Covenant Logistics Group, Inc. reported its financial results for the second quarter of 2026, revealing total revenue of $332.9 million, a 9.9% increase from $302.9 million in the same period last year. Freight revenue, which excludes fuel surcharges, rose by 6.6% to $294.7 million. However, the company experienced a decline in net income, which fell to $8.5 million, or $0.32 per diluted share, compared to $9.8 million, or $0.36 per diluted share, in the prior year. Operating income also decreased to $8.8 million from $11.6 million in the second quarter of 2025.
The company's financial performance reflects significant changes compared to the previous fiscal period, particularly in its revenue streams. The increase in total revenue was primarily driven by growth in the Managed Freight and Dedicated segments, which saw freight revenue increases of $22 million and $3.9 million, respectively. Conversely, the Expedited segment reported a $9.5 million decrease in freight revenue. The rise in fuel surcharge revenue, which increased by $11.9 million, also contributed to the overall revenue growth.
Strategically, Covenant Logistics has focused on enhancing its service offerings and expanding its market presence. The company completed the acquisition of Star Logistics Solutions in October 2025, which has since been integrated into its Managed Freight segment. This acquisition is expected to provide additional revenue opportunities, particularly in the consumer retail and disaster relief sectors. The company aims to have a substantial portion of its asset-based business under long-term dedicated or committed contracts by the end of the current freight market upcycle.
Operationally, Covenant Logistics reported a total of 2,202 tractors and 7,142 trailers as of June 30, 2026, with an average tractor age of 2.2 years. The company has also seen fluctuations in its employee headcount, with a focus on managing costs and improving operational efficiency. The total debt and lease obligations decreased to $324.4 million from $338.7 million at the end of 2025, primarily due to fleet downsizing and the sale of excess equipment. The company maintains a strong liquidity position, with available borrowing capacity of $59.1 million under its Credit Facility.
Looking ahead, Covenant Logistics is optimistic about its growth prospects, citing a growing pipeline of customer demand and plans to stabilize its fleet count. The company anticipates gradual margin expansion as it continues to focus on reducing overhead costs and improving operational efficiency. However, it acknowledges potential volatility in insurance and claims expenses due to recent legal developments and market conditions. For the third quarter of 2026, the company expects a modest sequential increase in earnings per share, driven by anticipated operating margin improvements.
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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