CVLG Filings — Covenant Logistics Group, Inc. - FilingSpy
CVLG
Covenant Logistics Group, Inc.
A trucking and logistics provider that handles team-driven expedited freight, dedicated contract capacity, freight brokerage, and warehousing across the U.S. David and Jacqueline Parker founded it in 1986 in Chattanooga, Tennessee, naming it Covenant for their Christian faith. Publicly traded, it was renamed Covenant Logistics Group in 2021 and grew through acquisitions including Landair, AAT, and Star.
Revenue rose 10% to $332.9M but operating income fell 24% as insurance and purchased transportation costs climbed.
grew, but costs grew faster. Total revenue rose 9.9% to $332.9 million, driven by a 28.4% increase in Managed Freight from the Star Acquisition, yet fell 23.5% to $8.8 million as insurance claims expense rose to 31.3 cents per mile and securing freight capacity outpaced contractual rate increases. The company is growing its top line through acquisitions but has not yet converted that growth into higher profit.
Key takeaways
fell 23.5% to $8.8 million from $11.6 million a year earlier, as higher purchased transportation, fuel, and insurance costs more than offset a $30.0 million increase in total .
Managed Freight rose 28.4% primarily from the Q4 2025 Star Acquisition, but fell to $1.7 million from $4.5 million because the cost of securing capacity outpaced contractual rate increases.
Insurance and claims expense rose to 31.3 cents per mile from 25.1 cents a year ago, and management warned of continued volatility from high retentions, nuclear verdicts, and a new Supreme Court ruling exposing freight brokers to state-law negligence claims.
Section summaries
Management's Discussion and Analysis
Q2 2026 revenue rose 9.9% to $332.9M on Managed Freight and Dedicated growth, but higher costs drove operating income down to $8.8M from $11.6M.
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Total increased 9.9% to $332.9 million, driven by a $22.0 million gain in Managed Freight and a $3.9 million gain in Dedicated, partially offset by a $9.5 million decline in Expedited.
Expedited declined 4.0% on a 17.0% drop in average tractors, while Dedicated revenue grew 9.9% on an 8.6% increase in average freight revenue per tractor per week.
were just $0.2 million in the first half of 2026 versus $52.8 million a year ago, as the company downsized its fleet and sold excess equipment, reducing by $6.6 million to $289.7 million.
What changed
The Q1 2026 watch item on Dedicated trajectory showed continued pressure: Dedicated grew 9.9% but the filing does not report a corresponding profit gain, indicating driver, maintenance, and costs persisted on the larger fleet.
The Q1 2026 watch item on Managed Freight after the July 2025 key-customer loss showed the Star Acquisition more than offset the loss, with Managed Freight revenue rising 28.4%, though still fell.
The Q1 2026 watch item on quarterly recovery toward 5% did not materialize: operating margin was 2.7%, up from 2.0% in Q1 2026 but still below the 3.8% of Q2 2025.
The Q1 2026 watch item on net indebtedness showed a $6.6 million reduction to $289.7 million, as the company sold 422 used tractors and limited new purchases, reversing the borrowing trend of 2025.
What to watch
Managed Freight in Q3 2026 as the absorbs the full run-rate of the Star Acquisition and the July 2025 key-customer loss anniversaries.
Insurance and claims expense per mile in Q3 2026 against the 31.3-cent Q2 level, as management warned of continued volatility from nuclear verdicts and the new Supreme Court ruling on broker liability.
Expedited tractor count and trajectory after the 17.0% drop in average tractors, and whether the fleet downsizing stabilizes or continues.
against the $289.7 million Q2 level as the company deploys the remaining 2026 net budget after spending only $0.2 million in the first half.
fell to $8.8 million from $11.6 million as higher purchased transportation, fuel, and insurance costs more than offset growth.
Expedited declined 4.0% on a 17.0% drop in average tractors, while Dedicated revenue grew 9.9% on an 8.6% increase in average per tractor per week.
Managed surged 28.4% primarily due to the Q4 2025 Star Acquisition, but fell to $1.7 million from $4.5 million as securing capacity costs outpaced contractual rate increases.
Insurance and claims expense rose to 31.3 cents per mile from 25.1 cents, and the company warns of continued volatility from high retentions, nuclear verdicts, and a recent Supreme Court decision affecting freight broker liability.
Net were just $0.2 million in H1 2026 versus $52.8 million a year ago, as the company downsized its fleet and sold excess equipment, reducing total indebtedness net of cash by $6.6 million to $289.7 million.
Quantitative and Qualitative Disclosures About Market Risk
Our market risks have not changed materially from the market risks reported in our Form 10-K for the year ended December 31, 2025. Page 36 Table of Contents
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Our market risks have not changed materially from the market risks reported in our Form 10-K for the year ended December 31, 2025.
Page 36
Table of Contents
Information about our legal proceedings is included in Note 9, "Commitments and Contingencies" of the accompanying condensed consolidated financial statements and is incorporated by reference herein. Page 38 Table of Contents
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Information about our legal proceedings is included in Note 9, "Commitments and Contingencies" of the accompanying condensed consolidated financial statements and is incorporated by reference herein.
Page 38
Table of Contents
Litigation risk is restated in full, highlighting wage-and-hour class actions, accident liability, and a new Supreme Court ruling exposing freight brokers to state-law negligence claims.
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The company faces ongoing wage-and-hour class actions over meal breaks, rest periods, and overtime, with peers paying substantial settlements.
Hauling arms, ammunition, and explosives heightens exposure if an accident occurs with that freight.
A May 2026 Supreme Court decision (Montgomery v. Caribe Transport II, LLC) removes federal preemption, allowing state-law negligence claims against freight-broker subsidiaries for motor-carrier selection.
Uninsured claims, coverage-limit exhaustion, or rising premiums from adverse claims experience could materially increase insurance costs and earnings volatility.
Trucking-accident litigation severity may be worsened by distracted driving, leading to large settlements and higher insurance costs.