Radiant Logistics (RLGT) delivered a robust finish to its fiscal year, with fourth-quarter results that exceeded expectations and sparked a post-market rally in its shares. The freight forwarding company reported adjusted EBITDA of $10.4 million for the three months ended June 30, a 31.6% increase from $7.9 million in the same period last year. Revenue surged 18.5% to $261.4 million, reflecting accelerating freight volumes across its network.
The earnings release, filed with the SEC, revealed that net income climbed 53.1% to $7.5 million, outpacing the revenue growth. Gross profit rose 11.2% to $64.4 million, though gross margin contracted to 24.6% from 26.2% a year earlier, as purchased transportation costs grew faster than revenue. However, the company's adjusted EBITDA margin, calculated against adjusted gross profit, expanded by 240 basis points to 15.5%, indicating improved operational efficiency.
For asset-light freight forwarders, the distinction between revenue and gross profit is critical. Carrier charges often pass through revenue without a corresponding increase in profitability. Adjusted gross profit, which strips out these pass-through costs, rose 10.6% to $66.8 million, providing a clearer picture of underlying business expansion. This metric suggests the quarter's growth was driven by higher-margin services rather than just volume inflation.
Despite the strong quarterly performance, full-year results painted a more nuanced picture. Fiscal 2026 revenue increased 3.5% to $934.4 million, and net income improved to $18.8 million from $17.3 million. However, adjusted EBITDA declined to $36.7 million from $38.8 million, reflecting ongoing margin pressures. Excluding a $1.3 million adjustment related to the First Brands acquisition, adjusted EBITDA would have been $35.4 million, underscoring the challenges of integrating new businesses.
Chief Executive Bohn Crain attributed the fourth-quarter acceleration primarily to strength in U.S. forwarding, with contributions from both domestic and international services. International airfreight was a particular highlight, benefiting from robust demand. Crain also noted that one enterprise customer now manages over 1,400 vendors through Radiant's Navegate platform, a sign of deepening client relationships and technology adoption.
While the domestic freight market shows signs of recovery, Crain remained cautious. He pointed to capacity leaving North American truckload and intermodal markets as an early indicator, but emphasized that the rebound is still in its infancy. This cautious optimism aligns with broader industry commentary, as freight demand has been volatile amid macroeconomic uncertainty.
Radiant's balance sheet provides flexibility to capitalize on a potential recovery. As of June 30, the company held $25.6 million in cash against $25.0 million drawn on its revolving credit facility, leaving it nearly debt-free. An August amendment extended its $200 million secured revolving facility to 2031 and increased the acquisition accordion to $100 million, signaling appetite for strategic deals. Operating cash flow for fiscal 2026 improved to $17.5 million from $13.3 million, enhancing liquidity.
Investors will be watching whether the momentum can be sustained. The company's ability to convert revenue growth into adjusted gross profit and adjusted EBITDA will be key, as pass-through revenue alone adds little value. If the freight cycle continues to firm, Radiant is well-positioned to benefit, but a widening gap between revenue and gross profit would raise concerns about the quality of growth.