What changed in this filing

/stocks — the workspaceLOADING

Item 2. Management’s Discussion and Analysis

2025-08-01 compared with 2025-05-02 · 228 added, 123 removed, 221 unchanged (61% of the section changed)

42 unchanged sentences

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

Three Months Ended March 31,

Three Months Ended June 30, Six Months Ended June 30,

2025 2024 2025 2024

Transportation $ 3,746,660 $ 4,121,930 $ 7,468,575 $ 8,204,518

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The reconciliation of operating margin to adjusted operating margin is presented below (dollars in thousands) :

Three Months Ended March 31,

Three Months Ended June 30, Six Months Ended June 30,

2025 2024 2025 2024

Total revenues $ 4,136,543 $ 4,483,348 $ 8,183,283 $ 8,895,659

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MARKET TRENDS

The North America surface transportation market continued to experience an imbalance of excess carrier capacity and industry freight volumes in the first quarter of 2025.

These conditions are typically referred to as a soft market.

While capacity has continued to exit the market it has been largely offset by declining industry freight volumes, as measured by the Cass Freight Index, which decreased in the first quarter of 2025 compared to both the prior quarter and the first quarter of 2024.

Despite these soft market conditions, freight costs per mile temporarily increased in January due to severe weather impacts before declining back to the suppressed levels experienced in recent quarters for the remainder of the first quarter of 2025.

The North American surface transportation market demonstrated signs of improved balance in the second quarter of 2025 compared to the same period in 2024, primarily driven by the recent trend of carriers exiting the market.

This shift contributed to a modest year-over-year increase in transportation rates.

Additionally, seasonal demand associated with the produce and beverage shipping season led to regional rate spikes temporarily slowing the pace of carrier attrition.

Despite these developments, the market remains characterized by an overall imbalance, with excess carrier capacity relative to industry freight volumes.

This condition is commonly referred to as a soft market.

Industry freight volumes, as measured by the Cass Freight Index, declined in the second quarter of 2025 compared to the second quarter of 2024, reflecting continued softness in underlying demand.

One of the key metrics we use to measure market conditions is the truckload routing guide depth from our Managed Solutions business.

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Routing guide depth of 1 would be perfect performance and 2 would be extremely poor.

The average routing guide depth in the first quarter of 2025 remained consistent with the end of 2024 at 1.3.

Seasonal factors, along with macroeconomic and geopolitical uncertainty, may impact future periods.

However, we expect that the current soft market conditions will persist until carrier capacity better aligns with shipper demand.

The global forwarding market remains volatile, driven by tariff and macroeconomic uncertainty.

Additionally, ongoing diversions from the Suez Canal continue to result in long transit times straining available capacity.

Ocean freight volumes in the first quarter of 2025 benefited from increased shipping activity ahead of tariff implementations.

However, industry volumes will likely face significant challenges in the second quarter of 2025 as shippers navigate the complexities of the evolving tariff and geopolitical landscape.

Ocean freight rates declined in the first quarter of 2025 compared to the prior year and declined each month within the first quarter of 2025.

The combination of tariff and geopolitical uncertainty, capacity continuing to enter the market, and the impact of disruptions including the Red Sea conflict will likely continue to affect ocean freight pricing in the near term, although the duration and extent remain uncertain.

The air freight market faces many of the same uncertainties but operated in a more balanced fashion than the ocean market in the first quarter of 2025 as capacity and demand have largely stabilized.

The average routing guide depth in the second quarter of 2025 was 1.3 compared to 1.2 in the second quarter of 2024 reflecting a modest tightening of the market compared to the prior year.

The global forwarding market in the second quarter of 2025 experienced significant policy shifts, volatile demand, and increasing capacity challenges.

In April, the U.S.

announced a 10 percent minimum tariff on all imported goods along with higher reciprocal tariffs on goods from certain countries.

This move prompted several nations to impose their own retaliatory tariffs on U.S.

Shortly after their announcement, a 90-day tariff pause was implemented for most countries other than China.

In May, the U.S.

and China reached a separate agreement to temporarily reduce their reciprocal tariffs and pause other trade barriers for 90-days.

This wave of uncertainty resulted in a sharp decline in global freight volumes early in the second quarter of 2025, with an increase in blank sailings as carriers reallocated or temporarily removed capacity from the market.

Following the temporary tariff pause, the market experienced a short-lived rebound as shippers accelerated shipments ahead of the 90-day pause expiration.

This surge of activity led to a short-term spike in global freight rates towards the end of the second quarter of 2025 before rapidly falling as capacity began to outpace demand and shippers adopted a cautious approach given the market uncertainty.

The combination of tariff and geopolitical uncertainty, capacity continuing to enter the market, and the impact of disruptions, including the Red Sea conflict, may continue to affect ocean and air freight pricing in the near term, although the duration and extent remain uncertain.

BUSINESS TRENDS

Our first quarter of 2025 surface transportation results continued to be impacted by the prevailing soft market conditions discussed in the market trends section.

These conditions led to most shipments moving under committed pricing agreements and suppressed freight rates for the limited number of shipments reaching the competitive spot market.

Despite these challenging market conditions, we were able to improve our adjusted gross profits per transaction in the first quarter of 2025 compared to the same period in 2024 as a result of disciplined pricing and capacity procurement efforts leading to better adjusted gross profits per transaction within our transactional portfolio.

Industry freight volumes, as measured by the Cass Freight Index, decreased approximately six percent in the first quarter of 2025 compared to the same period of 2024.

Despite these challenging market conditions, our combined North American Surface Transportation (“NAST”) truckload and less than truckload (“LTL”) volume outperformed the market, decreasing only one percent in the first quarter of 2025 compared to the first quarter of 2024.

Our average truckload linehaul cost per mile, excluding fuel surcharges, increased approximately 3.0 percent during the first quarter of 2025 compared to the first quarter of 2024, largely driven by the impacts of severe weather in January.

Our average truckload linehaul rate charged to our customers, excluding fuel surcharges, increased approximately 4.0 percent during the first quarter of 2025.

Our first quarter of 2025 global forwarding results continue to be impacted by the volatile market conditions discussed in the market trends section.

Assuming no significant changes to the current tariff and geopolitical landscape, our ocean freight volumes may be adversely impacted in the near term although the duration and extent remain uncertain.

Our ocean total revenues declined in the first quarter of 2025 driven by declining market rates compared to the first quarter of 2024.

Our ocean freight volumes increased 1.5 percent in the first quarter of 2025, driven by the strong execution of our global forwarding team and the impact of increased shipping activity ahead of tariff implementations discussed above.

Our air freight tonnage decreased 3.0 percent compared to the first quarter of 2024.

Our surface transportation business effectively navigated the evolving market dynamics and seasonal trends, as discussed in the market trends section.

During the second quarter of 2025, continued contraction in carrier capacity and seasonal demand spikes contributed to an increase in our truckload transportation costs.

Our average truckload linehaul cost per mile, excluding fuel surcharges, increased approximately 3.5 percent during the second quarter of 2025 compared to the second quarter of 2024, reflecting upward pressure from market rates.

Our average truckload linehaul rate charged to our customers, excluding fuel surcharges, also increased approximately 3.5 percent during the second quarter of 2025.

Despite this rising cost environment, we were able to improve our adjusted gross profits per transaction in the second quarter of 2025 compared to the same period in 2024 driven by the continued advancement of our dynamic pricing and costing capabilities.

These advancements have allowed us to respond more rapidly to market fluctuations through more frequent and precise pricing discovery.

Industry freight volumes, as measured by the Cass Freight Index, decreased approximately 3.5 percent in the second quarter of 2025 compared to the same period of 2024.

Despite these challenging market conditions, our combined North American Surface Transportation (“NAST”) truckload and less than truckload (“LTL”) volume outperformed the market, increasing 1.0 percent in the second quarter of 2025 compared to the second quarter of 2024.

Our global forwarding results in the second quarter of 2025 reflected the continued impact of the volatile market conditions and shifting trade policies outlined in the market trends section above.

Our ocean freight shipments decreased 4.0 percent compared to the second quarter of 2024, primarily driven by reduced demand early in the second quarter of 2025 following the announcement of new tariffs by the U.S.

This was partially offset by a rebound in June, as shippers accelerated activity ahead of the expiration of the 90-day tariff pause.

Adjusted gross profit per ocean shipment significantly improved in June due to this surge in activity;

however, adjusted gross profit per shipment declined 3.5 percent in total compared to the second quarter of 2024.

Air freight volumes were similarly affected by the intra-quarter tariff volatility, with overall air freight tonnage decreasing 12.5 percent compared to the second quarter of 2024.

As part of our enterprise strategy to drive focus on profitable growth in our four core modes—North American truckload and LTL and global ocean and air—as engines to ignite growth and create the most value for our stakeholders we divested our Europe Surface Transportation business.

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SELECTED OPERATING PERFORMANCE AND OTHER SIGNIFICANT ITEMS

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

• Total revenues decreased 8.3 percent to $4.0 billion, primarily driven by the divestiture of our Europe Surface Transportation business, lower volume in our truckload services and lower pricing in our ocean services.

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

• Total revenues decreased 7.7 percent to $4.1 billion, primarily driven by the divestiture of our Europe Surface Transportation business, in addition to lower pricing in our ocean services and lower fuel surcharges in our truckload services.

• Gross profits increased 0.4 percent to $679.6 million.

Adjusted gross profits increased 2.3 percent to $673.1 million, primarily driven by higher adjusted gross profit per transaction in our truckload and LTL services.

• Personnel expenses decreased 8.1 percent to $348.6 million, primarily due to cost optimization efforts and productivity improvements and prior year restructuring charges related to workforce reductions.

Adjusted gross profits increased 0.8 percent to $693.2 million, primarily driven by higher adjusted gross profit per transaction in our customs, truckload, and LTL services.

This was partially offset by the divestiture of our Europe Surface Transportation business and lower volume in ocean services.

• Personnel expenses decreased 7.2 percent to $335.3 million, primarily due to cost optimization efforts and productivity improvements, the divestiture of our Europe Surface Transportation business, a non-recurring benefit from certain actions taken within the current quarter, and lower restructuring charges related to workforce reductions.

Average employee headcount decreased 11.2 percent.

• Other selling, general, and administrative (“SG&A”) expenses decreased 2.5 percent to $147.7 million primarily due to restructuring charges in the prior year related to the impairment of internally developed software.

• Other selling, general, and administrative (“SG&A”) expenses decreased 4.1 percent to $142.0 million primarily due to restructuring charges in the prior year related to reducing our facilities footprint, including early termination or abandonment of office buildings under operating leases.

• Income from operations increased 21.2 percent to $215.9 million, due to the increase in adjusted gross profit and decreased operating expenses.

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• Interest and other income/expense, net totaled $22.0 million of expense, consisting primarily of $16.8 million of interest expense, which decreased $6.1 million compared to last year, and a $4.9 million net loss from foreign currency revaluation and realized foreign currency gains and losses.

• The effective tax rate in the quarter was 13.7 percent compared to 15.8 percent in the first quarter last year.

• The effective tax rate in the quarter was 21.4 percent compared to 19.4 percent in the second quarter last year.

• Net income totaled $152.5 million, an increase of 20.8 percent from a year ago.

• Diluted earnings per share increased 20.0 percent to $1.26.

• Cash flow from operations increased $139.9 million in the three months ended March 31, 2025, primarily driven by a favorable change in net operating working capital used for operations and the increase in net income.

• Cash flow from operations increased $200.6 million in the six months ended June 30, 2025, primarily driven by a favorable change in net operating working capital and the increase in net income.

CONSOLIDATED RESULTS OF OPERATIONS

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

Three Months Ended March 31,

2025 2024 % change

Three Months Ended June 30, Six Months Ended June 30,

2025 2024 % change 2025 2024 % change

Transportation $ 3,746,660 $ 4,121,930 (9.1) % $ 7,468,575 $ 8,204,518 (9.0) %

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Adjusted gross profit margin percentage (1)

Transportation 17.2 % 15.4 % 180 bps

Sourcing 10.0 % 9.1 % 90 bps

Total adjusted gross profit margin 16.6 % 14.9 % 170 bps

Transportation 17.5 % 15.8 % 170 bps 17.3 % 15.6 % 170 bps

Sourcing 10.1 % 9.9 % 20 bps 10.0 % 9.5 % 50 bps

Total adjusted gross profit margin 16.8 % 15.3 % 150 bps 16.7 % 15.1 % 160 bps

________________________________

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A reconciliation of our reportable segments to our consolidated results can be found in Note 8, Segment Reporting, in Part I, Financial Information of this Quarterly Report on Form 10-Q.

Consolidated Results of Operations—Three Months Ended March 31, 2025, Compared to the Three Months Ended March 31, 2024

Consolidated Results of Operations—Three Months Ended June 30, 2025, Compared to the Three Months Ended June 30, 2024

Total revenues and direct costs.

Total transportation revenues and direct costs decreased primarily due to the divestiture of our Europe Surface Transportation business, along with lower North America truckload volume, and lower pricing in ocean services.

Carrier capacity has continued to exit the North America truckload market although it has been largely offset by declining industry freight volumes, as measured by the Cass Freight Index, which decreased in the first quarter of 2025.

result of the continued soft market conditions, most shipments continued to move under committed pricing agreements, limiting the number of shipments reaching the competitive spot market.

Ocean freight rates in the first quarter of 2025 declined despite the continued market volatility discussed in the market trends section above.

Our sourcing total revenue and direct costs decreased, driven by lower average pricing with foodservice customers.

Total transportation revenues and direct costs decreased primarily due to the divestiture of our Europe Surface Transportation business, along with lower pricing in ocean services, and lower fuel surcharges in our truckload services.

In the second quarter of 2024, ocean freight rates were elevated due to market disruptions that strained capacity, including re-routing and extended transit times, resulting from the Red Sea conflict, container shortages, and worsening port congestion in certain regions of the world.

While similar capacity constraints persisted in the second quarter of 2025, the period also experienced notable shifts in demand as discussed in the market and business trends sections, leading to lower pricing compared to the prior year.

The decrease in fuel surcharges within our truckload services was driven by a year-over-year decline in diesel fuel prices.

Our sourcing total revenue and direct costs increased, driven by higher average pricing with retail customers.

Gross profits and adjusted gross profits.

Our transportation adjusted gross profits increased, driven by higher adjusted gross profits per transaction in truckload and to a lesser extent in LTL services.

The improvement in truckload services was driven by improved execution and disciplined pricing and capacity procurement within our transactional portfolio.

Our transportation adjusted gross profits increased, driven primarily by higher adjusted gross profits per transaction in our customs, truckload, and LTL services.

In our customs services, the improvement was largely attributable to increased duty advance fees, reflecting elevated global tariff rates.

The improvement in truckload services was driven by the continued advancement of our dynamic pricing and costing capabilities.

These advancements have allowed us to respond more rapidly to market fluctuations through more frequent and precise pricing discovery.

These increases were partially offset by the divestiture of our Europe Surface Transportation business, as well as lower volume and adjusted gross profits per transaction in our ocean services, which were impacted by the volatile market conditions and shifting trade policies discussed in the market and business trends sections.

Sourcing adjusted gross profits increased, driven by an increase in integrated supply chain solutions for retail and foodservice customers.

Operating expenses.

Personnel expenses decreased primarily due to cost optimization efforts and productivity improvements, the divestiture of our Europe Surface Transportation business, and prior year restructuring charges related to workforce reductions discussed below.

Other SG&A expenses decreased primarily due to restructuring charges in the prior year related to the impairment of internally developed software discussed below.

In addition to the above, our personnel expenses in the first quarter of 2025 included $1.2 million of severance and related personnel expenses, and $1.2 million of other SG&A 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.

Our personnel expenses for the first quarter of 2024 included $7.9 million of severance and related personnel expenses.

We also incurred a $5.0 million impairment in other SG&A expenses primarily related to capitalized internally developed software.

Personnel expenses decreased primarily due to cost optimization efforts and productivity improvements, the divestiture of our Europe Surface Transportation business, a non-recurring benefit from certain actions taken within the current quarter, and the impact of higher restructuring charges related to workforce reductions in the prior year discussed below.

Other SG&A expenses decreased primarily due to restructuring charges in the prior year related to reducing our facilities footprint, including early termination or abandonment of office buildings under operating leases.

In addition to the above, our personnel expenses in the second quarter of 2025 included $3.9 million of severance and related personnel expenses from our 2025 Restructuring Program, and $0.4 million of other SG&A expenses resulting from the divestiture of our Europe Surface Transportation business.

Our personnel expenses for the second quarter of 2024 included $9.5 million of severance and related personnel expenses.

We also incurred $5.7 million of restructuring related other SG&A expenses in the second quarter of 2024.

These expenses were both associated with our 2024 Restructuring Program.

Refer to Note 13, Restructuring , for further discussion related to our 2024 Restructuring Program.

Refer to Note 13, Restructuring , and Note 14, Divestitures , for further discussion related to our restructuring programs and the divestiture of our Europe Surface Transportation business.

Interest and other income/expense, net.

Interest and other income/expense, net primarily consisted of interest expense of $16.8 million.

Interest expense decreased $5.3 million during the first quarter of 2025, due to a lower average debt balance and lower variable interest rates.

The current year included a $3.4 million net loss from foreign currency revaluation and realized foreign currency gains and losses, compared to a $3.9 million net gain in the prior year.

Interest expense decreased $6.1 million during the second quarter of 2025, due to a lower average debt balance and lower variable interest rates.

The current period included a $4.9 million net loss from foreign currency revaluation and realized foreign currency gains and losses, compared to a $0.5 million net gain in the prior year period.

Provision for income taxes.

Our effective income tax rate was 13.7 percent for the first quarter of 2025 compared to 15.8 percent for the first quarter of 2024.

The effective income tax rate for the first quarter of 2025 was lower than the statutory federal income tax rate primarily due to the tax benefit of share-based payment awards, which reduced the effective tax rate by 6.1 percentage points.

Additionally, a lower tax rate on foreign earnings and U.S.

tax credits and incentives decreased the effective income tax rate by 2.7 percentage points and 1.6 percentage points, respectively, during the first quarter of 2025.

The effective income tax rate for the first quarter of 2024 was lower than the statutory federal income tax rate primarily due to the tax impact of U.S.

Our effective income tax rate was 21.4 percent for the second quarter of 2025 compared to 19.4 percent for the second quarter of 2024.

The effective income tax rate for the second quarter of 2025 was higher than the statutory federal income tax rate primarily due to state income tax expense, net of federal benefit, which increased the effective tax rate by 2.3 percentage points.

This impact was partially offset by foreign tax credits with decreased the effective income tax rate by 1.9 percentage points during the second quarter of 2025.

The effective income tax rate for the second quarter of 2024 was lower than the statutory federal income tax rate primarily due to the tax impact of U.S.

tax credits and incentives, which reduced the effective tax rate by 5.0 percentage points.

These impacts were partially offset by a higher tax rate on state income taxes, net of federal benefit, which increased the effective income tax rate by 2.8 percentage points during the first quarter of 2024.

These impacts were partially offset by a higher tax rate on foreign earnings, which increased the effective income tax rate by 2.7 percentage points during the second quarter of 2024.

Consolidated Results of Operations—Six Months Ended June 30, 2025, Compared to the Six Months Ended June 30, 2024

Total revenues and direct costs.

Total revenues and direct costs decreased primarily due to the divestiture of our Europe Surface Transportation business, along with lower pricing and purchased transportation costs in ocean services, and lower fuel surcharges in our truckload services.

In the six months ended June 30, 2024, ocean freight rates were elevated as a result of ongoing disruptions, including the Red Sea conflict, which strained capacity and increased ocean freight rates.

While similar capacity constraints persisted during the six months ended June 30, 2025, the period also experienced significant shifts in demand influenced by tariff and macroeconomic uncertainty resulting in lower pricing and purchased transportation costs compared to the prior year.

The decline in fuel surcharges within truckload services was driven by a year-over-year decrease in diesel fuel prices.

Our sourcing total revenue and direct costs increased driven by higher average pricing with retail customers.

Gross profits and adjusted gross profits.

Our transportation adjusted gross profits increased, driven by higher adjusted gross profits per transaction in our truckload, LTL, and customs services.

The higher adjusted gross profits per transaction in truckload services during the six months ended June 30, 2025 was driven by the continued advancement of our dynamic pricing and costing capabilities.

These advancements have allowed us to respond more rapidly to market fluctuations through more frequent and precise pricing discovery.

In our customs services, the improvement was largely attributable to increased duty advance fees, reflecting elevated global tariff rates.

Sourcing adjusted gross profits increased due to an increase in integrated supply chain solutions for retail and foodservice customers.

Operating expenses.

Personnel expenses decreased primarily due to cost optimization efforts including lower average employee headcount, the divestiture of our Europe Surface Transportation business, and the impact of higher restructuring charges related to workforce reductions in the prior year discussed below.

These decreases were partially offset by higher variable compensation reflecting the improved results compared to the prior year.

Other SG&A expenses decreased primarily due to the divestiture of our Europe Surface Transportation business and were partially offset by the impact of the restructuring charges in the prior year discussed below.

In addition to the above, our personnel expenses for the six months ended June 30, 2025 included $5.1 million of severance and related personnel expenses.

We also incurred $1.6 million in other SG&A expenses in the six months ended June 30, 2025.

These expenses were associated with our 2025 Restructuring Program and the divestiture of our Europe Surface Transportation business.

We also incurred $6.3 million of other SG&A expenses in the six months ended June 30, 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.

Our personnel expenses for the six months ended June 30, 2024 included $17.4 million of severance and related personnel expenses.

We also incurred $10.7 million of other SG&A expenses in the six months ended June 30, 2024.

Both expenses were associated with our 2024 Restructuring Program.

Interest and other income/expense, net.

Interest and other income/expense, net primarily consisted of interest expense of $33.6 million, which decreased $11.4 million driven by a lower average debt balance and variable interest rates compared to the prior year.

The six months ended June 30, 2025 included an $8.3 million net loss from foreign currency revaluation and realized foreign currency gains and losses, compared to a $4.4 million net gain in the prior year.

Provision for income taxes.

Our effective income tax rate was 17.9 percent for both the six months ended June 30, 2025 and 2024.

The effective income tax rate for the six months ended June 30, 2025 was lower than the statutory federal income tax rate primarily due to the tax benefit of share-based payment awards, foreign tax credits, and U.S.

tax credits and incentives, which decreased the effective tax rate by 2.9 percentage points, 1.9 percentage points, and 1.6 percentage points, respectively.

These impacts were partially offset by state income tax expense, net of federal benefit which increased the effective tax rate by 2.2 percentage points.

The effective income tax rate for the six months ended June 30, 2024 was lower than the statutory federal income tax rate primarily due to the tax impact of U.S.

tax credits and incentives, which reduced the effective tax rate by 6.2 percentage points.

These impacts were partially offset by state income taxes, net of federal benefit, and a higher tax rate on foreign earnings, which increased the effective income tax rate by 2.3 percentage points and 1.8 percentage points, respectively.

NAST Segment Results of Operations

Three Months Ended March 31,

(dollars in thousands) 2025 2024 % change

Three Months Ended June 30, Six Months Ended June 30,

(dollars in thousands) 2025 2024 % change 2025 2024 % change

Total revenues $ 2,918,227 $ 2,989,909 (2.4) % $ 5,786,647 $ 5,990,222 (3.4) %

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Income from operations $ 163,991 $ 141,102 16.2 % $ 307,662 $ 249,997 23.1 %

Three Months Ended March 31,

2025 2024 % change

Three Months Ended June 30, Six Months Ended June 30,

2025 2024 % change 2025 2024 % change

Average employee headcount 5,283 5,868 (10.0) % 5,283 5,929 (10.9) %

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Truckload — % (2.0) %

LTL 1.5 % 1.5 %

Adjusted gross profits (1)

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

Three Months Ended March 31, 2025, Compared to the Three Months Ended March 31, 2024

Three Months Ended June 30, 2025, Compared to the Three Months Ended June 30, 2024

Total revenues and direct costs.

NAST total revenues and direct costs decreased primarily due to a volume decline and lower pricing and purchased transportation costs in truckload services.

The lower pricing and purchased transportation costs in truckload services continue to be driven by the ongoing soft market conditions as the market remains in a prolonged stage of oversupplied carrier capacity with decreased industry freight volumes as discussed in the market and business trends section above.

NAST total revenues and direct costs decreased primarily due to lower fuel surcharges in our truckload services driven by a year-over-year decline in diesel fuel prices.

This decline was partially offset by an increase in transportation rates and increased LTL volumes.

As capacity continues to exit the market, this shift has contributed to a modest year-over-year increase in transportation rates.

Our average truckload linehaul rate per mile charged to our customers, which excludes fuel surcharges, increased approximately 3.5 percent in the second quarter of 2025 compared to the second quarter of 2024.

Our truckload linehaul cost per mile, excluding fuel surcharges, also increased approximately 3.5 percent in the second quarter of 2025 compared to the second quarter of 2024.

Gross profits and adjusted gross profits.

NAST adjusted gross profits increased due to higher adjusted gross profits per transaction in truckload and to a lesser extent in LTL services.

The improvement in truckload services was driven by improved execution and disciplined pricing and capacity procurement within our transactional portfolio.

Our average truckload linehaul rate per mile charged to our customers, which excludes fuel surcharges, increased approximately 4.0 percent in the first quarter of 2025 compared to the first quarter of 2024.

Our truckload linehaul cost per mile, excluding fuel surcharges, increased approximately 3.0 percent in the first quarter of 2025 compared to the first quarter of 2024.

NAST adjusted gross profits increased due to higher adjusted gross profits per transaction in truckload and LTL services along with increased volume in our LTL services.

The improvement in truckload services was driven by the continued advancement of our dynamic pricing and costing capabilities.

These advancements have allowed us to respond more rapidly to market fluctuations through more frequent and precise pricing discovery.

Operating expenses.

NAST personnel expenses decreased driven by cost optimization efforts and productivity improvements, including lower average employee headcount.

NAST other SG&A expenses decreased slightly as declines across several categories were mostly offset by higher claims and higher allocated corporate expenses.

In addition to the above, NAST personnel expenses in the first quarter of 2024 included $3.0 million of severance and related personnel expenses.

We also incurred $1.9 million of impairment losses in the first quarter of 2024 included in other SG&A expenses related to capitalized internally developed software.

NAST other SG&A expenses increased primarily due to higher allocated corporate expenses and higher credit losses.

These increases were partially offset by reductions across several expense categories.

In addition to the above, NAST personnel expenses in the second quarter of 2025 included $0.7 million of severance and related personnel expenses related to our 2025 Restructuring Program.

The second quarter of 2024 included $4.8 million of severance and related personnel expenses.

We also incurred $3.8 million of restructuring related other SG&A expenses in the second quarter of 2024.

These expenses were both associated with our 2024 Restructuring Program.

Refer to Note 13, Restructuring , for further discussion related to our 2024 Restructuring Program.

Refer to Note 13, Restructuring , and Note 14, Divestitures , for further discussion related to our restructuring programs and the divestiture of our Europe Surface Transportation business.

The operating expenses of NAST and all other segments include allocated corporate expenses.

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Remaining corporate allocations, including corporate functions and technology related expenses, are included within each segment’s other SG&A expenses, and are allocated based upon relevant segment operating metrics.

Six Months Ended June 30, 2025, Compared to the Six Months Ended June 30, 2024

Total revenues and direct costs.

NAST total revenues and direct costs decreased driven primarily due to lower fuel surcharges in our truckload services driven by a year-over-year decline in diesel fuel prices and lower volume in truckload services.

These declines were partially offset by higher transportation rates and increased LTL volumes.

As capacity continues to exit the market, this shift has contributed to a modest year-over-year increase in transportation rates.

Our average truckload linehaul rate per mile charged to our customers, which excludes fuel surcharges, increased approximately 4.5 percent.

Our truckload linehaul cost per mile, excluding fuel surcharges, increased approximately 4.0 percent.

Gross profits and adjusted gross profits.

NAST adjusted gross profits increased driven by higher adjusted gross profits per transaction in both truckload and LTL services.

The improvement in truckload services was driven by the continued advancement of our dynamic pricing and costing capabilities.

These advancements have allowed us to respond more rapidly to market fluctuations through more frequent and precise pricing discovery.

Operating expenses.

NAST personnel expense decreased driven by cost optimization efforts and productivity improvements, including lower average employee headcount.

NAST other SG&A expenses increased primarily due to higher allocated corporate expenses and higher credit losses.

These increases were partially offset by reductions across several expense categories.

In addition to the above, NAST personnel expenses in the six months ended June 30, 2025 included $0.7 million of severance and related personnel expenses related to our 2025 Restructuring Program.

We also incurred $7.8 million of severance and related personnel expenses and $5.7 million of restructuring related other SG&A expenses in the six months ended June 30, 2024.

These expenses were both associated with our 2024 Restructuring Program.

Global Forwarding Segment Results of Operations

Three Months Ended March 31,

(dollars in thousands) 2025 2024 % change

Three Months Ended June 30, Six Months Ended June 30,

(dollars in thousands) 2025 2024 % change 2025 2024 % change

Total revenues $ 797,800 $ 921,223 (13.4) % $ 1,572,688 $ 1,779,860 (11.6) %

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Income from operations $ 51,330 $ 40,982 25.3 % $ 94,273 $ 72,534 30.0 %

Three Months Ended March 31,

2025 2024 % change

Three Months Ended June 30, Six Months Ended June 30,

2025 2024 % change 2025 2024 % change

Average employee headcount 4,436 4,652 (4.6) % 4,469 4,770 (6.3) %

Service line volume statistics

Ocean (4.0) % (1.5) %

Air (12.5) % (8.0) %

Customs 0.5 % 1.0 %

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

Three Months Ended March 31, 2025, Compared to the Three Months Ended March 31, 2024

Three Months Ended June 30, 2025, Compared to the Three Months Ended June 30, 2024

Total revenues and direct costs.

Global Forwarding total revenues and direct costs decreased driven by lower pricing and purchased transportation costs in ocean services partially offset by an increase in ocean services volume, compared to the first quarter of 2024.

Ocean pricing and purchased transportation declined throughout the first quarter of 2025.

Assuming no significant changes to the current tariff and geopolitical landscape, our ocean freight volumes may be adversely impacted in the near term although the extent and duration remain uncertain.

Global Forwarding total revenues and direct costs decreased in the second quarter of 2025 compared to the second quarter of 2024.

This decrease was primarily attributable to lower pricing and reduced purchased transportation costs in ocean services, as well as volume declines in both ocean and air freight services.

In the second quarter of 2024, ocean and air freight rates were elevated due to market disruptions that strained ocean capacity including re-routing and extended transit times resulting from the Red Sea conflict, container shortages, and worsening port congestion in certain regions of the world.

These disruptions also led to ocean freight conversions to air freight in the second quarter of 2024.

Gross profits and adjusted gross profits.

Global Forwarding adjusted gross profits increased driven by higher adjusted gross profits per ton in air freight and an increase in ocean volumes.

The increase in ocean volume was driven by increased activity by shippers discussed in the market trends section above.

Customs adjusted gross profits increased driven by both an increase in adjusted gross profits per transaction and an increase in transaction volumes.

Global Forwarding adjusted gross profits increased in the second quarter of 2025 driven by higher adjusted gross profits per transaction in customs and air freight services.

The improvement in customs was largely attributable to increased duty advance fees, reflecting elevated global tariff rates while the improvement in air freight services was driven by improved pricing discipline.

These increases were partially offset by lower volumes and lower adjusted gross profits per transaction in our ocean services, which were impacted by the volatile market conditions and shifting trade policies discussed in the market and business trends sections.

Operating expenses.

Personnel expenses decreased driven by cost optimization efforts and productivity improvements, including lower average employee headcount.

Global Forwarding other SG&A expenses increased primarily related to higher allocated corporate expenses.

In addition to the above, Global Forwarding personnel expenses for the first quarter of 2024 included $3.2 million of severance and related personnel expenses.

We also incurred $0.2 million in other SG&A expenses in the first quarter of 2024.

Global Forwarding other SG&A expenses decreased with reductions across several expense categories.

In addition to the above, Global Forwarding personnel expenses for the second quarter of 2025 included $2.6 million of severance and related personnel expenses.

These expenses were associated with our 2025 Restructuring Program.

Personnel expenses for the second quarter of 2024 included $2.2 million of severance and related personnel expenses.

We also incurred $1.3 million in other SG&A expenses in the second quarter of 2024.

These expenses were both associated with our 2024 Restructuring Program.

Refer to Note 13, Restructuring , for further discussion related to our 2024 Restructuring Program.

Refer to Note 13, Restructuring , for further discussion related to our restructuring programs.

Six Months Ended June 30, 2025, Compared to the Six Months Ended June 30, 2024

Total revenues and direct costs.

Global Forwarding total revenues and direct costs decreased, driven by lower pricing and purchased transportation costs in ocean services, as well as volume declines in air freight services.

In the six months ended June 30, 2024, ocean freight rates were elevated as a result of ongoing disruptions, including the Red Sea conflict, which strained capacity and increased ocean freight rates.

These disruptions also led to ocean freight conversions to air freight in the six months ended June 30, 2024.

Gross profits and adjusted gross profits.

Global Forwarding adjusted gross profits increased driven by higher adjusted gross profits per transaction in customs and air freight services.

These increases were partially offset by lower volumes in air freight and ocean services driven by the volatile market conditions and shifting trade policies outlined in the market trends section above.

Operating expenses.

Personnel expenses decreased driven by cost optimization efforts and productivity improvements, including lower average employee headcount.

Other SG&A expenses decreased with reductions across several expense categories, partially offset by higher allocated corporate expenses.

In addition to the above, Global Forwarding personnel expenses for the six months ended June 30, 2025 included $2.6 million of severance and related personnel expenses.

These expenses were associated with our 2025 Restructuring Program.

Personnel expenses for the six months ended June 30, 2024 included $5.4 million of severance and related personnel expenses.

We also incurred $1.6 million of other SG&A expenses in the six months ended June 30, 2024.

All Other and Corporate Segment Results of Operations

All Other and Corporate includes our Robinson Fresh and Managed Solutions segments, as well as Other Surface Transportation outside of North America and other miscellaneous revenues and unallocated corporate expenses.

Three Months Ended March 31,

(dollars in thousands) 2025 2024 % change

Three Months Ended June 30, Six Months Ended June 30,

(dollars in thousands) 2025 2024 % change 2025 2024 % change

Total revenues $ 420,516 $ 572,216 (26.5) % $ 823,948 $ 1,125,577 (26.8) %

Income (loss) from operations (9,761) (13,314) (26.7) %

Income (loss) from operations 598 (3,994) N/M (9,163) (17,308) (47.1) %

Adjusted gross profits (1)

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

Three Months Ended March 31, 2025, Compared to the Three Months Ended March 31, 2024

Three Months Ended June 30, 2025, Compared to the Three Months Ended June 30, 2024

Total revenues and direct costs.

Total revenues and direct costs decreased driven by a decline in Europe truckload services in Other Surface Transportation resulting from the divestiture of our Europe Surface Transportation business on February 1, 2025.

Total revenues and direct costs decreased driven by the divestiture of our Europe Surface Transportation business on February 1, 2025.

Refer to Note 14, Divestitures , for further discussion related to the divestiture of our Europe Surface Transportation business.

Partially offsetting this decrease was an increase in total revenues and direct costs in our Robinson Fresh business driven by higher average pricing with retail customers.

Gross profits and adjusted gross profits.

Robinson Fresh adjusted gross profits increased due to an increase in integrated supply chain solutions for retail and foodservice customers.

Managed Solutions adjusted gross profits decreased driven by lower transaction volume.

Other Surface Transportation adjusted gross profits decreased driven by a decline in Europe truckload services in Other Surface Transportation resulting from the divestiture of our Europe Surface Transportation business on February 1, 2025.

Refer to Note 14, Divestitures , for further discussion related to the divestiture of our Europe Surface Transportation business.

Managed Solutions adjusted gross profits increased modestly compared to the prior year.

Other Surface Transportation adjusted gross profits decreased resulting from the divestiture of our Europe Surface Transportation business.

Restructuring, lease impairment charge, and divestiture expenses.

All Other and Corporate personnel expenses in the first quarter of 2025 included $1.2 million of severance and related personnel expenses and $1.2 million of other SG&A expenses resulting from the divestiture of our Europe Surface Transportation business.

All Other and Corporate personnel expenses in the second quarter of 2025 included $0.6 million of severance and related personnel expenses from our 2025 Restructuring Program and $0.4 million of other SG&A expenses resulting from restructuring and the divestiture of our Europe Surface Transportation business.

Personnel expenses in the second quarter of 2024 included $2.5 million of severance and related personnel expenses from our 2024 Restructuring Program.

We also incurred $0.6 million of other SG&A expenses related to the 2024 Restructuring Program in the second quarter of 2024.

Refer to Note 13, Restructuring, for further discussion related to our restructuring programs, and Note 14, Divestitures , for further discussion related to the divestiture of our Europe Surface Transportation business.

Six Months Ended June 30, 2025, Compared to the Six Months Ended June 30, 2024

Total revenues and direct costs.

Total revenues and direct costs decreased driven by the divestiture of our Europe Surface Transportation business on February 1, 2025.

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 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.

Personnel expenses in the first quarter of 2024 included $1.7 million of severance and related personnel expenses.

We also incurred a $2.9 million impairment loss in the first quarter of 2024 included in other SG&A expenses related to capitalized internally developed software.

These expenses were both associated with our 2024 Restructuring Program.

Refer to Note 13, Restructuring , for further discussion related to our 2024 Restructuring Program.

Partially offsetting this decrease was an increase in total revenues and direct costs in our Robinson Fresh business driven by higher average pricing with retail customers.

Gross profits and adjusted gross profits.

Robinson Fresh adjusted gross profits increased due to an increase in integrated supply chain solutions for retail and foodservice customers.

Managed Solutions adjusted gross profits decreased due to lower transaction volume.

Other Surface Transportation adjusted gross profits decreased resulting from the divestiture of our Europe Surface Transportation business.

Restructuring, lease impairment charge, and divestiture expenses.

Personnel expenses in the six months ended June 30, 2025, included $1.8 million of severance and related personnel expenses associated with the divestiture of our Europe Surface Transportation business and our 2025 Restructuring Programs.

We incurred $1.6 million in other SG&A expenses in the six months ended June 30, 2025 related to the divestiture of our Europe Surface Transportation business.

Personnel expenses in the six months ended June 30, 2024, included $4.2 million of severance and related personnel expenses.

We also incurred $3.5 million of other SG&A expenses in the six months ended June 30, 2024.

These expenses were associated with our 2024 Restructuring Program.

LIQUIDITY AND CAPITAL RESOURCES

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In addition, we maintain the following debt facilities as described in Note 4, Financing Arrangements (in thousands):

Description Carrying Value as of March 31, 2025 Borrowing Capacity Maturity

Description Carrying Value as of June 30, 2025 Borrowing Capacity Maturity

Revolving credit facility $ — $ 1,000,000 November 2027

9 unchanged sentences

We expect to use our current debt facilities and potentially other indebtedness incurred in the future to assist us in continuing to fund working capital, capital expenditures, possible acquisitions, dividends, share repurchases or other investments.

Cash and cash equivalents totaled $129.9 million as of March 31, 2025, and $145.8 million as of December 31, 2024.

Cash and cash equivalents held outside the United States totaled $121.3 million as of March 31, 2025, and $134.0 million as of December 31, 2024.

Cash and cash equivalents totaled $156.0 million as of June 30, 2025, and $145.8 million as of December 31, 2024.

Cash and cash equivalents held outside the United States totaled $146.2 million as of June 30, 2025, and $134.0 million as of December 31, 2024.

We prioritize our investments to grow our market share and expand globally in key industries, trade lanes, and geographies, and to digitize our customer, carrier, and internal tools to support our organic growth.

1 unchanged sentence

The following table summarizes our major sources and uses of cash and cash equivalents (dollars in thousands):

Three Months Ended March 31,

Six Months Ended June 30,

Sources (uses) of cash:

Cash provided by (used for) operating activities $ 106,531 $ (33,323)

Cash provided by operating activities $ 333,659 $ 133,099

Capital expenditures (36,241) (41,811)

3 unchanged sentences

Cash dividends (152,355) (147,283)

Net borrowings on debt 12,000 120,000

Net (payments) borrowings on debt (24,000) 28,000

Other financing activities (27,563) (782)

Cash (used for) provided by financing activities (146,211) 34,695

Cash used for financing activities (332,685) (120,065)

Effect of exchange rates on cash and cash equivalents 6,985 (3,581)

1 unchanged sentence

Cash flows from operating activities.

In the prior year, cash flows from operating activities were negatively impacted by increasing ocean freight rates resulting in an increase in net operating working capital and a use of cash for operations.

In the current year, our improved net income and a lesser increase in net operating working capital drove a significant improvement in cash flows from operating activities in the three months ended March 31, 2025, compared to the three months ended March 31, 2024.

In the prior year, cash flows from operating activities were negatively impacted by increasing ocean freight rates resulting in a significant increase in net operating working capital which negatively impacted cash flows from operating activities.

In the current year, our improved net income and a decrease in net operating working capital drove a significant improvement in cash flows from operating activities in the six months ended June 30, 2025, compared to the six months ended June 30, 2024.

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.

1 unchanged sentence

Capital expenditures consisted primarily of investments in software, which are intended to develop and deliver scalable solutions by transforming our processes, accelerate the pace of development and prioritizing data integrity, improve our customer and carrier experience, and increase efficiency to help expand our adjusted operating margins and grow the business.

The sale of our Europe Surface Transportation business closed during the three months ended March 31, 2025.

The sale of our Europe Surface Transportation business closed during the first quarter of 2025.

We received $27.7 million of consideration at closing with the remaining consideration due in fixed equal installments on the 12-month and 18-month anniversary of the closing date subject to post-closing working capital adjustments.

1 unchanged sentence

Cash flows from financing activities.

Net borrowing on debt in the three months ended March 31, 2024, were primarily to fund operations.

Cash used for financing activities in the three months ended March 31, 2025 increased as we resumed share repurchases under our board authorization in addition to an increase of common stock surrendered to satisfy minimum statutory tax obligations under our stock incentive plans compared to the prior year.

Net cash used for financing activities increased significantly in the six months ended June 30, 2025 compared to the six months ended June 30, 2024, driven by an increase in cash returned to shareholders.

In the six months ended June 30, 2025 we resumed share repurchases under our board authorization and increased our annual dividend to shareholders.

Common stock surrendered to satisfy minimum statutory tax obligations under our stock incentive plans also increased compared to the prior year.

Despite the increase in cash returned to shareholders, we also reduced our outstanding borrowings on debt.

The number of shares we repurchase, if any, during future periods will vary based on our cash position, other potential uses of our cash, and market conditions.

4 unchanged sentences

We also believe we could obtain funds under lines of credit or other forms of indebtedness on short notice, if needed.

As of March 31, 2025, we were in compliance with all of the covenants under our debt agreements.

As of June 30, 2025, we were in compliance with all of the covenants under our debt agreements.

Recently Issued Accounting Pronouncements

2 unchanged sentences

Refer to the company's 2024 Annual Report on Form 10-K for a complete discussion regarding our critical accounting policies and estimates.

As of March 31, 2025, there were no material changes to our critical accounting policies and estimates.

As of June 30, 2025, there were no material changes to our critical accounting policies and estimates.

QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Refer to the company’s 2024 Annual Report on Form 10-K for a discussion on the company’s market risk.

As of March 31, 2025, there were no material changes in market risk from those disclosed in the company’s 2024 Annual Report on Form 10-K.

As of June 30, 2025, there were no material changes in market risk from those disclosed in the company’s 2024 Annual Report on Form 10-K.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 2. Management’s Discussion and Analysis