Shares of Hub Group were off 19% in midday trading on Friday after the company flagged a $77 million understatement in purchased transportation expenses. It said the accounting error occurred in the first three quarters of 2025 and that its financial statements are under review. It has delayed fourth-quarter and full-year reporting until the matter can be resolved.
“Based on its analysis to date, the Company estimates the correction of the error will increase purchased transportation and warehousing costs for the nine months ended September 30, 2025, but cannot yet estimate what the resulting increase to purchased transportation and warehousing costs and accounts payable will be,” a news release said.
Hub Group (NASDAQ: HUBG) said it plans to restate financials for the first three quarters of 2025 and will “assess the potential impact” to 2024 and 2023 results.
The company does not expect any impact to its cash position or operating cash flows, which it said totaled $194 million in 2025.
A fourth-quarter update issued on Thursday after the market closed only provided select financial results for the period. Hub Group hosted a pre-recorded call discussing preliminary results and said updated results will be available “as soon as practicable.”
“Accuracy and transparency in reporting on our performance is of the utmost importance at Hub Group,” said President, CEO and Vice Chairman Phil Yeager. “We look forward to reporting our full financial results as soon as possible and are enhancing our processes. Our team continues to focus on serving our customers with innovative solutions and services.”
Following the announcement, some industry analysts downgraded Hub Group’s stock, and others worked to estimate the total impact.
Deutsche Bank (NYSE: DB) analyst Richa Harnain said the understated expenses could represent roughly 300 basis points of degradation to the company’s already depressed operating margin.
“This figure represents 2.8% of revenue or over 65% of HUBG’s EBIT [earnings before interest and taxes],” Harnain said in a Friday note to clients. “In other words, after fully adjusting for this cost, the company’s adjusted operating margins for the first nine months of 2025 would appear to have been 1.4%, significantly lower than the 4.4% originally reported.”
She said there could be other offsets and that the restatement may not be as bad as feared, “therefore implying the margin headwind could be smaller.”
Preliminary Q4 results
Intermodal and Transportation Solutions revenue “declined slightly” year over year in the fourth quarter. Intermodal volumes were up 1% y/y with revenue per load coming in flat.
Intermodal loads were off 4% y/y in January. January volumes were negatively impacted by winter storms. The month was also up against a difficult comp to January 2025, when “shippers pulled forward orders ahead of tariffs.”
Dedicated revenue was down in the fourth quarter. Brokerage volumes were down 10% y/y with revenue per load off 4%.
Hub Group said full-year 2025 revenue was approximately $3.7 billion, a 7% y/y decline. It guided 2026 revenue to a range of $3.65 billon to $3.95 billion, which bracketed the $3.77 billion consensus estimate.
Securities law firm, Bleichmar Fonti & Auld LLP, announced it has launched an investigation to see if the company “violated the federal securities laws by making false and misleading statements to investors.”
