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C. H. ROBINSON WORLDWIDE, INC. (CHRW)·Q2 2025 Earnings Summary

Executive Summary

  • Q2 2025 delivered margin-led upside: adjusted operating margin rose 520 bps to 31.1% and income from operations grew 21%, while diluted EPS was $1.26 and adjusted EPS $1.29, with disciplined cost controls and productivity gains offsetting softer revenue from the Europe Surface divestiture and ocean pricing pressure .
  • Results vs Street: EPS beat (Primary EPS $1.29 vs $1.16 consensus*) but revenue was slightly below ($4.14B vs $4.20B consensus*)—a continuation of a revenue-miss/EPS-beat pattern seen in Q4’24 and Q1’25 as mix, revenue management and cost discipline drive profitability* .
  • Guidance actions: management lowered full‑year 2025 personnel expense guidance to $1.3–$1.4B (prior $1.375–$1.475B) and SG&A to $550–$600M (prior $575–$625M); reiterated 2025 ETR of 18–20% and capex of $65–$75M; raised the likelihood of ongoing buybacks given improved leverage (net debt/EBITDA 1.40x) .
  • Strategic progress: NAST achieved ~38% adjusted operating margin and outgrew the market; Global Forwarding expanded margins to 27.4%; management emphasized “evergreen” productivity and scaling AI agents to automate quote‑to‑cash, compress cycle times, and support dynamic pricing/costing .
  • Potential stock catalysts: EPS beat and operating margin expansion; opex guidance cuts; AI execution proof points (2,000+ LTL orders/day automated, 10s→seconds processing) and continued share repurchases .

What Went Well and What Went Wrong

What Went Well

  • Margin expansion and EPS beat: Adjusted operating margin up 520 bps to 31.1% and diluted EPS up 20% to $1.26; adjusted EPS $1.29, driven by AGP growth and 6.3% lower opex .
  • NAST outperformance: NAST grew adjusted gross profit 3% and expanded adjusted operating margin to 37.9%; linehaul rate and cost per mile both +3.5% YoY with improved AGP/mile and disciplined pricing .
  • Global Forwarding leverage: Despite revenue headwinds, GF adjusted GP rose 1.9% and operating margin expanded 510 bps to 27.4%; customs AGP +31.7% on pricing and volume resilience .
  • Management quote: “We are not waiting for a market recovery… built to be effective in any market environment.” — CEO Dave Bozeman .
  • AI-driven execution: Automation at scale (e.g., new LTL classification AI agent ~2,000 orders/day, reducing per‑shipment processing time from ~10 minutes to seconds) supporting faster quoting, higher win rates and productivity .

What Went Wrong

  • Top-line pressure: Total revenue declined 7.7% YoY to $4.14B, primarily from the Europe Surface divestiture, lower ocean pricing and lower fuel surcharges in truckload .
  • Ocean softness: Ocean adjusted gross profit fell 7.5% YoY on lower shipments and AGP/shipment; Red Sea rerouting and softer demand kept rates elevated but down YoY .
  • Higher effective tax rate and FX: Q2 effective tax rate rose to 21.4% (vs 19.4% LY) and net FX impact was a $4.9M loss; interest expense declined but remained a headwind .

Financial Results

Consolidated P&L – Last Three Quarters (oldest → newest)

MetricQ4 2024Q1 2025Q2 2025
Total Revenues ($)$4,184,656,000 $4,046,740,000 $4,136,543,000
Gross Profit ($)$672,861,000 $657,422,000 $679,550,000
Adjusted Gross Profit ($)$684,623,000 $673,088,000 $693,231,000
Income from Operations ($)$183,799,000 $176,853,000 $215,919,000
Operating Margin (%)4.4% 4.4% 5.2%
Adjusted Operating Margin (%)26.8% 26.3% 31.1%
Diluted EPS ($)$1.22 $1.11 $1.26
Adjusted Diluted EPS ($)$1.21 $1.17 $1.29

Q2 YoY Comparison (Q2 2024 → Q2 2025)

MetricQ2 2024Q2 2025
Total Revenues ($)$4,483,348,000 $4,136,543,000
Gross Profit ($)$676,526,000 $679,550,000
Adjusted Gross Profit ($)$687,409,000 $693,231,000
Income from Operations ($)$178,090,000 $215,919,000
Operating Margin (%)4.0% 5.2%
Adjusted Operating Margin (%)25.9% 31.1%
Diluted EPS ($)$1.05 $1.26
Adjusted Diluted EPS ($)$1.15 $1.29

Segment Performance – Q2 2025 vs Q2 2024

SegmentRevenues Q2’24 ($)Revenues Q2’25 ($)Adj. GP Q2’24 ($)Adj. GP Q2’25 ($)Op Inc Q2’24 ($)Op Inc Q2’25 ($)
NAST2,989,909,000 2,918,227,000 419,657,000 432,248,000 141,102,000 163,991,000
Global Forwarding921,223,000 797,800,000 184,067,000 187,581,000 40,982,000 51,330,000
All Other & Corporate572,216,000 420,516,000 83,685,000 73,402,000 (3,994,000) 598,000

Service Line KPIs – Adjusted Gross Profit (Q2 2025 vs Q2 2024)

Service LineQ2 2024 ($)Q2 2025 ($)
Truckload274,187,000 267,913,000
LTL145,823,000 152,186,000
Ocean116,659,000 107,902,000
Air30,906,000 34,461,000
Customs26,652,000 35,098,000
Other Logistics Services57,320,000 56,459,000
Sourcing35,862,000 39,212,000

Cash Flow & Balance Highlights

MetricQ4 2024Q1 2025Q2 2025
Cash from Operations ($)$267.9M $106.5M $227.1M
Capital Expenditures ($)$15.2M $16.1M $20.2M
Average Employee Headcount13,869 13,347 12,858
Liquidity (end of Q)——~$1.22B (cash + undrawn facilities)
Net Debt / EBITDA——1.40x

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Personnel ExpensesFY 2025$1.375B–$1.475B $1.3B–$1.4B Lowered
SG&A Expenses (incl. D&A)FY 2025$575M–$625M $550M–$600M; D&A $95M–$105M included Lowered
Effective Tax RateFY 202518%–20% (unchanged) 18%–20% Maintained
Capital ExpendituresFY 2025$65M–$75M (unchanged) $65M–$75M Maintained
Share Repurchases2025Lower probability in 2024 backdrop“Higher likelihood” of ongoing buybacks given leverage Increased likelihood
DividendQ4’25 payment—$0.62/share payable Oct 2, 2025 Declared

Earnings Call Themes & Trends

TopicPrevious Mentions (Q4 2024)Previous Mentions (Q1 2025)Current (Q2 2025)Trend
AI/AutomationScaling ML/dynamic pricing; >15% GF productivity in 2024 Evergreen productivity; AI across quote-to-cash Fleet of AI agents; LTL classification agent (~2,000 orders/day, seconds per shipment); Agentic AI next unlock Accelerating deployment and scope
NAST MarginsAdjusted operating margin progress, ~33% NAST Q4 NAST adj. op margin 34.3% ~38% adjusted operating margin in Q2; optionality to pursue volume vs margin Improving; near mid‑cycle targets
Global ForwardingQ4 ocean/air AGP +25–45% YoY Margin expansion; disciplineMargin up to 27.4%; tariffs & Red Sea rerouting shaping demand Mixed macro, better yield/discipline
Tariffs & Macro—New tariffs creating uncertainty Tariffs reduced Transpacific demand; uncertain peak season; macro watch Cautious, volatile
Cost DisciplineY/Y opex down; productivity +30% since 2023–24 Opex -6.5%; headcount down 11% Further opex cuts; FY25 opex guidance lowered; headcount managed via attrition Continued leverage
Customs Services+11.6% AGP in Q4 +3.2% AGP +31.7% AGP; elevated complexity supports demand Strengthening

Management Commentary

  • Strategic focus: “We are not waiting for a market recovery… built to be effective in any market environment.” — CEO Dave Bozeman .
  • On transformation and productivity: “Greater than 35% productivity gains delivered since 2022… we’re in the early innings… leading with cutting-edge technology” .
  • On AI deployment: “A fleet of secure proprietary AI agents across every aspect of the extensive quote‑to‑cash lifecycle… LTL agent reduced processing time from 10 minutes to 10 seconds” — Chief Strategy & Innovation Officer Arun Rajan .
  • On NAST sustainability: “Productivity gains and movement in margins are evergreen… no cap on what we think we can do” — NAST President Michael Castagnetto and CFO Damon Lee .

Q&A Highlights

  • Margin sustainability: Analysts probed whether NAST can maintain ~38% adjusted op margin; management emphasized “evergreen” productivity, optionality between volume and margin, and further AI unlocks; reaffirmed mid‑cycle 40% NAST target without capping upside .
  • Upcycle operating leverage: Team asserted processes have been fundamentally redesigned via automation, allowing decoupling of headcount from volume when demand recovers .
  • Capacity/industry tech: On whether broker tech sustains excess capacity, management noted democratization of tools but sees declining broker/carrier counts; emphasized CHRW’s data/scale advantage in matching freight .
  • Near-term trends: Typical Q3 seasonality (flat vs Q2) for NAST; forwarding outlook uncertain due to tariffs and consumer confidence; continued pursuit of productivity milestones .
  • Capital allocation/M&A: Prioritized organic ROI-rich tech initiatives; buybacks more likely given leverage; active but disciplined on inorganic opportunities .

Estimates Context

PeriodRevenue Consensus* ($)Revenue Actual ($)EPS Consensus* ($)EPS Actual ($)Result
Q4 20244,435,736,560*4,184,656,000 1.1075*1.21 (Adj.) Rev: Miss; EPS: Beat
Q1 20254,247,284,540*4,046,740,000 1.0505*1.17 (Adj.) Rev: Miss; EPS: Beat
Q2 20254,197,515,190*4,136,543,000 1.1559*1.29 (Adj.) Rev: Slight Miss; EPS: Beat

Values retrieved from S&P Global.*

Implications: Consensus likely moves up for FY EPS given sustained margin outperformance and lower opex guidance; revenue expectations may remain conservative amid tariff and ocean dynamics .

Key Takeaways for Investors

  • Profit-led outperformance is intact: operating margin and EPS beats continue despite top-line pressure from divestiture and ocean rates; margin quality underpinned by revenue management and cost discipline .
  • Structural efficiencies appear durable: management’s “evergreen” productivity thesis, automation at scale, and process redesign support sustained operating leverage across cycles .
  • NAST momentum: market share gains with ~38% adjusted operating margin; optionality to balance growth and profitability as the cycle turns .
  • Forwarding improving yield: margin expansion with customs strength; watch tariff outcomes and Red Sea disruptions for volume trajectory .
  • 2025 opex cut is meaningful: lower personnel and SG&A guidance, with capex and ETR maintained, strengthens FCF profile and supports buybacks .
  • Near-term trading lens: EPS beat + opex guidance cuts + AI execution are positive catalysts; revenue caution persists given macro/tariffs; expect investors to reward sustained margin delivery .
  • Medium-term thesis: As freight normalizes, redesigned processes and AI should enable outsized operating leverage and mid‑cycle margin targets, with capital returns supported by improving leverage .

Guidance Changes

(See table above for full details; FY25 personnel expenses to $1.3–$1.4B from $1.375–$1.475B; SG&A to $550–$600M from $575–$625M; ETR 18–20%; capex $65–$75M; higher likelihood of buybacks) .

Additional Relevant Press Releases (Q2 2025)

  • AI Agent for LTL classification automating ~2,000 orders/day, cutting processing time from ~10 minutes to seconds .
  • Item‑level solutions scaled to all global customers; SKU‑level visibility cited to drive 10–30% supply chain cost savings in user examples .