EX-99.1 2 d29338dex991.htm EX-99.1

Exhibit 99.1

For Immediate Release |  | October 28, 2025

LANDSTAR SYSTEM REPORTS THIRD QUARTER RESULTS

Jacksonville, FL - Landstar System, Inc. (NASDAQ: LSTR) (“Landstar” or the “Company”) today reported its financial results for the 2025 third quarter. The Company reported total revenue of $1,205 million in the 2025 third quarter, compared to $1,214 million in the 2024 third quarter. Gross profit and variable contribution each also decreased approximately 1% in the 2025 third quarter compared to the 2024 third quarter. Landstar reported basic and diluted earnings per share (“EPS”) of $0.56 for the 2025 third quarter, compared to $1.41 in the 2024 third quarter. As further described below, and as previously disclosed in a Current Report on Form 8-K filed with the U.S. Securities and Exchange Commission on August 13, 2025, the 2025 third quarter included three non-cash, non-recurring items (the “Non-Cash Impairment Charges”) that adversely impacted financial results for the quarter. Excluding the impact of the Non-Cash Impairment Charges, Landstar would have reported 2025 third quarter EPS of $1.22 (“Adjusted EPS”). Reconciliations of EPS and Adjusted EPS for the 2025 and 2024 third quarters and year-to-date periods are provided in the Company’s accompanying financial disclosures.

“The Landstar team of independent business owners and employees executed admirably during the 2025 third quarter despite continued challenges in the overall economic environment for truck transportation services,” said Landstar President and Chief Executive Officer Frank Lonegro. “There were two notable highlights in the quarter. First, Landstar continued to experience strong performance in our services hauled by unsided/platform equipment. Second, for the first time since the first quarter of 2022, the Company achieved sequential quarter-over-quarter growth in BCO truck count. Sustained strength over multiple quarters in our unsided/platform business, turning the corner on net BCO truck count and our laser focus on safety, security and delivering great service to our customers will be key elements we will leverage during the next upcycle.”

LANDSTAR SYSTEM/2

With respect to Landstar’s EPS performance in the 2025 third quarter, the Company conducted a strategic review of our operations during the 2025 third quarter focused on efforts to streamline our core operations and position the Company for future growth. Following this strategic review, Landstar made several important decisions that resulted in the Non-Cash Impairment Charges. In the aggregate, the Non-Cash Impairment Charges adversely impacted 2025 third quarter EPS by $0.66, consisting of:

| • |  | $16.1 million, or $0.35 per basic and diluted share, charged to goodwill and certain other assets in connection with the decision to actively market for sale Landstar Metro, S.A.P.I. de C.V., the Company’s wholly-owned Mexican operating subsidiary, principally engaged in intra-Mexico truck transportation services;

| • |  | $9.0 million, or $0.20 per basic and diluted share, related to the decision to select one of the Company’s transportation management systems as its primary such system for truckload brokerage services and, in connection with that decision, wind-down an alternative transportation management system currently in use by one of the Company’s operating subsidiaries; and

| • |  | $5.0 million, or $0.11 per basic and diluted share, relating to a non-controlling equity investment made by the Company in 2022 in a privately held technology start-up company.

Additional disclosure with respect to each of the Non-Cash Impairment Charges will be included in the Company’s Quarterly Report on Form 10-Q for the 2025 third quarter.

|  | 3Q 2025 |  |  | 3Q 2024 |
Revenue |  | $ | 1,205,406 |  |  | $ | 1,213,867 |
Gross profit |  | $ | 111,060 |  |  | $ | 112,693 |
Variable contribution |  | $ | 170,241 |  |  | $ | 171,359 |
Operating income |  | $ | 26,326 |  |  | $ | 63,116 |
Adjusted operating income |  | $ | 56,430 |  |  | $ | 63,116 |
Basic and diluted earnings per share (“EPS”) |  | $ | 0.56 |  |  | $ | 1.41 |
Adjusted basic and diluted earnings per share (Adjusted EPS”) |  | $ | 1.22 |  |  | $ | 1.41 |

(1) | Dollars above in thousands, except per share amounts.

(2) | Please refer to the Consolidated Statements of Income, the Reconciliation of Gross Profit to Variable Contribution, the Reconciliation of GAAP Operating Income to Adjusted Operating Income and the Reconciliation of GAAP EPS to Adjusted EPS included below.

LANDSTAR SYSTEM/3

Landstar continues to return capital to stockholders through the Company’s stock purchase program and dividends. During the 2025 third quarter, Landstar purchased 308,709 shares of its common stock at an aggregate cost of $40.6 million, bringing the total number of common shares purchased during the thirty-nine week period ended September 27, 2025, to 995,168 shares at an aggregate cost of approximately $143.9 million. The Company is currently authorized to purchase up to an additional 1,552,813 shares of the Company’s common stock under its longstanding share purchase program. Landstar also announced today that its Board of Directors declared a quarterly dividend of $0.40 per share payable on December 9, 2025, to stockholders of record as of the close of business on November 18, 2025.

Truck transportation revenue hauled by independent business capacity owners (“BCOs”) and truck brokerage carriers in the 2025 third quarter was $1,090 million, or 90% of revenue, compared to $1,091 million, or 90% of revenue, in the 2024 third quarter. Truckload transportation revenue hauled via van equipment in the 2025 third quarter was $583 million, compared to $604 million in the 2024 third quarter. Truckload transportation revenue hauled via unsided/platform equipment in the 2025 third quarter was $386 million, compared to $370 million in the 2024 third quarter. Revenue from other truck transportation, which is largely related to power-only services, in the 2025 third quarter was $96 million, compared to $93 million in the 2024 third quarter. Revenue hauled by rail, air and ocean cargo carriers was $96 million, or 8% of revenue, in the 2025 third quarter, compared to $97 million, or 8% of revenue, in the 2024 third quarter.

Both truck revenue per load and the number of loads hauled via truck in the 2025 third quarter were approximately equal as compared to the 2024 third quarter.

Gross profit in the 2025 third quarter was $111 million, and variable contribution (defined as revenue less the cost of purchased transportation and commissions to agents) in the 2025 third quarter was $170 million. Gross profit in the 2024 third quarter was $113 million, and variable contribution in the 2024 third quarter was $171 million. Reconciliations of gross profit to variable contribution and gross profit margin to variable contribution margin for the 2025 and 2024 third quarters and year-to-date periods are provided in the Company’s accompanying financial disclosures.

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The Company’s balance sheet continues to be very strong, with cash and short-term investments of approximately $434 million as of September 27, 2025. Trailing twelve-month return on average shareholders’ equity was 15%. Return on invested capital, representing net income divided by the sum of average equity plus average debt, was 13%.

Landstar will provide a live webcast of its quarterly earnings conference call this afternoon at 4:30 p.m. ET. To access the webcast, visit www.investor.landstar.com; click on “Webcasts,” then click on “Landstar’s Third Quarter 2025 Earnings Release Conference Call.” A slide presentation to accompany the webcast presentation is also available on Landstar’s investor relations website at https://investor.landstar.com/.

Contact:

Jim Todd

Chief Financial Officer

904-398-9400

About Landstar:

Landstar System, Inc., is a technology-enabled, asset-light provider of integrated transportation management solutions delivering safe, specialized transportation services to a broad range of customers utilizing a network of agents, third-party capacity providers and employees. Landstar transportation services companies are certified to ISO 9001:2015 quality management system standards and RC14001:2015 environmental, health, safety and security management system standards. Landstar System, Inc. is headquartered in Jacksonville, Florida. Its common stock trades on The NASDAQ Stock Market® under the symbol LSTR.

LANDSTAR SYSTEM/5

Non-GAAP Financial Measures:

In this earnings release and accompanying financial disclosures, the Company provides the following information that may be deemed non-GAAP financial measures: variable contribution and variable contribution margin; adjusted operating income; and Adjusted EPS. The Company believes variable contribution and variable contribution margin are useful measures of the variable costs that we incur at a shipment-by-shipment level attributable to our transportation network of third-party capacity providers and independent agents in order to provide services to our customers. The Company believes adjusted operating income and Adjusted EPS are useful measures given the non-cash, non-recurring nature of the Non-Cash Impairment Charges included in the Company’s 2025 third quarter results. The Company also believes that it is appropriate to present each of the financial measures that may be deemed a non-GAAP financial measure, as referred to above, for the following reasons: (1) disclosure of these matters will allow investors to better understand the underlying trends in the Company’s financial condition and results of operations; (2) this information will facilitate comparisons by investors of the Company’s results as compared to the results of peer companies; and (3) management considers this financial information in its decision making.

Forward Looking Statements Disclaimer:

The following is a “safe harbor” statement under the Private Securities Litigation Reform Act of 1995. Statements contained in this press release that are not based on historical facts are “forward-looking statements.” This press release contains forward-looking statements, such as statements which relate to Landstar’s business objectives, plans, strategies and expectations. Terms such as “anticipates,” “believes,” “estimates,” “intention,” “expects,” “plans,” “predicts,” “may,” “should,” “could,” “will,” the negative thereof and similar expressions are intended to identify forward-looking statements. Such statements are by nature subject to uncertainties and risks, including but not limited to: decreased demand for transportation services; U.S. trade relationships and potential or imposed tariffs; an increase in the frequency or severity of accidents or other claims; unfavorable development of existing accident claims; dependence on third party insurance companies; dependence on independent commission sales agents; dependence on third party capacity providers; the impact of the Russian conflict with Ukraine on the operations of certain independent commission sales agents, including the Company’s largest such agent by revenue in the 2024 fiscal year; substantial industry competition; disruptions or failures in the Company’s computer systems; cyber and other information security incidents; dependence on key vendors; potential changes in taxes; status of independent contractors; regulatory and legislative changes; regulations focused on diesel emissions and other air quality matters; regulations requiring the

LANDSTAR SYSTEM/6

purchase and use of zero-emission vehicles; intellectual property; acquisitions and investments; and other operational, financial or legal risks or uncertainties detailed in Landstar’s Form 10-K for the 2024 fiscal year, described in Part I, Item 1A Risk Factors, Landstar’s Form 10-Q for the 2025 first quarter, described in Part II, Item 1A Risk Factors, and in other SEC filings from time to time. These risks and uncertainties could cause actual results or events to differ materially from historical results or those anticipated. Investors should not place undue reliance on such forward-looking statements, and the Company undertakes no obligation to publicly update or revise any forward-looking statements.

Landstar System, Inc. and Subsidiary

Consolidated Statements of Income

(Dollars in thousands, except per share amounts)

(Unaudited)

|  | Thirty-Nine Weeks Ended |  |  | Thirteen Weeks Ended |
|  | September 27, 2025 |  |  | September 28, 2024 |  |  | September 27, 2025 |  |  | September 28, 2024 |
Revenue |  | $ | 3,569,291 |  |  | $ | 3,609,915 |  |  | $ | 1,205,406 |  |  | $ | 1,213,867 |
Investment income |  |  | 10,620 |  |  |  | 10,988 |  |  |  | 3,293 |  |  |  | 3,922 |
Costs and expenses: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Purchased transportation |  |  | 2,775,761 |  |  |  | 2,799,384 |  |  |  | 936,472 |  |  |  | 943,805 |
Commissions to agents |  |  | 291,529 |  |  |  | 295,801 |  |  |  | 98,693 |  |  |  | 98,703 |
Other operating costs, net of gains on asset sales/dispositions |  |  | 46,996 |  |  |  | 44,138 |  |  |  | 15,572 |  |  |  | 15,144 |
Insurance and claims |  |  | 103,309 |  |  |  | 83,830 |  |  |  | 33,008 |  |  |  | 30,398 |
Selling, general and administrative |  |  | 174,303 |  |  |  | 162,613 |  |  |  | 57,015 |  |  |  | 51,252 |
Depreciation and amortization |  |  | 35,884 |  |  |  | 44,001 |  |  |  | 11,509 |  |  |  | 15,371 |
Impairment of intangible and other assets |  |  | 30,104 |  |  |  | — |  |  |  | 30,104 |  |  |  | — |
Total costs and expenses |  |  | 3,457,886 |  |  |  | 3,429,767 |  |  |  | 1,182,373 |  |  |  | 1,154,673 |
Operating income |  |  | 122,025 |  |  |  | 191,136 |  |  |  | 26,326 |  |  |  | 63,116 |
Interest and debt expense (income) |  |  | 756 |  |  |  | (4,455 | ) |  |  | 217 |  |  |  | (1,169 | )
Income before income taxes |  |  | 121,269 |  |  |  | 195,591 |  |  |  | 26,109 |  |  |  | 64,285 |
Income taxes |  |  | 30,206 |  |  |  | 45,838 |  |  |  | 6,745 |  |  |  | 14,252 |
Net income |  | $ | 91,063 |  |  | $ | 149,753 |  |  | $ | 19,364 |  |  | $ | 50,033 |
Basic and diluted earnings per share |  | $ | 2.61 |  |  | $ | 4.21 |  |  | $ | 0.56 |  |  | $ | 1.41 |
Average basic and diluted shares outstanding |  |  | 34,885,000 |  |  |  | 35,608,000 |  |  |  | 34,581,000 |  |  |  | 35,420,000 |
Dividends per common share |  | $ | 1.16 |  |  | $ | 1.02 |  |  | $ | 0.40 |  |  | $ | 0.36 |

Landstar System, Inc. and Subsidiary

Consolidated Balance Sheets

(Dollars in thousands, except per share amounts)

(Unaudited)

|  | September 27, 2025 |  |  | December 28, 2024 |
ASSETS |  |  |  |  |  |  |  |
Current assets: |  |  |  |  |  |  |  |
Cash and cash equivalents |  | $ | 375,191 |  |  | $ | 515,018 |
Short-term investments |  |  | 59,227 |  |  |  | 51,619 |
Trade accounts receivable, less allowance of $12,471 and $12,904 |  |  | 695,983 |  |  |  | 683,841 |
Other receivables, including advances to independent contractors, less allowance of $18,665 and $17,812 |  |  | 56,437 |  |  |  | 47,160 |
Assets held for sale |  |  | 13,856 |  |  |  | — |
Other current assets |  |  | 44,414 |  |  |  | 22,229 |
Total current assets |  |  | 1,245,108 |  |  |  | 1,319,867 |
Operating property, less accumulated depreciation and amortization of $468,683 and $456,547 |  |  | 262,466 |  |  |  | 311,345 |
Goodwill |  |  | 34,005 |  |  |  | 40,933 |
Other assets |  |  | 120,617 |  |  |  | 141,166 |
Total assets |  | $ | 1,662,196 |  |  | $ | 1,813,311 |
LIABILITIES AND SHAREHOLDERS’ EQUITY |  |  |  |  |  |  |  |
Current liabilities: |  |  |  |  |  |  |  |
Cash overdraft |  | $ | 47,992 |  |  | $ | 61,033 |
Accounts payable |  |  | 402,753 |  |  |  | 383,625 |
Current maturities of long-term debt |  |  | 29,428 |  |  |  | 33,116 |
Insurance claims |  |  | 43,889 |  |  |  | 40,511 |
Dividends payable |  |  | — |  |  |  | 70,632 |
Contractor escrow |  |  | 31,011 |  |  |  | 30,205 |
Liabilities held for sale |  |  | 4,247 |  |  |  | — |
Other current liabilities |  |  | 59,758 |  |  |  | 54,032 |
Total current liabilities |  |  | 619,078 |  |  |  | 673,154 |
Long-term debt, excluding current maturities |  |  | 47,703 |  |  |  | 69,191 |
Insurance claims |  |  | 67,567 |  |  |  | 62,842 |
Deferred income taxes and other non-current liabilities |  |  | 39,144 |  |  |  | 35,685 |
Shareholders’ equity: |  |  |  |  |  |  |  |
Common stock, $0.01 par value, authorized 160,000,000 shares, issued 68,589,418 and 68,559,269 |  |  | 686 |  |  |  | 686 |
Additional paid-in capital |  |  | 260,501 |  |  |  | 255,260 |
Retained earnings |  |  | 2,910,514 |  |  |  | 2,859,916 |
Cost of 34,244,716 and 33,243,196 shares of common stock in treasury |  |  | (2,276,252 | ) |  |  | (2,131,413 | )
Accumulated other comprehensive loss |  |  | (6,745 | ) |  |  | (12,010 | )
Total shareholders’ equity |  |  | 888,704 |  |  |  | 972,439 |
Total liabilities and shareholders’ equity |  | $ | 1,662,196 |  |  | $ | 1,813,311 |

Landstar System, Inc. and Subsidiary

Supplemental Information

(Unaudited)

|  | Thirty-Nine Weeks Ended |  |  | Thirteen Weeks Ended |
|  | September 27, 2025 |  |  | September 28, 2024 |  |  | September 27, 2025 |  |  | September 28, 2024 |
Revenue generated through (in thousands): |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Truck transportation |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Truckload: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Van equipment |  | $ | 1,769,440 |  |  | $ | 1,851,237 |  |  | $ | 583,369 |  |  | $ | 603,993 |
Unsided/platform equipment |  |  | 1,127,276 |  |  |  | 1,093,753 |  |  |  | 386,006 |  |  |  | 369,758 |
Less-than-truckload |  |  | 72,229 |  |  |  | 77,902 |  |  |  | 24,480 |  |  |  | 24,195 |
Other truck transportation (1) |  |  | 288,807 |  |  |  | 242,853 |  |  |  | 96,041 |  |  |  | 93,178 |
Total truck transportation |  |  | 3,257,752 |  |  |  | 3,265,745 |  |  |  | 1,089,896 |  |  |  | 1,091,124 |
Rail intermodal |  |  | 63,183 |  |  |  | 65,981 |  |  |  | 23,668 |  |  |  | 20,979 |
Ocean and air cargo carriers |  |  | 188,696 |  |  |  | 201,729 |  |  |  | 72,270 |  |  |  | 76,349 |
Other (2) |  |  | 59,660 |  |  |  | 76,460 |  |  |  | 19,572 |  |  |  | 25,415 |
|  | $ | 3,569,291 |  |  | $ | 3,609,915 |  |  | $ | 1,205,406 |  |  | $ | 1,213,867 |
Revenue on loads hauled via BCO Independent Contractors (3) included in total truck transportation |  | $ | 1,345,852 |  |  | $ | 1,374,915 |  |  | $ | 457,363 |  |  | $ | 456,844 |
Number of loads: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Truck transportation |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Truckload: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Van equipment |  |  | 850,047 |  |  |  | 887,895 |  |  |  | 277,893 |  |  |  | 287,922 |
Unsided/platform equipment |  |  | 369,495 |  |  |  | 362,627 |  |  |  | 123,254 |  |  |  | 118,220 |
Less-than-truckload |  |  | 115,692 |  |  |  | 119,346 |  |  |  | 38,862 |  |  |  | 36,496 |
Other truck transportation (1) |  |  | 135,606 |  |  |  | 114,552 |  |  |  | 45,421 |  |  |  | 43,112 |
Total truck transportation |  |  | 1,470,840 |  |  |  | 1,484,420 |  |  |  | 485,430 |  |  |  | 485,750 |
Rail intermodal |  |  | 21,960 |  |  |  | 21,420 |  |  |  | 7,990 |  |  |  | 7,040 |
Ocean and air cargo carriers |  |  | 24,370 |  |  |  | 26,120 |  |  |  | 7,810 |  |  |  | 8,880 |
|  |  | 1,517,170 |  |  |  | 1,531,960 |  |  |  | 501,230 |  |  |  | 501,670 |
Loads hauled via BCO Independent Contractors (3) included in total truck transportation |  |  | 597,010 |  |  |  | 620,640 |  |  |  | 199,010 |  |  |  | 198,340 |
Revenue per load: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Truck transportation |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Truckload: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Van equipment |  | $ | 2,082 |  |  | $ | 2,085 |  |  | $ | 2,099 |  |  | $ | 2,098 |
Unsided/platform equipment |  |  | 3,051 |  |  |  | 3,016 |  |  |  | 3,132 |  |  |  | 3,128 |
Less-than-truckload |  |  | 624 |  |  |  | 653 |  |  |  | 630 |  |  |  | 663 |
Other truck transportation (1) |  |  | 2,130 |  |  |  | 2,120 |  |  |  | 2,114 |  |  |  | 2,161 |
Total truck transportation |  |  | 2,215 |  |  |  | 2,200 |  |  |  | 2,245 |  |  |  | 2,246 |
Rail intermodal |  |  | 2,877 |  |  |  | 3,080 |  |  |  | 2,962 |  |  |  | 2,980 |
Ocean and air cargo carriers |  |  | 7,743 |  |  |  | 7,723 |  |  |  | 9,254 |  |  |  | 8,598 |
Revenue per load on loads hauled via BCO Independent Contractors (3) |  | $ | 2,254 |  |  | $ | 2,215 |  |  | $ | 2,298 |  |  | $ | 2,303 |
Revenue by capacity type (as a % of total revenue): |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Truck capacity providers: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
BCO Independent Contractors (3) |  |  | 38 | % |  |  | 38 | % |  |  | 38 | % |  |  | 38 | %
Truck Brokerage Carriers |  |  | 54 | % |  |  | 52 | % |  |  | 52 | % |  |  | 52 | %
Rail intermodal |  |  | 2 | % |  |  | 2 | % |  |  | 2 | % |  |  | 2 | %
Ocean and air cargo carriers |  |  | 5 | % |  |  | 6 | % |  |  | 6 | % |  |  | 6 | %
Other |  |  | 2 | % |  |  | 2 | % |  |  | 2 | % |  |  | 2 | %
|  |  |  |  |  |  |  | September 27, 2025 |  |  | September 28, 2024 |
Truck Capacity Providers: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
BCO Independent Contractors (3) |  |  |  |  |  |  |  |  |  |  | 7,827 |  |  |  | 8,266 |
Truck Brokerage Carriers: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Approved and active (4) |  |  |  |  |  |  |  |  |  |  | 40,004 |  |  |  | 44,828 |
Other approved |  |  |  |  |  |  |  |  |  |  | 27,461 |  |  |  | 25,714 |
|  |  |  |  |  |  |  |  |  |  | 67,465 |  |  |  | 70,542 |
Total available truck capacity providers |  |  |  |  |  |  |  |  |  |  | 75,292 |  |  |  | 78,808 |
Trucks provided by BCO Independent Contractors (3) |  |  |  |  |  |  |  |  |  |  | 8,618 |  |  |  | 9,027 |

(1)   Includes power-only, expedited, straight truck, cargo van, and miscellaneous other truck transportation revenue generated by the transportation logistics segment. Power-only refers to shipments where the Company furnishes a power unit and an operator but not trailing equipment, which is typically provided by the shipper or consignee. (2)   Includes primarily reinsurance premium revenue generated by the insurance segment and intra-Mexico transportation services revenue generated by Landstar Metro. (3)   BCO Independent Contractors are independent contractors who provide truck capacity to the Company under exclusive lease arrangements. (4)   Active refers to Truck Brokerage Carriers who moved at least one load in the 180 days immediately preceding the fiscal quarter end.

Landstar System, Inc. and Subsidiary

Reconciliation of Gross Profit to Variable Contribution

(Dollars in thousands)

(Unaudited)

|  | Thirty-Nine Weeks Ended |  |  | Thirteen Weeks Ended |
|  | September 27, |  |  | September 28, |  |  | September 27, |  |  | September 28, |
|  | 2025 |  |  | 2024 |  |  | 2025 |  |  | 2024 |
Revenue |  | $ | 3,569,291 |  |  | $ | 3,609,915 |  |  | $ | 1,205,406 |  |  | $ | 1,213,867 |
Costs of revenue: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Purchased transportation |  |  | 2,775,761 |  |  |  | 2,799,384 |  |  |  | 936,472 |  |  |  | 943,805 |
Commissions to agents |  |  | 291,529 |  |  |  | 295,801 |  |  |  | 98,693 |  |  |  | 98,703 |
Variable costs of revenue |  |  | 3,067,290 |  |  |  | 3,095,185 |  |  |  | 1,035,165 |  |  |  | 1,042,508 |
Trailing equipment depreciation |  |  | 20,829 |  |  |  | 20,764 |  |  |  | 6,985 |  |  |  | 6,930 |
Information technology costs (1) |  |  | 10,928 |  |  |  | 18,115 |  |  |  | 3,319 |  |  |  | 6,129 |
Insurance-related costs (2) |  |  | 104,622 |  |  |  | 85,122 |  |  |  | 33,305 |  |  |  | 30,463 |
Other operating costs |  |  | 46,996 |  |  |  | 44,138 |  |  |  | 15,572 |  |  |  | 15,144 |
Other costs of revenue |  |  | 183,375 |  |  |  | 168,139 |  |  |  | 59,181 |  |  |  | 58,666 |
Total costs of revenue |  |  | 3,250,665 |  |  |  | 3,263,324 |  |  |  | 1,094,346 |  |  |  | 1,101,174 |
Gross profit |  | $ | 318,626 |  |  | $ | 346,591 |  |  | $ | 111,060 |  |  | $ | 112,693 |
Gross profit margin |  |  | 8.9 | % |  |  | 9.6 | % |  |  | 9.2 | % |  |  | 9.3 | %
Plus: other costs of revenue |  |  | 183,375 |  |  |  | 168,139 |  |  |  | 59,181 |  |  |  | 58,666 |
Variable contribution |  | $ | 502,001 |  |  | $ | 514,730 |  |  | $ | 170,241 |  |  | $ | 171,359 |
Variable contribution margin |  |  | 14.1 | % |  |  | 14.3 | % |  |  | 14.1 | % |  |  | 14.1 | %

(1) | Includes costs of revenue incurred related to internally developed software including ASC 350-40 amortization, implementation costs, hosting costs and other support costs utilized to support the Company’s independent commission sales agents, third party capacity providers, and customers, included as a portion of depreciation and amortization and of selling, general and administrative in the Company’s Consolidated Statements of Income.

(2) | Primarily includes (i) insurance premiums paid for commercial auto liability, general liability, cargo and other lines of coverage related to the transportation of freight; (ii) the related cost of claims incurred under those programs; and (iii) brokerage commissions and other fees incurred relating to the administration of insurance programs available to BCO Independent Contractors that are reinsured by the Company, which are included in selling, general and administrative in the Company’s Consolidated Statements of Income.

Landstar System, Inc. and Subsidiary

Reconciliation of GAAP Operating Income to Adjusted Operating Income

(Dollars in thousands)

(Unaudited)

|  | Thirty-Nine Weeks Ended |  |  | Thirteen Weeks Ended |
|  | September 27, |  |  | September 28, |  |  | September 27, |  |  | September 28, |
|  | 2025 |  |  | 2024 |  |  | 2025 |  |  | 2024 |
GAAP operating income |  | $ | 122,025 |  |  | $ | 191,136 |  |  | $ | 26,326 |  |  | $ | 63,116 |
Plus: Impairment of intangible and other assets |  |  | 30,104 |  |  |  | — |  |  |  | 30,104 |  |  |  | — |
Adjusted operating income |  | $ | 152,129 |  |  | $ | 191,136 |  |  | $ | 56,430 |  |  | $ | 63,116 |

Landstar System, Inc. and Subsidiary

Reconciliation of GAAP Earnings per Share to Adjusted Earnings per Share

(Unaudited)

|  | Thirty-Nine Weeks Ended |  |  | Thirteen Weeks Ended |
|  | September 27, |  |  | September 28, |  |  | September 27, |  |  | September 28, |
|  | 2025 |  |  | 2024 |  |  | 2025 |  |  | 2024 |
GAAP basic and diluted earnings per share |  | $ | 2.61 |  |  | $ | 4.21 |  |  | $ | 0.56 |  |  | $ | 1.41 |
Plus: Impairment of intangible and other assets, net of tax, per basic and diluted share |  |  | 0.66 |  |  |  | — |  |  |  | 0.66 |  |  |  | — |
Adjusted basic and diluted earnings per share |  | $ | 3.27 |  |  | $ | 4.21 |  |  | $ | 1.22 |  |  | $ | 1.41 |