C.H. Robinson Worldwide, Inc. (CHRW) Q4 2025 Earnings Call Transcript
Access earnings results, analyst expectations, report, slides, earnings call, and transcript.
Overview
The earnings call summary shows strong financial performance with market share gains, improved operating margins, and effective cost management. The Q&A section reveals confidence in overcoming challenges and strategic use of AI and technology. The $2 billion share repurchase program and optimistic guidance for 2026 further support a positive outlook. Although there were some vague responses, the overall sentiment is positive, indicating a likely stock price increase of 2% to 8%.
Key Financial Performance
Total Revenue and Adjusted Gross Profit (AGP) Total revenue declined approximately 7% year-over-year, and AGP declined approximately 4% year-over-year. The decline in AGP was driven by a 13% year-over-year decline in Global Forwarding AGP, primarily due to a significant drop in ocean rates caused by declining demand and growing vessel capacity. This was partially offset by a 2% increase in NAST AGP.
Global Forwarding AGP Declined 13% year-over-year due to a significant drop in ocean rates driven by a market imbalance from declining demand and growing vessel capacity.
NAST AGP Increased by 2% year-over-year, reflecting market share growth and improved gross margins despite tougher market conditions.
Truckload Volume Increased approximately 3% year-over-year, reflecting market share gains and growth in key verticals such as retail and automotive.
LTL Volume Increased approximately 0.5% year-over-year, reflecting market share gains and consistent outperformance versus the broader LTL market.
Ocean AGP per Shipment Declined 15.2% year-over-year, most pronounced in December, due to lower ocean rates.
Personnel Expenses Q4 personnel expenses were $337 million, including $15.2 million of restructuring charges. Excluding restructuring charges, personnel expenses were $321.8 million, down 8.2% year-over-year due to productivity and cost optimization efforts and the divestiture of the Europe Surface Transportation business.
SG&A Expenses Q4 SG&A expenses totaled $138.7 million, excluding restructuring charges. This was down 7.9% year-over-year due to cost optimization efforts.
Operating Margin Expanded by 320 basis points year-over-year, driven by market share growth, improved gross margins, and increased productivity and operating leverage.
Cash from Operations Generated $305.4 million in Q4, ending the quarter with approximately $1.49 billion of liquidity, including $1.33 billion of committed funding under credit facilities and a cash balance of $161 million.
You have reached the limit. Sign up to access full content
Get started
Operating Highlights
Lean AI: Lean AI combines the company's Lean operating model, industry-leading technology, and expertise to improve productivity and operational performance. It automates manual tasks, enhances customer service, and contributes to market share gains.
Drop Trailer Asset Management System: Introduced to support retail and automotive verticals, addressing customer pain points and simplifying supply chain complexities.
AI Agents for LTL: Launched to address missed LTL pickups, reducing return trips by 42% and automating 95% of checks, saving over 350 hours of manual work daily.
Market Share Growth: Achieved 11 consecutive quarters of market share growth, with truckload volume up 3% and LTL volume up 0.5% year-over-year in Q4.
Retail and Automotive Verticals: Double-digit year-over-year volume growth in these verticals, supported by expanded capabilities like cross-border freight consolidation and warehousing.
Productivity Improvements: Double-digit productivity increases in NAST and high single-digit increases in Global Forwarding for 2025, with a 40% increase in shipments per person per day since 2022.
Cost Optimization: Reduced personnel expenses by 8.2% and SG&A expenses by 7.9% year-over-year in Q4, driven by productivity gains and Lean AI implementation.
Lean AI Transformation: Focused on building a scalable model with proprietary AI agents to enhance operational efficiency and customer outcomes.
Builder Culture: Emphasizes in-house development of technology and AI agents, reducing dependency on third-party providers and enabling faster implementation.
You have reached the limit. Sign up to access full content
Get started
Risk or Challenges
Macroeconomic Conditions: Weak global freight demand, rising spot costs in trucking, and falling ocean rates are creating headwinds for the business. The Cass Freight Shipment Index has declined for 13 consecutive quarters, reaching its lowest Q4 reading since 2009.
Spot Market Costs: Spot market costs for truckload capacity spiked due to seasonal capacity decline, winter storms, and enforcement of commercial driver regulations, leading to increased cost pressures.
Global Trade Policies: International freight is impacted by global trade policies, causing shipment dislocations and a pronounced decline in demand after peak seasons.
Ocean Freight Rates: Excess vessel capacity and declining demand have caused substantial drops in ocean freight rates, negatively impacting gross profits in Global Forwarding.
Regulatory Changes: Cumulative enforcement of commercial driver regulations is adding pressure to trucking capacity and costs.
Economic Uncertainty: The geopolitical landscape and potential volatility present unknown risks that could impact operations and strategy.
Productivity and Cost Optimization: While productivity improvements are being achieved, the company faces challenges in maintaining these gains amidst declining demand and cost pressures.
You have reached the limit. Sign up to access full content
Get started
Guidance & Outlook
Revenue Expectations: The company expects 2026 personnel expenses to be in the range of $1.25 billion to $1.35 billion, with double-digit productivity improvements in both NAST and Global Forwarding. SG&A expenses are projected to be $540 million to $590 million, including depreciation and amortization of $95 million to $105 million. Capital expenditures for 2026 are expected to be $75 million to $85 million.
Market Trends and Conditions: The company anticipates Q1 to be a seasonally weaker quarter compared to Q4, with the Cass Freight Shipment Index historically reflecting a 2.3% sequential volume decline from Q4. Spot rate trends in Q1 are expected to mirror Q4, with rates ramping up in Q4 and trending back down to preholiday levels by the end of Q1 or early Q2 as capacity returns after the holidays. The company also notes less elasticity in the supply of capacity, causing more dramatic changes in spot rates.
Strategic Plans and Operational Changes: The company plans to continue implementing agentic AI across the quote-to-cash life cycle of an order, aiming for significant productivity improvements over the second half of 2026. The Lean AI strategy is expected to enhance gross margins, operating leverage, and market share growth. The company is also focused on scaling proprietary AI innovations to automate manual tasks and improve customer and carrier experiences.
Tax Rate Projections: The full-year tax rate for 2026 is expected to be in the range of 18% to 20%, with Q1 tax rates projected to be below 15% due to incremental tax benefits from stock-based compensation deliveries.
You have reached the limit. Sign up to access full content
Get started
Shareholder Return Plan
Dividends in Q4: $74.3 million of dividends were returned to shareholders.
Share Repurchases in Q4: $133.3 million worth of shares were repurchased.
You have reached the limit. Sign up to access full content
Get started
Key Q&A
Q:Can you provide more perspective on the first quarter, particularly regarding adjusted gross profit growth and the impact of December's market pressures?
A:Damon Lee explained that December was challenging due to global forwarding and ocean rate normalization, which continued into Q1. Spot rate cost pressures from December carried over to January. Despite challenges, the company is confident in its ability to overdeliver and execute its strategy in Q1.
Q:Do you think you can exceed the mid-40s operating margin target for NAST by 2027?
A:Damon Lee stated that while the company is on track to achieve the mid-cycle margin target of 40% for NAST, decisions on further margin expansion or reinvestment into growth will depend on the quality of earnings growth and market conditions.
Q:How does the company balance margin expansion and share growth as it approaches 2026?
A:Damon Lee emphasized the importance of quality earnings growth and optionality. The company makes revenue management decisions multiple times daily to balance volume and margins. Once mid-cycle margin thresholds are achieved, decisions will focus on reinvesting margins into profitable growth or further margin expansion.
Q:What differentiates C.H. Robinson's Lean operating model and AI deployment from competitors?
A:David Bozeman highlighted three key factors: the company's skilled workforce, industry-leading internally built technology, and the Lean operating model that drives accountability, innovation, and speed. Arun Rajan added that the builder culture and in-house expertise enable faster implementation of AI and technology, providing a competitive advantage.
Q:Why might this cycle be shorter and less painful for a broker like C.H. Robinson?
A:Michael Castagnetto explained that the company's use of data and technology allows for quicker, more accurate decision-making. This advantage was evident in Q4, where the company managed cost-of-hire better than the market. While the company will feel the margin squeeze, it expects to manage it more effectively and recover faster.
Q:How does the company balance headcount reductions with maintaining the human touch in customer and carrier relationships?
A:David Bozeman clarified that headcount reductions result from process automation and efficiency improvements, not arbitrary cuts. Damon Lee added that processes have fundamentally changed, reducing the need for human input. Michael Castagnetto emphasized the focus on enhancing customer-facing roles while automating low-value tasks.
Q:What does demonstrable market share growth mean for C.H. Robinson?
A:Damon Lee and Michael Castagnetto explained that demonstrable market share growth involves outperforming the market and taking share intelligently. The company uses its strategy and margins to ensure growth aligns with customer, carrier, and shareholder interests.
Q:Why does the personnel expense guide not reflect double-digit productivity savings?
A:Damon Lee explained that personnel expenses include inflationary benefit costs and rewards for employee performance. Additionally, the company's $6 EPS target assumes no market growth but includes outgrowth, which impacts operating leverage and personnel expense calculations.
Q:Review of Unclear Management Responses
A:Management avoided providing specific guidance for Q1 and 2027, using vague language about 'elevated comments' and 'optionalities' instead of concrete details. They also did not provide tangible evidence for why the current cycle might be shorter and less painful, relying on general statements about technology and process improvements.
You have reached the limit. Sign up to access full content
Get started
Earnings Word Cloud
The most frequently occurring keywords in this quarter's earning call
Cass Freight
Damon
Europe Surface
FICA tax
Freight Shipment
Global Forwarding
LTL pickup
Lean AI
SGA
Shipment Index
ability cost
advantage market
application
builder culture
capacity advantage
capacity winter
cash life
cost capacity
decline capacity
digit productivity
driver regulation
fleet AI
headwind
house
implementation
industry technology
life cycle
moat
ocean rate
pressure
provider
restructuring
software
spot market
spot rate
winter storm
CHRW Transcript
C.H. Robinson Worldwide, Inc. (CHRW) Q4 2025 Earnings Call Transcript
Positive1-28
The earnings call summary shows strong financial performance with market share gains, improved operating margins, and effective cost management. The Q&A section reveals confidence in overcoming challenges and strategic use of AI and technology. The $2 billion share repurchase program and optimistic guidance for 2026 further support a positive outlook. Although there were some vague responses, the overall sentiment is positive, indicating a likely stock price increase of 2% to 8%.
C.H. Robinson Worldwide, Inc. (CHRW) Presents at UBS Global Technology and AI Conference 2025 Transcript
Neutral12-3
C.H. Robinson Worldwide, Inc. (CHRW) Presents at UBS Global Industrials and Transportation Conference Transcript
Neutral12-2
C.H. Robinson Worldwide, Inc. (CHRW) Presents at Baird 55th Annual Global Industrial Conference Transcript
Neutral11-11
CHRW Report
Frequently Asked Questions
Where does this earnings call transcript come from?
All transcripts are sourced directly from the official live webcast or the company’s official investor relations website. We use the exact words spoken during the call with no paraphrasing of the core discussion.
How soon is the transcript available after the earnings call ends?
Full verbatim transcripts are typically published within 4–12 hours after the call ends. Same-day availability is guaranteed for all S&P 500 and most mid-cap companies.
Is the transcript edited or altered in any way?
No material content is ever changed or summarized in the “Full Transcript” section. We only correct obvious spoken typos (e.g., “um”, “ah”, repeated 10 times”, or clear misspoken ticker symbols) and add speaker names/titles for readability. Every substantive sentence remains 100% as spoken.
Why do some answers appear as “Unclear” or “Inaudible”?
When audio quality is poor or multiple speakers talk over each other, we mark the section instead of guessing. This ensures complete accuracy rather than introducing potential errors.
Who creates the AI Summary and Key Q&A highlights shown above the transcript?
They are generated by a specialized financial-language model trained exclusively on 15+ years of earnings transcripts. The model extracts financial figures, guidance, and tone with 97%+ accuracy and is regularly validated against human analysts. The full raw transcript always remains available for verification.
