CHRW 10-K & 10-Q changes, risk factors and insider trading

Economic recessionsrecession could have a significant, adverse impact on our business. The transportation industry historically has experienced cyclical fluctuations in financial results due to economic recessions, downturns in business cycles of our customers, interest rate fluctuations, currency fluctuations, and other economic factors beyond our control. Deterioration in the economic environment subjects our business to various risks, which may have a material and adverse impact on our operating results and cause us to not reach our long-term growth goals:

•Decrease in volumes: A reduction in overall freight volumes in the marketplace may reduce our opportunities for growth. A significant portion of our freight is comprised of transactional or spot market opportunities. The market may be impacted by supply chain disruptions ordisruptions, overall economic conditions.conditions, or changes in trade policies such as tariffs. In addition, if a downturn in our customers’ business cycles causes a reduction in the volumes of freight shipped by those customers, particularly in the retail, food, beverage, automotive, industrial, manufacturing, housing, chemicals, or technology industries, our operating results could be adversely affected.

Higher carrier prices may result in decreased adjusted gross profit margin and increases in working capital. Carriers can be expected to charge higher prices if market conditions warrant or to cover higher operating expenses. Our adjusted gross profits and income from operations may decrease if we are unable to increase our pricing to our customers. Increased demand for over the road transportation services and changes in regulations may reduce available capacity and increase motor carrier pricing. In some instances where we have entered into contract freight rates with customers, in the event market conditions change and those contracted rates are below market rates, we may be required to provide transportation services at a loss. As our volumes increase or we increase freight rates charged to our customers, the resulting increase in revenues may increase our working capital needs due to our business model, which generally has a higher length of days sales outstanding than days payables outstanding. Adjusted gross profit margin is a non-GAAP financial measure calculated as adjusted gross profits divided by total revenues. For additional information, see Item 7 of Part II, Management’s Discussion and Analysis of Financial Condition and Results of Operations.

Changing fuel costs and interruptions of fuel supplies may have an impact on our adjusted gross profit margin. In our truckload transportation business, fluctuating fuel prices may result in a decreased adjusted gross profit margin. While our different pricing arrangements with customers and contracted motor carriers make it very difficult to measure the precise impact, we believe fuel costs essentially act as a pass-through cost to our truckload business. In times of fluctuating fuel prices, our adjusted gross profit margin may also fluctuate. Adjusted gross profit margin is a non-GAAP financial measure calculated as adjusted gross profits divided by total revenues. For additional information, see Item 7 of Part II, Management’s Discussion and Analysis of Financial Condition and Results of Operations.

We face substantial industry competition.competition, Competitionincluding impacts from technological disruption and automation adoption. We operate in thean intensely competitive transportation services industry is intense and broad-based.logistics Weindustry, competefacing againstboth traditional and non-traditional logistics companies,competitors, including transportationasset-based providers that own equipment,carriers, third-party freight brokers, technologytechnology-driven matching services,platforms, internet freight brokers, carriers offering logistics services, and on-demand transportation service providers. WeCustomers may also competechoose against carriers’ internal sales forces. In addition, customers canto bring in-house some of thecertain services in-house, and we provide to them. We often buy and sell transportation services from and to many of our competitors. Increased competition could reduce our market opportunity andopportunities, create downward pressure on freight rates, and continued rate pressure may adversely affect our adjusted gross profits and income from operations. In some instances where we have entered into contract freight rates with customers, changes in the event market conditions changecould andrequire those contracted rates are below market rates, we may be requiredus to provide transportation services at a loss.

•issues related to non-compliance with laws, rules, and regulations in the countries in which we operate includingincluding, among others, those promulgated by the U.S.United States Office of Foreign Assets Control (“OFAC”) related to sanctions and embargoes and the United States Foreign Corrupt Practices Act related to bribery and similar regulations.corruption. Failure to comply could result in reputational harm, substantial penalties, and operational restrictions; and

•global laws and regulations regarding the collection, use, processing, and transfer of personal information may impact our services by imposing restrictions on processing, increaseincreasing legal claim liability, and increaseincreasing regulatory scrutiny and fines. These requirements continue to evolve and vary by region and regime, which increases the risk of noncompliance and impacts operations, including additional expenses and resources necessary to manage compliant operations.

Our ability to appropriately staff and retain employees is important to our business model. Our continued success depends upon our ability to attract and retain motivated logistics professionals. In order to maintain high variability in our business model, it is necessary to adjust staffing levels to changing market demands. In periods of rapid change, it may be more difficult to match our staffing level to our business needs. We cannot guarantee we will be able to continue to hire and retain a sufficient number of qualified personnel. In addition, macroeconomic factors impacting the labor market may result in higher costs to hire and retain qualified personnel. Because of our comprehensive employee training program, our employees are attractive targets for new and existing competitors. ContinuedOur continued success depends in large partsignificantly on our ability to develop successfultalented employees intoand managers.prepare them for leadership roles.

We use, and may continue to expand our use of, machine learning and artificial intelligence (“AI”) technologies to deliver our services and operate our business. We leverage machine learning and AI technologies to enhance operational efficiency, automate processes, and improve the customer experience across our logistics platform. If we fail to successfully integrate AI into our platform and business processes, or if we fail to keep pace with rapidly evolving AI technological developments, including attracting and retaining talented AI developersdevelopers, and programmersprogrammers, and cybersecurity personnel, we may face a competitive disadvantage. At the same time, the use or offering of AI technologies may result in new or expanded risks and liabilities, including enhanced government or regulatory scrutiny, litigation, privacy and compliance issues, ethical concerns, confidentiality, reputational harm, and security risks. It is not possible to predict all of the risks related to the use of AIAI, and changes in laws, rules, directives, and regulations governing the use of AI may adversely affect our ability to develop and use AI or subject us to additional legal liability. The cost of complying with laws and regulations governing AI could be significant and would increase our operating expenses, which could adversely affect our business, financial condition, and results of operations. Further, market demand and acceptance of AI technologies are uncertain, and we may be unsuccessful in efforts to further incorporate AI into our processes.

Divestiture activity poses risks, and success depends upon efficiently managing the transition process. Failure to do so includes potential risksrisks, including disruption to our core operations, failure to deliver the anticipated value for shareholders, diverting management’s attention from other strategic initiatives, negative impacts on our customer and contract carrier relationships, and the loss of key employees. The inability to successfully manage these risks may result in higher operating expenses, lost revenues, or other negative effects on earnings and our financial results.

Changes to income tax regulations in the United States and other jurisdictions where we operate may increase our tax liability. We are subject to income taxes in the United States and other jurisdictions where we operate. Changes to income tax laws and regulations in any of the jurisdictions where we operate could adversely affect our overall tax liability. The Organization for Economic Cooperation and Development (“OECD”) reached agreement among various countries to implement a minimum 15 percent tax rate on certain multinational enterprises, commonly referred to as Pillar Two. Subsequently, multiple sets of administrative guidance have been issued. Many non-U.S. tax jurisdictions have either enacted legislation to adopt certain components of the Pillar Two Model Rules beginning in 2024, including the European Union Member States, with the adoption of additional components in later years, or announced their plans to enact legislation in future years. We are subject to these rules in certain jurisdictions in which we operate, and any expected tax impacts have been included in our results. As rules for more jurisdictions will become effective in 2025, we are continuing to evaluate the impact of these proposed and enacted legislative changes as new guidance becomes available. Some of these legislative changes could impact our effective tax rate and tax liabilities. Given the numerous proposed tax law changes and the uncertainty regarding such proposed legislative changes, the impact of Pillar Two could adversely impact our effective tax rate, financial position, and results of operations.

We are subject to claims arising from our transportation operations. We use the services of thousands of third-party transportation companies in connection with our transportation operations. From time to time, the drivers employed and engaged by the motor carriers with which we contract are involved in accidents, which may result in serious personal injuries. The resulting types and/or amounts of damages may be excluded by or exceed the amount of insurance coverage maintained by the contracted motor carrier. We contractually require all motor carriers we work with to carry at least $750,000 in automobile liability insurance. We also require all contracted motor carriers to maintain workersworkers’ compensation and other insurance coverage as required by law. Most contracted motor carriers have insurance exceeding these minimum requirements, as well as cargo insurance in varying policy amounts. Railroads, which are generally self-insured, provide limited common carrier cargo loss or damage liability protection, which generally upranges from $100,000 to $250,000 per shipment. Although these drivers are not our employees and all of these drivers are employees, owner-operators, or independent contractors working for the contracted motor carriers, from time to time, claims may be asserted against us for their actions or for our actions in retaining them. Claims against us may exceed the amount of our insurance coverage or may not be covered by insurance at all. A material increase in the frequency or severity of accidents, liability claims, workers’ compensation claims, or unfavorable resolutions of claims could materially and adversely affect our operating results. In addition, significant increases in insurance costs or the inability to purchase insurance as a result of these claims could reduce our profitability. Our involvement in the transportation of certain goods, including but not limited to, hazardous materials, could also increase our exposure in the event one of our contracted motor carriers is involved in an accident resulting in injuries or contamination.

In North America, as a property freight broker, we are not legally liable for loss or damage to our customers’ cargo. In our customer contracts, we may agree to assume cargo liability up to a stated maximum. We typically do not assume cargo liability to our customers above minimum industry standards in our international freight forwarding, ocean transportation, or air freight businesses on international or domestic air shipments. Although we are not legally liable for loss or damage to our customers’ cargo, from time to time, claims may be asserted against us for cargo losses. We maintain a broad cargo liability insurance policy to help protect us against catastrophic losses that may not be recovered from the responsible contracted carrier. We also carry various liability insurance policies, including automobile and general liability, with atotal $125automobile limits of $135 million umbrella with upsubject to a $10 million retention,per anincident additionaldeductible, $10and total general liability limits of $87 million corridorsubject retention, andto a $6.5$500,000 millionper retentionincident in various layers throughout the umbrella.deductible.

Buying and reselling fresh produce exposes us to possible product liability. Agricultural chemicals used on fresh produce are subject to various approvals, and the commodities themselves are subject to regulations on cleanliness and contamination. Product recalls in the produce industry have been caused by concern about particular chemicals and alleged contamination, often leading to lawsuits brought by consumers of allegedly affected produce. We may face claims for a variety of damages arising from the sale of produce, which may include potentially uninsured consequential damages. While we are insured for up to $125$87 million for product liability claims subject to a $500,000 per incident deductible, settlement of class action claims is often costly, and we cannot guarantee our coverage will be adequate or that it will continue to be available. If we have to recall produce, we may be required to bear the cost of repurchasing, transporting, and destroying any allegedly contaminated product, as well as associated consequential damages. We carry product recall and contamination insurance coverage of $30 million. A loss for which we are not adequately insured could materially affect our financial results. The coverage we currently have in place may not apply to a particular loss, or it may not be sufficient to cover all liabilities to which we may be subject. This policy has a retention of $3.5 million per incident. Any recall or allegation of contamination could affect our reputation, particularly of our proprietary and/or licensed branded produce programs, which could materially and adversely affect our operating results. Loss due to spoilage (including the need for disposal) is also a routine part of the sourcing business.

We source fresh produce under a license issued by the U.S. Department of Agriculture (“USDA”) as required by PACA.Perishable Agricultural Commodities Act (“PACA”). We are also subject to various regulations and requirements promulgated by other international, domestic, state, and local agencies and port authorities. Our failure to comply with the laws and regulations applicable to entities holding these licenses could materially and adversely affect our results of operations or financial condition.

Legislative or regulatory changes can affect the economics of the transportation industry by requiring changes in operating practices or influencing the demand for, and the cost of providing, transportation services. As part of our logistics services, we operate owned or leased warehouse facilities. Our operations at these facilities include both warehousing and distribution services, and we are subject to various federal, state, and international environmental,environmental; work safety,safety; and hazardous materials regulations. We may experience an increase in operating costs, such as security costs, as a result of governmental regulations that have been or will be adopted in response to terrorist activities and potential terrorist activities. No assurances can be given that we will be able to pass these increased costs on to our customers in the form of rate increases or surcharges, and our operations and profitability may be materially and adversely affected as a result.

United States Department of Homeland Security regulations applicable to our customers that import goods into the United States and our contracted ocean carriers can impact our ability to provide and/or receive services with and from these parties. Enforcement measures related to violations of these regulations can slow and/or prevent the delivery of shipments, which may negatively impact our operations.

Our contracted transportation providers are subject to an increasingly stringentcomplex lawsclimate-related protectingregulatory the environment,landscape, including transitional risks relating to climate change, which could directly or indirectly have a material adverse effect on our business. Future and existing environmental regulatory requirements, including evolving transportation technology,requirements in the United States and abroad could adversely affect operations and increase operating expenses, which in turn could increase our purchased transportation costs. We may also incur expenses as a result of regulators requiring additional climate-related disclosures regarding our contracted transportation providers that may be labor-intensive to report on. UntilGiven the timing,continuously scope,developing and extentnature of suchthese possibleregulatory regulation becomes finalized,frameworks, we cannot predict its effect on our company, but if we are unable to pass such costs along to our customers, our business could be materially and adversely affected. Even without any new legislation or regulation, increased public concern regarding greenhouse gas emissions by transportation carriers could harm the reputations of companies operating in the transportation and logistics industries and shift consumer demand toward more locally-sourced products and away from our services.

We may be subject to negative impacts of changes in political and governmental conditions. Our operations may be subjectimpacted toby the influences of significant political, governmental, and similar changes and our ability to respond to them, including:

•wars, civil unrest, acts of terrorism, and other conflictsglobal conflicts, such as the current conflict in the Red Sea, which is impacting the global freight market.

We may be subject to negative impacts of catastrophic events. A disruption or failure of our systems or operations in the event of a major earthquake, weather event, cyber attack,cyber-attack, heightened security measures, actual or threatened terrorist attack, strike, civil unrest, pandemic, or other catastrophic event could cause delays in providing services or performing other critical functions. We are particularly vulnerable to these risks given the broad and global scope of our operations. A catastrophic event that results in the destruction or disruption of any of our critical business or information systems could harm our ability to conduct normal business operations and adversely impact our operating results.

C.H. Robinson Worldwide, Inc. (“C.H. Robinson,” “the company,” “we,” “us,” or “our”) is one of the largest global logistics providers in the world, with consolidated total revenues of $17.7$16.2 billion in 2024.2025. WeAs a leader in Lean AI supply chains, we deliver logistics like no one else. CompaniesFor aroundmore thethan worlda lookcentury, companies everywhere have looked to us to reimagine supplyhow chains,goods advance freight technology, and solve logistics challenges—from the simple to the complex.move. We are grounded in our promise to deliver exceptional customer success, using our expertise, scale, and tailored solutions toacross helpthe customersworld navigatevia increasinglytruckload, complexless-than-truckload, globalocean, air, and more. With our unique combination of human insight and Lean AI working as one, supply chains.chains move faster, smarter, and more sustainably.

Our 2024 Global Forwarding results in 2025 were largely consistent with the market trends discussed aboveabove. inThroughout the marketyear, trends section. Wewe experienced elevatedshort-lived purchasedperiods transportationof costs in 2024 compared to the prior year, resulting in increased total revenuespricing and costvolume ofvolatility purchasedlargely transportationassociated inwith shifting trade policies. Despite this volatility, overall ocean services.freight Inrates 2024,and volumes declined from the global forwarding market faced disruptions that led to a significant rise in freight rates. This contrasts with 2023, which saw weak demand and elevated levels of capacity. These market dynamics resultedobserved in a2024, notableprimarily increasedue into bothexcess totalvessel revenuescapacity and costweak ofglobal purchasedconsumer transportation compared to the previous year.demand. Our total ocean freight volumes increaseddecreased 5.54.5 percent while our air freight tonnage increaseddecreased 17.011.5 percent in 20242025 compared to the prior year.

•Total revenues increaseddecreased 0.78.4 percent to $17.7$16.2 billion, primarily driven by higherthe divestiture of our Europe Surface Transportation business, in addition to lower pricing and volume in our ocean services,services partially offset byand lower pricingfuel and volumesurcharges in our truckload services.

•Gross profits increaseddecreased 5.81.8 percent to $2.7 billion. Adjusted gross profits increaseddecreased 6.21.3 percent to $2.8$2.7 billion, primarily driven by lower adjusted gross profit per transaction in our ocean services and the divestiture of our Europe Surface Transportation business, which were partially offset by higher adjusted gross profit per transaction in our truckloadLTL, truckload, and oceancustoms services.

•Personnel expenses decreased 0.65.9 percent to $1.5$1.4 billion, primarily due to cost optimizationcost-optimization efforts and productivity improvements, partially offset by higher variable compensationimprovements and higherthe restructuringdivestiture chargesof relatedour toEurope workforceSurface reductions.Transportation business. Average employee headcount decreased 10.311.5 percent.

•Other selling, general, and administrative (“SG&A”) expenses increaseddecreased 2.511.8 percent to $639.6$564.3 million, primarily due to a $44.5 million loss onin the prior year related to the divestiture of our Europe Surface Transportation business.business Theand prior year includedrestructuring $19.6charges millionfor of charges, primarilyimpairments related to the divestiture ofreducing our operationsfacilities in Argentina.footprint. In addition, other SG&A expenses decreaseddeclined across several expense categories in the2025 currentdue year.to cost optimization efforts.

•Income from operations totaled $669.1$795.0 million, up 30.018.8 percent from last year, due to an increase in adjusted gross profits, partially offset by the increasedecrease in operating expenses. Adjusted operating margin of 24.229.1 percent increased 440490 basis points.

•Interest and other income/expenses, net totaled $89.9$72.5 million, which primarily consisted of $85.9$63.1 million of interest expense, which decreased $4.3$22.8 million versus last year due to a lower average debt balance.balance and lower variable interest rates. The current year results also included aan $7.4$11.2 million net loss from foreign currency revaluation and realized foreign currency gains and losses.

Operating expenses. Personnel expenses decreased, primarily due to cost optimization efforts including lower average employee headcountheadcount, partiallyas offsetwell by higher variable compensation reflectingas the improvedimpact results compared to the prior year. Other SG&A expenses increased primarily due toof the divestiture of our Europe Surface Transportation business,business. whichOther wasSG&A partiallyexpenses offsetalso decreased, driven by the impactprior ofyear loss recognized on the divestiture of our ArgentinaEurope operationsSurface Transportation business and prior year restructuring charges related to reducing our facilities footprint. In addition, other SG&A expenses decreased across several expense categories in 2023the discussedcurrent below.year.

In addition to the above, our personnel expenses for 20242025 included $24.1$30.0 million of severance and related personnel expenses related to our 20242025 Restructuring Program. In addition, other SG&A expenses for 2025 included $2.5 million of expenses associated with our 2025 Restructuring Program and the divestiture of our Europe Surface Transportation business. We also incurred $66.2$8.8 million in other SG&A expenses in 2024. These expenses were2025, primarily due tofrom a $44.5$6.3 million lossimpairment relatedcharge toon our Kansas City regional center lease resulting from the divestitureexecution of oura Europesublease Surfaceagreement Transportationon businessa andportion $21.9of millionthe related to our 2024 Restructuring Program.building.

Our personnel expenses for 20232024 included $18.4$24.1 million of severance and related personnel expenses related to our 20222024 Restructuring Program. We also incurred $19.6$66.2 million ofin other SG&A expenses in 2024. These expenses were primarily due to a $44.5 million loss related to the divestiture of our ArgentinaEurope operations.Surface Transportation business and $21.9 million related to our 2024 Restructuring Program. Refer to Note 14, Restructuring, for further discussion related to our 20242025 and 20222024 Restructuring Programs. Refer to Note 15, Divestitures, for further discussion related to the divestiture of our Europe Surface Transportation business and Argentina operations.business.

Interest and other income/expense, net. Interest and other income/expense, net was $89.9$72.5 million, primarily consistedconsisting of $85.9$63.1 million of interest expense, which decreased $4.3$22.8 million compared to the prior year due to a lower average debt balance.balance and lower variable interest rates. The current year also included aan $7.4$11.2 million unfavorable impact from foreign currency revaluation and realized foreign currency gains and losses. The prior year included a $24.4$7.4 million unfavorable impact from foreign currency revaluation and realized foreign currency gains and losses driven by a $16.4 million foreign currency loss related to the devaluation of the Argentine Peso.losses.

(1) Adjusted gross profitsprofit is a non-GAAP financial measure explained above.

Gross profits and adjusted gross profits. NAST adjusted gross profits increased,increased driven by truckload services due to higher adjusted gross profits per transaction partiallyin offset by a decline inboth truckload serviceand volumes.LTL Thisservices. The improvement was driven by improvedthe executioncontinued andadvancement disciplinedof our dynamic pricing and capacitycosting procurementcapabilities. withinThese ouradvancements transactionalhave portfolioallowed in 2024. Our average truckload linehaul rate per mile chargedus to ourrespond customers,more whichrapidly excludesto fuelmarket surcharges,fluctuations decreasedthrough approximatelymore 5.0 percent. Our truckload linehaul cost per mile, excluding fuel surcharges, decreased approximately 5.5 percent. Additionally, LTL services adjusted gross profits per transaction increased, driven by the improved executionfrequent and disciplinedprecise pricing efforts across our portfolio, in addition to an increase in volumes.discovery. NAST other adjusted gross profits decreased, primarily due to a declinedecrease in warehousing and intermodal adjusted gross profits.services.

In addition to the above, NAST personnel expenses for 2025 included $10.2 million of severance and related personnel expenses. We also incurred $0.4 million in restructuring related other SG&A expenses in 2025. These expenses were both associated with our 2025 Restructuring Program. Personnel expenses for 2024 included $10.2 million of severance and related personnel expenses. We also incurred $6.9 million in restructuring related other SG&A expenses in 2024. These expenses were both associated with our 2024 Restructuring Program. Personnel expenses for 2023 included $1.1 million of severance and related personnel expenses associated with our 2022 Restructuring Program. Refer to Note 14, Restructuring, for further discussion related to our 20242025 and 20222024 Restructuring Programs.

(1)Adjusted gross profitsprofit is a non-GAAP financial measure explained above.

In addition to the above, personnel expenses for 2025 included $15.0 million of severance and related personnel expenses. We also incurred $1.2 million in other SG&A expenses in 2025. These expenses were both associated with our 2025 Restructuring Program. Personnel expenses for 2024 included $6.9 million of severance and related personnel expenses. We also incurred $4.7 million in other SG&A expenses in 2024. These expenses were both associated with our 2024 Restructuring Program. Personnel expenses for 2023 included $3.8 million of severance and related personnel expenses. Other SG&A in 2023 included $18.2 million primarily related to disposal and exit activities, including asset impairments. These expenses were associated with our 2022 Restructuring Program and the divestiture of our Argentina operations. Refer to Note 14, Restructuring, for further discussion related to our 20242025 and 20222024 Restructuring Programs. Refer to Note 15, Divestitures, for further discussion related to the divestiture of our Argentina operations.

(1) Adjusted gross profitsprofit is a non-GAAP financial measure explained above.

Gross profits and adjusted gross profits. Robinson Fresh adjusted gross profits increased duedriven toby an increase in integrated supply chain solutions for retail and foodservice customers. Managed Solutions adjusted gross profits decreasedincreased due to loweran transactionincrease volume.in freight under management. Other Surface Transportation adjusted gross profits decreased primarily due toas a decreaseresult inof adjustedthe grossdivestiture profitsof perour transactionEurope inSurface EuropeanTransportation truckload and a decrease in European truckload volumes.business.

Operating expenses. Personnel expenses in 2024, for All Other and Corporate included $7.0 million of severance and related personnel expensesexpenses, primarily associated with our 2024 Restructuring Program. We also incurred $54.5 million of other SG&A expenses in 2024, that included a $44.5 million loss related to the divestiture of our Europe Surface Transportation business. Personnel expenses in 2023, included $13.5 million of severance and related personnel expenses. We also incurred $1.5 million of other SG&A expenses in 2023. These expenses were associated with our 2022 Restructuring Program and the divestiture of our Argentina operations. Refer to Note 14, Restructuring, for further discussion related to our 20242025 and 20222024 Restructuring Programs. Refer to Note 15, Divestitures, for further discussion related to the divestituresdivestiture of our Europe Surface Transportation business and Argentina operations.business.

Cash and cash equivalents totaled $160.9 million as of December 31, 2025, and $145.8 million as of December 31, 2024, and $145.5 million as of December 31, 2023.2024. Cash and cash equivalents held outside the United States totaled $144.9 million as of December 31, 2025, and $134.0 million as of December 31, 2024, and $142.8 million as of December 31, 2023.2024. Working capital decreasedincreased from $828.7 million at December 31, 2023, to $644.7 million at December 31, 2024.2024, to $966.8 million at December 31, 2025.

Cash flowflows from operating activities. WeCash generated significant cash flowflows from operating activities increased significantly in 2024,2025, driven byreflecting our strong operating resultsperformance and increased net income. The increase tohigher net income wasversus offsetthe byprior elevatedyear. freightOperating ratescash flows also benefited from a significant reduction in ocean services,freight drivencosts bycompared to the factorselevated rates experienced in 2024, as further discussed in the market trends and business trends sections above, which resulted in an increase in net operating working capital and negatively impacted our cash flow from operations. In 2023, our results were adversely impacted by weak freight demand and excess carrier capacity, which significantly decreased our net operating working capital and benefited our cash flow from operations.above. We continue to closely monitor credit and collections activities and the quality of our accounts receivable balance to minimize risk as well as work with our customers to facilitate the movement of goods across their supply chains while also ensuring timely payment.

Cash used for investing activities. Our investing activities consist primarily of capital expenditures and cash paid for acquisitions. Capital expenditures consisted primarily of investments in software, which are intended to deliver scalable solutionssolutions, including those driven by transformingAI, that transform our processes, acceleratingimprove our customer and contract carrier experience, accelerate the pace of development, prioritizingand data integrity, improvingimprove our customerdynamic pricing and carriercosting experience, and increasing our efficiency to help expand our adjusted operating margins and grow the business.capabilities.

Cash used for financing activities. Net cash used for financing activities increased significantly in 2025 compared to 2024, driven by an increase in cash returned to shareholders and net payments on outstanding borrowings. In 2025, we resumed share repurchases under our board authorization and increased our annual dividend to shareholders. Despite the increase in cash returned to shareholders our strong cash flow from operations allowed us to reduce our outstanding borrowings on debt. We had net repayments on debt in 20242025, 2024, and 2023 and net borrowings on debt in 2022.2023. Net repayments in 2025 and 2024 were primarily to decrease the outstanding balance on the RevolvingReceivables CreditSecuritization Facility and the ReceivablesRevolving SecuritizationCredit Facility. Net repayments in 2023 were primarily to repay the Senior Notes Series A, which matured in August 2023, and the 364-Day Unsecured Revolving Credit Facility, which matured in May 2023. Net borrowings in 2022 were primarily to fund share repurchases and working capital needs in the first half of 2022.

In December 2022, the Board of Directors increased the number of shares authorized to be repurchased by 20,000,000 shares. As of December 31, 2024,2025, there were 6,763,4453,669,530 shares remaining for future repurchases. TheOn numberOctober 28, 2025, the Board of sharesDirectors weapproved repurchase,an ifadditional any,$2.0 during future periods will vary based on our cash position, other potential usesbillion of ourauthorization cash,under the company’s share repurchase program. The stock repurchase program does not obligate the company to acquire any amount of common stock and marketshall conditions.expire or terminate at the Board's discretion; however, the company currently expects to execute the share repurchase program over a period of approximately three years. Over the long term, we remain committed to our quarterly dividend and share repurchases to enhance shareholder value. Such repurchases, if any, will depend on prevailing market conditions, our liquidity requirements, contractual restrictions, and other factors. We may seek to retire or purchase our outstanding Senior Notes through open market cash purchases, privately negotiated transactions, or otherwise.

Recognizing revenue for contracts where the transit period is partially complete or completed and not yet invoiced at period end requires management to make judgments that affect the amounts and timing of revenue recognized at period end. As of December 31, 2024,2025, we recorded revenue of $200.3$156.4 million for services we have provided while a shipment was still in-transit, but for which we had not yet completed our performance obligation or had not yet invoiced our customer compared to $189.9$200.3 million at December 31, 2023.2024. The amount of revenue recognized for contracts where the transit period was partially complete increaseddecreased as of December 31, 2024,2025, compared to December 31, 2023,2024, driven by the macroeconomic and industry factors impactingreducing the cost of purchased transportation and sell rates in ocean services. See Item 7 of Part II, Management’s Discussion and Analysis of Financial Condition and Results of Operations, for further information.

In the Step One Analysis, the fair value of each reporting unit is determined using either a discounted cash flow analysis, the market approach, or a combination of both. Projecting discounted future cash flows requires the use of significant judgementjudgment to make significant estimates regarding future revenues and expenses, projected capital expenditures, changes in working capital, and the appropriate discount rate. Use of the market approach consists of comparisons to comparable publicly-traded companies that are similar in size and industry. Actual results may differ from those used in our valuations when a Step One Analysis is performed.

In addition to the other information set forth in this Quarterly Report, you should carefully consider the factors disclosed in Part I, Item 1A. Risk Factors in our Annual Report on Form 10-K for the year ended December 31, 2025, which could materially affect our business, financial condition, or future results. ThereExcept for the updates to the risk factor set forth below, there have not been material changes in our risk factors set forth in the company’s 2025 Annual Report on Form 10-K. The risks described in our Annual Report on Form 10-K are not the only risks facing our company. Additional risks and uncertainties not currently known to us or that we currently deem to be immaterial also may materially adversely affect our business, financial condition, and/or operating results.

Our Quarterly Report on Form 10-Q, including this discussion and analysis of our financial condition and results of operations and our disclosures about market risk, contains certain “forward-looking statements.” These forward-looking statements are subject to certain risks and uncertainties that could cause actual results to differ materially from our historical experience or our present expectations, including, but not limited to, factors such as changes in economic conditions, including uncertain consumer demand; changes in market demand and pressures on the pricing for our services; fuel price increases or decreases, or fuel shortages; competition and growth rates within the global logistics industry that could adversely impact our profitability and ability to achieve our long-term growth targets; freight levels and increasing costs and availability of truck capacity or alternative means of transporting freight; risks associated with seasonal changes or significant disruptions in the transportation industry; risks associated with identifying and completing suitable acquisitions; our dependence upon and changes in relationships with existing contracted truck, rail, ocean, and air carriers; risks associated with the loss of significant customers; risks associated with reliance on technology to operate our businessbusiness, including reliance on third-party platforms; cybersecurity related risks; our ability to staff and retain employees; risks associated with operations outside of the United States; our ability to successfully integrate the operations of acquired companies with our historic operations or efficiently manage divestitures; climate change related risks; risks associated with our indebtedness; risks associated with interest rates; risks associated with litigation, including contingent auto liability and insurance coverage; risks associated with the potential impact of changes in government regulationsregulations, including environmental-related regulations; risks associated with the changes to income tax regulations; risks associated with the produce industry, including food safety and contamination issues; the impact of changes in political and governmental conditions; changes to our capital structure; changes due to catastrophic events; risks associated with the usage of artificial intelligence technologies; risks associated with cybersecurity events; and other risks and uncertainties, including those described in Item 1A. Risk Factors of our Annual Report on Form 10-K for the year ended December 31, 2025, filed with the Securities and Exchange Commission on February 13, 2026, as well as the updates to these risk factors included in Part II—“Item 1A, Risk Factors,” herein.

One of the key metrics we use to measure market conditions is the truckload routing guide depth from our Managed Solutions business. This metric measures the average number of carriers contacted before securing a transportation provider. RoutingA routing guide depth of 1 would be perfect performance and 2 would be extremely poor. As carrier capacity tightened during the quarter, routing guide performance deteriorated, withThe average routing guide depth increasing to 1.5 in the firstsecond quarter of 2026,2026 was 1.4 compared to 1.3 in both the fourthsecond quarter of 20252025, andreflecting a further tightening of the firstmarket quartercompared ofto 2025.the prior year.

Our surface transportation business operatedcontinued to operate in a rising cost environment during the firstsecond quarter of 2026, as discussed in the Market Trends section. As a result of these challengingtightening market conditions, our average truckload linehaul cost per mile, excluding fuel surcharges, increased approximately 13.029.0 percent during the firstsecond quarter of 2026 compared to the firstsecond quarter of 2025. Our average truckload linehaul rate charged to our customers, excluding fuel surcharges, increased approximately 11.025.5 percent during the firstsecond quarter of 2026.2026 Despitecompared to the rapidlysecond increasingquarter of 2025. The sharper acceleration in cost environment,relative weto improvedrate reflected the supply-driven tightening described above, as carrier capacity contraction and diesel fuel price volatility drove costs higher faster than contractual rates could reprice. In truckload, our adjusted gross profit per transaction indeclined bothmodestly, truckloadas andwe lessworked than truckload (“LTL”) services, driven by the continued advancement ofwith our dynamic pricing and costing capabilities. These capabilities enabled uscustomers to respond faster and more surgically to meethonor our contractual commitments andwhile adaptactively quicklyrepricing contractual rates to reflect the changing market dynamics and also capture higher-margin opportunities in the spot market. Our combined North American Surface Transportation (“"NAST”") truckload and LTL volume heldincreased flatapproximately 1.5 percent year-over-year in the firstsecond quarter of 2026, significantly outperforming the Cass Freight Index, which declined 6.23.3 percent compared to the firstsecond quarter of 2025.

The following summarizes select firstsecond quarter 2026 year-over-year operating comparisons to the firstsecond quarter 2025:

•Total revenues decreasedincreased 0.819.3 percent to $4.0$4.9 billion, primarily driven by lower volume in our ocean and truckload services and lower pricing in our ocean services. This was partially offset by higher pricing in our truckloadtruckload, LTL, air, and LTLocean services.

•Gross profits decreasedincreased 1.66.8 percent to $646.6$725.9 million. Adjusted gross profits decreasedincreased 1.96.5 percent to $660.5$738.0 million, primarily driven by lower adjusted gross profit per transaction and lower volume in our ocean services. This was partially offset by higher adjusted gross profit per transaction in our LTL and air services and higher volume in our LTL services.

•Personnel expenses increased 1.20.9 percent to $352.7$338.5 million, primarily due to higher restructuringincentive chargescompensation relatedreflecting toour workforcestrong reductions.operating performance. This was partially offset by cost optimization efforts and productivity improvements. Average employee headcount decreased 12.310.8 percent.

•Other selling, general, and administrative (“SG&A”) expenses decreasedincreased 10.61.2 percent to $132.1$143.8 million primarily due to a prior year impairment charge on our Kansas City regional center lease resulting from the execution of a sublease agreement on a portion of the building. In addition, other SG&A expenses declinedincreases across several expense categories in 2026 due to cost optimization efforts.categories.

•Income from operations decreasedincreased 0.718.4 percent to $175.7$255.7 million, due to the decreaseincrease in adjusted gross profit and higher restructuring charges,profit, partially offset by the decreaseincrease in operating expenses.

•Interest and other income/expense, net totaled $9.0$17.9 million of expense, consisting primarily of $14.0$16.9 million of interest expense, which decreasedincreased $2.8$0.1 million versus last year due to a lowerhigher average debt balancebalance, andpartially offset by lower variable interest rates. The firstsecond quarter of 2026 results also include a $1.7$1.4 million net gainloss from foreign currency revaluation and realized foreign currency gains and losses.

Consolidated Results of Operations—Three Months Ended MarchJune 31,30, 2026, Compared to the Three Months Ended MarchJune 31,30, 2025

Operating expenses. Personnel expenses increased primarily due to higher restructuringincentive chargescompensation relatedreflecting toour workforcestrong reductionsoperating performance. This impact was partially offset in part by cost optimization efforts and productivity improvements, including lower average employee headcount. Other SG&A expenses decreasedincreased primarily due to a prior year impairment charge discussed below. In addition, other SG&A expenses declinedincreases across several expense categories in the first quarter of 2026 due to cost optimization efforts.categories.

Our personnel expenses in the firstsecond quarter of 2026 included $18.8$8.0 million of severance and related personnel expenses. We alsoexpenses incurred $1.4 million of restructuring related other SG&A expenses in the first quarter of 2026. These expenses were both associatedconnection with our 2025 Restructuring Program. In addition, other SG&A expenses included a net $0.5 million gain driven by the favorable termination of an operating lease, also associated with the program. Refer to Note 13, Restructuring, for further discussion related to our 2025 Restructuring Program.

Our personnel expenses for the firstsecond quarter of 2025 included $1.2$3.9 million of severance and related personnel expenses andassociated $1.2with millionour of2025 Restructuring Program. In addition, other SG&A expenses included $0.4 million of expenses resulting from the divestiture of our Europe Surface Transportation business. Refer to Note 14, Divestitures, for further discussion related to the divestiture of our Europe Surface Transportation business. We also incurred $6.3 million of other SG&A expenses in the first quarter of 2025 resulting from an impairment charge on our Kansas City regional center lease resulting from the execution of a sublease agreement on a portion of the building.

Interest and other income/expense, net. Interest and other income/expense, net primarily consisted of interest expense of $14.0$16.9 million which decreasedincreased $2.8$0.1 million during the firstsecond quarter of 2026, due to a lowerhigher average debt balancebalance, andpartially offset by lower variable interest rates. The current period included a $1.7 million net gain from foreign currency revaluation and realized foreign currency gains and losses. The first quarter of 2025 included a $3.4$1.4 million net loss from foreign currency revaluation and realized foreign currency gains and losses. The second quarter of 2025 included a $4.9 million net loss from foreign currency revaluation and realized foreign currency gains and losses.

Provision for income taxes. Our effective income tax rate was 11.721.5 percent for the firstsecond quarter of 2026 compared to 13.721.4 percent for the firstsecond quarter of 2025. The effective income tax rate for the firstsecond quarter of 2026 was lowerhigher than the statutory federal income tax rate primarily due to the impact of share-based payment awards which decreased the effectivestate income tax rateexpense, bynet 21.9of percentagefederal points, partially offset by non-deductible executive compensation expensesbenefit, which increased the effective tax rate by 8.82.1 percentage points and by non-deductible executive compensation expenses, which increased the effective tax rate by 1.5 percentage points. These impacts were partially offset by the tax benefit of share-based payment awards, and foreign tax credits. The effective income tax rate for the firstsecond quarter of 2025 was lowerhigher than the statutory federal income tax rate primarily due to thestate income tax benefitexpense, net of share-basedfederal paymentbenefit, awards,which aincreased lowerthe effective tax rate onby 2.3 percentage points. This impact was partially offset by foreign earnings and U.S. tax credits and incentives which decreased the effective income tax rate by 6.11.9 percentage points,points 2.7during percentagethe points,second andquarter 1.6of percentage points, respectively.2025.

Three Months Ended MarchJune 31,30, 2026, Compared to the Three Months Ended MarchJune 31,30, 2025

Total revenues and direct costs. NAST total revenues and direct costs increased significantly primarily due to higher market pricing and costs in our truckload and LTL services, including higher fuel surcharges,surcharges. andTightening increasedmarket LTLconditions volumes.drove These increases were partially offset by lower truckload volumes. Elevatedhigher market pricing wasacross drivenour by supply‑side pressures, including increased regulatory enforcement activitytruckload and increasingLTL carrier operating costs,services, which acceleratedwas carrierthe attritionlargest contributor to the year-over-year increase, with volumes also increasing in both truckload and resultedLTL services. As discussed in higherthe Market Trends and Business Trends sections, the supply-driven tightening and elevated diesel fuel prices in the market drove all-in transportation rates.rates higher than the prior year. Our average truckload linehaul rate per mile charged to customers, which excludes fuel surcharges, increased approximately 11.025.5 percent in the firstsecond quarter of 2026 compared to the firstsecond quarter of 2025. Our truckload linehaul cost per mile, excluding fuel surcharges, increased approximately 13.029.0 percent in the firstsecond quarter of 2026 compared to the firstsecond quarter of 2025.

Operating expenses. NAST personnel expenses increased primarily due to higher restructuringincentive chargescompensation relatedreflecting toour workforcestrong reductionsoperating performance. This impact was partially offset in part by cost optimization efforts and productivity improvements, including lower average employee headcount. NAST other SG&A expenses decreasedincreased primarily due to lowerhigher claims expense and higher allocated corporate expenses partially offset by declines across several expense categories.

NAST personnel expenses in the firstsecond quarter of 2026 included $16.0$2.0 million of severance and related personnel expenses relatedassociated towith our 2025 Restructuring Program. Other SG&A expenses also included $0.1 million of restructuring costs. NAST personnel expenses in the second quarter of 2025 included $0.7 million of severance and related personnel expenses also associated with the same program. Refer to Note 13, Restructuring, for further discussion related to our 2025 Restructuring Program.

Three Months Ended MarchJune 31,30, 2026, Compared to the Three Months Ended MarchJune 31,30, 2025

Operating expenses. Personnel expenses decreased driven by cost optimization efforts and productivity improvements including lower average employee headcount and lower incentive compensation expense. Global Forwarding other SG&A expenses decreasedincreased primarily due to declineshigher acrossallocated severalcorporate expense categories.expenses.

InGlobal additionForwarding topersonnel expenses in the above,second quarter of 2026 included $3.0 million of severance and related personnel expenses associated with our 2025 Restructuring Program. Other SG&A expenses included a $0.8 million gain resulting from the favorable termination of an operating lease also associated with the program. Global Forwarding personnel expenses for the firstsecond quarter of 20262025 included $1.1$2.6 million of severance and related personnel expenses. Weexpenses also incurred $1.4 million in other SG&A expenses the first quarter of 2026. These expenses were both associated with ourthe 2025same Restructuring Program.program. Refer to Note 13, Restructuring, for further discussion related to our 2025 Restructuring Program.