TFI International Inc.

TFI International Inc. Annual Report Summary: A Look at 2025 Performance

TFI International Inc. (TSX: TFII, NYSE: TFII), a major North American transportation and logistics provider, faced significant headwinds in 2025. This summary distills the company's annual report for the fiscal year ending December 31, 2025, comparing its performance to 2024 and offering crucial insights for investors into a challenging period.

Business Overview TFI International operates as a leading North American transportation and logistics provider. The company diversifies its services across four core segments:

• Truckload: Includes specialized, flatbed, and dry van services.
• Less-Than-Truckload (LTL): Efficiently transports smaller freight shipments.
• Package & Courier: Delivers time-sensitive packages.
• Logistics: Offers comprehensive supply chain solutions, freight brokerage, and intermodal services. This extensive service portfolio enables TFI to meet diverse industry and customer needs across Canada, the United States, and Mexico.

Key Financial Performance Highlights (2025 vs. 2024) The year 2025 presented significant challenges for TFI International, marked by a notable decline in profitability despite overall asset growth.

• Revenue: Total revenue, including fuel surcharges, decreased by 6.1% to $7.9 billion in 2025, down from $8.4 billion in 2024. This suggests a tougher market environment or reduced demand for TFI's services.
• Operating Income: Income from core operations fell more sharply, declining 21.4% to $565 million in 2025 from $719 million in 2024.
• Net Income (Profit): The company's profit saw an even steeper decline of 26.5%, dropping to $311 million in 2025 from $422 million in 2024.
• Earnings Per Share (EPS): Reflecting the profit decline, basic earnings per share decreased by 25.2%, from $5.00 in 2024 to $3.74 in 2025.

Financial Health

• Total Assets: Despite the revenue dip, total assets grew by 4.8% to $7.5 billion in 2025, suggesting ongoing investments or strategic acquisitions.
• Total Liabilities: Liabilities also increased by 7.6% to $4.8 billion, including a 7.3% rise in long-term debt to $2.6 billion. This indicates that while TFI expanded its asset base, its financial obligations also grew.
• Cash Position: Cash and cash equivalents saw a significant increase, rising to $210 million in 2025 from a very low amount in 2024, enhancing financial flexibility.
• Shareholder Equity: Shareholder equity remained relatively stable, showing a slight increase of 0.2% to $2.68 billion.
• Liquidity: The rise in cash and cash equivalents, coupled with a stable equity base, suggests TFI maintained adequate liquidity to manage operations and meet short-term obligations, despite the increase in liabilities.

Management Discussion and Analysis (MD&A) Highlights TFI International's financial results for 2025 reflect a challenging operating environment, as detailed in the Management's Discussion and Analysis (MD&A) section of its annual report. Broader economic headwinds, including reduced freight volumes and persistent pricing pressures in the transportation industry, primarily drove the decline in revenue and profitability. Management responded by focusing on operational efficiency and cost control measures to mitigate these impacts.

Key insights from the MD&A include:

• Acquisition of Hearn Industrial Services: In 2025, TFI acquired Hearn Industrial Services. This strategic move aims to expand TFI's footprint, and its initial financial contribution was modest, adding 0.1% to total revenues and 0.7% to net income for the year. It also contributed 4.6% to current assets and 4.4% to long-term assets.
• Cost Management: The MD&A highlights the company's efforts to manage operating expenses, including fuel costs and labor. These strategies were crucial for maintaining profitability amidst revenue declines.
• Auditor's Confidence: KPMG LLP, the independent auditors, issued an unqualified opinion on TFI International's financial statements. This "clean bill of health" assures investors that the financial statements are presented fairly and that internal controls over financial reporting are effective, bolstering confidence in the reported figures.

Key Risk Factors for Investors Investors should consider several key risks:

• Declining Profitability: The significant drop in revenue, operating income, and net income in 2025 is a primary concern. Investors must determine if this decline stems from temporary market conditions or deeper operational challenges, as this understanding is crucial for future investment decisions.
• Self-Insurance Provisions: Auditors identified the assessment of self-insurance provisions as a "critical audit matter," underscoring its complexity and the significant judgment involved. As of December 31, 2025, TFI International holds $212 million for potential future payouts related to cargo loss, bodily injury, and worker's compensation. While based on historical data, actual costs could vary, posing a financial risk.
• Integration of Acquisitions: Acquisitions like Hearn Industrial Services offer growth potential, but integrating new businesses always carries risks. These include challenges with operational efficiency, customer retention, and realizing expected synergies.
• Broader Industry Risks: As a major transportation and logistics company, TFI International faces general industry risks such as economic downturns, fluctuating fuel prices, labor shortages, intense competition, and evolving regulatory environments.

Competitive Position TFI International holds a leading competitive position in North American transportation and logistics, largely due to its diversified service offerings across Truckload, Less-Than-Truckload (LTL), Package & Courier, and Logistics segments. This broad portfolio enables the company to serve a wide range of customer needs and adapt to varying market demands.

Key aspects of its competitive strength include:

• Scale and Network: TFI's extensive North American network and significant fleet size provide economies of scale and broad geographic reach, offering a distinct competitive advantage in a fragmented industry.
• Diversification: Its multi-segment approach helps mitigate risks associated with downturns in any single sector of the transportation industry.
• Operational Efficiency: A continuous focus on optimizing operations, leveraging technology, and managing costs is crucial for maintaining competitiveness in a price-sensitive market.
• Acquisition Strategy: The company's history of strategic acquisitions, such as Hearn Industrial Services, consistently expands its market presence and service capabilities.