# How Old Dominion Freight Line makes money

CXProWealth Business Lens · Old Dominion Freight Line (ODFL) · Q2 FY2026

Read from the 10-Q for the period 2026-04-01 to 2026-06-30, filed 2026-08-05 with the SEC (accession 0000878927-26-000023): https://www.sec.gov/Archives/edgar/data/878927/000087892726000023/

Business Lens explains how a company earns, spends and keeps its money, from its own filings. It is insight and context, never a view on the shares, a target, or advice. Figures are raw units as filed; percentages are percentage points.

## Headline figures

- Revenue: $1.6B (+10.4% on the year)
- Operating income: $465.3M (operating margin 29.9%)
- Net income: $350.6M (net margin 22.6%)
- Gross margin: not reported (the company reports expenses by nature: no cost of revenue or gross profit line exists)
- Free cash flow: $195.7M (12.6% of revenue)
- Cash conversion (operating cash flow / net income): 0.78x
- Capital expenditure: 5.0% of revenue

## Where the money goes (Q2 FY2026)

- LTL Service Revenue → Revenue from operations: $1.5B
- Other Service Revenue → Revenue from operations: $15.1M
- Revenue from operations → Total operating expenses: $1.1B
- Total operating expenses → Salaries, wages and benefits: $687.3M
- Total operating expenses → Operating supplies and expenses: $177.7M
- Total operating expenses → General supplies and expenses: $46.4M
- Total operating expenses → Operating taxes and licenses: $34.3M
- Total operating expenses → Insurance and claims: $18.9M
- Total operating expenses → Communications and utilities: $8.2M
- Total operating expenses → Depreciation and amortization: $91.7M
- Total operating expenses → Purchased transportation: $33.8M
- Miscellaneous (income) expense, net → Total operating expenses: $9.6M
- Revenue from operations → Operating income: $465.3M
- Operating income → Income before income taxes: $465.3M
- Total non-operating (income) expense → Income before income taxes: $2.2M
- Income before income taxes → Provision for income taxes: $116.9M
- Income before income taxes → Net income: $350.6M

## Where the revenue comes from

### Products and services (Significant Accounting Policies - Disaggregated Revenue (Details))

| Member | Value | Share |
|---|---:|---:|
| LTL Service Revenue | $1.5B | 99.0% |
| Other Service Revenue | $15.1M | 1.0% |

The members sum to total revenue.

## Income statement, as filed

| Line | Q2 FY2026 | Of revenue |
|---|---:|---:|
| Revenue from operations | $1.6B | 100% |
| Salaries, wages and benefits | $687.3M | 44.2% |
| Operating supplies and expenses | $177.7M | 11.4% |
| General supplies and expenses | $46.4M | 3.0% |
| Operating taxes and licenses | $34.3M | 2.2% |
| Insurance and claims | $18.9M | 1.2% |
| Communications and utilities | $8.2M | 0.5% |
| Depreciation and amortization | $91.7M | 5.9% |
| Purchased transportation | $33.8M | 2.2% |
| Miscellaneous (income) expense, net | ($9.6M) | 0.6% |
| **Total operating expenses** | $1.1B | 70.1% |
| **Operating income** | $465.3M | 29.9% |
| Interest expense | $76.0K | 0.0% |
| Interest income | ($2.4M) | 0.2% |
| Other expense, net | (-$198.0K) | 0.0% |
| **Total non-operating (income) expense** | ($2.2M) | 0.1% |
| **Income before income taxes** | $467.5M | 30.1% |
| Provision for income taxes | $116.9M | 7.5% |
| **Net income** | $350.6M | 22.6% |
| Basic | $2 | 0.0% |
| Diluted | $2 | 0.0% |
| Basic | 207,659,000 |  |
| Diluted | 208,715,000 |  |
| Dividends declared per share | $0 | 0.0% |

## History

| Period | Revenue | Operating income | Net income | Operating cash flow | Capital expenditure | Free cash flow |
|---|---:|---:|---:|---:|---:|---:|
| FY2008 | — | $129.1M | $68.7M | $196.5M | $181.5M | $15.0M |
| FY2009 | — | $70.4M | $34.9M | $130.7M | $210.9M | -$80.2M |
| FY2010 | — | $137.7M | $75.7M | $140.5M | $106.3M | $34.2M |
| FY2011 | — | $234.1M | $139.5M | $277.9M | $250.8M | $27.2M |
| FY2012 | — | $285.3M | $169.5M | $328.1M | $373.2M | -$45.1M |
| FY2013 | — | $338.4M | $206.1M | $350.7M | $295.6M | $55.1M |
| FY2014 | — | $441.3M | $267.5M | $391.7M | $367.7M | $24.0M |
| FY2015 | — | $498.2M | $304.7M | $553.9M | $462.1M | $91.8M |
| FY2016 | $3.0B | $483.8M | $295.8M | $565.6M | $417.9M | $147.6M |
| FY2017 | $3.4B | $575.9M | $463.8M | $536.3M | $382.1M | $154.2M |
| FY2018 | $4.0B | $817.1M | $605.7M | $900.1M | $588.3M | $311.8M |
| FY2019 | $4.1B | $818.7M | $615.5M | $983.9M | $479.3M | $504.6M |
| FY2020 | $4.0B | $906.9M | $672.7M | $933.0M | $225.1M | $707.9M |
| FY2021 | $5.3B | $1.4B | $1.0B | $1.2B | $550.1M | $662.5M |
| FY2022 | $6.3B | $1.8B | $1.4B | $1.7B | $775.1M | $916.4M |
| FY2023 | $5.9B | $1.6B | $1.2B | $1.6B | $757.3M | $811.8M |
| FY2024 | $5.8B | $1.5B | $1.2B | $1.7B | $771.3M | $888.0M |
| FY2025 | $5.5B | $1.4B | $1.0B | $1.4B | $415.0M | $955.1M |

Latest trend (the newest full year against the year before; a reading, not a forecast):

- Revenue: -5.5% (year before -0.9%): slowing
- Operating income: -11.8% (year before -5.9%): slowing
- Net income: -13.7% (year before -4.3%): slowing
- Free cash flow: +7.6% (year before +9.4%): steady

## Operating figures stated in the filing

- LTL tonnage per day: 31,804 tons (as of 2026-06-30). "LTL tonnage per day 31,804 33,178" (Item 2. Management’s Discussion and Analysis o f Financial Condition and Results of Operations)
- LTL tonnage per day: 33,178 tons (as of 2025-06-30). "LTL tonnage per day 31,804 33,178" (Item 2. Management’s Discussion and Analysis o f Financial Condition and Results of Operations)
- LTL shipments per day: 42,332 shipments (as of 2026-06-30). "LTL shipments per day 42,332 44,907" (Item 2. Management’s Discussion and Analysis o f Financial Condition and Results of Operations)
- LTL shipments per day: 44,907 shipments (as of 2025-06-30). "LTL shipments per day 42,332 44,907" (Item 2. Management’s Discussion and Analysis o f Financial Condition and Results of Operations)
- LTL revenue per hundredweight: $38 (as of 2026-06-30). "LTL revenue per hundredweight $ 37.84 $ 32.84" (Item 2. Management’s Discussion and Analysis o f Financial Condition and Results of Operations)
- LTL revenue per hundredweight: $33 (as of 2025-06-30). "LTL revenue per hundredweight $ 37.84 $ 32.84" (Item 2. Management’s Discussion and Analysis o f Financial Condition and Results of Operations)
- LTL weight per shipment: 1,503 lbs (as of 2026-06-30). "LTL weight per shipment (lbs.) 1,503 1,478" (Item 2. Management’s Discussion and Analysis o f Financial Condition and Results of Operations)
- LTL weight per shipment: 1,478 lbs (as of 2025-06-30). "LTL weight per shipment (lbs.) 1,503 1,478" (Item 2. Management’s Discussion and Analysis o f Financial Condition and Results of Operations)
- LTL revenue per shipment: $569 (as of 2026-06-30). "LTL revenue per shipment $ 568.55 $ 485.31" (Item 2. Management’s Discussion and Analysis o f Financial Condition and Results of Operations)
- LTL revenue per shipment: $485 (as of 2025-06-30). "LTL revenue per shipment $ 568.55 $ 485.31" (Item 2. Management’s Discussion and Analysis o f Financial Condition and Results of Operations)
- Average length of haul: 909 miles (as of 2026-06-30). "Average length of haul (miles) 909 912" (Item 2. Management’s Discussion and Analysis o f Financial Condition and Results of Operations)
- Average length of haul: 912 miles (as of 2025-06-30). "Average length of haul (miles) 909 912" (Item 2. Management’s Discussion and Analysis o f Financial Condition and Results of Operations)
- On-time service: 99.0% (as of 2026-06-30). "We continued to maintain our commitment to superior customer service by providing our customers with 99% on-time service and a cargo claims ratio of 0.1% during the second quarter and first six months of 2026, which supported the continued improvement in our yield." (Item 2. Management’s Discussion and Analysis o f Financial Condition and Results of Operations)
- Cargo claims ratio: 0.1% (as of 2026-06-30). "We continued to maintain our commitment to superior customer service by providing our customers with 99% on-time service and a cargo claims ratio of 0.1% during the second quarter and first six months of 2026, which supported the continued improvement in our yield." (Item 2. Management’s Discussion and Analysis o f Financial Condition and Results of Operations)

## Key insights

### Fewer shipments, yet 30.0% more operating income

Daily shipments fell to 42,332 from 44,907, yet operating income rose 30.0% to $465.3M on higher revenue per hundredweight.

Revenue rose 10.4% to $1.55B while the company moved less freight: LTL tonnage per day fell to 31,804 from 33,178 and LTL shipments per day to 42,332 from 44,907. The filing attributes the growth to higher LTL revenue per hundredweight, $37.84 against $32.84 a year earlier, partly offset by the lower volume. Revenue per shipment was $568.55 against $485.31. _(from the filing)_
The freight mix worked against the yield, not for it. The filing says heavier shipments typically lower revenue per hundredweight and shorter hauls lower it too. Weight per shipment rose to 1,503 lbs from 1,478 and average length of haul eased to 909 miles from 912. The higher yield therefore came from pricing and fuel surcharges, not from a lighter or longer-haul mix. _(from the filing)_
Part of the yield is fuel. The surcharge is indexed to weekly Department of Energy diesel prices and sits inside revenue per hundredweight. The filing reports a smaller yield increase once fuel surcharges are excluded and credits that remainder to its yield management strategy, a cost-based approach that aims to offset its own cost inflation. _(from the filing)_
Operating income grew 30.0% against revenue's 10.4%, nearly three times as fast. Operating expenses were 70.1% of revenue, against 74.6% a year earlier, the operating ratio management uses to judge itself. _(from the filing)_
Our reading: revenue that comes from price rather than from extra freight arrives with little added cost, since it needs no extra pickups, terminal handling or linehaul miles. That is why a quarter with less freight can still widen the margin. The fuel part of the price is different: it arrives with a matching diesel cost. _(analysis)_

### Labor's lower share explains most of the margin gain

Salaries, wages and benefits fell to 44.2% of revenue from 47.7%, a 3.51-point drop against a 4.52-point rise in operating margin.

Salaries, wages and benefits grew 2.3% to $687.3M while revenue grew 10.4%. Their share of revenue fell 3.51 points, which on its own covers most of the 4.52-point rise in operating margin, to 29.9% from 25.4%. The filing credits the leverage of higher yield, better platform and linehaul productivity and fewer full-time employees on average, partly offset by higher bonus pay, the annual wage increase and higher benefit costs. _(from the filing)_
The other lines moved less. Depreciation and amortization fell to 5.9% of revenue from 6.4%, worth 0.54 points. Fuel pulled the other way: operating supplies and expenses rose 24.7% to $177.7M, 11.4% of revenue against 10.1% a year earlier, a 1.31-point drag the filing attributes mainly to diesel. _(from the filing)_
Two caveats. Revenue includes fuel surcharges, so higher diesel prices lift the denominator of every cost-to-revenue ratio, labor's included, and part of the lower labor share is that price effect. And the miscellaneous line helped: it was $9.6M of income, 0.62% of revenue, against an $11.3M expense, 0.80% of revenue, a year earlier, which the filing says came mainly from gains on selling property and equipment. _(from the filing)_
Our reading: part of the labor line moves with profit. The filing says retirement plan costs are directly linked to net income and that bonus pay is performance-based, so in a strong quarter some of the saving is handed back as benefits, and in a weak one that part of the cost falls with profit. _(analysis)_

### Profit rose, but cash from operations fell

Net income rose 30.5% to $350.6M while operating cash flow slipped to $272.7M from $285.8M, converting 78% of profit against 106% a year earlier.

In the second quarter of FY2026, operating cash flow was $272.7M against net income of $350.6M, a conversion of 0.78. A year earlier, operating cash flow of $285.8M exceeded net income of $268.6M, about 106% of it. Profit grew 30.5% while cash from operations went down. _(from the filing)_
The filing does not explain the quarter on its own. For the first six months it attributes the change in operating cash flow to higher net income, partly offset by changes in certain working capital accounts. _(from the filing)_
Low capital spending kept free cash flow healthy despite the gap. Capital spending was $77.0M, 5.0% of revenue, against $187.2M in the same quarter a year earlier, and free cash flow was $195.7M, 12.6% of revenue, against $98.7M. _(from the filing)_
Our reading: when revenue jumps within a quarter, much of it is billed but not yet collected at the quarter's end, so cash tends to trail profit for a period before catching up. One quarter does not show a trend; the next quarters' conversion is the test. _(analysis)_

### Competitive edge

- **Service quality is what holds the price** The company reports 99% on-time service and a 0.1% cargo claims ratio, and credits them with supporting its higher yield.
- **Capacity built early now turns profit into cash** Capital spending fell to $415.0M in FY2025 from $771.3M, and free cash flow rose to $955.1M even as revenue fell.
- **One union-free network, run with its own trucks** LTL services are 99.0% of revenue, and freight paid to outside carriers is only $33.8M, 2.2% of revenue.

### What to watch

- **Unhedged diesel runs through revenue and cost** Operating supplies, led by diesel, rose 24.7% to $177.7M; the company does not hedge and relies on surcharges to recover it.
- **A fixed network feels lost volume sharply** Revenue fell from $6.26B in FY2022 to $5.50B in FY2025, while operating income fell from $1.84B to $1.36B.
- **Pricing has to keep pace with labor costs** Salaries, wages and benefits are $687.3M, 44.2% of revenue, so rates that lag pay and benefit inflation would reach margin directly.

## Investor view

**Old Dominion moved less freight and earned 30.0% more operating income, by pricing each shipment for yield rather than volume**

### How it makes money

Old Dominion is a less-than-truckload carrier: it collects many small shipments from many shippers, consolidates them at its service centers and moves them across its own network. LTL services brought in $1.54B of the quarter's $1.55B revenue, 99.0%. Other services, which the filing lists as container drayage, truckload brokerage and supply chain consulting, were $15.1M. The company describes itself as "a single integrated, union-free organization" with one reportable segment. _(from the filing)_
Freight is priced by weight, commodity and distance, under an industry class system in which light, bulky freight pays more per hundredweight than dense, heavy freight. Fuel surcharges are indexed to weekly Department of Energy diesel prices and sit inside the yield figure. In the quarter, LTL revenue per hundredweight was $37.84, against $32.84 a year earlier, and LTL revenue per shipment was $568.55, against $485.31. _(from the filing)_
The costs are mostly people, fuel and a network of owned terminals and trucks. Salaries, wages and benefits were $687.3M, 44.2% of revenue. Operating supplies and expenses, led by diesel, were $177.7M, 11.4%. Depreciation of the fleet and service centers was $91.7M, 5.9%. Purchased transportation, freight paid to outside carriers, was $33.8M, 2.2% of revenue, a small line next to the company's own labor and equipment. _(from the filing)_
Management measures itself by the operating ratio, total operating expenses divided by revenue. It was 70.1% this quarter, against 74.6% a year earlier, leaving operating income of $465.3M on $1.55B of revenue. The filing names the levers: density, which it defines as "shipment and tonnage growth within our existing infrastructure", an appropriate yield on each shipment, and operating efficiency. _(from the filing)_

### What shifted

Revenue rose 10.4% to $1.55B while the company moved less freight. LTL shipments per day fell to 42,332 from 44,907 and LTL tonnage per day to 31,804 from 33,178. The filing attributes the growth to higher revenue per hundredweight, partly from higher fuel surcharges as diesel prices rose, and says the rest of the yield gain was "driven by the ongoing execution of our yield management strategy". _(from the filing)_
Operating income rose 30.0% to $465.3M and the operating margin widened to 29.9% from 25.4%. The largest move was labor: salaries, wages and benefits grew 2.3% against revenue's 10.4%, falling to 44.2% of revenue from 47.7%. The filing credits higher yield and better platform and linehaul productivity, with fewer full-time employees on average, partly offset by higher bonus pay and retirement costs that are linked to net income. _(from the filing)_
Fuel pushed the other way. Operating supplies and expenses rose 24.7% to $177.7M, 11.4% of revenue against 10.1% a year earlier, which the filing puts down mainly to diesel. The company says it does not hedge fuel; the surcharge, reset weekly against the diesel index, is how it recovers the cost. A smaller help came from the miscellaneous line: $9.6M of income this quarter against an $11.3M expense a year earlier, mainly gains on selling property and equipment. _(from the filing)_
Cash lagged profit this quarter. Operating cash flow was $272.7M against net income of $350.6M, a conversion of 0.78, and free cash flow was $195.7M, 12.6% of revenue. Capital spending was $77.0M, 5.0% of revenue, after falling from $771.3M in FY2024 to $415.0M in FY2025. The filing says the company will keep spending below its historical range this year as it continues to "utilize available capacity within our existing network for growth". _(from the filing)_

### Risks in the filing

Demand and price. The company says demand for its services is tied to industrial production and the health of the U.S. economy, and names downturns, inflation, tariffs and competitive pricing pressure as risks, along with being unable to raise its rates enough to offset its own cost increases. The quarterly report says there have been no material changes to the risk factors in its annual report. _(from the filing)_
Fuel, equipment and land. The company does not hedge diesel, so it relies on fuel surcharges and lists their effectiveness as a risk. It also names the cost and supply of equipment and parts, falling demand for and value of used equipment, and higher costs or limited availability of suitable real estate for its service centers. _(from the filing)_
People and regulation. The named labor risks are unionization of a workforce that is union-free today, rising pay and benefit costs to attract and retain drivers and technicians, healthcare costs, succession, and the FMCSA's Compliance, Safety, Accountability initiative, which the company says could limit its ability to hire qualified drivers. Emissions and fuel-efficiency rules, cyber incidents and dependence on third-party technology services are also listed. _(from the filing)_
Ownership and control. The filing lists the concentration of stock ownership with the Congdon family, and provisions in its articles of incorporation, bylaws and Virginia law that could discourage, delay or prevent a change in control or in management. _(from the filing)_
Two of the named risks already show in the numbers. Diesel shows in operating supplies growing more than twice as fast as revenue, recovered through surcharges rather than hedges. Softer demand shows in fewer shipments per day. The risk the numbers do not yet show is the one the model depends on most: rates failing to keep pace with costs. _(analysis)_

## Founder view: mechanisms

### Price for the cost of the freight, not for the volume

Old Dominion prices each account to cover its own cost inflation and fund new capacity, and accepts losing freight that will not pay. The filing calls this a "consistent, cost-based approach to pricing" and says it focuses on "the profitability of each customer account". In a soft market many carriers cut price to keep trucks full. This one lets volume go and protects the yield, on the view that freight comes back to the carrier with the most reliable service. _(analysis)_

### Service quality is what the price buys

The yield holds because the service justifies it. LTL freight passes through several terminals and many hands, so on-time delivery and damage-free handling are what shippers pay for. The filing links the two directly, saying its service levels "supported the continued improvement in our yield". A premium price on a service that looks like a commodity survives only if the service is measurably better, every week. _(analysis)_

### Density spreads the cost of a fixed network

A terminal network costs much the same whether its trucks run full or half empty. Each extra shipment on an existing lane adds revenue with little added cost, and each lost one removes revenue without saving much. The filing calls density its "primary revenue focus". This quarter shows the other route to the same result: with density down, higher revenue per shipment spread labor and depreciation over more revenue instead. _(analysis)_

### Build capacity ahead of demand, then grow into it

Old Dominion spends on service centers and trucks ahead of demand, then slows spending once there is room to grow into. The filing says capital spending varies with its plan for "long-term growth" and that it is now using spare capacity in its existing network. The cash cost of growth is paid early, so a recovery in freight can be served without waiting for new terminals. _(analysis)_

## Member research

Signed-in members read, on the page: what Old Dominion Freight Line's numbers depend on from here, and the playbook behind each mechanism (what needs scale, what transfers, how to test it, the metric that would show it).

## Sources

- Old Dominion Freight Line 10-Q for the period to 2026-06-30: https://www.sec.gov/Archives/edgar/data/878927/000087892726000023/ (2026-08-05)

Methodology business-lens-1.0 · schema 1.2.0 · run business-lens-2026-11-02 · as of 2026-11-02