C.H. Robinson’s AI strategy boosts 2026 financial forecast

(A summary of some of the key data in the C.H. Robinson earnings can be found here).

C.H. Robinson’s aggressive adoption of AI in its operations has enough legs that the company Wednesday sharply increased its projections for what the strategy will mean financially into 2026, and investors embraced what they heard.

The announcement by the company of sharply higher forecasts for the 3PL’s finances into next year came alongside the result of quarterly earnings that were called “impressive” multiple times on the earnings call with analysts. The bottom line was that the non-GAAP earnings per share at C.H. Robinson of $1.40 was an increase sequentially from the second quarter figure of $1.29, and was up 9.4% from the third quarter of 2024.

But the sharp upturn in the C.H. Robinson stock price, already riding a three-month gain of almost 30%, appears to have been driven not as much by the earnings, which while strong were not shockingly so, but more so by the concurrent press release the company put out about its projected gains through 2026 from its various AI-driven efficiency gains.

The increase in the company’s projections come off the base forecast it made at its New York investors’ day in December, the first the company had in several years and the first under CEO David Bozeman.

In the prepared statement with the revised 2026 forecast, CFO Damon Lee said the investors’ day forecast was that by next year, operating income would be $350 million to $450 million more than a baseline of 2023 adjusted operating income of $553 million.

But because of what Lee said was the company’s “strategy, disciplined execution and significant runway for further improvement,” C.H. Robinson (NASDAQ: CHRW) was tacking another $50 million on to that forecast, “despite market dynamics that have created greater headwinds than we originally anticipated.”

The addition puts the target for 2026 operating income at $965 million to $1.04 billion.

The nine-month figure for operating income at C.H. Robinson was $613.6 million, up from $485.3 million in 2024. Operating income for the third quarter was $220.8 million, compared to $180.1 million a year earlier.

That forecast was the fuel for C.H. Robinson stock to climb anew. At approximately 8 p.m. EDT, the post-close price of C.H. Robinson was $146, a gain of $16.62 and 12.85% from the day’s close at $129.38.

That price of around $145 to $146, an all-time high, marks a more than doubling of where C.H. Robinson was trading at the end of April 2024. But a May 1 announcement of strong first quarter 2024 earnings, driven by many of the AI-driven and other efficiencies constantly touted by the company’s management, set the stock price off on a run that now puts it at a doubling of the pre 1Q 2024 earnings price.

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In his prepared comments for the earnings call, Bozeman cited several statistics from the company’s North American Surface Transportation segment, where its core truck brokerage activities are located. Combined truckload and LTL volume was up about 3% year-over-year; gross margins in the sector rose for the eighth straight quarter; NAST’s adjusted operating margin of 39% was just below what Bozeman said was the company’s mid-cycle target of 40%; C.H. Robinson’s internal measures of efficiency is up 55% since the end of 2022.

Within that improvement, NAST President Michael Castagnetto said on the call that the NAST productivity measurement of shipments per person per day is up 40% during that time.

C.H. Robinson has consistently said that its measurements of market share show the company grabbing a larger slice of the pie. Bozeman said that goal is not dependent on a stronger freight market. “With our strong balance sheet and cash flow generation, we are comfortable operating in an environment that is lower for longer,” he said. “In today’s environment, there is a flight to quality, and that is Robinson.”

In a summary of the earnings released after the analyst call, Deutsche Bank analyst Richa Harnain noted several key points in what she called the “definition of very high quality.”

Margins at NAST were more than projections, Harnain said, coming in 190 bps more than expectations. And she highlighted what management also emphasized: the company is outperforming all its peers even in the current weak freight market.

“CHRW remains one of the best revision stories in transports,” she said.

The first question from analysts when they were given the floor on the earnings call was how C.H. Robinson might be impacted by a tightening of capacity as a result of drivers leaving the field due to the weak market and the crackdown on drivers who don’t speak English or are in the country illegally.

Castagnetto said none of the individual steps have by themselves had an impact on capacity, “but as they have started to stack on each other, that stacking effect does have an impact.”

The impact has not been uniform around the country, Castagnetto said. C.H. Robinson has seen “pressure in very localized markets and geographic areas for short periods of time,” he added. “We are seeing more volatile spikes in costing.”

And sticking to the message that C.H. Robinson has consistently driven home, the response by those conditions by the company is to “lean into our AI-driven pricing engines, our ability to match the right carriers to the right loads, and just making sure we really manage our customer supply chains the right way.”

But despite that, Castagnetto said, “we are not immune to these changes. We do think this is having an impact. It’s not a long term impact so far, it’s more of a squeeze in certain places for very specific periods of time.”

Purchased transportation at C.H. Robinson in the third quarter was $3.11 billion, down 13% from a year ago when it was $3.58 billion. Transportation revenues were down 11.6%, so the cost of purchased transportation declined more year-on-year than the drop in transportation revenue.

A follow-up question on the increased forecast for 2026 led to a discussion of whether any of the growth might be fueled by an acquisition, a strategy that Bozeman has downplayed in the past.

Lee said the company is “looking at inorganic opportunities all the time,” but that the “bar is extremely high on inorganic opportunities.”

Suggesting that the 2026 forecast was not dependent at all on an acquisition, Lee said C.H. Robinson is “kicking the tires on inorganic (growth).” “When we do make an inorganic move, and we will at some point in time, it will be obvious to our investors why we made that move. It will be a high quality decision. The synergy case will be obvious.”

C.H. Robinson, he said, “won’t make a mistake on M&A.”

C.H. Robinson’s AI strategy boosts 2026 financial forecast

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