Covenant Logistics Group, Inc. reported its financial results for the first quarter of 2026, revealing total revenues of $307.2 million, a 14% increase from $269.4 million in the same period of 2025. The growth was primarily driven by a 15.9% rise in freight revenue, which reached $281.9 million, compared to $243.2 million in the prior year. However, net income decreased to $4.4 million, or $0.17 per diluted share, down from $6.6 million, or $0.24 per diluted share, in the first quarter of 2025. The decline in profitability was attributed to severe weather disruptions and increased fuel costs during January and February.
In terms of operational performance, Covenant's freight revenue was bolstered by significant contributions from its Managed Freight and Dedicated segments, which saw increases of $33.9 million and $9.0 million, respectively. Conversely, the Expedited segment experienced a revenue decline of $8.3 million, reflecting a decrease in average total tractors and fuel surcharge revenue. The company’s operating income also fell to $6.3 million from $7.6 million year-over-year, influenced by rising operational costs, particularly in salaries and wages, which increased due to growth in the Dedicated and Warehousing segments.
Covenant's strategic developments included the acquisition of Star Logistics Solutions in October 2025, which has been integrated into the Managed Freight segment. This acquisition is expected to enhance the company's service offerings in the consumer retail and disaster relief sectors. The company also reported a decrease in total indebtedness, which fell by $51 million to $245.3 million, primarily due to the sale of unproductive equipment and minimal new purchases. As of March 31, 2026, Covenant had $57.5 million in available borrowing capacity under its Credit Facility.
Operationally, Covenant's fleet consisted of 2,234 tractors and 7,265 trailers, with an average tractor age of 2.2 years. The company reported a decrease in average miles driven, which contributed to a reduction in fuel expenses as a percentage of freight revenue. The company’s equity investment in Transport Enterprise Leasing, LLC (TEL) generated $3.7 million in pre-tax earnings, consistent with the previous year.
Looking ahead, Covenant anticipates gradual improvement in its financial performance, driven by solid economic demand and a growing pipeline of new customers. The company plans to focus on reallocating resources to enhance margins and returns, particularly in its Dedicated and Managed Freight segments. The management expressed optimism about the momentum heading into the second quarter of 2026, supported by expected seasonal improvements in freight volumes and rate increases with select customers.
About COVENANT LOGISTICS GROUP, INC.
Covenant Logistics Group, Inc. provides transportation and logistics services across the U.S., including expedited, dedicated, brokerage, and warehousing solutions. Operating a modern fleet of approximately 2,300 tractors, the company focuses on high-service truckload transportation, supply chain integration, and technology-driven efficiency. Serving manufacturers, retailers, and government clients, it emphasizes safety, driver retention, and strategic capital allocation in a highly competitive industry.
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