C. H. ROBINSON WORLDWIDE, INC. (CHRW)

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following discussion of our financial condition and results of operations should be read in conjunction with our condensed consolidated financial statements and related notes.

FORWARD-LOOKING INFORMATION

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 business, 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 regulations, 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.

Any forward-looking statement speaks only as of the date on which such statement is made, and we undertake no obligation to update such statement to reflect events or circumstances arising after such date.

OVERVIEW

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. As a leader in Lean AI supply chains, we deliver logistics like no one else. For more than a century, companies everywhere have looked to us to reimagine how goods move. We deliver tailored solutions across the world via truckload, less-than-truckload, ocean, air, and more. With our unique combination of human insight and Lean AI working as one, supply chains move faster, smarter, and more sustainably.

Our adjusted gross profits and adjusted gross profit margin are non-GAAP financial measures. Adjusted gross profits are calculated as gross profits excluding amortization of internally developed software utilized to directly serve our customers and contracted carriers. Adjusted gross profit margin is calculated as adjusted gross profits divided by total revenues. We believe adjusted gross profits and adjusted gross profit margin are useful measures of our ability to source, add value, and sell services and products that are provided by third parties, and we consider adjusted gross profits to be a primary performance measurement. Accordingly, the discussion of our results of operations often focuses on the changes in our adjusted gross profits and adjusted gross profit margin.

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The reconciliation of gross profits to adjusted gross profits and gross profit margin to adjusted gross profit margin is presented below (dollars in thousands):

Our adjusted operating margin is a non-GAAP financial measure calculated as operating income divided by adjusted gross profits. We believe adjusted operating margin is a useful measure of our profitability in comparison to our adjusted gross profits, which we consider a primary performance metric as discussed above. The reconciliation of operating margin to adjusted operating margin is presented below (dollars in thousands):

MARKET TRENDS

The North American surface transportation market continued to tighten during the second quarter of 2026, extending the trend that emerged in late 2025 and accelerated in early 2026. Carrier capacity contracted further as regulatory enforcement activity impacting driver availability, combined with elevated operating costs, continued to strain capacity. These supply-side dynamics, rather than a meaningful recovery in underlying freight demand, remained the primary driver of higher transportation rates, with truckload spot rates rising sharply on a year-over-year basis. Seasonal produce and beverage demand, along with disruptive events such as the International Roadcheck enforcement period, further tightened regional capacity and contributed to temporary spikes in spot rates. As truckload rates increased, some shippers shifted freight to less-than-truckload solutions to improve transportation efficiency and manage costs, contributing to stronger demand trends in portions of the less than truckload (“LTL”) market. In addition, escalating geopolitical tensions in the Middle East disrupted global oil flows and drove diesel fuel prices to multi-year highs during the quarter before easing later in the period, adding further cost pressure and volatility to all-in transportation rates. Underlying freight demand remained subdued, and industry freight volumes, as measured by the Cass Freight Index, declined 3.3 percent in the second quarter of 2026 compared to the second quarter of 2025.

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. A routing

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guide depth of 1 would be perfect performance and 2 would be extremely poor. The average routing guide depth in the second quarter of 2026 was 1.4 compared to 1.3 in the second quarter of 2025, reflecting a further tightening of the market compared to the prior year.

During the second quarter of 2026, the global forwarding market remained driven primarily by supply-side dynamics rather than underlying demand conditions. Market conditions were shaped by intensifying geopolitical disruption, elevated fuel costs, and ocean carriers' continued capacity management actions, including blank sailings. Ongoing conflict in the Middle East severely constrained transits and continued the rerouting of Asia-to-Europe vessels around the Cape of Good Hope, which continues to extend transit times and reduced effective capacity. Ocean freight rates rose sharply during the second quarter of 2026 as these supply-side pressures, combined with the early onset of peak-season demand and customer front-loading of holiday and retail inventory, outpaced available capacity. Rate increases were further amplified by conflict and fuel-related surcharges, rather than by a broad-based recovery in underlying freight demand. The air freight market experienced a similar supply-driven tightening, as airspace restrictions and reduced carrier operations in the Middle East contracted global cargo capacity, lengthened flight routings, and increased operating costs, although capacity began to stabilize late in the quarter. These constraints, together with a sharp increase in jet fuel prices, drove air freight rates meaningfully higher during the quarter.

Looking ahead, conflict-related disruptions, the pace of capacity normalization, and evolving trade and tariff policy are likely to continue to drive volatility in ocean and air freight pricing in the near term, although the ultimate extent and duration remain uncertain.

BUSINESS TRENDS

Our surface transportation business continued to operate in a rising cost environment during the second quarter of 2026, as discussed in the Market Trends section. As a result of these tightening market conditions, our average truckload linehaul cost per mile, excluding fuel surcharges, increased approximately 29.0 percent during the second quarter of 2026 compared to the second quarter of 2025. Our average truckload linehaul rate charged to our customers, excluding fuel surcharges, increased approximately 25.5 percent during the second quarter of 2026 compared to the second quarter of 2025. The sharper acceleration in cost relative to rate 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 declined modestly, as we worked with our customers to honor our contractual commitments while actively repricing contractual rates to reflect the changing market dynamics and also c

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ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

OVERVIEW

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 $16.2 billion in 2025. As a leader in Lean AI supply chains, we deliver logistics like no one else. For more than a century, companies everywhere have looked to us to reimagine how goods move. We deliver tailored solutions across the world via truckload, less-than-truckload, ocean, air, and more. With our unique combination of human insight and Lean AI working as one, supply chains move faster, smarter, and more sustainably.

Our adjusted gross profits and adjusted gross profit margin are non-GAAP financial measures. Adjusted gross profits is calculated as gross profits excluding amortization of internally developed software utilized to directly serve our customers and contracted carriers. Adjusted gross profit margin is calculated as adjusted gross profits divided by total revenues. We believe adjusted gross profits and adjusted gross profit margin are useful measures of our ability to source, add value, and sell services and products that are provided by third parties, and we consider adjusted gross profits to be a primary performance measurement. Accordingly, the discussion of our results of operations often focuses on the changes in our adjusted gross profits and adjusted gross profit margin. The reconciliation of gross profits to adjusted gross profits and gross profit margin to adjusted gross profit margin is presented below (dollars in thousands):

Our adjusted operating margin is a non-GAAP financial measure calculated as operating income divided by adjusted gross profit. We believe adjusted operating margin is a useful measure of our profitability in comparison to our adjusted gross profit, which we consider a primary performance metric as discussed above. The reconciliation of operating margin to adjusted operating margin is presented below (dollars in thousands):

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MARKET TRENDS

Carrier capacity in the North America surface transportation market continued to contract toward the end of 2025 as carriers exited the market. This gradual tightening, coupled with disruptive weather events and incremental pressures from the enforcement of commercial driver regulations, contributed to upward pressure on transportation rates. As a result, the market has become increasingly sensitive, with spot market rates exhibiting sharper than typical reactions to changes in supply and demand conditions. Despite these emerging pressures, the market has not fully transitioned into a sustained upcycle. Key indicators, such as truckload routing guide depth within our Managed Solutions business, have remained at historically low levels for nearly two years. Routing guide depth represents the average number of carriers contacted prior to acceptance when procuring a transportation provider. Average routing guide depth was 1.3 in the fourth quarter of 2025, compared to 1.2 for much of the prior two years. While this increase reflects early signs of a tightening market, soft demand conditions and remaining excess capacity continue to temper the pace of the shift.

The global forwarding market continued to face a persistent imbalance in 2025, marked by excess vessel capacity and weak global demand. Despite carriers’ ongoing avoidance of the Suez Canal, which has resulted in longer transit times and strain on global networks, vessel capacity has remained elevated. While short periods of rate volatility have occurred due to shifting trade and tariff policies, front‑loading, seasonal factors, and carriers’ use of blank sailings, international freight rates have largely remained depressed as weak demand outweighed these pressures. Looking ahead, uncertainty persists due to geopolitical and macroeconomic factors, including evolving trade policies, the Red Sea conflict, and carriers’ ability to effectively manage excess capacity. Despite this uncertainty, we expect ocean pricing to remain under pressure until global freight demand meaningfully improves. Similar dynamics continue to affect the air freight market. Although demand has shown resilience in certain technology‑focused sectors, overall air freight pricing remains sensitive to tariff developments and broader economic conditions, including cost-efficient ocean freight rates.

BUSINESS TRENDS

Our surface transportation results in 2025 reflected the challenging market conditions described above, including the increase in transportation rates as capacity tightened in the market near the end of the year. Throughout the year, we continued to advance our dynamic pricing and costing capabilities, navigating both the prolonged softness in demand and the rising cost environment that emerged toward year‑end. These enhanced capabilities allowed us to better react to changing market conditions and led to an improvement in adjusted gross profit per transaction in 2025 compared to 2024. Our average truckload linehaul rate charged to customers, excluding fuel surcharges, increased approximately 2.5 percent during 2025 reflecting our advanced dynamic pricing. Our average truckload linehaul cost per mile, excluding fuel surcharges, increased approximately 2.0 percent over the same period, reflecting our disciplined costing capabilities. Despite operating in a persistently soft market for much of the year, our combined North American Surface Transportation (“NAST”) truckload and LTL volumes significantly outperformed the Cass Freight Index increasing 1.0 percent compared to 2024.

Our Global Forwarding results in 2025 were largely consistent with the market trends discussed above. Throughout the year, we experienced short-lived periods of pricing and volume volatility largely associated with shifting trade policies. Despite this volatility, overall ocean freight rates and volumes declined from the elevated levels observed in 2024, primarily due to excess vessel capacity and weak global consumer demand. Our total ocean freight volumes decreased 4.5 percent while our air freight tonnage decreased 11.5 percent in 2025 compared to the prior year.

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SELECTED OPERATING PERFORMANCE AND OTHER SIGNIFICANT ITEMS

The following summarizes select 2025 year-over-year operating comparisons to 2024:

•Total revenues decreased 8.4 percent to $16.2 billion, primarily driven by the divestiture of our Europe Surface Transportation business, in addition to lower pricing and volume in our ocean services and lower fuel surcharges in our truckload services.

•Gross profits decreased 1.8 percent to $2.7 billion. Adjusted gross profits decreased 1.3 percent to $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 LTL, truckload, and customs services.

•Personnel expenses decreased 5.9 percent to $1.4 billion, primarily due to cost-optimization efforts and productivity improvements and the divestiture of our Europe Surface Transportation business. Average employee headcount decreased 11.5 percent.

•Other selling, general, and administrative (“SG&A”) expenses decreased 11.8 percent to $564.3 million, primarily due to a $44.5 million loss in the prior year related to the divestiture of our Europe Surface Transportation business and prior year restructuring charges for impairments related to reducing our facilities footprint. In addition, other SG&A expenses declined across several expense categories in 2025 due to cost optimization efforts.

•Income from operations totaled $795.0 million, up 18.8 percent from last year, due to the decrease in operating expenses. Adjusted operating margin of 29.1 percent increased 490 basis points.

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

•The effective tax rate for 2025 was 18.7 percent compared to 19.6 percent in 2024. The lower rate was driven by higher foreign tax credits, higher tax benefits from share-based compensation, and the prior year impact of the divestiture of our European Surface Transportation business, partially offset by a reduced benefit from U.S. tax credits in the current year and non-recurring discrete items in the prior year.

•Net income totaled $587.1 million, up 26.1 percent from a year ago. Diluted earnings per share increased 25.1 percent to $4.83.

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CONSOLIDATED RESULTS OF OPERATIONS

The following table summarizes our results of operations (dollars in thousands, except per share data):

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