Company Overview - Expeditors International of Washington, Inc. (EXPD) is a global third-party logistics and freight forwarding company with operations in 340 locations across more than 100 countries [2] - The company employs an asset-light model, purchasing cargo space from carriers and reselling it, which allows for agility and high returns on capital [2] Service Mix and Market Position - EXPD's balanced service mix includes airfreight (34%), ocean (30%), and customs brokerage (36%), making it a critical partner for various industries such as electronics, healthcare, automotive, and retail [3] - The shifting tariff landscape presents both challenges and opportunities, with lower global trade volumes impacting routes while increasing supply chain complexity boosts demand for EXPD's expertise [3] Technology and Culture - The company's proprietary technology ecosystem, including tools like EXP.O NOW, Tradeflow, and Cargo Signal, enhances visibility and compliance, integrating seamlessly with global carriers and customers [3] - EXPD's culture, focused on empowerment and long-term retention, fosters strong customer relationships and high switching costs, differentiating it from competitors [4] Financial Performance - EXPD's asset-light model results in exceptional returns, with a return on invested capital (ROIC) exceeding 40%, negative net debt, and strong cash generation [6] - The company maintains a compelling 7.3% EBITDA/EV yield and consistently returns capital to shareholders through buybacks and dividends [6] Growth Catalysts - Key growth catalysts for EXPD include increasing supply chain complexity, expanding adoption of its technology platform EXP.O NOW, and ongoing share repurchases [6]

Financial Data and Key Metrics Changes - Consolidated revenue for the third quarter was $1 billion, a slight decrease year over year [15] - Non-GAAP operating income from continuing operations was $50 million, down from $55 million last year [15] - Adjusted earnings per share were $1.46, down from $1.64 in the third quarter of 2024 [15] Business Line Data and Key Metrics Changes - The asset-based segment reported third-quarter revenue of $726 million, representing a 2% increase on a per-day basis [15] - Daily shipments in the asset-based segment grew by 4%, while weight per shipment decreased by 2% [16] - The asset-light segment achieved third-quarter revenue of $356 million, with shipments per day reaching a record high, up 2.5% year over year [18][19] Market Data and Key Metrics Changes - Daily shipments in October grew 1% year over year, while weight per shipment decreased by 2% [17] - The company expects an operating ratio increase of approximately 400 basis points sequentially for the fourth quarter due to market softness [18] Company Strategy and Development Direction - The company is focused on a long-term strategy built on growth, efficiency, and innovation, with a commitment to understanding customer needs [4][5] - Long-term financial targets include improving the non-GAAP operating ratio to 87%-90% and achieving non-GAAP EPS in the range of $12-$15 by 2028 [13] - The company is strategically investing in technology and process improvements to enhance productivity and reduce costs [12][22] Management's Comments on Operating Environment and Future Outlook - Management noted ongoing softness in the freight environment but expressed confidence in the company's ability to navigate challenges and drive growth [15][22] - The company anticipates that improvements in the housing market and interest rate reductions could spur demand in 2026 [76] - Management emphasized a focus on disciplined execution and strategic investments to position the company for future growth [22] Other Important Information - The company returned over $66 million to shareholders through share repurchases and dividends in the first nine months of 2025 [21] - The board increased the company's share repurchase authorization to $125 million, indicating confidence in the long-term strategy [21] Q&A Session Summary Question: Insights on Q4 guidance and potential impacts - Management acknowledged softness in October, attributing it to multiple factors including government shutdown impacts and seasonal trends [26][27] Question: Expectations for operating ratio and pricing dynamics - Management indicated that while the operating ratio is expected to increase, they are focused on controlling costs and improving pricing strategies [32][33] Question: Capacity dynamics and potential for price recovery - Management noted that there is currently excess capacity in the LTL space but expects pricing to improve as the market inflects due to strategic investments [40][41] Question: Volume decline and its cyclical versus structural nature - Management believes the volume decline is more cyclical, with strong customer retention despite reduced shipping volumes [46][47] Question: Insights on housing market demand - Management sees continued weakness in the housing market but anticipates that interest rate reductions could spur demand in 2026 [76][77] Question: Market share gains and service challenges - Management highlighted the effectiveness of their commercial team in gaining market share, despite some service challenges [79][80]