C.H. Robinson Worldwide, Inc. Q1 FY2026 earnings call

• North American trucking market entered supply-driven tightening, but CH Robinson's adjusted earnings per share increased 15% y/y in Q1 2026 despite higher truckload spot market costs. It outperformed by capturing transactional volumes at higher margins, disciplined revenue management, targeted repricing of contractual business, and widening cost advantage via new lean operating model.
• Lean AI is the unique, disciplined approach combining lean methodology, custom-built AI, and people expertise to transform supply chains, aiming to maximize value, minimize waste, and drive better outcomes.
• In NAST, team's disciplined execution in Q1 showcased secular earnings growth. Contractual truckload volume grew y/y due to standing by customers with industry-leading tender acceptance rate and improved win rate. Absorbed elevated capacity costs while maintaining NAS gross margin at 14.6%. LTL volume grew for the 9th consecutive quarter. Delivered double-digit productivity increases in NAST since end-2022.
• Global forwarding team helped customers navigate disruptions. International freight market was tumultuous, but team expanded gross margins by 60 basis points y/y in Q1. Evolving global forwarding business to more cohesive, centralized model with standardized and lean AI-enabled processes.

In North American Surface Transportation (NAST), adjusted earnings per share increased 15% year over year in Q1 2026. NAST gained market share for the 12th consecutive quarter. Q1 total NAS volume was flat year over year. LTL volume increased approximately 2% year-over-year, while truckload volume declined approximately 3.5% year-over-year. NAS gross margin percentage was maintained at 14.6% in Q1. For international freight, the global forwarding team expanded gross margins by 60 basis points year over year in Q1.

• Expect 2026 personnel expenses to be in the range of 1.25 - 1.35 billion, with double-digit productivity improvements in NAST and global forwarding in 2026, over-indexed to the second half.
• Anticipate 2026 SG&A expenses to be in the range of 540 - 590 million, including depreciation and amortization of 95 - 105 million.
• Expect 2026 capital expenditures to be $75 - $85 million.
• Full-year effective tax rate expected to be in the range of 18 - 20%.
• Reaffirm 2026 operating income target.
• Now expecting a 17% year-over-year increase in drive-in spot rates for the full year 2026, up from 8% three months ago.

• Montgomery case risk: If adverse outcome, could bring headwinds to the industry with 50 different state rules instead of national safety standard.
• International freight market risks: Impacted by global trade policies, geopolitical conflicts, route restrictions, causing ocean rate decline and market tumult.
• Macro environment risks: Impact of macroeconomic conditions on freight market, such as lower demand environment or continued tight supply.

Q: Tom Wadowitz asked about impact of cycle improvement on business and Montgomery case.

A: Dave said they expect to win Montgomery case, it's about safety not broker immunity, and has a playbook for either outcome. Michael said team did well in repricing in Q1, had strong bid activity and expect to manage higher cost marketplace.

Q: Ken Hexter asked about headcount reduction and contract business mix.

A: Dave said it's about re-engineering order to cash process, shifting focus to customer focus, and not having headcount KPI. Damon said they're in early innings of productivity journey, and Michael said contract business mix in Q1 was due to supply-driven events, and they expect mix to equalize over time.

Q: Chris Weatherby asked about spot activity and contract rate increases.

A: Michael said they saw transactional marketplace pick up steam as market conditions became clear, and repricing is ongoing depending on market and customer mix. Dave said they put strong argument for Montgomery case to bring clarity to industry.

Q: Jonathan Chappelle asked about sustainability of repricing approach.

A: Michael said with lean AI disciplines, tools in people's hands faster, they can have conversations with customers to make disciplined decisions, and Damon said they interrogate market frequently for price and volume.

Q: Bruce Chan asked about forwarding volume development and margin.

A: The speaker said global forwarding team managed impact of Middle East disruption and global capacity and rate challenges, with impact being immaterial to Robinson's global forwarding results.

Q: Brandon Oakland asked about earnings progression into back half of 2026.

A: Damon said they feel very confident in $6 EPS target, with productivity improvements over-indexed to second half.

Q: Richa Harnane asked about flat volumes in NAST.

A: Michael said they made deliberate choices about volume to win at margins, and Damon said they take volume that meets their criteria, focusing on quality of earnings and superior model.