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C. H. ROBINSON WORLDWIDE, INC. (CHRW)·Q3 2025 Earnings Summary

Executive Summary

  • Q3 delivered strong margin execution despite freight softness: adjusted operating margin rose to 31.3% (+680 bps YoY), GAAP operating income grew 22.6% to $220.8M, and adjusted EPS was $1.40; revenue declined 10.9% to $4.14B on ocean and divestiture headwinds .
  • Versus S&P Global consensus, EPS beat and revenue was slightly light: EPS $1.40 vs $1.30*; revenue $4.14B vs $4.22B*; EBITDA slightly above $242.2M vs $241.9M* (see Estimates Context) ; S&P Global data*.
  • Management raised its 2026 operating income target to $965M–$1.04B and authorized an additional $2B buyback (intended over ~3 years), citing Lean AI-driven productivity and yield discipline as key drivers .
  • NAST outgrew the market again (TL+LTL volumes +3% YoY) with adjusted operating margin ~39%; Global Forwarding margins expanded YoY despite ocean rate headwinds and delivered its 30% mid-cycle adjusted operating margin in the quarter .

What Went Well and What Went Wrong

  • What Went Well

    • NAST outperformance: Truckload and LTL volumes +3% YoY; LTL AGP/order +8% and margin expanded 70 bps; adjusted operating margin ~39% .
    • Operating leverage and productivity: Operating income +22.6% YoY; enterprise adjusted operating margin 31.3%; average headcount -10.8% YoY as Lean AI improved productivity (>40% since 2022 in NAST; >55% in Global Forwarding) .
    • Strategic update and capital return: 2026 OI target raised to $965M–$1.04B; new $2B buyback authorization, with intent to execute over ~3 years .
    • CEO tone: “This is a new C.H. Robinson…illustrated by the company’s consistent outperformance versus the market” and “We are not waiting for a market recovery” .

  • What Went Wrong

    • Ocean rate normalization: Global Forwarding total revenues -31.1% YoY; ocean AGP -32.5% with AGP/shipment -27.5% and shipments -7% .
    • Macro softness: Cass Freight Index showed the lowest Q3 reading since 2009; spot TL rates “bounced along the bottom,” weighing on market volumes .
    • Sequential pressure late in quarter: AGP per business day down 3% in July, flat in August, down 9% in September; CFO expects ocean normalization to continue into Q4 .

Financial Results

MetricQ3 2024Q1 2025Q2 2025Q3 2025
Revenue ($B)$4.64 $4.05 $4.14 $4.14
Gross Profit ($M)$723.8 $657.4 $679.6 $691.7
Adjusted Gross Profit ($M)$735.3 $673.1 $693.2 $706.1
Operating Income ($M)$180.1 $176.9 $215.9 $220.8
Adjusted Operating Margin (%)24.5% 26.3% 31.1% 31.3%
Net Income ($M)$97.2 $135.3 $152.5 $163.0
Diluted EPS$0.80 $1.11 $1.26 $1.34
Adjusted Diluted EPS$1.28 $1.17 $1.29 $1.40
Effective Tax Rate (%)32.4% 13.7% 21.4% 20.6%
Cash from Operations ($M)$108.1 $106.5 $227.1 $275.4

Segment breakdown (Q3 2025 vs Q3 2024):

  • NAST: Revenue $2,965.7M vs $2,934.6M; AGP $444.1M vs $420.7M; Operating Income $172.9M vs $148.8M .
  • Global Forwarding: Revenue $786.3M vs $1,141.2M; AGP $191.8M vs $234.6M; Operating Income $49.0M vs $88.1M .
  • All Other & Corporate: Revenue $384.8M vs $568.8M; AGP $70.2M vs $80.0M; Op Income -$1.1M vs -$56.8M .

Service-line AGP (Q3 2025 vs Q3 2024):

  • Truckload: $273.9M vs $279.6M (-2.0%) .
  • LTL: $158.3M vs $143.2M (+10.5%) .
  • Ocean: $110.4M vs $163.3M (-32.4%) .
  • Air: $35.5M vs $33.6M (+5.7%) .
  • Customs: $36.4M vs $28.3M (+28.6%) .

Selected KPIs and balance sheet:

  • Average employee headcount: 12,559 vs 14,085 YoY; average headcount -10.8% YoY .
  • Liquidity: ~$1.37B (cash ~$137M plus ~$1.23B committed facilities); net debt/EBITDA 1.17x (end Q3) .
  • Capex: $18.6M (Q3); FY25 capex expected $65–$75M .

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Operating Income (2026)FY2026+$350–$450M vs 2023 adj. OI ($553M) $965M–$1.04B Raised
EPS (implied at low end)FY2026—≈$6 at low end, assumes ~120M diluted shares New color
Share Repurchase3-yr planExisting authorization (4.5M shares remaining) New $2B authorization; intend over ~3 years New authorization
Personnel ExpensesFY2025—$1.3–$1.4B; above midpoint Maintained (above midpoint)
SG&A ExpensesFY2025—$550–$600M; above midpoint Maintained (above midpoint)
Depreciation & AmortizationFY2025$95–$105M $100–$105M Raised lower bound
CapexFY2025$65–$75M $65–$75M Maintained
Effective Tax RateFY202518%–20% 18%–20% Maintained

Earnings Call Themes & Trends

TopicPrevious Mentions (Q1–Q2 2025)Current Period (Q3 2025)Trend
AI/Lean AI and productivityLean operating model and AI to drive automation; productivity and margin expansion; GF adopting NAST-like revenue mgmt Early innings; >40% productivity since 2022 in NAST; >55% in GF; Agentic AI wave; scalable at token cost Intensifying execution; broader agentic AI deployment
Market/macro (TL, ocean)Outgrowing in TL/LTL; ocean rates lower; GF yield improving Cass index at lowest Q3 since 2009; ocean rate normalization continued; Q3 ocean AGP/shipment -27.5% from June to Sept; normalization to continue into Q4 Continued ocean pressure; TL stable but soft
Operating leverageAdj op margin 26–31% (Q1–Q2); headcount down >10% YoY Adj op margin 31.3%; NAST ~39%; headcount -10.8% YoY; net debt/EBITDA 1.17x Strengthening
Capital returns/targetsDividend and buybacks ongoing $2B new buyback; 2026 OI target raised; ~120M diluted shares underpin ≈$6 EPS at low end More shareholder-friendly
Regulatory/capacity—Localized capacity squeezes from policy changes (e.g., visas, English requirement), mitigated by AI-driven pricing and carrier matching Manageable micro-pressures

Management Commentary

  • CEO: “This is a new C.H. Robinson…We are a fundamentally different company than we were two years ago, illustrated by the company’s consistent outperformance versus the market.”
  • CEO on Lean AI: “Our model, with an industry-leading cost to serve, is highly scalable and we expect it will improve further as we harness the evolving power of AI…We’re still in the early innings of our Lean AI journey.”
  • CFO on outlook: “Ocean rates…normalized…significantly in the quarter…and they continue to normalize. We don’t feel like Q3 is the bottom of that normalization…[it] will continue through Q4.”
  • CFO on targets and buybacks: “New 2026 operating income target range of $965 million to $1.04 billion…[and] a $2 billion share repurchase program…intend to execute…over approximately three years.”
  • NAST President: “We delivered market share growth in both truckload and LTL…70 bps YoY improvement in NAST gross margin…double-digit productivity increases in NAST in 2025.”

Q&A Highlights

  • Capacity/regulatory: Localized cost spikes from stacked regulatory changes (e.g., visa pause, non-domiciled CDLs) managed via AI-driven pricing and carrier matching; effects remain short-lived and localized .
  • Volume growth drivers: Balanced approach across verticals (retail/energy/auto/healthcare), SMB and enterprise; tech-driven RFP selection; focus on profitable share rather than volume for volume’s sake .
  • SG&A and monthly cadence: SG&A to be above midpoint of $550–$600M; September comps impacted by continued ocean normalization; pressures expected into Q4 .
  • Competitive moat: Multi-moat strategy combining Lean operating model, in-house tech/450 engineers, data scale, and “human-in-the-loop” yields ROI and faster deployment vs third parties .
  • 2026 path and optionality: $6 EPS target (no market growth) over-indexed to organic self-help; maintain mid-cycle margin targets (NAST 40%, GF 30%) but willing to invest above targets for demonstrable outgrowth .
  • Upcycle leverage: Structural process automation means marginal cost in an upcycle is token-based; no need to add back prior manual capacity, enabling significant operating leverage when demand returns .

Estimates Context

MetricQ1 2025Q2 2025Q3 2025
EPS – Consensus Mean$1.05*$1.16*$1.30*
EPS – Actual$1.17 $1.29 $1.40
Revenue – Consensus Mean ($B)$4.247*$4.198*$4.218*
Revenue – Actual ($B)$4.047 $4.137 $4.137
EBITDA – Consensus Mean ($M)$198.9*$219.1*$241.9*
EBITDA – Actual ($M)$194.3*$231.0*$242.2*
  • Q3 2025 result vs consensus: EPS beat (+$0.10), revenue slight miss (~-$0.08B), EBITDA in line/slightly above. Management’s focus on gross margin discipline and operating leverage (Lean AI productivity) supports upward bias to EPS estimates even amid continued ocean rate normalization into Q4 .
  • Values retrieved from S&P Global*.

Key Takeaways for Investors

  • Execution > cycle: The company is expanding margins and outgrowing in NAST despite a soft freight backdrop; Lean AI productivity and revenue discipline are the core drivers .
  • Guidance catalysts: Raised 2026 operating income target and a $2B buyback offer medium-term EPS support and capital return visibility; low-end ≈$6 EPS assumes no market growth .
  • Mix matters: Ocean normalization remains the main headwind; however, customs and air AGP growth plus NAST share gains cushion revenue and support margins .
  • Into Q4: Expect continued ocean pressure and seasonally softer volumes; management is leaning on pricing/AI tools and operating leverage while keeping SG&A/personnel within guided ranges (above midpoints) .
  • Upcycle torque: Structural automation implies high incremental margins when freight demand recovers; minimal need to re-add manual capacity suggests strong operating leverage on the turn .
  • Strategy durability: In-house AI agents, data scale, and the Robinson operating model create a defensible moat and speed of iteration that should sustain share gains and profitability through cycles .

Appendix: Additional Context

  • Q3 product innovation: Launch of Drop Trailer Plus Asset Management System (AMS) enhances drop-trailer visibility and utilization; supports NAST growth vectors and service differentiation .
  • Capital returns in Q3: ~$190M returned ($115M buybacks; $75M dividends); capex $18.6M; liquidity ~$1.37B; net debt/EBITDA 1.17x .