Executive Summary / Key Takeaways

• Strategic Growth Amidst Volatility: Radiant Logistics ($RLGT) is executing a dual strategy of organic growth and disciplined acquisitions, including converting strategic operating partners, to expand its North American footprint and service offerings, even as it anticipates near-term market volatility from trade and tariff disputes.
• Robust Financial Health and M&A Capacity: The company maintains a strong balance sheet with significant cash and a largely untapped \$200 million credit facility, providing ample financial flexibility to pursue its acquisition strategy and re-lever towards a normalized target of approximately 2.5x EBITDA.
• Technology as a Differentiator: RLGT's proprietary Global Trade Management (GTM) platform, acquired through Navegate, offers advanced SKU-level visibility and collaboration tools, positioning it as a key competitive advantage and catalyst for cross-selling and customer retention.
• Resilience in a Challenging Market: Despite a "soft" freight market and "muted peak" season expectations, RLGT's diverse service portfolio and ability to secure project-based work, such as humanitarian relief charters, have fortified recent results and demonstrate operational resilience.
• Long-Term Bullish Outlook: Management expresses long-term optimism, anticipating a "bullwhip effect" and surge in global trade once current tariff uncertainties resolve, coupled with ongoing shifts in supply chain diversification benefiting regions like Mexico, where RLGT has recently expanded.

A Non-Asset-Based Powerhouse in a Fragmented Landscape

Radiant Logistics, Inc. operates as a leading third-party logistics (3PL) company, providing technology-enabled global transportation and value-added logistics services primarily across the United States and Canada. The company distinguishes itself with a non-asset-based business model, which minimizes fixed operating costs and allows for greater flexibility and competitive pricing compared to asset-based competitors focused on maximizing their own fleet utilization. This model underpins a multi-brand network comprising over 100 operating locations, including approximately 30 Company-owned sites and a significant number of independent agents, referred to as strategic operating partners, who operate exclusively on Radiant's behalf.

Radiant's core offerings span domestic and international freight forwarding and freight brokerage, covering air, ocean, truckload, less-than-truckload (LTL), and intermodal services. These services primarily involve arranging shipments of materials, products, equipment, and other goods typically larger than small parcels handled by integrated carriers like FedEx (FDX) or UPS (UPS). Complementing these transportation services are value-added logistics solutions, including materials management and distribution (MMD), customs house brokerage (CHB), and global trade management (GTM). The market for third-party logistics services in the United States and Canada is substantial, estimated at approximately \$336.30 billion annually, reflecting a growing trend of businesses outsourcing logistics to enhance efficiency and manage complex supply chains.

Technological Edge: The Navegate Platform and Digital Transformation

A cornerstone of Radiant Logistics' strategy and a significant competitive differentiator is its commitment to advanced information technology. The company continuously develops and enhances its technology platform to provide accurate, real-time information to management, strategic operating partners, and customers. This includes customer delivery tools that enable connectivity with customer and trading partner systems, and a centralized transportation management system for rating, routing, tender, and financial settlement processes, driving significant efficiency across its network.

A pivotal technological advantage stems from the acquisition of Navegate, Inc. in 2021, which brought a proprietary global trade management platform. This platform offers purchase order and vendor management tools that unlock SKU-level visibility from the manufacturing floor in Asia through final delivery in the U.S. This capability is described by management as a "state-of-the-art market differentiating, what I'll call, collaboration platform" that is unique in the marketplace. For investors, this technological moat translates into enhanced customer stickiness, improved operational efficiency, and the potential for higher margins by offering a bundled solution that competitors may struggle to replicate. The company plans to increase spending in fiscal year 2026 to further enhance this platform, focusing on customer-facing, vendor-facing, and user-facing tools to support continued growth.

Strategic Expansion and Competitive Dynamics

Radiant Logistics has a long history of growth through strategic acquisitions, completing 33 since 2006. This includes both greenfield acquisitions and the conversion of strategic operating partners into Company-owned locations. Recent acquisitions in fiscal year 2025 further illustrate this strategy: Foundation Logistics Services, LLC (specialized oil and gas logistics), Focus Logistics, Inc. (operating partner conversion in Michigan), TCB Transportation Associates, LLC (intermodal marketing company), Transcon Shipping Co., Inc. (ocean freight forwarding), USA Logistics Services, Inc. and USA Carrier Services, LLC (operating partner conversion in Philadelphia), and Universal Logistics, Inc. (operating partner conversion in Houston). Subsequent to the fiscal year end, on September 1, 2025, Radiant acquired an 80% interest in Weport, S.A. de C.V., a Mexico City-based global transportation and logistics solutions company. This acquisition is a "significant milestone," completing Radiant's "North American puzzle" and providing strong international air and ocean capabilities in the Mexican market.

The logistics industry is intensely competitive and highly fragmented. Radiant competes against both asset-based and other non-asset-based 3PL companies, including larger players with substantially greater financial resources. Key competitors include C.H. Robinson Worldwide, Inc. (CHRW), Expeditors International of Washington, Inc. (EXPD), XPO, Inc. (XPO), and J.B. Hunt Transport Services, Inc. (JBHT).

Radiant's non-asset-based model and extensive partner network provide flexibility and customer-focused services, allowing it to compete effectively in niche segments. For example, its recent acquisition of TCB Transportation adds incremental competency in 40-foot intermodal containers, complementing its existing 53-foot intermodal business and creating potential revenue synergies. This contrasts with asset-heavy competitors like J.B. Hunt, which, while offering cost-effective ground transport, may lack Radiant's multi-modal integration flexibility. Compared to large-scale 3PLs like C.H. Robinson, Radiant's partner-based network can foster stronger customer loyalty in regional markets, potentially enhancing its pricing power. However, larger rivals often benefit from economies of scale, which can lead to materially lower operating costs and more robust cash flow.

In the international freight forwarding space, Expeditors International of Washington is a formidable competitor with strong global trade facilitation expertise. While Expeditors may lead in international scale and innovation speed, Radiant's integrated domestic-international approach, particularly with its expanded Mexican presence, aims to offer greater coordination for cross-border shipments. XPO, with its focus on transportation optimization and technology, presents a challenge in efficiency and market share capture. Radiant's technological platform, particularly its GTM capabilities, helps it differentiate by offering a holistic solution for complex supply chain needs, a critical advantage against rivals.

The current environment, marked by market softness and trade policy uncertainty, has created opportunities for Radiant. Many competitors, having levered up at peak earnings, now face balance sheet challenges, allowing Radiant, with its low leverage, to pursue acquisitions more aggressively. This strategic positioning enables Radiant to "effectively double our EBITDA within our existing capital structure," a significant advantage in a consolidating industry.

Financial Performance and Outlook

Radiant Logistics has demonstrated solid financial performance, particularly in fiscal year 2025, despite persistent market headwinds. For the fiscal year ended June 30, 2025, the company reported total revenues of \$902.70 million, an increase from \$802.47 million in the prior year. Net income attributable to Radiant Logistics for the year surged by approximately \$9.606 million, or 125%, to \$17.291 million. Adjusted EBITDA for the full fiscal year increased by \$7.596 million, or 24.4%, reaching \$38.756 million, with acquisitions contributing \$6 million to this growth.

Transportation revenue for FY2025 grew by \$101.20 million, or 13.40%, primarily driven by \$58.50 million in project charter revenues and \$57.70 million from acquisitions. However, net transportation margins decreased from 27.70% to 24.70%, mainly due to the lower gross profit margin characteristics of project charter revenues and increased ocean revenues. Operating partner commissions decreased by \$14.20 million, or 15.30%, largely due to the conversion of strategic operating partners to Company-owned locations, which also led to a 640 basis point decrease in commissions as a percentage of adjusted gross profit. Personnel costs increased by 4.20% due to headcount growth from acquisitions, while selling, general and administrative (SGA) expenses rose by 9.70%, influenced by higher technology spending and facilities costs.

The company maintains a strong liquidity position, with \$22.90 million in unrestricted cash and cash equivalents as of June 30, 2025. Its \$200 million Revolving Credit Facility had only \$20 million outstanding, providing substantial borrowing capacity for future growth initiatives. Management targets a normalized leverage ratio of "plus or minus 2.5x," indicating a disciplined approach to capital allocation.

Looking ahead, Radiant Logistics anticipates near-term volatility, particularly in the March quarter (fiscal Q3), which is seasonally slower and faces potential impacts from recently introduced tariffs with China, Mexico, and Canada. Management expects a "muted peak" season and softer results in the June quarter (fiscal Q4) due to trade tensions. However, a long-term bullish outlook prevails, with expectations of an eventual "surge in global trade" as tariff disputes are resolved, creating a "bullwhip effect." The company also foresees continued diversification of sourcing away from China to Southeast Asia and Mexico, benefiting its North American operations.

Risks and Challenges

Despite its strengths, Radiant Logistics faces several risks. The ongoing U.S. negotiations around trade and tariffs introduce significant uncertainty, making supply chain management difficult for customers and potentially impacting international trade volumes. The company's reliance on its strategic operating partner network carries risks of terminations or non-renewals, which could affect revenue. Cybersecurity threats, as evidenced by past ransomware incidents, pose a continuous risk to operations and data integrity. Furthermore, dependence on third-party carriers exposes Radiant to risks such as capacity shortages, fluctuating fuel and labor costs, and carrier instability. The cyclical nature of the transportation industry means economic recessions, inflation, and interest rate fluctuations can materially impact operating results. Finally, the highly competitive landscape, with larger players possessing greater financial resources, could lead to pricing pressures and market share erosion.

Conclusion

Radiant Logistics stands as a resilient and strategically expanding player in the global 3PL market. Its non-asset-based model, diverse service offerings, and robust technology platform, particularly the Navegate GTM system, provide a strong foundation for long-term growth and competitive differentiation. Despite near-term headwinds from trade volatility and a generally soft freight market, the company's disciplined acquisition strategy, low leverage, and focus on converting strategic operating partners position it to capitalize on market consolidation and an anticipated eventual rebound in global trade. Investors should recognize Radiant's ability to generate value through operational efficiency and strategic expansion, underpinned by its technological leadership and financial flexibility, as it continues to build a comprehensive North American and international logistics solution.