Forward Air surges on deal to retain up to 75% of at-risk business

Forward Air (FWRD) up 18.6% in Tuesday's trading to a two-month high after saying it entered into an agreement with one of its largest customers covering services that the customer had planned to shift to other providers as part of an effort to diversify its list of vendors.

The customer generated ~$250M of Forward Air's (FWRD) FY 2025 revenue, and the non-binding memorandum of understanding calls for the company to retain at least 50% of the business—with the potential to retain 75%—while extending the contract for the retained services by at least another two years; any remaining transition is expected to begin later in 2026, with most of it occurring in December and throughout 2027.

Forward Air (FWRD) shares plunged as much as 40% on May 8 after the company said it was potentially losing the large customer who is responsible for 10% of its annual revenue, and that the potential loss of business could end its plan to sell the company.

The agreement could preserve $125M-$187M of annual revenue that investors had feared was largely at risk, improving Forward Air's (FWRD) earnings visibility, network utilization, cash flow outlook, and ability to reduce leverage following the debt-heavy Omni Logistics acquisition.