Echo Global Logistics knocks the cover off the ball in Q1

Gross margins for the whole business flattened to 14.9% compared to 15.3% in the year-ago period, a relatively insignificant 40-basis-point change when accompanied by a 39% increase in truckload rates and a 13% increase in truckload volume. Echo leaned into less-than-truckload, too, driving both volume and revenue per shipment up by 10%. 

Echo exploited opportunities in truckload presented by high rates, tight capacity and uncertain service in the freight market to grow truckload faster than LTL. In the first quarter of 2021, truckload accounted for 71.9% of Echo’s revenue and LTL represented 23.8% compared to a somewhat more even 66.7% and 28.7% split in the year-ago period.

Echo’s Managed Transportation business grew even faster than the brokerage, posting 49.9% year-over-year growth to reach $183.8 million in revenue. Now Managed Transportation contributes 22.9% of Echo’s overall revenue.

Echo strengthened its balance sheet by reducing net debt (debt minus cash) to $76.7 million, 17% below where it began the quarter. Accounts receivable grew by 13.9% as Echo won more business and took on more freight.

One thing that became clear from the second-quarter data Echo has provided is that April 2021 looks nothing like April 2020, essentially the economic bottom of the COVID-19 shutdown in the United States. Revenue per business day through April 17 was up 86%, and truckload volume is up 33% year-over-year, for starters.

Guidance from management was positive as well. Pete Rogers, Echo’s chief financial officer, expects the momentum to continue and second-quarter revenues to come in between $830 million and $870 million, with the midpoint representing 65% year-over-year growth (not to mention 6.25% quarter-on-quarter growth). 

“In addition,” Rogers said, “we are raising our full year revenue guidance to be between $3.15B-$3.35B, representing 29% year over year growth and a 15% increase from our original expectations.”