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    CHRW
    Earnings call· Mar 2026(Q1 FY26)

    C. H. ROBINSON WORLDWIDE Q1 FY26 earnings call CHRW

    Apr 29, 2026 Source

    Executive summary

    C.H. Robinson Q1 FY26 — Strong Earnings Growth Amidst Tightening Truckload Market

    C.H. Robinson delivered secular earnings growth in Q1 FY26, leveraging its Lean AI strategy and disciplined revenue management to outperform in a challenging North American trucking market characterized by tightening supply and elevated spot rates. The company strategically balanced volume and profitability, maintaining strong gross margins and expanding operating margins despite revenue and AGP declines. Management remains confident in its full-year earnings target, emphasizing the long runway for productivity improvements through AI adoption.

    Highlights

    5

    • Adjusted earnings per share increased 15% year-over-year despite significant increase in truckload spot market costs.

    • NAST business gained market share for the 12th consecutive quarter, outgrowing the Cass Freight Shipment Index.

    • NAST gross margin maintained at 14.6% in Q1 despite higher fuel costs and increased spot rates.

    • Global Forwarding expanded gross margins by 60 basis points year-over-year.

    • Returned approximately $360 million of cash to shareholders in Q1, more than twofold increase year-over-year.

    Concerns

    5

    • Q1 total revenue and adjusted gross profit (AGP) declined approximately 1% and 2% year-over-year, respectively.

    • Global Forwarding AGP declined 12% year-over-year due to lower AGP per transaction and lower ocean volume.

    • Truckload spot market costs, excluding fuel, increased approximately 19% year-over-year according to DAT.

    • Net debt-to-EBITDA ratio increased to 1.32x at the end of Q1 from 1.03x at the end of Q4.

    • Full-year dry van spot rates now expected to increase 17% year-over-year, up from 8% forecast three months ago.

    Guidance & targets

    7
    CategoryTargetConfidence
    Full-year 2026 Personnel Expenses
    $1.25 billion to $1.35 billion
    medium materiality
    High
    Full-year 2026 SG&A Expenses
    $540 million to $590 million
    medium materiality
    High
    Full-year 2026 Operating Income Target
    Reaffirmed
    high materiality
    High
    Full-year 2026 Effective Tax Rate
    18% to 20%
    low materiality
    High
    Full-year 2026 Capital Expenditures
    $75 million to $85 million
    medium materiality
    High
    Full-year 2026 Adjusted EPS
    $6
    high materiality
    High
    Full-year 2026 Dry Van Spot Rates Increase
    17% year-over-year
    medium materiality
    High

    Segment performance

    2
    SegmentRevenueYoYQoQMargin
    North American Surface Transportation (NAST)
    Maintained gross margin despite 19% increase in spot market costs and higher fuel surcharges. Outgrew Cass Freight Shipment Index for 12th consecutive quarter. Achieved volume growth in retail and automotive verticals. LTL business delivered year-over-year volume growth for the ninth consecutive quarter.
    Gross margin: 14.6%Contractual truckload volume mix: 70% (up from 65% in Q1 last year)LTL volume growth YoY: ~2%Truckload volume decline YoY: ~3.5%Shipments per person per day increase (since end of 2022): >50%Operating margin expansion (excluding restructuring costs) YoY: 310 bps
    		———14.6%
    Global Forwarding
    Expanded gross margins despite lower adjusted gross profit per transaction and lower ocean services volume. Navigated tumultuous international freight market with conflict-driven rerouting and reduced flexibility. Evolving to a more cohesive, centralized model with Lean AI-enabled processes.
    Gross margin expansion YoY: 60 bpsAdjusted gross profit decline YoY: 12%
    		————

    Operational metrics

    24
    Adjusted EPS
    increased 15%YoY
    Q1 FY26

    Increased despite significant increase in truckload spot market costs.

    Total Revenue
    declined ~1%YoY
    Q1 FY26

    Macro environment continued to provide pressure.

    Adjusted Gross Profit (AGP)
    declined ~2%YoY
    Q1 FY26

    Primarily driven by 12% YoY decline in Global Forwarding.

    AGP per business day
    down 4%YoY
    January FY26

    Compared to prior year.

    AGP per business day
    down 2%YoY
    February FY26

    Compared to prior year.

    AGP per business day
    flatYoY
    March FY26

    Compared to prior year.

    Personnel Expenses (excluding restructuring)
    $334 milliondown $13.4 million or 3.9% YoY
    Q1 FY26

    Primarily due to continued productivity improvements and cost optimization efforts. Total personnel expenses were $352.7 million, including $18.8 million of restructuring charges.

    SG&A Expenses (excluding restructuring)
    $132.1 milliondown $9.6 million or 6.9% YoY
    Q1 FY26

    Due to cost optimization efforts. Excludes $1.5 million of restructuring charges.

    Operating Margin (excluding restructuring)
    expanded 210 bpsYoY
    Q1 FY26

    Result of efforts to grow market share, improve gross margins, and increase productivity and operating leverage.

    Operating Margin (excluding restructuring)
    expanded 310 bpsYoY
    Q1 FY26

    Expanded despite significant increase to spot market cost in the truckload market, demonstrating Lean AI strategy at work.

    Effective Tax Rate
    11.7%
    Q1 FY26

    Historically lower in Q1 due to incremental tax benefits from stock-based compensation deliveries.

    Liquidity
    $1.24 billion
    Q1 FY26

    Total liquidity at the end of Q1.

    Net Debt-to-EBITDA Ratio
    1.32xup from 1.03x at Q4 FY25
    Q1 FY26

    Increased as capital was opportunistically deployed for higher share repurchases.

    Capital Returned to Shareholders
    $360 millionmore than twofold increase YoY
    Q1 FY26

    Reflects strong conviction in strategy and long-term fundamentals.

    Share Repurchases
    $280.7 million
    Q1 FY26

    Part of capital returned to shareholders.

    Dividends
    $79 million
    Q1 FY26

    Part of capital returned to shareholders.

    Cass Freight Shipment Index
    down 6.2%YoY
    Q1 FY26

    Against easier comps, indicating market pressure.

    Total NAST Volume
    flatYoY
    Q1 FY26

    Outperformed the Cass Freight Shipment Index.

    Average Headcount
    down 12.3%YoY
    Q1 FY26

    Illustrates decoupling headcount growth from volume growth and optimizing organizational structure.

    Average Headcount
    down 3.1%sequentially
    Q1 FY26

    Illustrates decoupling headcount growth from volume growth and optimizing organizational structure.

    Shipments per person per day
    more than 50% increase
    since end of 2022

    Enhanced efficiency lowering cost to serve and elevating customer experience.

    Truckload Spot Market Costs (excluding fuel)
    increased ~19%YoY
    Q1 FY26

    According to DAT, due to supply-driven constraints like CDL enforcement and winter storms.

    Fuel Surcharge Impact on Truckload Gross Margin
    reduced by over 50 bpssequentially
    March FY26

    Due to increase in fuel surcharges from February to March. No impact on gross profit dollars as it's a pass-through cost.

    Sequential Volume Increase (Cass Freight Shipment Index)
    4.5%10-year average (excluding 2020)
    Q2

    Typical seasonal trend, beginning with produce season and continuing with stronger food and beverage demand.

    Industry KPIs

    3
    MetricValueDetails
    Smb b2b mixincreased from ~65% to ~70%%
    Fuel surcharge mechanicsreduced by over 50 bpsbps
    Workforce structural cost itemsdown 12.3%%

    Risks & headwinds

    4
    North American Trucking Market TighteningQ1 FY26, Full-year FY26

    Truckload spot market costs increased ~19% YoY (excluding fuel); full-year dry van spot rates expected to increase 17% YoY (up from 8% forecast 3 months ago).

    Mitigation: Opportunistically capturing transactional volumes at higher margins, disciplined revenue management, targeted repricing of contractual business, widening cost of hire advantage, Lean AI operating model.

    Geopolitical Conflicts and Route RestrictionsQ1 FY26

    Excess vessel capacity caused ocean rates to decline YoY; conflict-driven rerouting and reduced flexibility across global shipping networks.

    Mitigation: Global Forwarding team helping customers navigate disruptions, implementing revenue management disciplines, evolving to a more cohesive, centralized model.

    Montgomery Case OutcomeDecision expected May/June

    Potential for 50 different state rules if the Supreme Court ruling is not in the company's favor, bringing headwinds to the industry due to insurance implications.

    Mitigation: Strong legal argument, expectation to win, playbook for either outcome, focus on driving safety for the industry and a single national safety standard.

    Inflationary Pressures on SG&AFY26

    Most SG&A expenses are subject to inflation.

    Mitigation: Expected continued cost improvements to partially offset inflationary impact.

    What to watch in Q2 FY26

    5

    Productivity Improvements

    H2 FY26
    CurrentDouble-digit productivity improvements in Q1 (NAST shipments per person per day >50% increase since end of 2022)
    TargetOver-indexed to the second half of 2026

    Why it matters

    Execution of productivity gains, especially in the second half, is crucial for achieving the full-year EPS target and demonstrating the effectiveness of the Lean AI strategy.

    We continue to expect that our 2026 personnel expenses will be in the range of $1.25 billion to $1.35 billion. This includes an expectation that we will generate double-digit productivity improvements in both NAST and Global Forwarding in 2026 as we continue to implement agentic AI solutions across our quote-to-cash lifecycle of an order. As we have stated previously, we expect these productivity improvements to be over-indexed to the second half of 2026, and the same can be said of the sequential declines that are expected in our personnel expenses.

    Q&A highlights

    7

    How would C.H. Robinson respond if the Montgomery case decision is adverse, particularly regarding safety measures and market share implications for smaller brokers?

    Dave Bozeman stated the company expects to win the Montgomery case, emphasizing its importance for establishing a consistent national safety standard rather than 50 state rules. He noted that an adverse outcome would bring headwinds to the industry due to insurance implications, but C.H. Robinson is prepared for either scenario with a playbook.

    “The Montgomery case is a case that we expect to win. We have argued, I think, a really good case going to the Supreme Court. It's important that you know in the context here, and I think you do, is this case is really not about immunity for brokers. This is about safety, and this is why we support this case. Not having 50 different state rules.”

    asked by Thomas Wadewitz · answered by David Bozeman

    2 min read6 chapters

    Detailed Narrative

    01

    Lean AI Strategy and Productivity

    C.H. Robinson's Lean AI strategy, combining lean methodology with custom-built AI and human expertise, is central to its transformation. This approach aims to maximize value, minimize waste, and drive better outcomes for customers and carriers. The company is focused on engineering work to drive higher automation and achieve industry-leading cost to serve, with a goal of double-digit productivity improvements in 2026, particularly in the second half, by scaling AI agents across the quote-to-cash lifecycle.

    02

    North American Surface Transportation (NAST) Performance

    NAST demonstrated disciplined execution in Q1, achieving secular earnings growth and offsetting pressure from increased capacity costs. The segment maintained its gross margin at 14.6% and outgrew the Cass Freight Shipment Index for the 12th consecutive quarter. Contractual truckload volume grew year-over-year, increasing its mix to approximately 70% from 65% in Q1 last year, reflecting improved win rates in targeted verticals. The team strategically captured transactional volumes at higher margins amidst rising spot rates.

    03

    Global Forwarding Resilience

    The Global Forwarding team successfully navigated a tumultuous international freight market, impacted by geopolitical conflicts and route restrictions. Despite excess vessel capacity leading to declining ocean rates, the team expanded gross margins by 60 basis points year-over-year in Q1. The business continues to evolve towards a more cohesive, centralized model with standardized and Lean AI-enabled processes, focusing on differentiated service and solutions for customers.

    04

    Market Conditions and Strategic Response

    The North American trucking market experienced supply-driven tightening in Q1 2026, with truckload spot market costs increasing approximately 19% year-over-year. This was due to CDL enforcement actions and winter storms. C.H. Robinson responded with disciplined revenue management, targeted repricing of contractual business, and widening its cost of hire advantage. The company emphasizes its ability to pivot between volume and margins based on market dynamics, aiming for optimal earnings growth.

    05

    Capital Allocation and Financial Strength

    C.H. Robinson maintains a strong balance sheet and cash flow generation, enabling investments and significant capital returns. In Q1, the company generated $68.6 million in cash from operations and ended with $1.24 billion in liquidity. It returned approximately $360 million to shareholders, including $280.7 million in share repurchases and $79 million in dividends, reflecting conviction in its strategy and long-term fundamentals.

    06

    Montgomery Case and Industry Safety

    The company expects to win the Montgomery case, which is currently before the Supreme Court. Management views the case as critical for establishing a consistent national safety standard for the trucking industry, rather than 50 different state rules. While acknowledging potential implications for the industry, C.H. Robinson states it has a playbook for either outcome and is prepared to navigate any changes, emphasizing its commitment to safety.

    AI-generated summary of the company’s earnings call. Not investment advice.