Old Dominion Freight Line grew Q2 2026 revenue 10.4% to $1.55B and EPS 32.3% to $1.68 as a 15.2% jump in revenue per hundredweight (5.5% ex-fuel) and a 7.1% smaller workforce cut its operating ratio to 70.1%, despite LTL tons per day falling 4.1%.
Revenue
$1.6B
+10.4% YoY
Net income
$351M
+30.5% YoY
Diluted EPS
$1.68
+32.3% YoY
Operating margin
29.9%
Headline: pricing and fuel surcharges lift revenue 10.4% while freight volumes fall 4.1%
Old Dominion Freight Line reported second-quarter 2026 revenue of $1.554 billion, up 10.4% from $1.408 billion a year earlier. Net income rose 30.5% to $350.6 million and diluted EPS rose 32.3% to $1.68. Old Dominion still moved less freight than a year ago: tons per day fell 4.1%. All of the growth came from higher revenue on each shipment. About a third of that came from price increases and the rest from fuel surcharges, which rose with a 70% jump in diesel prices. The company also cut its full-time workforce by 7.1%, so labor costs rose far more slowly than revenue.
Old Dominion is a less-than-truckload (LTL) carrier. It moves shipments too small to fill a whole trailer, typically a few pallets from one business to another. It combines freight from many customers in one truck and sorts it through a network of terminals it calls service centers. Because that network costs roughly the same to run whether trucks are full or half-empty, small changes in volume or price have a large effect on profit.
Key metrics
Metric
Q2 2026
Q2 2025
YoY Change
Revenue
$1,554.0M
$1,407.7M
+10.4%
Operating income
$465.3M
$357.9M
+30.0%
Operating margin
29.9%
25.4%
+4.5 pts
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LTL revenue per hundredweight, excl. fuel surcharges
—
—
+5.5%
Average full-time employees
—
—
-7.1%
Source: Form 10-Q for the quarter ended June 30, 2026. The ex-fuel yield change and the headcount change are given only as percentages in the filing.
Terms used above:
Operating ratio is operating expenses divided by revenue, the standard profit measure for trucking companies. It works the opposite way to a margin, so lower is better. A 70.1% operating ratio means 70.1 cents of every revenue dollar went to running the business and 29.9 cents was left as operating profit.
Revenue per hundredweight is revenue per 100 pounds of freight. It is the industry's main pricing gauge. It also moves with fuel surcharges, shipment size and trip distance, so it is not a pure measure of price.
What drove revenue: price and fuel up, volume down
The 10-Q says revenue grew "due to an increase in LTL revenue per hundredweight that was partially offset by a decrease in volumes." There are three parts to that:
Volume was still shrinking. Tons per day fell 4.1% and shipments per day fell 5.7%. Each shipment got slightly heavier (1,503 lbs vs. 1,478 lbs, +1.7%), which softened the drop in tonnage. The freight downturn had not ended for Old Dominion by mid-2026, even though management's MD&A describes "continued improvement in demand trends."
Fuel accounted for most of the yield gain. Revenue per hundredweight rose 15.2%, but only 5.5% excluding fuel surcharges. Those surcharges are extra charges tied to a weekly U.S. Department of Energy diesel price index, and the filing says Old Dominion's average cost per gallon of diesel rose 70.5% year over year. By our calculation, fuel surcharges explain roughly 9 of the 15 points of yield growth. Surcharge revenue largely offsets fuel costs and mostly passes through, so it adds little profit.
Underlying pricing was solid, not dramatic. The 5.5% ex-fuel increase is what management credits to "the ongoing execution of our yield management strategy." Old Dominion describes its pricing as "cost-based," meaning it tries to raise rates at least as fast as its own costs rise, even when volumes are weak.
The trend within the year matters more than the quarter alone. Using the six-month figures minus Q2, Q1 2026 revenue was about $1,334.7 million, down 2.9% year over year. Q1 tonnage fell about 7.7% and the operating ratio worsened to about 76.2% from 75.4%. By comparison, Q2 volumes fell less, revenue rose, and margins widened sharply. The monthly updates continue that trend. Tons per day fell 1.0% in July (10-Q) and 0.9% in August (September 3 update), while revenue per day rose 8.2% and 12.4%.
Where the margin came from
The operating ratio improved by 4.5 points, from 74.6% to 70.1%. There were three separate causes, and only one is likely to repeat every quarter.
1. Labor costs grew much more slowly than revenue (the largest and most lasting factor). Salaries, wages and benefits rose only 2.3% ($15.3 million) while revenue rose 10.4%, so labor fell from 47.7% to 44.2% of revenue. The average number of full-time employees was 7.1% lower. Pay for drivers, dock workers and mechanics fell to 21.7% of revenue from 24.4%. The filing says platform (dock) productivity and linehaul load averages improved, though pickup-and-delivery productivity got worse, as usually happens when fewer shipments are spread over the same routes. Two factors pushed the other way. Employee benefit costs rose to 42.0% of wages from 39.5%, driven by retirement plan costs linked to net income and higher group health claim costs. Performance bonuses also increased.
2. Fuel costs rose, but surcharges covered them. Operating supplies and expenses rose 24.7% ($35.2 million), which the filing attributes mainly to diesel. Gallons used fell 5.2% because trucks drove fewer miles, and lower fleet maintenance costs partly offset the increase. This line rose from 10.1% to 11.4% of revenue, but the surcharge revenue above paid for it. Old Dominion does not hedge fuel, so a sudden drop in diesel prices would lower both revenue and this cost.
3. A one-off gain from selling property and equipment. The "miscellaneous" line swung from a $11.3 million expense to $9.6 million of income. The main reason was $17.2 million of net gains on sales of property and equipment, compared with $1.6 million of losses a year earlier. Excluding the whole miscellaneous line, the operating ratio would have been about 70.7% vs. 73.8%, so roughly 3.1 of the 4.5 points of improvement came from the core business. After tax at the 25.0% effective rate, the gain added roughly $0.06 to EPS by our calculation. Excluding it, EPS growth is still about 27%.
Depreciation rose only 1.2% because Old Dominion has sharply cut its capital spending. That also helped margins.
Takeaway: Old Dominion expanded its operating margin by 4.5 points while shipping 4.1% less freight. It raised underlying prices 5.5% and cut its full-time workforce 7.1%, so labor fell to 44.2% of revenue from 47.7%. About 1.4 points of the improvement came from asset-sale gains that won't repeat, but the rest came from the core business. Volume declines also narrowed to about 1% by July and August. If tonnage starts growing again while prices hold, these margins could improve further, because the network already has room for more freight.
Six-month view
For the first half of 2026, revenue rose 3.8% to $2.889 billion, net income rose 12.5% to $588.9 million, and diluted EPS rose 14.6% to $2.82. The half-year operating ratio was 72.9%, compared with 75.0% a year earlier. Tons per day were down 5.9% for the half. EPS grew faster than net income partly because of buybacks: diluted shares fell 1.6% year over year to 208.7 million in Q2.
Cash, spending and shareholder returns
Operating cash flow was $646.3 million in the first half, compared with $622.4 million a year earlier.
Capital spending is well below Old Dominion's usual level. Net capex was $100.2 million for the half, compared with $751.2 million for all of 2024. The company normally spends 10–15% of revenue on capex. The 10-Q says 2026 spending will "remain below this range as we continue to utilize available capacity within our existing network." The 2026 plan was raised to about $380 million, which is $115 million more than the initial plan: about $180 million for service centers, $155 million for tractors and trailers, and $45 million for technology and other assets. A higher equipment budget suggests management expects more volume.
Buybacks fell but continued. Old Dominion spent $239.7 million on repurchases in the first half, compared with $424.6 million a year earlier. In Q2 it bought about 694,000 shares under its program at an average of $208.41, roughly $145 million, and $1.31 billion of authorization remains. The quarterly dividend rose to $0.29 from $0.28.
Balance sheet: $283.9 million of cash at June 30, nothing drawn on the $400 million credit line, and $20 million of notes due in May 2027.
Outlook
Old Dominion does not give numeric earnings guidance. Its most recent comments are the monthly volume and pricing updates. On September 3, CEO Marty Freeman said underlying demand was "relatively consistent as the quarter has progressed," and that the company has "all the necessary elements of capacity in place to support volume growth." Quarter-to-date through August, revenue per hundredweight was up 11.3%, or 4.8% excluding fuel.
Our view: Q3 looks set to show another year of revenue growth. Revenue per day was up 8.2% in July and 12.4% in August, with tonnage roughly flat. The quality of that growth is the question. Ex-fuel pricing slowed from 5.5% in Q2 to 4.8% quarter-to-date, and much of the headline revenue growth is fuel surcharge pass-through that would reverse if diesel prices fell. The operating ratio is now around 70% because the company has fewer employees and is spending less on equipment and facilities. Both of those will be harder to keep down if volumes recover and the company has to hire again. Watch three things in the Q3 report, which Old Dominion usually releases in late October: whether tons per day turn positive year over year, whether ex-fuel yield stays above about 4.5%, and how much of the operating ratio improvement holds once the property-sale gains are excluded. Q3 is also normally one of Old Dominion's two strongest quarters, while Q4 is seasonally weaker.