Heartland (NASDAQ: HTLD), a less-than-truckload freight carrier, announced a net loss in its Q3 2025 earnings report on Friday—marking its ninth consecutive quarterly loss (excluding one-time real estate gains). The North Liberty, Iowa-based company noted sequential operational improvements but cautioned that a material recovery is unlikely before next year.

The company posted a net loss of $0.11 per share ($8.3 million total), beating analyst consensus and year-ago results by $0.01 per share. The quarter benefited from a $6.2 million year-over-year increase in equipment sales revenue.

For the first nine months of 2025, Heartland’s cumulative net loss reached $33 million, compared to $27.9 million in the same period last year.

CEO Mike Gerdin stated, 「While we’re seeing early signs of capacity-related stabilization, freight demand remains below available supply. We now expect meaningful market improvement no earlier than 2026.」

Revenue fell 24% year-over-year to $197 million, missing consensus by $13 million. The company did not disclose capacity utilization or pricing metrics.

**Operational Pressures Easing?** The adjusted operating ratio (inversely related to margin) worsened by 90 basis points (bps) year-over-year to 103.5% but improved 250 bps sequentially. Rising insurance/claims (up 340 bps) and depreciation/amortization (up 240 bps) costs were partially offset by lower salaries/benefits (down 200 bps) and purchased transportation expenses (down 80 bps).

Year-to-date equipment sales totaled $11.3 million, with management projecting Q4 proceeds to double (full-year guidance: $21–24 million).

Heartland’s legacy and Millis Transfer fleets maintained strong sub-90% operating ratios, while underperforming acquisitions Smith Transport and Contract Freighters Inc. (CFI)—purchased during the 2022 freight downturn—continued to struggle. Smith returned to profitability, but CFI slipped back into losses.

Operational overhauls progressed: Millis and Smith completed transportation management system (TMS) upgrades, while CFI finished telematics upgrades (TMS was replaced in Q2). Gerdin emphasized that unified systems would boost driver utilization, collaboration, and efficiency amid weak demand.

**Cash Flow and Balance Sheet Optimization** Despite market headwinds, Heartland generated $74 million in operating cash flow year-to-date (down from $107 million in 2024). Net debt (including leases) declined by $18 million to $153 million, with over $300 million repaid since its acquisition spree. The company retains $88 million in untapped revolving credit and remains compliant with covenants.

With an average truck age of 2.6 years—elevated by historical standards—Heartland’s shares rose 2.5% midday, outperforming the S&P 500’s 0.6% gain.