • Adjusted operating income of $37 million or 4.1% of revenue, a 10-basis point improvement over the previous year operating income percentage of revenue • LTM Adjusted EBITDA of $343 million • Returned $29 million to shareholders year-to-date through share repurchases and dividends • Ended the quarter with cash of $164 million • Net Debt/Adjusted EBITDA1 of 0.3x, well below the leverage target of 0.75 to 1.25x Q 2 2 0 2 5 P E R F O R M A N C E 1Represents a non-GAAP financial measure; See Appendix for reconciliation to the most comparable measure under GAAP
Page 11
hubgroup.com $986 $987 $974 $915 $906 Q2 2024 Q3 2024 Q4 2024 Q1 2025 Q2 2025 Revenue ($ in millions) Q 2 2 0 2 5 P E R F O R M A N C E $0.47 $0.52 $0.48 $0.44 $0.45 Q2 2024 Q3 2024 Q4 2024 Q1 2025 Q2 2025 Adjusted EPS1 11 1Q3 2024, Q4 2024 and Q2 2025 EPS numbers are adjusted for one -time/non-recurring expenses Q2 2025 Consolidated Financial Results 11 1
Page 12
hubgroup.com Q 2 2 0 2 5 P E R F O R M A N C E Intermodal & Transportation Solutions • Operating income margin increased 6% or 30 basis points from Q2 2024 • Intermodal volume growth reflects sub-seasonal demand and higher growth comparison • Mexico volume growth up 3x and temperature- controlled intermodal volume up 17.5% year- over-year • Operating income improved year-over-year as team enhanced operational efficiencies • Announced acquisition of Marten Intermodal accelerates momentum with Hub Group’s refrigerated intermodal offering I T S R E V E N U E $528 M I L L I O N $14 M I L L I O N 2.7% O F R E V E N U E Intermodal 88% Dedicated 12% OPERATING INCOME REVENUE BY SERVICE Q2 2025 VOLUME GROWTH YoY Total 2% Local West -2% Local East -1% Transcon -6% Mexico 302% Temperature- Controlled 18% Intermodal Highlights Q2 2025
Page 13
hubgroup.com Q 2 2 0 2 5 P E R F O R M A N C E Logistics Segment • Adjusted operating margin stable year-over- year even with a more difficult Brokerage environment • Final Mile awards reflect successful approach through bid season with $150M of net new annualized revenue to start onboarding in 2H25 • Productivity gains at Managed Transportation mitigating lower customer volumes • Improving warehouse utilization for Consolidation & Fulfillment countering lower demand LOGISTICS REVENUE $404 M I L L I O N $23 M I L L I O N 5.6% O F R E V E N U E Acquisitions to Expand Offering & Build Scale 36% 21% 20% 22% REVENUE BY SERVICE Q2 2025 2023 (Final Mile) 2022 2021 2020 2018 11% 19% 70% ADJUSTED OPERATING INCOME
Page 14
hubgroup.com Q2 2025 Financial Information by Segment Q 2 2 0 2 5 P E R F O R M A N C E Intermodal & Transportation Solutions Segment Logistics Segment Consolidated ($ in thousands) Q1 2025 Q2 2025 YTD 2025 Q2 2024 Revenue $530,022 $528,184 $1,058,206 $561,033 % Growth -4% -6% -5% -9% Adjusted Operating Income1 $14,049 $14,407 $28,457 $13,639 % Margin 2.7% 2.7% 2.7% 2.4% ($ in thousands) Q1 2025 Q2 2025 YTD 2025 Q2 2024 Revenue $411,001 $404,310 $815,311 $459,088 % Growth -14% -12% -13% 1% Adjusted Operating Income1 $23,289 $22,516 $45,805 $25,889 % Margin 5.7% 5.6% 5.6% 5.6% ($ in thousands) Q1 2025 Q2 2025 YTD 2025 Q2 2024 Revenue $915,216 $905,648 $1,820,864 $986,495 % Growth -8% -8% -8% -5% Adjusted Operating Income1 $37,338 $36,923 $74,262 $39,528 % Margin 4.1% 4.1% 4.1% 4.0% Adjusted EBITDA1 $84,679 $85,053 $169,732 $88,957 14 1Represents a non-GAAP financial measure; See Appendix for reconciliation to the most comparable measure under GAAP
Page 15
hubgroup.com Balance Sheet as of June 30, 2025 • Cash balance of $164M • Q2 2025 Adjusted EBITDA1 less CapEx of $74M • Total Debt of $232M • Net Debt of $96M • Net Debt/Adjusted EBITDA1 of 0.3x • Nearly $450M of availability on credit facility Highlights Q 2 2 0 2 5 P E R F O R M A N C E Assets ($ in mm) Cash & Equivalents $164 Other Current Assets $582 Total Current Assets $746 Property, Plant & Equipment, net $725 Goodwill & Intangible Assets $1,063 Other Assets $266 Total Assets $2,800 Liabilities & Stockholders' Equity Accounts Payable $267 Accrued Expenses $117 Current Operating Leases $44 Current Portion of Debt & Financing Leases $98 Total Current Liabilities $526 Non-Current Portion of Operating Leases $186 Non-Current Portion of Debt & Financing Leases $134 Other Liabilities $228 Total Liabilities $1,074 Total Stockholders' Equity $1,726 Total Liabilities & Stockholders' Equity $2,800 hubgroup.com 15 1Represents a non-GAAP financial measure; See Appendix for reconciliation to the most comparable measure under GAAP
Page 16
hubgroup.com Where We Are Going Return of Capital Returned $29M to shareholders in 1H 2025 through stock repurchases of $14M and dividends payments of $15M Invest in Core Business Capital Expenditures of $30M in 1H 2025 with spending across tractor replacements, warehouse equipment and technology Pursue Acquisitions Entered agreement to acquire Marten Transport, Ltd. Intermodal in July to become the second largest provider of temperature- controlled intermodal solutions in North America Capital Allocation Plan in Action Q 2 2 0 2 5 P E R F O R M A N C E
Page 17
hubgroup.com The Way Ahead H U B G R O U P O V E R V I E W
Page 18
hubgroup.com Outlook T H E WAY A H E A D • Accelerating growth in Intermodal driven by high service positioning, investments in temperature-controlled equipment and over-the-road conversions • Expanded Logistics offering through cross-selling, innovative new service offerings, and acquisition-led growth opportunities as reflected in Final Mile performance • Continued focus on yields and operating efficiency, enabled by technology investments • Sustainable improvements in profit margins and return on invested capital • Invest to grow our business while executing on return of capital strategy Long-Term Outlook • Revenue of $3.6 to $3.8 billion • EPS of $1.80 to $2.05 per share • Capital expenditures of $40 to $50 million • Full year tax rate of approximately 24.5% 2025 Guidance
Page 19
hubgroup.com T H E WAY A H E A D Why Invest in Hub Group? Strong competitive position as a leading intermodal service provider with a portfolio of logistics solutions that deepen customer relationships and enhance return profile Resilient performance with structurally higher revenue and free cash flow trough-to- trough, validating execution and portfolio changes Organic growth potential seeded by franchise investments and levered to long-term modal conversion opportunity and demand for targeted logistics offerings plus cyclical leverage Significant balance sheet flexibility and disciplined framework guiding capital return to shareholders and accretive deployment Opportunistic M&A consistent with lower-risk profile, portfolio diversification, and return focus Quality Execution, Free Cash Flow Growth, Accretive Capital Allocation Diversified supply chain solutions provider with attractive growth, return outlook, and discounted valuation 19
Page 20
hubgroup.com Appendix H U B G R O U P O V E R V I E W
Page 21
hubgroup.com A P P E N D I X : R E C O N C I L I AT I O N O F N O N- G A A P F I N A N C I A L M E A S U R E 21 1By providing this Non-GAAP measure of EBITDA, management intends to provide investors with a meaningful, consistent comparison of the Company's profitability and leverage for the periods presented. Note: 2017 restated with a normalized tax rate of 25% as 2017 results were impacted by changes in deferred tax liability due to the Job Act Hub Group, Inc. 2017 2018 2019 2020 2021 2022 2023 2024 Adjusted Net Income $50,198 $87,661 $107,171 $73,559 $171,474 $356,948 $171,624 $116,967 Interest Expense, net $5,738 $8,252 $8,891 $9,343 $7,302 $6,632 $3,424 $7,578 Depreciation & Amortization of intangibles and right-of-use assets $46,630 $83,910 $116,888 $123,679 $130,629 $153,726 $184,449 $192,562 Provision for Income Taxes $16,733 $29,064 $36,699 $22,541 $59,436 $111,010 $42,695 $32,043 Adjusted EBITDA1 $119,299 $208,887 $269,649 $229,122 $368,841 $628,316 $402,192 $349,150 Capital Expenditures $55,906 $199,791 $94,847 $115,306 $132,952 $219,140 $140,068 $50,847 Adjusted EBITDA less CapEx1 $63,393 $9,096 $174,802 $113,816 $235,889 $409,176 $262,124 $298,303 Adjusted Diluted EPS1 $0.75 $1.31 $1.60 $1.10 $2.53 $5.32 $2.68 $1.91 Intangible Amortization for effected EPS $0.02 $0.06 $0.15 $0.15 $0.21 $0.30 $0.34 $0.43 Adjusted Cash EPS1 $0.77 $1.37 $1.75 $1.25 $2.74 $5.62 $3.02 $2.34 Reconciliation of Adjusted Net Income to Adjusted EBITDA1, Adjusted EBITDA less CapEx1 and Adjusted Cash EPS1 by Year ($ in 000s, except EPS)
Page 22
hubgroup.com A P P E N D I X : R E C O N C I L I AT I O N O F N O N- G A A P F I N A N C I A L M E A S U R E 22 1By providing this Non-GAAP measure of EBITDA and Net Debt / EBITDA Leverage, management intends to provide investors with a meaningful, consistent comparison of the Company's profitability and leverage for the periods presented. 2Includes depreciation of property and equipment, amortization of intangible assets and amortization of right-of-use assets. 3Last twelve months. 4Total debt (including finance leases) less cash and cash equivalents (i)Network Alignment expenses include transfer costs, legal fees and other expenses related to consolidating from existing warehouses to improve operational efficiency of our cross dock services, Final Mile, and Consolidation and Fulfillment lines of business. (ii)Transaction related expenses are comprised of due diligence costs, legal fees, insurance fees and other professional service fees incurred as part of the forming of a joint venture with EASO in 2024. (iii)Other includes non-ordinary expenses related to employee matters. (iv)Vendor settlements include legal costs and settlements regarding certain vendor disputes. Hub Group, Inc. 2024 2025 Q3 Q4 Q1 Q2 LTM3 Net Income $23,603 $24,372 $27,194 $25,031 $100,200 Interest Expense, net $1,333 $1,858 $1,992 $2,129 $7,312 Depreciation & Amortization2 $46,374 $47,088 $47,046 $47,402 $187,910 Provision for Income Taxes $7,140 $5,387 $8,447 $7,916 $28,890 EBITDA $78,450 $78,705 $84,679 $82,478 $324,312 Network Alignment(i) $8,381 $4,814 $13,195 Transaction Related(ii) $947 $1,194 $2,141 Other(iii) $1,061 $67 $1,128 Vendor Settlements(iv) $2,575 $2,575 Adjusted EBITDA $88,839 $84,780 $84,679 $85,053 $343,351 EBITDA LTM3 $331,535 $332,686 $330,791 $324,312 Net Debt4 $102,105 $167,106 $140,223 $95,537 Net Debt / EBITDA LTM 0.3 0.5 0.4 0.3 Adjusted EBITDA LTM3 $347,016 $349,150 $347,255 $343,351 Net Debt / Adjusted EBITDA LTM 0.3 0.5 0.4 0.3 Reconciliation of Net Income to EBITDA1 and Net Debt / EBITDA Leverage ($ in 000s)
Page 23
hubgroup.com A P P E N D I X : R E C O N C I L I AT I O N O F N O N- G A A P F I N A N C I A L M E A S U R E 23 Hub Group, Inc. Reconciliation of EBITDA less CapEx and Cash EPS by Quarter ($ in 000s, except EPS) 2024 2025 Q3 Q4 Q1 Q2 EBITDA1 $78,450 $78,705 $84,679 $82,478 Capital Expenditures $11,965 $7,627 $19,190 $11,290 EBITDA less CapEx $66,485 $71,078 $65,489 $71,188 Adjusted EBITDA1 $88,839 $84,780 $85,053 Capital Expenditures $11,965 $7,627 $11,290 Adjusted EBITDA less CapEx1 $76,874 $77,153 $73,763 Diluted EPS $0.39 $0.40 $0.44 $0.42 Intangible Amortization for Effected EPS $0.10 $0.11 $0.11 $0.10 Cash EPS $0.49 $0.51 $0.55 $0.52 Adjusted EPS1 $0.52 $0.48 $0.45 Intangible Amortization for Effected EPS $0.10 $0.11 $0.10 Cash EPS $0.62 $0.59 $0.55 1By providing this Non-GAAP measure of EBITDA and Net Debt / EBITDA Leverage, management intends to provide investors with a meaningful, consistent comparison of the Company's profitability and leverage for the periods presented.
Page 24
Thank You hubgroup.com