C.H. Robinson Worldwide, Inc. Q3 FY2025 earnings call

• Macro Environment: The third quarter of 2025 had a soft freight environment with the cass freight shipment index declining for the 12th consecutive quarter, low truckload spot rates, and international freight impacted by global trade policies. - Lean Operating Model: Shifted to a culture of solving problems quickly, with the lean operating model helping eliminate waste and deliver value faster. - NAST Results: Grew market share in truckload and LTL, had volume growth in key verticals, introduced value-added solutions, and achieved yield improvements leading to margin expansion. - Global Forwarding: Expanded gross margins via revenue management, and productivity improved despite ocean rate declines. - Lean AI Strategy: Combining lean methodology with AI to transform supply chains, with AI agents automating tasks and enhancing productivity and customer experience.

NAST: Grew combined truckload and LTL volume by approximately 3% year-over-year, expanded gross margins for the eighth consecutive quarter, achieved a 39% adjusted operating margin, and saw a more than 40% increase in shipments per person per day since the end of 2022. Revenue contribution: NAST contributes significantly to overall performance due to its growth and margin expansion. Global Forwarding: Expanded gross margins by 380 basis points year-over-year through improved revenue management discipline, with productivity increasing by more than 55% since the end of 2022. However, ocean rates declined substantially, causing adjusted gross profit per ocean shipment to decline 27% from June to September.

• 2026 operating income target increased to $965 million to $1.04 billion, up ~$50 million from previous expectations. - 2025 personnel expenses expected to be $1.3 billion to $1.4 billion, above the midpoint; 2025 SG&A expenses expected $550 million to $600 million, above the midpoint. - $2 billion share repurchase program intended over approximately 3 years.

• Macro freight environment remains challenging with soft demand, low spot rates, and global trade policies impacting international freight. - Regulatory changes and localized market squeezes create uncertainty in trucking capacity and costing.

Q: Thoughts on volume growth in truckload against a tough freight backdrop?

A: Growth in key verticals like retail, energy, automotive, and health care; combination of people and technology; targeting the right volume for margin and growth.

Q: SG&A and September revenue drop?

A: SG&A above midpoint due to project spend; September impacted by ocean rate normalization and challenging Global Forwarding market.

Q: Staying ahead of copycat AI strategies?

A: Operating model as baseline, in-house tech team, data advantage, and symbiotic relationship of human and technology.

Q: '26 operating income bridge and inorganic opportunities?

A: Global Forwarding impact minimal; organic growth over-indexed; disciplined inorganic approach.

Q: Productivity beyond 2026?

A: Mid-single-digit baseline from operating model; double-digit waves from innovations like Agentic AI; early innings of lean and tech deployment.

Q: $6 EPS potential and share buybacks?

A: $6 includes share buybacks; strategy works in all market cycles.