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DATE

Thursday, April 30, 2026 at 10 a.m. ET

CALL PARTICIPANTS

  • President and Chief Executive Officer — Frederick J. Holzgrefe
  • Chief Financial Officer — Matthew J. Batteh

TAKEAWAYS

  • Revenue -- $806.2 million, representing a 2.4% increase; highest reported for any first quarter.
  • Diluted EPS -- $1.86, unchanged compared to the prior year.
  • Shipments per Workday -- Up 1%, with March showing a notable acceleration and April trending up about 5.5%.
  • Tonnage -- Down 2.1%, attributed to a 3.1% decrease in average weight per shipment.
  • Revenue per Shipment (Excluding Fuel Surcharge) -- Down 1.2% to $297.11; sequential improvement throughout the quarter observed.
  • Revenue per Shipment (Including Fuel Surcharge) -- Increased 0.7% compared to the prior year.
  • Fuel Surcharge Revenue -- Grew 12.3%, making up 16.5% of total revenue versus 15.1% previously.
  • Average Length of Haul -- Fell 1.7% to 890 miles compared to 905 miles.
  • Yield (Excluding Fuel Surcharge) -- Increased by 1.9%.
  • Yield (Including Fuel Surcharge) -- Rose by 3.8%.
  • Productivity (Touches per Shipment) -- Improved over 2.5% versus 2025 and up about 1% sequentially from Q4, marking the best result since 2024.
  • Operational Safety -- Miles between preventable accidents set a first-quarter record; hours between lost-time injuries reached their highest first-quarter level since 2020.
  • Claims Ratio -- 0.5%, marking the sixth consecutive quarter below 0.6%.
  • Salaries, Wages, and Benefits Expense -- Increased $4 million, or 1%, with a $7.9 million rise in health insurance cost and $1.4 million increase in workers' compensation, partially offset by a $5.1 million (1.8%) decrease in combined salaries and wages due to a 6.3% reduction in headcount.
  • Purchased Transportation Expense -- Rose 7.5% and accounted for 8% of revenue, fully driven by increased rail usage meeting customer service expectations.
  • Fuel Expense -- Increased by 3.6%, impacted by a 13.6% rise in national diesel prices year over year and a price jump of more than 30% from February to March, resulting in a $3.5 million margin headwind stemming from fuel surcharge timing lag.
  • Operating Ratio -- Worsened to 91.7% from 91.1% a year ago, reflecting expense increases outpacing revenue growth.
  • Depreciation Expense -- $62.2 million, up 5.3%, attributed to ongoing investment in revenue equipment, real estate, and technology.
  • Cost per Shipment -- Increased 2%, primarily from higher self-insurance costs, with health insurance accounting for over 50% of the increase.
  • Headcount (Excluding Linehaul Drivers) -- Down 7.9% compared to the prior year, highlighting focus on cost and network optimization.
  • Contractual Renewals -- Averaged 6.7% for the quarter, exceeding 7% in March.
  • Balance Sheet -- $39 million cash, $12 million revolving credit facility drawn, $113 million total debt outstanding at quarter end.
  • Facility Network Expansion -- 70 new facilities opened since 2017, now totaling 214 locations.
  • Recent Investments -- Approximately $1.8 billion in network and fleet over 36 months, equating to more than 19% of total revenue for that period.

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RISKS

  • Chief Financial Officer Matthew J. Batteh noted, "Claims and insurance expense increased by 6.3% year over year," driven by higher insurance premiums and inflationary pressure on claims.
  • Rapidly rising diesel prices in March led to a "meaningful short-term impact on profitability" due to fuel surcharge timing lag, resulting in a $3.5 million margin headwind.
  • "Total operating expenses increased by 3.1% in the quarter," outpacing the 2.4% revenue growth and increasing the operating ratio to 91.7% from 91.1%.

SUMMARY

Saia, Inc. reported first-quarter financial results characterized by record revenue and sequential improvement in operational metrics, while facing expense headwinds that pressured profitability. Management reiterated strategic commitment to leveraging network expansion, technology investment, and optimization initiatives to drive future growth and margin gains. Customer sentiment indicated by net promoter scores reached record levels and the company cited improving demand signals for both legacy and newly opened terminals. Facility openings in 2023 and 2024 achieved margin improvement exceeding two OR points year over year, though the ramping terminals remain a drag with margins still in the upper 90s. Free cash flow was highlighted as a "great inflection point" given decreased capital intensity and possible upside if market conditions tighten further.

  • Frederick J. Holzgrefe confirmed customers "track and give us feedback on our performance all the time, and our net promoter scores have never been higher."
  • April-to-date performance showed shipments up about 5.5% and tonnage up about 6.5%, a pronounced acceleration over previous months.
  • Year-over-year growth resumed in legacy terminals for the first time in approximately five quarters, with ramping facilities maintaining faster growth rates.
  • Management projected 400-450 basis points sequential operating ratio improvement from the first to second quarter if demand and seasonal trends hold, exceeding typical historical sequential gains.
  • Company indicated incremental margins for non-mature terminals could reach 25%-30% per quarter if volume leverage materializes during a recovery, supporting long-term sub-80 operating ratio ambitions.

INDUSTRY GLOSSARY

  • LTL (Less-Than-Truckload): Freight transportation service for shipments too large for parcel but not requiring a full truck.
  • Touch (in LTL context): Each handling instance or movement required for a shipment from pickup to delivery.
  • OR (Operating Ratio): Operating expenses divided by operating revenue, a key metric of profitability in trucking; lower is better.
  • GRI (General Rate Increase): Industry-wide price increase applied by carriers, typically on an annual basis.
  • PT (Purchased Transportation): Transportation performed by third parties (e.g., railroads, non-asset truckload providers) versus own fleet.
  • RFP (Request for Proposal): Customer-initiated process to solicit carrier pricing and service offers on freight.

Full Conference Call Transcript

Frederick J. Holzgrefe: Good morning, and thank you for joining us to discuss Saia, Inc.’s first quarter results. As we moved into 2026, we remained focused on serving our customers, enhancing operational efficiency, and integrating our newer terminals into our network. Q1 2026 was no different than history with weather impacting operational results. This year was pronounced as we saw weather patterns impacting our core and profitable Texas and Mid-South regions. However, much like history, we saw seasonality increase in March, particularly the second half of the month, as our customers began to tap our national network. Our teams, fleet, and footprint were well positioned to take advantage of this opportunity to support our customers’ seasonal demands.

Service metrics continued to improve through the quarter. During the quarter, our team remained focused on what matters most: serving the customer. We achieved a cargo claims ratio of 0.5%, which is our sixth straight quarter of claims ratio below 0.6%, a record of consecutive quarters achieving this milestone. Customers also value our ability to reliably pick up and deliver freight in the timeframes that meet their requirements and expectations. Across our KPIs, we continue to meet and exceed expectations throughout the network. Despite the dynamic environment this quarter, we improved operationally. Most notably, we saw a significant increase in miles between preventable accidents and a significant improvement in hours between lost-time injuries.

Miles between preventable accidents were a first-quarter record, while hours between lost-time injuries were at the highest first-quarter level since 2020. Both metrics are a testament to our ongoing commitment to safety, training, and technology. Our operational execution is driven by our continued investments in our network and optimization technology. Although we are still in the early stages of realizing the full long-term benefits of a national network, execution remains strong across the organization, improving upon trends seen in the back half of last year. Increasingly, customers value consistency and reliability, and our performance in these areas is enabled by the longer-term investments that are core to our strategy.

As a result, productivity continued to improve in the quarter, with touches making their strongest performance since 2024, improving more than 2.5% compared to 2025 and improving approximately 1% sequentially from the fourth quarter. These metrics demonstrate the impact of our ongoing investments in optimization technology. As the freight backdrop improves and we continue to build density on our national network, we anticipate additional network leverage and asset utilization. With service levels among the best in the industry and our increasing value proposition to our customers, we continue to make progress on pricing and mix management. Revenue per shipment excluding fuel ramped throughout the quarter, in part due to our efforts around contractual renewals, which were 6.7% for the quarter.

While there is still movement among shipments with an ever-changing backdrop, our renewal rates reflect our value proposition to customers and our ability to provide solutions that meet their needs. First quarter results were largely in line with our expectations, as volumes in late March were strong, offsetting to some extent a weather impact to January and February. Revenue for the quarter was $806 million, a record for the first quarter and a 2.4% improvement over the prior year. While trends in the first couple of months of the year can always be volatile, I was pleased to see the volume acceleration in March, resulting in a shipment increase of 1% for the quarter.

As customers continue to value our expanded presence and our national network, we saw shipment growth in both our legacy and ramping markets. Weight per shipment, while still down compared to the prior year, improved sequentially each month of the quarter, a result of our targeted actions around mix management and improving shipper sentiment throughout the quarter. Matt will provide additional detail as it relates to cost. However, it is important to note we were negatively impacted in March by the 30% increase in diesel costs in a matter of a few days.

This rapid increase in cost created a meaningful short-term impact on profitability given the timing difference of our surcharge program, which is based on weekly national average diesel prices. I will now turn the call over to Matt for more details from our first quarter results.

Matthew J. Batteh: Thanks, Fritz. Revenue was a record for any first quarter, increasing by 2.4% to $806.2 million, partially as a result of an increase in fuel surcharge revenue as well as a 1% increase in shipments per workday. Revenue per shipment excluding fuel surcharge decreased 1.2% to $297.11 compared to $300.76 in 2025, largely as a result of lower weight per shipment and shorter length of haul compared to the prior year. However, I was pleased to see revenue per shipment excluding fuel surcharge increase throughout the quarter. Revenue per shipment including fuel increased 0.7% compared to 2025. Fuel surcharge revenue increased by 12.3% and was 16.5% of total revenue compared to 15.1% a year ago.

Tonnage decreased 2.1% compared to the prior year, attributable to a 3.1% decrease in our average weight per shipment. Our average length of haul decreased 1.7% to 890 miles compared to 905 miles in 2025. Yield, excluding fuel, increased by 1.9%, while yield increased by 3.8% including fuel surcharge compared to 2025. Shifting to the expense side for a few key items to note in the quarter. Salaries, wages, and benefits increased $4 million, or 1%, compared to 2025. This increase was primarily driven by a $7.9 million increase in health insurance costs, as well as a $1.4 million increase in workers’ compensation costs, both of which are primarily the result of escalating costs of claims.

These increases were partially offset by a $5.1 million, or 1.8%, decrease in salaries and wages combined compared to 2025, as headcount at the end of the quarter was 6.3% lower than 2025. Excluding linehaul drivers, headcount decreased 7.9% compared to 2025. These reductions were a result of our continued focus on operational efficiency and network cost management. Purchased transportation expense, including both non-asset truckload volume and LTL purchased transportation miles, increased by 7.5% compared to the first quarter last year and was 8% of total revenue compared to 7.6% in 2025. Truck and rail PT miles combined were 13.4% of our total linehaul miles in the quarter compared to 12.4% in the prior year.

The increase in purchased transportation usage was driven entirely by rail that matched customer service expectations as we leveraged the most cost-effective mode. Fuel expense for the quarter increased by 3.6% compared to the prior year, while company linehaul miles decreased 4%. The increase in fuel expense was primarily the result of a 13.6% increase in national average diesel prices on a year-over-year basis, as national average price per gallon increased more than 30% from February to March. Due to the rapid rise in diesel costs in March, our costs were elevated in real time while the fuel surcharge table updates the following week. This period of quickly rising diesel costs resulted in an approximately $3.5 million margin headwind.

Claims and insurance expense increased by 6.3% year over year. This increase was primarily due to rising insurance premium costs in addition to inflationary costs associated with the claims expense. While claims costs continue to escalate at a rapid pace, our efforts remain focused around safety and training, resulting in a significant decrease in preventable accidents compared to 2025. Depreciation expense of $62.2 million in the quarter was 5.3% higher year over year, primarily due to ongoing investments in revenue equipment, real estate, and technology. Moving to costs on a per-shipment basis. Cost per shipment increased 2% compared to 2025, largely due to increases in self-insurance-related costs.

Health insurance alone accounted for more than 50% of the year-over-year cost per shipment increase due to cost inflation and claims mix trending more toward high-cost claims. Compared to 2025, salaries, wages, and purchased transportation combined were down 1.2% on a per-shipment basis as a result of our actions around cost control and network optimization. Meanwhile, higher fuel costs contributed to the increase in cost per shipment compared to the prior year as fuel prices surged during March due to external factors. As a reminder, while our fuel surcharge program helps mitigate rising fuel costs, our fuel surcharge table updates weekly, whereas fuel costs are incurred in real time.

The impact of this timing is more pronounced in a rapidly increasing fuel environment. Total operating expenses increased by 3.1% in the quarter and, with the year-over-year revenue increase of 2.4%, our operating ratio increased to 91.7% compared to 91.1% a year ago. The tax rate for the first quarter was 23.3% compared to 24% in the first quarter last year, and our diluted earnings per share were $1.86, which is flat compared to the first quarter a year ago. Focusing on the balance sheet, we finished the quarter with $39 million of cash on hand, $12 million drawn on the revolving credit facility, and $113 million in total debt outstanding.

I will now turn the call back over to Fritz for some closing comments.

Frederick J. Holzgrefe: Thanks, Matt. While 2026 has shown some positive demand signals, the ever-changing macroeconomic environment continues to create uncertainty from a customer perspective. One constant, however, is our team’s ability to adapt to change and deliver solutions for our customers. As we remain focused on serving our customers while driving efficiency across our operations, I am increasingly excited about the opportunity ahead. Our disciplined approach to cost management is reflected in our cost structure. We remain vigilant about managing cost. We noted in Q1 that employee-related costs associated with running the business continued to be inflationary. It is critically important that we invest in what we feel is the best team in the freight business.

At the same time, we continue to invest in the technologies that allow us to best manage and deploy the industry-leading team. Dating back to 2017, since we began our journey to becoming a national network, we have opened 70 facilities. Throughout, we have maintained a competitive cost structure with deployment of data analytics and optimization tools that have served us well. We will continue to invest in those capabilities and expand the use of those tools, which remains core to our strategy. Looking forward, we remain committed to executing our long-term strategy of getting closer to the customer, providing a high level of service, and being appropriately compensated for the quality and service provided.

As the industry is perhaps emerging from a four-year freight recession, we see Saia, Inc.’s upside as significant. We have invested with keen focus on supporting success, which requires a best-in-class team, a national terminal network, a flexible modern fleet, and a technology stack to bring all these elements together. Over the last 36 months, we have invested approximately $1.8 billion in our network and fleet alone, representing more than 19% of total revenue during that time. This investment is a clear signal of our commitment to customers, and we believe we are still in the early stages of fully realizing the benefits of these investments, which we expect will generate substantial long-term value for our shareholders.

With that said, we are now ready to open the line for questions. Operator?

Operator: Thank you. We will now open the call for questions. If you are using a speakerphone, please pick up your handset before pressing the keys. If at any time your question has been addressed and you would like to withdraw your question, please press the appropriate key. At this time, we will pause momentarily to assemble our roster. The first question will be from Jordan Robert Alliger from Goldman Sachs. Please go ahead.

Jordan Robert Alliger: Yes, hi, good morning. In the context of underlying demand feeling a bit better, can you talk about margin progression as we go from Q1 to Q2 and the specific levers that underpin that, whether it be volume, yield, or cost? Thank you.

Matthew J. Batteh: Hey, Jordan. Sure. I will give the shipments and tonnage stats monthly and then get into the margin commentary. January shipments per day were down 2.1%, tonnage per day was down 7%. February shipments per day were up 0.3%, tonnage per day down 2.7%. March shipments per day were up 4.3%, tonnage per day up 2.8%. And April to date, shipments are tracking up about 5.5%, tonnage up about 6.5%. We saw nice acceleration in March, which was good to see and did not come to fruition last year, and you see the April-to-date numbers. Looking back in history, Q1 to Q2 typically shows about 250 to 300 basis points of improvement sequentially.

This year, with the momentum we see, we think we can do about 400 to 450 basis points of improvement, which would be a significant step up. There is a lot going on in the backdrop, and we are projecting May and June to be seasonal. Factors include demand and the diesel environment. If May and June come together with normal seasonality, we feel like we can hit that, and if the environment improves dramatically, we can outperform that.

Operator: The next question will be from Kenneth Scott Hoexter from Bank of America. Please go ahead.

Kenneth Scott Hoexter: Good morning, Matt and Fritz. Revenue per shipment ex-fuel was down 1.2%. You mentioned lower weight and shorter length of haul, and it also decreased sequentially, but then you noted an acceleration in the quarter. Can you talk about that by month and core or contract pricing within that? And on weight per shipment, you are going to lap Southern Cal issues in April. Are you getting truckload spillover, and how does that affect weight per shipment?

Matthew J. Batteh: We will unpack that. From a year-over-year standpoint, the Los Angeles region headwinds we have talked about are still there. They abated a touch, but that region’s shipments were still down about 14% to 14.5% year over year. That is typically our highest revenue-per-bill region with longer length of haul. We are also still winning in these one- and two-day lanes. That is good business, but generally it is not going as far, and price is a little bit less compared to longer-haul company average lanes. As we put more dots on the map, we are getting matched with customers and they are routing us different freight that we may not have had access to before.

That mix shifts a little bit from Q4 to Q1 seasonally. We were pleased to see weight per shipment improve throughout the quarter along with revenue per shipment month by month. Part of that is our actions on contractual renewals. You heard Fritz cite 6.7% for the quarter, capped by a March number that was north of 7%. There are shippers still moving around; the environment remains dynamic, so we continue to manage mix. Nothing has changed in our focus on pricing, and we are getting more advanced in some of these shorter-haul markets.

Operator: The next question will come from Jonathan B. Chappell from Evercore ISI. Please go ahead.

Jonathan B. Chappell: Thank you. Good morning. Given the numbers you just noted for 2Q, the full-year OR improvement guide from February of 100 to 200 basis points had the high end assuming some volume tailwind. With 1Q done, the acceleration of tonnage through April, and that 2Q bogey you laid out, does the high end become the low end, or are we still questioning the pace of demand in the back half?

Frederick J. Holzgrefe: John, good points. I will start with what we are hearing from customers. We spend a fair amount of time connected to customers. We survey and communicate to understand where their business is. Two things we like to hear right now: first, they track and give us feedback on our performance all the time, and our net promoter scores have never been higher. Second, their sentiment is more positive; they see a better second half. Matt and I tend to be “show me” people, so those are positive tones, and we would like to see it in the results.

We are excited about what is in front of us for Q2, and the 100 to 200 basis points is certainly within range. There is still a lot going on. Diesel costs and overall transportation infrastructure costs are high. Disasters may have an impact on demand down the road; I do not know yet. But short term, customers think we are doing a great job. It is showing up in March and April, and the feedback from customers is great. We feel good about what we have talked about for Q2, and the trends would indicate that the second half of the year could be pretty good.

Operator: The next question is from Thomas Richard Wadewitz from UBS. Please go ahead.

Thomas Richard Wadewitz: Good morning. Can you talk about weight per shipment in March to April, and your assumption of normal seasonality in May and June? What does that mean for year-over-year tons per day and shipments per day? Also, how do shipments develop and how much does weight matter to your outlook?

Matthew J. Batteh: We saw weight per shipment increase throughout Q1, which was good to see, driven by pricing actions and targeted mix management. We also feel the backdrop is improving. As we go into April, weight is up a touch; you see that in the shipments and tonnage numbers for April. It remains to be seen what happens in the back half of the quarter. Typically, you see a step up of about 1% to 2% in the March-to-April timeframe, then additional step-ups April to May and May to June. Q2 is generally the most seasonal and strongest period, so that is what we are assuming now based on customer demand signals.

Thomas Richard Wadewitz: On growth in new terminals versus legacy terminals, is growth similar or meaningfully higher in the terminals opened in the last two years?

Matthew J. Batteh: One thing we are excited about this quarter is we saw shipment growth in both legacy and ramping facilities. This was the first time in about five quarters that we have seen growth in legacy. The ramping terminals are still outperforming legacy, but both grew.

Frederick J. Holzgrefe: What is exciting is having the legacy facilities grow while the new facilities grow faster, as expected. Customers are considering us more for their complete solution. Growth in a legacy market is often tied to the fact that we can provide service in a ramping market at the same time. We are becoming a more important part of the customer’s supply chain.

Operator: The next question is from Scott Group from Wolfe Research. Please go ahead.

Scott Group: Thanks. The pricing renewal numbers sound good, but a blended average of the reported pricing metrics is basically flat. When should we start to see yield and revenue per shipment actually improve and get closer to renewal numbers? Do we start to see some of that in Q2? And can you bracket revenue assumptions within the margin guide?

Matthew J. Batteh: I think we will start to see some of that in the back half of Q2. We are lapping the big change in the Los Angeles region from last year. There is still volume moving around with shippers, and you do not always net what you take as they move. As the environment continues to tighten, we should see more of that come through. We will get closer as we get into the back half of the year, and I would expect some improvement in the back half of this quarter as well.

Frederick J. Holzgrefe: The tough part of the SoCal market for us starts exiting in May as we begin lapping those tougher months.

Matthew J. Batteh: We do not give revenue-level detail within the margin guide. From a volume perspective, we are assuming seasonal May and June. Fuel plays a factor; we are paying fuel in real time. Prices have stabilized a little, but it is anyone’s guess what happens next. Our guide is underpinned by seasonal May and June. We are not assuming a change in fuel; diesel can go up or down from here through the end of the quarter.

Operator: The next question will come from Ravi Shanker from Morgan Stanley. Please go ahead.

Ravi Shanker: Thanks. Can you unpack what you are seeing in terms of end markets, particularly retail versus industrial, and what the typical lag is between retail picking up versus industrial going into a cycle?

Frederick J. Holzgrefe: I do not have a specific callout for retail versus industrial. Feedback from customers is broad-based across markets, which is positive. End markets we have good line of sight to include grocery and data centers. The feedback is consistent that we are doing a good job and they feel a little more positive about the balance of the year.

Ravi Shanker: On tech, you mentioned new investments in productivity. Are there any big tech products that could drive a step-function improvement in optimization?

Frederick J. Holzgrefe: We are not ready to talk about step-function changes. We are continuously investing in core optimization tools critical to our cost structure—how we run our linehaul network and plan our city operation. These are large models or early-stage AI models we have worked on for years, with continued enhancements. We are also deploying AI around customer service, including track and trace. Those add value but do not necessarily change cost structure. Looking ahead, Vision AI and similar areas are potentially operationally significant. The big opportunity over time is national network optimization combined with pricing.

Matthew J. Batteh: You see this in our numbers—touches improving, best since 2024; salaries, wages, and PT per shipment down. That is optimization, technology, and cost management at work, even with 20-plus new terminals that are not fully mature. On pricing, our customer conversations are more equal now that we have a national network, letting us say “yes” to more things.

Operator: The next question will be from Eric Thomas Morgan from Barclays. Please go ahead.

Eric Thomas Morgan: Good morning. On the truckload market, is tightness driving incremental volume to your network, potentially contributing to the upward trend in weight per shipment? And on your 2Q shipment progression (April to May to June), can you translate that into a year-over-year view for the quarter?

Matthew J. Batteh: We do not give the year-over-year view, and my earlier comments referred to shipments.

Frederick J. Holzgrefe: Over time, freight is moving through its more historic modes. In a supply chain with increasing costs, you see a flight to quality. Reliability matters when inventory is expensive to move. The reliability of our network is shining. As the truckload market tightens, LTL freight returns to LTL, which likely helps. Specifically for Saia, Inc., it reflects our performance for customers.

Operator: The next question is from Christian F. Wetherbee from Wells Fargo. Please go ahead.

Christian F. Wetherbee: Good morning. Can you discuss building density in newer markets? You have previously given ORs for facilities open a couple of years. How is that progressing, particularly in March and April as volume strengthens?

Matthew J. Batteh: Pleased with those. They are still above the company average—those facilities are relatively immature—but improved year over year. Looking at the 2023 and 2024 openings as a batch, margins improved by over two OR points year over year. They remain in the upper 90s and are a drag overall, but trending the right way.

Frederick J. Holzgrefe: Our OR guide into Q2 reflects growth not only in legacy markets but continued leverage in ramping new markets. That is really key to the value story.

Christian F. Wetherbee: On legacy versus new, how do you parse demand improvement between core demand and Saia initiatives enabling more freight from existing customers in the new network?

Frederick J. Holzgrefe: Legacy facilities grew in the first quarter for the first time in a number of quarters, while new facilities grew faster. We are now a bigger part of customers’ supply chains. When you are a national player and can do more, you are easier to do business with. That creates synergy—customers lean into us for longstanding lanes (e.g., Dallas to Atlanta) because they know we can also cover markets like the Upper Midwest where we historically were lighter. That footprint value is building and should drive growth in Q2 and beyond.

Operator: The next question is from Stephanie Moore from Jefferies. Please go ahead.

Stephanie Moore: Good morning. Taking a longer-term approach, what is the torque to the model after recent years of investment? How should we think about incremental margins as legacy terminals ramp and Southern California bounces back? What could incrementals look like in the upcycle?

Frederick J. Holzgrefe: This is an exciting time. We have waited for the market to firm so we can show the value of a 214-terminal network. We offered a range this year of 100 to 200 basis points in a choppy market with improving sentiment. The big opportunity as the freight cycle normalizes is that we have long talked about Saia, Inc. operating at an 80 OR below. We are starting to see early innings—Q1 to Q2, 400 to 450 basis points of improvement is a big deal. Incrementals in facilities opened less than three years could be significant. If we return to the days of leveraging the Northeast, we could see 25% to 30% incrementals per quarter, potentially higher.

Short of a broader economic slowdown, I do not see an impediment to continued margin improvement and achieving sub-80 OR over time.

Stephanie Moore: And a follow-up on free cash flow. It was very strong in the quarter. Could this be a market inflection, or are there other considerations?

Matthew J. Batteh: We have long talked about being free cash flow positive this year. Much of the build-out is done, though we still have some terminal opportunities. If the market tightens, our plans around free cash flow could escalate further. There are still near-term unknowns, but based on demand indicators and customer conversations, this could be a great inflection point for us.

Operator: The next question will be from Jason H. Seidl with TD Cowen. Please go ahead.

Analyst: Hi. Thanks. This is Uday on for Jason. Circling back on pricing, on your last call you spoke to better-than-expected capture on GRIs. Since then, freight markets have tightened up and core pricing sounds robust. Have you seen any changes or improvements on capture as the year has progressed, and does that telegraph further momentum on core pricing as you move through annual RFPs?

Matthew J. Batteh: It has been relatively steady with no major differences. Movement tends to be around national accounts or larger customers who use more carriers or have more sophisticated TMS platforms. Our ability to do more for the customer matters—when we can cover everything, it is harder to make a change. Now that we have 214 facilities in the national network, our value proposition is better than ever. Every time we can say “yes” and do more, we get the chance to hold on to that business at a higher price.

Operator: The next question is from Richa Harnain from Deutsche Bank. Please go ahead.

Richa Harnain: Thanks. It is Richard here. Revisiting how you manage purchased transportation: you look at it holistically with salaries, wages, and benefits and optimize in totality. Your salaries, wages, and benefits plus PT per shipment was impressively down in Q1. As truck rates rise, do you plan to in-source more, or do your pass-through mechanisms on purchased transportation give enough protection? And on the macro, if improvement does not materialize, can you still improve OR by at least 50 bps this year, or could it be higher given the momentum and productivity initiatives?

Frederick J. Holzgrefe: On PT, our decision process starts with service—does it meet the schedule and quality standards? In March we leaned into rail, and the entire increase in PT year over year was driven by rail. On a cost-per-mile basis, rail is upwards of $0.50 cheaper than internal miles, and in that case the cost decision is straightforward if service is met. Over time, as we build density and scale, we can run more balanced schedules and in-source more linehaul with Saia drivers, which is cost optimal. We will continue to take advantage of PT when it works for service and cost, and redeploy internal resources where optimal. Regarding momentum, even in a flattish macro we believe we can improve OR.

We have underlying efficiency goals we are achieving, and as new facilities ramp, volume provides cost leverage. We are shoring up the lower end of the range. In a soft or flat macro, we believe we can still achieve at least about 50 bps of improvement, particularly as we continue to win with customers in new markets.

Richa Harnain: And a quick follow-up: any sense that the good demand you are seeing, including legacy facilities growing after five quarters, is being pulled forward, or any concern around that based on customer feedback?

Frederick J. Holzgrefe: Based on customer feedback, we do not see evidence of broad pull-forward. Sentiment is improving and feels more durable across end markets. We will remain disciplined and watch the signals closely, but what we are seeing today appears to be driven by service performance, footprint expansion, and customers consolidating to reliable partners rather than timing-related pull-forward.